Remote Audit of the UNESCO Office in Khartoum. Internal Oversight Service Audit Section. IOS/AUD/2017/12 Original: English.

Transcription

1 Internal Oversight Service Audit Section IOS/AUD/2017/12 Original: English Remote Audit of the UNESCO Office in Khartoum December 2017 Auditors: Afschin Lagies Dawn Clemitson

2 EXECUTIVE SUMMARY Key Audit Results IOS conducted a remote audit of UNESCO s Office in Khartoum to provide assurance on the effectiveness of governance, risk management and internal control processes. While the office is making efforts to increase its country footprint, it faces continued challenges with regards to efficiency and sustainability of interventions. Given the high staff costs compared to regular programme funds, the long term financial sustainability of the office may be at risk if the Office is not able to deliver upon its UNDAF commitments and to mobilize sufficient funding. Given the scarce human and financial resources there is need for programmatic focus and proactive resource mobilization efforts. A more systematic approach to donors guided by specific targets and supported by a sound strategy and risk management practices is required. Close monitoring of joint implementation with UN partners requires more efforts by the Office to ensure that UNESCO delivers upon its commitments. Finally although the control environment is generally functioning some weaknesses related to Procurement and Travel were noted. These were mainly originated by poor planning and excessive use of single source contracts which led to financial losses and the office not being able to ensure value for money. Background 1. UNESCO s Office in Sudan was created in 2006 and included until the independence of South Sudan in 2011 an Antenna in Juba. It now forms part of UNESCO s Arab State region and is one of the three countries of the cluster of countries belonging to the Cairo Office. 2. The UNESCO Office in Khartoum is a national Office under the Cairo Cluster office. The Office has activities in the fields of Education, Communication & Information, and Culture. 3. The Office comprises as of July staff members all funded by regular programme. The current Head of the Office (P-5) was appointed in May The Office has no international programme staff; national programme officers: NO-C and NO-A implement the Education (ED) and Science (SC) programmes. A P-2 Administrative Officer, who joined UNESCO under the young professional programme in 2016, heads the administration unit. The Office also has four fixed term posts for General Service staff and hires three service contractors from its running costs. BFM provides the funding for two additional service contractors. 2

3 Figure 1. Khartoum Office Organigram 4. The budget allotments for the Office totaled US $1,823,406 for the Regular Programme (RP) and Staff Costs, out of which US $1,410,091 were running costs. In addition, the Office was implementing two extra budgetary projects totaling US $673, Data extracted from SISTER and FABS 3

4 Table 2. Total Office resources and expenditure in US $ 2, 3 Sector/Service 38 C5 RP Allocation (A) 38 C5 Std. Staff Costs for P and L and actual costs for SC holders (B) RP and Staff Budget (A+B) Global and decentralized funds Global and decentralized funds expenditure EXB Projects Allotment Current year EXB expenditure 38 C5 ED - Education 70, , , ,067 62,755 22,522 17,788 SC - Natural sciences 60,000 79, ,000 36,120 36,120 CLT - Culture 70,000 70,000 1 Donor funds to be received CI - Communication and information SHS Social Human Sciences BFM - Running costs BFM - Running costs additional security upgrade ERI Field Office Security Costs FSC - Personnel costs 338,200 12, ,092 15,752 15,752 87,934 87, , ,582 BFM - AO unit 362, ,000 18,181 18, ,700 Project recently started Total 642,201 1,132,474 1,774, , , ,223 17,788 2 The Global and Decentralized funds expensed are for projects undertaken in Sudan by the Office in coordination with Headquarters and other field Offices. The Office considers that it was instrumental in expensing funds in respect of the following projects (1) Paving the Road to Education 2030 in Sudan +/- US $ , Assessing Sudanese Red Sea Coast defining areas for better protection +/- US $ 30,000 and Joint Authority meeting for Nubian Aquifer (GEF) project in Khartoum +/- US $40,000. The table above includes only those expenses where the Office s involvement could be identified in FABS. 3 In addition, the Office has managed to mobilize small contributions from UNESCO Sectors and Field Offices in country e.g. the Sudanese National Commission, UNICEF and UNDP. The amounts vary from US $ 746 to US $ 20,000, and help the Office to reinforce its activities. 4

