Organization of American States OAS QUARTERLY RESOURCE MANAGEMENT REPORT MARCH 31, 2010

Transcription

1 Organization of American States Original: English OAS QUARTERLY RESOURCE MANAGEMENT REPORT MARCH 31, 2010 An overview of the financial position of the funds administered by the General Secretariat for the first quarter (JanuaryMarch) of 2010 and status report on other management activities GENERAL SECRETARIAT (GS/OAS) 1889 F Street, N.W., Washington, D.C , USA (202) /

2 SECTION I MANAGEMENT DISCUSSION AND ANALYSIS 5 GS/OAS Resources at a Glance 6 Inflows from a Financial Perspective 8 Outflows from a Financial Perspective 10 Budget Execution 2010 Regular Fund ProgramBudget 12 Status of Regular Fund Quota Contributions 14 Regular Fund Cash Flow: Liquidity Risk Assessment 15 GS/OAS Financial Investments 16 GS/OAS Improvements and Efficiencies SECTION II 2010 OAS RESOURCES BY PROGRAM 27 All Programs 29 Program 1 Office of the Secretary General (SG) 32 Program 2 Office of the Assistant Secretary General (ASG) 35 Program 3 Autonomous and/or Decentralized Entities 38 Program 4 Secretariat for Legal Affairs (SLA) 41 Program 5 Secretariat for Multidimensional Security (SMS) 44 Program 6 Secretariat for Political Affairs (SPA) 47 Program 7 Executive Secretariat for Integral Development (SEDI) 50 Program 8 Secretariat for External Relations (SER) 53 Program 9 Secretariat for Administration and Finance (SAF) 56 Other Activities SECTION III FINANCIAL STATEMENTS AND REPORTS 61 Combining Financial Statements 64 Regular Fund Budget Execution Status Report 66 Quota Payments 68 Compliance Report 71 Regular Fund Cash Flow: Liquidity Risk Analysis 73 Specific Funds: Statement of Changes in Fund Balance 102 Contributions to the OAS by Donors 105 Resolution CP/RES. 831 (1342/02) 109 Service and Revolving Funds 111 Indirect Cost Recovery (ICR) 113 Activities of the Offices of the General Secretariat in the member states.

3 COMPLIANCE WITH RESOLUTION AG/RES. 1 (XXXVIIIE/09) The quarterly resource management report is presented in compliance with resolution AG/RES. 1 (XXXVIIIE/09), by which the General Assembly resolves, through mandate: III.A.2.c. to request the General Secretariat (GS/OAS) to present its administrative and financial management reports to the CAAP on a quarterly basis. These reports should include: i. A discussion and analysis of the report at the management level that summarizes the financial situation of the General Secretariat; [See Section I] ii. Detailed financial reports, including budgetary execution of the Regular Fund and the Voluntary, Specific, Service (including ICR), and the Trust Funds. [See Section I page 5; Section II pages 27 to 28; and Section III ] Resolution AG/RES. 1 (XXXVIIE/09) also mandates: III.A.2.d to request the General Secretariat to provide the following reports on a semiannual basis: reports on other administrative aspects of the General Secretariat, such as the impact of human resource policies on geographic representation and gender equity and equality; performance evaluations of General Secretariat staff; the human resource plan; post audits;...personnel funded by specific funds;...[see Section II]...contracting mechanisms; travel expense control measures; and any other requested by the CAAP. [Presented separately] III.A.2.e. to report (on an annual basis) on resources allocated for compliance with the mandates of the member states of the Organization, listed by effective date, object of expenditure (e.g., travel, contracts)... [See Section I page 8, and Section III page 64],...and responsible area of the Secretariat, taking into account the four pillars of the organization; a report on the activities of the Offices of the General Secretariat in the member states [See Section III page 113],... a report on the income generated through the rental of conference rooms [Presented separately]...and the Hall of the Americas... [See Section III Statement of Service and Revolving Funds page 109]...and a report on fundraising for external resources to support the activities of the Organization [Presented separately]...and other contributions to building maintenance and improvements... [See Section III Statement of Service and Revolving Funds page 109]. III.A.2.b.ii. report (end of each fiscal year) containing fiscal year s actual disbursements for statutory adjustments of staff salaries as a result of the Organization s use of smart parity, variations between actual disbursement and estimated costs, suggestions to regularly address the financing of the variation. [Presented separately] III.B.19.a to instruct the General Secretariat to intensify its ongoing initiative aimed at controlling operating expenditures. This initiative should identify all cost mitigation and cost reduction opportunities and determine specific costcontrol measures in the use of meeting, conference, and office resources and/or the purchase of inputs and materials. [See Section I pages 16 to 25] III.B.19.b to highlight in the quarterly resource management reports presented to the Permanent Council examples of savings and efficiencies achieved through the implementation of these measures. [See Section I pages 16 to 25]. This is in compliance with resolution AG/RES. 1 (XXXVIIIE/09) Guidelines for the ProgramBudget of the Organization for Adopted at the fourth plenary session, held on September 30, 2009

4 MANAGEMENT DISCUSSION AND ANALYSIS 4

5 The GS/OAS financial position can be presented from two perspectives: financial and budgetary, as shown in Table 1. The financial perspective is based on actual inflows and outflows of all funds of the Organization. Inflows under the Regular Fund include current quotas, quotas in arrears, interest income, rental space income, and miscellaneous income, received through the first quarter of the year. Inflows under FEMCIDI include voluntary contributions from member states, interest and reimbursements. Inflows for Specific Funds include current year contributions for specific activities as mandated by the donor agreement, interest income and transfers. Service Funds include Regular Fund transfers for basic infrastructure and common costs, tax reimbursements, indirect cost recovery and other income. Inflows for Other Funds (which includes Medical Benefit, Rowe PanAmerican and Trust for the Americas) vary depending on the nature for which these funds were established. On the outflows side, the Regular, Specific and Service Funds include expenditures, obligations, payroll encumbrances to yearend, transfers, and other decreases. Outflows under FEMCIDI include only nonpayroll expenditures, obligations and transfers. Other Funds include only expenditures and transfers. For all funds, the ending balance represents the excess of inflows over outflows plus the beginning balances carried forward from the prior year. The budgetary perspective for the Regular Fund reflects the authorized appropriations for the 2010 cycle and does not show actual income collected. For FEMCIDI, it reflects the authorized appropriations for the 2009 cycle, which began on April 1, 2009 and ended on March 31, 2010, and does not show actual income collected, as shown under the financial perspective. The budget for Specific, Service, and Other Funds includes beginning balances, contributions, transfers, and miscellaneous income through the first quarter of the year, reflecting funds available for programming. Execution for the Regular Fund and FEMCIDI includes expenditures and obligations for the current budgetary year. Execution for Specific, Service, and Trust Funds may include expenditures and obligations from prior budgetary years. In addition, execution under Other Funds may include unrealized gains from investments. Table 1 GS/OAS Resources (in millions of USD) From January 1, 2010 to March 31, 2010 ALL PROGRAMS FINANCIAL PERSEPECTIVE Regular Fund Voluntary Funds (FEMCIDI) Specific Funds Service and Revolving Funds Other Funds (B) TOTAL 2010 BEGINNING BALANCE INFLOWS OUTFLOWS ENDING BALANCE (3.4) (76.1) (1.4) (15.7) (8.1) (3.4) (104.7) (46.2) (4.3) BUDGETARY PERSEPECTIVE Regular Fund Voluntary Funds (FEMCIDI) Specific Funds Service and Revolving Funds Other Funds TOTAL 2010 BUDGET EXECUTION VARIANCE (A) (4.3) (A) Corresponds to 2009 Cycle (April 1, 2009 through March 31, 2010) (B) Includes Medical Benefits Fund, Rowe Pan American Fund and Trust for the Americas. 5