5 Audit objective, scope and methodology 5. IOS conducted a remote audit of the Office. The audit objective was to assess the effective functioning of the Office s internal controls and compliance with UNESCO s procedures and regulations. The audit covered the following areas: Objectives Setting Programme Management Financial Control Contracting and Procurement Human Resource Management Travel General Administration 6. A remote audit or desk audit, by definition is a limited-scope examination of documents and records, away from the place of action. The audit was performed in accordance with the International Standards for the Professional Practice of Internal Auditing and covered activities undertaken from January 2016 to July The audit methodology was based on a risk assessment conducted in the planning phase. The fieldwork entailed document review, questionnaires, and substantive testing of a sample of projects, contracts, travel and financial transactions. 7. The audit selected a sample of 18 contracts for review, totaling US $208,978 representing 58 per cent by value of all contracts issued during the audit period. Figure 2 below provides an overview of the contract types sampled. Figure 2. Contract types sampled 4 4 Number of contracts Contract for services Financing Activities Contract Individual Consultant Intergovernmental Body Allocation Non Standard Contract Purchase Order 8. The audit also reviewed a sample of nine mission travels with an expenditure of US $7,869. This represented 39 percent of the missions undertaken during the audit period. Further, the audit sampled 15 Fund Reservations totalling US $8,905 made during the period of January 2016 to July 2017 to cover expenses such as salaries for service contract holders, meetings and conferences, participant travel, etc. Assessment of Controls 9. As part of the audit, IOS validated the most recent self-assessment of internal controls 2016 (SIC) completed by the Office. The purpose of this validation is to reinforce the self-assessment methodologies and resultant assurance as this process continues to evolve. We concluded that the self-assessment accurately presented the status of the Office s controls in only three of the seven functional areas reviewed in this audit. The discrepancy between the Offices selfassessment and IOS conclusion on the effectiveness of internal controls confirms the results of the 5

6 recent IOS audit of UNESCO s Statement on Internal Control 4. The implementation of the recommendations contained in this audit report will improve the Office controls where needed. Table 1. Control Self-Assessment Functional Area Self-Assessment (2016) IOS assessment Office Objectives Programme Management (Recommendations 1, 2, 3, 4, and 5) (Recommendation 6) Financial Control Globally under control Supply of Goods, Works & Services (Recommendation 7) Human Resource Management Travel Management Globally under control (Recommendations 8) General Administration Globally under control Achievements and Good Practices 10. In 2016/2017 the Office has increased its footprint in the country and leveraged its local partners, such as the National Commission, resulting in a revitalization of extra budgetary support totalling US $637,338 signed contributions for two projects. Key Issues and unmitigated risks The country strategy document has deficiencies and may be insufficient to support the strategic positioning of the Office and the resource mobilization efforts. Further the office does not have a resource mobilization plan. The lack of a well-defined strategy for the office has led to over ambitious programme commitments and lack of programmatic focus setting unrealistic and unattainable targets. Staff costs are significantly higher than regular programme funds, further analysis to rationalise the financial sustainability of the office is required. Insufficient involvement in the UNDAF Monitoring & Evaluation Group has led to failure to report on performance and results. Weaknesses in the areas of procurement and travel weaken the ability to ensure value for money and expose the office to financial loss. Finally it should be noted that the Office has not received Gender or Ethics training, except for the Head of Office who attended an Ethical Leadership Training workshop held at Headquarters in September IOS/AUD2017/11 6

7 TABLE OF RECOMMENDATIONS Recommendation 1 (MEDIUM PRIORITY): BSP in liaison with FSC to ensure that Offices timely prepare UCS. Khartoum office to address in addition weaknesses identified by the audit. Recommendation 2 (MEDIUM PRIORITY): Khartoum office to revise its programmatic commitments by focusing on areas where it can realistically engage with the existing resources. Recommendation 3 (MEDIUM PRIORITY): Khartoum office to improve the risk register by including internal and external risks, with duly assigned risk ratings and mitigation plans by fully applying the guidance included in the UNESCO s Risk Management Handbook and seeking support where needed. Recommendation 4 (HIGH PRIORITY): FSC to define financial and performance targets for field offices and to measure the continuing efficiency and effectiveness of the field network. Recommendation 5 (MEDIUM PRIORITY): Khartoum office to establish with the support from BSP a resource mobilization plan aligned to its UNDAF commitments and the UCS. Recommendation 6 (MEDIUM PRIORITY): Khartoum office to participate in M&E Group as planned and agreed in the UNDAF. Recommendation 7 (MEDIUM PRIORITY): Khartoum office using BFM s training material as a reference source to establish and implement a time bound plan to address weaknesses on contracting practices. Recommendation 8 (LOW PRIORITY): Khartoum office to reiterate to all staff the importance of timely planning and purchasing flight tickets. 7