6 Figure 1 Trend and Composition of Inflows by Fund (in millions of USD) From January 1 to March 31 TREND Regular Fund Service and Revolving Funds FEMCIDI Specific Funds Other Funds* Trend and Composition of Inflows by Fund As defined on page 5, inflows to the OAS include more than just quota payments or voluntary contributions. Figure 1 presents a comparative summary of all inflows through March 31 for various years for funds managed by the GS/OAS, and Trust funds for which the GS/OAS has a fiduciary responsibility. The administration of each fund is regulated by its own mandates, statutes or regulations. The GS/OAS Funds received approximately USD 41.7 million (excludes interfund transactions of USD 6.5 million) during the first quarter of The overall income in the first three months of 2010 has slightly increased compared to last year, primarily due to an increase in quota payments. Inflows for the Regular Fund have increased 125% compared to the same period from last year, mostly as a result of the first quota payment received from United States. Member states have also confirmed their support to FEMCIDI through a gradual increase in pledges in 2008 and For the first quarter of the year, inflows for FEMCIDI have increased from USD 0.1 million in 2009 to USD 0.5 million in COMPOSITION Regular Fund % Total % FEMCIDI 0.5 1% Other Funds* % * Includes Medical Benefit Fund, Rowe Pan American Fund and Trust for the Americas Specific Funds % Service and Revolving Funds % On the other hand, the chart provides mixed trends across individual funds. Contributions received by the GS/OAS to Specific Funds have reached its lowest level in the last four years. Inflows to Specific Funds experienced a decrease of 48% compared to March 31, During this quarter, funds have been received mainly from the United States (USD 2.2 million) and Spain (USD 1.6 million), directed primarily towards democracy and governance, integral development and multidimensional security initiatives. In addition, the deficit in the tax equalization account has affected the inflows to Service Funds which have decreased 42% when compared to the same period in Inflows attributed to Other Funds have slightly decreased from USD 4.6 million in 2009 to USD 4.2 million in 2010, mostly due to a decrease in contributions received by the Trust for the Americas. 6

7 Contributions by Source of Financing By the first quarter of 2010 (see Table 2), the United States was the major contributor to the OAS (USD 14.2 million), followed by Mexico (USD 6.5 million), Canada (USD 3.5 million) and Spain (USD 1.6 million). From the USD 14.2 million contributed by the United States to all funds, USD 11.8 million corresponds to the Regular Fund. In addition, contributions received from Mexico and Canada constitute mostly quota payments to the Section I Inflows from a Financial Persective Regular Fund. Among Permanent Observers, Spain is at the top of all contributors, with USD 1.6 million in contributions to Specific Funds mainly to support sustainable democracy initiatives. Finally, other donors and institutions such as the International Bank for Reconstruction and Development and the InterAmerican Development Bank are important partners to the GS/OAS. Table 2 Contributions by Source of Financing Top Donors (in millions of USD) From January 1, 2010 to March 31, 2010 Contributor Regular Fund Voluntary Funds (FEMCIDI) Specific Funds Trust for the Americas TOTAL United States Mexico Canada Spain Colombia Peru 0.0 * Brazil Norway Intl. Bank for Reconstruction & Development Costa Rica Guatemala Inter American Development Bank Belgium Trinidad & Tobago Other Member States Multiple Funding Sources & Others TOTAL * Although Regular Fund show zero due to rounding in millions, this corresponds to prompt payment credit of USD 8,760 applied to 2010 quota assessment from Peru. 7

8 Outflows by fund Outflows for the Regular, Specific and Service Funds include expenditures, and obligations, less carryover obligations, payroll encumbrances to yearend, transfers, and other decreases. Outflows under FEMCIDI include only non payroll expenditures, obligations and transfers. Other Funds include only expenditures and transfers. Overall outflows in GS/OAS funds totaled USD million through March 31, 2010; the total outflows has slightly decreased by 4.3% when compared to the same period last year, which totaled USD million. Figure 2 shows that Regular Fund outflows represent USD 76.1 million or 73% of the total; Specific Funds USD 15.7 million or 15%, and the Service Funds USD 8.1 million or 8%. These three funds combined account for 96% of the total GS/OAS outflows. Outflows by category As a service organization, the GS/OAS invests a significant amount of its income on salaries and contracts (Figure 3); Personnel (Object 1) represents 60.6% of total outflows, Performance contracts (Object 8) represents 13.6%, Other expenses (Object 9) represents 4.7%, which includes administrative and technical support, subsidies to the InterAmerican Court of Human Rights, the Pan American Development Foundation and the InterAmerican Defense Board. Figure 2 Outflows by Fund (in millions of USD) From January 1, 2010 to March 31, 2010 Other Funds 3.4 Service and 3% Revolving Funds 8.1 8% Voluntary Funds (FEMCIDI) 1.4 1% Specific Funds % Regular Fund % Total: USD Figure 3 Outflows by category (in millions of USD) From January 1, 2010 to March 31, USD Personnel Temporary Posts Fellowships Travel Documents Equipment, Supplies and Maintenance Building and Maintenance Performance Contracts 2009 USD USD Other expenses Other outflows 8

9 Disbursements by Location The General Secretariat executes numerous activities throughout its member states, requiring payment for goods and services in their corresponding local currencies. Figure 4 shows disbursements by location through the first quarter of the year, totaling USD million. The majority of disbursements occur in Headquarters, mostly due to payroll expenses and infrastructure costs. Section I Outflows from a Financial Perspective In Latin America, a great majority of disbursements are related to the Mission to Support the Peace Process in Colombia (MAPP), demining and judicial facilitator activities in Nicaragua, and environmental and dialogue activities in Brazil. There were no disbursements for activities held in Canada or Chile. Disbursements in the Caribbean are also significant due to projects related to recovery efforts in Haiti. Figure 4 Disbursements by Location (in millions of USD) Belize Bahamas Honduras Dominican Republic Mexico 0.27 Costa Rica Saint Kitts and Nevis Guatemala 0.24 Panama 0.10 El Salvador Haiti Antigua and Barbuda 0.29 Suriname Nicaragua 0.47 Guyana Jamaica Dominica Colombia 0.91 Venezuela Santa Lucia Barbados Ecuador Saint Vicent and the Grenadines 0.10 Grenada Peru Trinidad and Tobago Bolivia Paraguay 0.09 Brazil 0.42 Argentina 0.26 Uruguay 0.29 Headquarters (DC) TOTAL DISBURSEMENT USD M 9

10 Approved Levels For 2010, through Resolution AG/RES. 1 (XXXVIIIE/09), the General Secretariat was authorized to execute up to USD 90.1 million for Regular Fund activities. Table 3 presents the 2010 original and modified appropriation and the corresponding sources of financing. Quota assessments represent 87% of the sources of financing for the 2010 appropriation. Table Appropriations and Financing (in thousands of USD) Original Modified Appropriations Personnel 58, ,022.5 Non personnel 32, , , ,125.0 Actual Projected Mar 31, 2010 Sources of Financing Quota Assessment 78, ,469.7 Administrative and Technical Support 3,282.6 Other Income 1,579.4 Reserve Sub fund 6,749.4 a b , , ,800.8 under the Office of the Assistant Secretary General and no longer under Autonomous and/or Decentralized Entities; the InterAmerican Children s institute is under Autonomous and/or Decentralized Entities and no longer under the Secretariat for Legal Affairs (see table 4). Table 4 Transfers between Programs (in thousands of USD) Original Appropriation AG/RES. 1 (XXXVIII E/09) Modified Appropriation as of March 31, 2010 Transfers January 2010 to March 2010 PROGRAMS: (a) (b) (c) Secretary General 5,221.8 (736.3) 4,485.5 Assistant Secretary General 17, ,619.9 Autonomous and/or Decentralized Entities 11, ,255.9 Secretariat for Legal Affairs 4,129.2 (1,281.3) 2,847.9 Secretariat for Multidimensional Security 4, ,098.0 Secretariat for Political Affairs 5,012.5 (277.1) 4,735.4 Executive Secretariat for Integral Development 15, ,451.8 Secretariat for External Relations 3, , ,146.8 Secretariat for Administration and Finance 11,432.2 (177.4) 11,254.8 Basic Infrastructure and Common Costs 12, ,229.1 Grand Total 90, ,125.0 a) ICR Collection from Specific Funds (USD 2,500.0 M) and FEMCIDI (USD M) b) Interest, rents, and repayments Regular Budgetary Execution by Program Transfers Between Programs As per Executive Order 0801 Rev. 3, changes in the organizational structure were approved as of October 1 st, The Press Department now is under the Secretariat for External Relations and no longer under the Secretary General Office; The Secretariat of the InterAmerican Committee on Ports (CIP) is The 2010 Regular Fund Appropriation of USD 90.1 million has been executed to the amount of USD 76.3 million, or 84.6% of the appropriation, as of March 31, Execution includes expenditures, payroll encumbrances, and outstanding commitments through yearend. Six out of ten programs have already executed over 90% of their correspond 10

11 Section I Budget Execution of the 2009 Regular Fund ProgramBudget ing appropriations (Figure 5). The lowest percentage of execution comes from the Autonomous and/or Decentralized Entities, 70.2%, mostly due the low execution of the Secretariat of the OAS Administrative Tribunal of 11.8% (USD 6,300 out of USD 53,000), followed by the Executive Secretariat for Integral Development 75.0%, mostly due the low execution of CIDI meetings, Ministries and InterAmerican Meeting of 1.1% (USD 1,100 out of USD 151,000). Table 5 shows the Regular Fund Budget versus Execution. Budget corresponds to the modified appropriation (per Table 4); Execution includes expenditures and obligations; and the balance is the remaining unliquidated appropriations as of March 31, As of March 31, 2010, only USD 13.8 million remained available for programming. Table 5 Budget vs Execution (in thousands of USD) As of March 31, 2010 Budget Execution Balance PROGRAMS (a) (b) (c) = (a) (b) Secretary General 4, , Assistant Secretary General 17, , ,018.7 Autonomous and/or Decentralized Entities 12, , ,655.2 Secretariat for Legal Affairs 2, , Secretariat for Multidimensional Security 4, , Secretariat for Political Affairs 4, , Executive Secretariat for Integral Development 15, , ,867.6 Secretariat for External Relations 5, , Secretariat for Administration and Finance 11, , Basic Infrastructure and Common Costs 12, , ,675.2 Grand Total 90, , ,842.1 Figure 5 Budgetary Execution by Program (in millions of USD) As of March 31,

12 Quota Contributions At the beginning of 2010, the GS/OAS had USD 79.4 million in quota receivables: USD 78.5 million from current year quota assessments and USD 0.9 million from quotas in arrears. As of March 2010, the GS/OAS has received USD 22.6 million in quota payments (28% of total quota receivable): USD 22.5 million for 2010 assessment and USD 0.1 million from quotas in arrears, received from Jamaica and Nicaragua. Member states are required by the General Standards to pay their quota assessments in full by January 1 st of the calendar year, or otherwise submit a payment plan for the year. As of March 2010, from the outstanding USD 56.9 million quota receivable, USD 43.5 million are backed by current payment plans accepted by the GS/OAS from Barbados, Canada, Nicaragua and United States, most of which is expected to be collected during There is no certainty as to when the difference of USD 13.4 million will be received. Under existing regulations, member states with outstanding arrears not backed by a payment plan are considered Not Current. Member states that pay their annual quota assessment by April 30 of that period are entitled to the following discounts: 3% of the amount paid by January 31, and 2% of the amount paid between February 1 st and April 30. In 2009, USD 460,732 in discounts were credited to member states for prompt payment, to be applied to their 2010 quota assessment. In 2010, Figure 6 Quota Receivable versus Quota Payments (in millions of USD) As of March 31 USD USD QR Quota Receivable QP Quota Payments Current Arrears USD USD 60.0 USD 40.0 USD 20.0 USD QR QP QR QP QR QP QR QP QR QP QR QP QR QP QR QP

13 Section I Status of Regular Fund Quota Contributions member states already have accumulated USD 140,554 in prompt payment credits, to be applied to their 2011 quota assessment. Detailed information of prompt payment credits for 2010 can be found in the Quota Payment Report in Section III. Arrears Arrears refer to prior years balances on quota assessments. As of January 1, 2010, quotas in arrears amounted to USD 0.9 million, mainly from Nicaragua (USD 0.3 million) and Venezuela (USD 0.5 million). In the first quarter of 2010, USD 0.1 million were received in payments towards quotas in arrears, leaving an outstanding balance of USD 0.8 million. Nicaragua s arrears are covered by a payment plan approved by the Permanent Council. Nicaragua is current with its obligations under that payment plan. As illustrated in Figure 7, quotas in arrears are at the lowest level in the last eight years. Figure 7 Quotas in Arrears (in millions of USD) As of March 31 USD 25 USD 20 USD 15 USD 10 USD 5 USD Quota Compliance As of March 31, 2010, there were eleven member states Current with their quota contribution to the Regular Fund, one member state Considered Current, and twenty two member states considered Not Current. This is in accordance with AG/RES (XXXO/00), and as amended by AG/ RES.2157 (XXXVO/05). See report on compliance below (Table 6). Please note that during the month of April, the GS/OAS received full payment of the 2010 assessed quotas of Brazil, Dominica (Commonwealth of), Peru and Saint Vincent and the Grenadines, thus the status of these countries Current at the time this report is published. Table 6 Summary on Compliance with Quota Contributions according to AG/RES (XXXO/00), as amended by AG/RES (XXXVO/05) As of March 31, 2010 Current Antigua and Barbuda Bahamas Barbados Belize Canada Costa Rica Considered Current Nicaragua Not Current Argentina Bolivia Brazil ** Chile Colombia Dominica, Comm. Of ** Dominican Republic Ecuador El Salvador Grenada Guyana Guatemala Mexico Suriname Trinidad and Tobago United States Haiti Honduras * Jamaica Panama Paraguay Peru ** St. Kitts and Nevis St. Lucia St. Vincent and the Grenadines ** Uruguay Venezuela * Note that effective July 5, 2009 as per AG/RES. 2 (XXXVII E/09), Honduras has been suspended from the exercise of its right to participate in the Organization of American States in accordance with Article 21 of the Inter American Democratic Charter ** Member states that have become current as of April 30,

14 Cash Flow Actual and Projections At the beginning of the year, the Regular Fund started with a cash balance of USD 5.2 million, subsequently decreasing to USD 2.6 million in February and increasing to USD 7.0 million through March. Projections show the lowest cash balance will be attained during the month of November. The unpredictability associated with the current cash flows impedes the efficient execution of activities throughout the Organization. Consequently, receiving timely payment of quotas assessment is essential to allow for adequate strategic planning. Figure 8 shows actual and projected cash balances for the Regular Fund. Anticipated quota collections have been projected according to member states payment plans and payment history for the past 3 years, and outflows have been evenly spread throughout the year for purposes of this analysis. During the first quarter of the year, a total of USD 21.9 million was received in quota payments: USD 17.0 thousand from Antigua and Barbuda, USD 12.0 thousand from Belize, USD 2.7 million from Canada, USD thousand from Colombia, USD thousand from Costa Rica, USD thousand from Guatemala, USD 48.7 thousand from Jamaica, USD 6.2 million from Mexico, USD 93.0 thousand from Panama, USD 54.5 thousand from Paraguay, USD 34.8 thousand from Suriname, USD thousand from Trinidad and Tobago and USD 11.7 million from the United States. Figure 8 Regular Fund 2010 Actual and Projected Cash Balance (in millions of USD) Actual Projected 10 5 (5) (10) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec (6.5) Projected 14

15 Unprecedented monetary policy and fiscal stimulus in the US and elsewhere in the region have stabilized the financial system, helped to restore confidence and engineer a recovery. These reflationary policies include holding rates near zero. Much of the fiscal stimulus is aimed at promoting domestic demand which is necessary before a recovery can take hold. All of the cash available for use in carrying out the activities of the Regular Fund, Specific Funds, Voluntary Fund, Service Funds and certain Trust Funds of the OAS are consolidated in the OAS Treasury Fund. The General Secretariat administers the OAS Treasury Fund. Amounts not immediately required for operations are invested in accordance with the guidelines prescribed in the GS/OAS investment policy. GS/OAS applies a conservative risk profile in the management of assets in the OAS Treasury Fund. The investment policy requires that OAS invest in high quality instruments that preserve principal, maintain sufficient liquidity to meet forecasted cash needs, and deliver competitive returns subject to prevailing market conditions. The portfolio is also diversified in order to minimize credit risk and excludes the OAS from investing in any equities and complex derivative securities. Overall, through December 2009, the OAS Treasury Fund has returned an average of 2.53%. This diminished rate of return is indicative of the considerably lower investment income achieved by those funds whose operational requirement are either immediate or less than one year. As of March 31 st, the Treasury Fund held USD million in cash and investments for the following funds (in millions of USD): Regular Fund.4 Specific Funds 95.6 Voluntary Fund (FEMCIDI) 8.9 Service and Revolving Funds 10.0 Trust Funds Operating Cash 11.0 Total USD One of the major components of this investment model is the managed portfolio. This segment of the OAS Treasury Fund serves as the repository for those funds whose operational requirements are greater than a year. As of February 28 th, the OAS s managed portfolio had an unrealized gain of USD 2,854,735 and, despite the continued uncertain economic and investment environment, the managed portfolio has a yeartodate return of 1.13%. For 2009, the rate of return for the portfolio was 7.01%. This yeartodate return has outperformed comparable benchmarks like the Merrill Lynch 13 year government and corporate bond index (.42%) and the Solomon 3month CD (.05%). In like manner, the 2009 return outperformed the Merrill Lynch 13 year government and corporate bond index (6.61%) and the Solomon 3month CD (.54%). 15

16 On December 16, 2008, the GS/OAS presented to CAAP document CP/ CAAP. 2976/08, titled Report on Savings in the Administration of Resources of the OAS General Secretariat and Measures Adopted by the General Secretariat (GS/OAS) to Rationalize Costs and Improve Institutional Efficiency, reflecting efficiencies accomplished through December 31, The GS/OAS continues its efforts of improved efficiencies and austerity. The Resource Management Report for the three first quarters of 2009 (CP/ CAAP3008/09, CP/CAAP3015/09, and CP/CAAP3032/09) outlined improvements and efficiencies for the quarters. The following section provides various examples of additional improvements and efficiencies through the first quarter of DEPARTMENT OF FINANCIAL ADMINISTRATION AND MANAGE MENT SERVICES (DFAMS) Financial Reporting Automated Compliance Mechanism for Donor Agreements DFAMS is in the process of developing an automated compliance mechanism for donor agreements. This new process will include a new Grants Module Action Request (GMA). The new GMA will include all financial and administrative aspects of an agreement to upload to OASES; this way compliance with the donor agreement s clauses and mandates can be monitored in OASES. Financial and Administrative Framework Agreement (FAFA) with the EU The GS/OAS is working to establish a Financial and Administrative Framework Agreement (FAFA) with the European Union s Economic Commission (EC). If approved by the EC, FAFA will strengthen mutual cooperation through an umbrella agreement that facilitates and reduces the administrative cost of the negotiation, implementation and closing of projects. Future contribution agreements with the European Union would reflect the standard principles contained in this umbrella agreement. The GS/OAS submitted a first draft of the EC questionnaire with the required documentation. The EC has presented a response to the GS/OAS requesting additional information before the partnership can be approved. The GS/OAS expects to submit this information during April at the latest. More Useful Financial Statements SAF is preparing improved comprehensive financial statements for major Specific Funds, such as the OAS/CIDA Cooperation Plan and the Electoral Observation Mission (EOM) Fund. The emphasis of these statements has shifted from the usual focus on cash and the nine objects of expenditure to the appropriation level and budgetary execution. Program leaders and managers are now able to monitor execution levels against the multiyear plan submitted to the donor and make decisions accordingly. These statements are accessible in the Finance Portal on a monthly basis. SAF expects to publish additional statements emphasizing budgetary information in the upcoming months. International Public Sector Accounting Standards (IPSAS) The GS/OAS has redefined the terms of reference of the GS/OAS contract with our external auditors, Ernst & Young, to redirect audit funds and efforts from outdated agreedupon procedures review to IPSASrelated advice. This was begun in the 2009 audit cycle. An initial meeting took place with IPSAS experts from Ernst & Young. In addition, to engage the external auditors and other experts in the transition to IPSAS, staff from across SAF and the OIG s office met with Ernst & Young in order to asses the Organization s needs to help it move forward, and how E&Y can better guide the GS/OAS in the implementation process. Further, E&Y intends to review and analyze all matters pertaining to the financial statements and the underlying processes that allow DFAMS to arrive at the figures that are published. The GS/OAS received the computerbased and instructorled IPSAS training courses that were developed for UN agencies. These courses will be delivered to key financial and administrative personnel in the second quarter of 16

17 Section I GS/OAS Improvements and Efficiencies 2010 by the subjectmatter experts that developed these training programs for the UN. In accordance with IPSAS and understanding that its adoption will be a gradual process, DFAMS has decided to adopt two initial changes to its financial statements. First, it will use crossreference notes in the financial statements, which will enable general users to have additional information that expands and supports the financial statements. Second, moving forward, the sign $ will be substituted for USD, which clearly identifies the functional currency of the financial statements as US dollars. SAF/DFAMS has given a presentation to the CAAP on IPSAS and no substantive objections surfaced. As we approach critical milestones in the process, SAF will consult with the political bodies. DEPARTMENT OF INFORMATION AND TECHNOLOGY SERVICES (DOITS) Systems Infrastructure In order to ensure continued availability of network services in all OAS buildings, SAF/DOITS has implemented a secure backup link ( sitetosite VPN configuration ) using the internet as the medium. In order to do so, new stateof theart hardware and software have been installed. With the incorporation of new server technologies, SAF/DOITS has upgraded its server infrastructure that manages our missioncritical applications, including database servers and , to a more robust environment providing redundancy where needed and higher availability for users. Systems Development As part of SAF/DOITS activities to support OAS departmental goals through software applications/services, the following applications are currently under development: be utilized by the five InterAmerican institutions (InterAmerican Development BankIDB, InterAmerican Institute for Cooperation for AgricultureIICA, Organization of American StatesOAS, Pan American Development FoundationPADF and the Pan American Health OrganizationPAHO) to register all projects underway in Haiti. 2. The enhancement to the Electoral Observers Management System (EOMS), adding functionality to automate the evaluation of the electoral observations, generating evaluation lists (evaluated/evaluators), issuing notifications for evaluation, online filling of evaluations forms, collection of evaluations, and measurements of results. The EOMS was first developed in The Inter American Commission on Human Rights (IACHR) Public Petition Portal, an application that will allow external users of the IACHR (petitioners, and Member states) and IACHR staff to consult their petitions/cases/measures status securely over the Internet. It will issue automated notifications to external users on selected actions on documents approved by IACHR in the petitions/cases/measures process. Further, it will provide an administration module that will facilitate the work of the IACHR in managing account holders information and portal information. 4. The Job Description Database, created to support the initiative for the standardization of job descriptions of the Department of Human Resources. The evergrowing demand from the technical areas to use what has been called social software has led SAF/DOITS to analyze the existing offer for these type of tool, complete its review of External Virtual Community Platforms, and select Telligent Community as the best fit for the Organization s needs. The social software tool selected will facilitate the creation of virtual places for various departments, allowing for collaboration among people or organizations in the information ecosystem outside of the Organization, including Member States, Civil Society, specialists, partners and others. It will also facilitate members interaction online to share ideas. 1. The InterAmerican Project Database for Haiti, a web application to 17

18 Section I GS/OAS Improvements And Efficiencies Systems Security As part of DOITS s strategy to protect OAS network assets, testing of the OAS Secure Web Gateway (solution that bundles both hardware and software that will be used to prevent the involuntary access of GS/OAS personnel to fraudulent websites, where malicious third parties could steal OAS corporate and staff information) has been finished. The OAS Secure Web Gateway will be fully implemented in the second quarter of this year. DOITS also has implemented its inhouse developed Cyber Attack Threat Map that, among other features, has the capability of showing in real time the number and origin of all cyber attacks to OAS network that are detected and neutralized by DOITS network security architecture. DOITS expects to increase the number of services to be deployed in order to achieve its strategy regarding IT Security. Software Quality Assurance and Systems Administration SAF/DOITS has continued the implementation of the OAS Software Development Framework (OASSDF) in various software development projects. All newuser requests are being made thru a User Need Specification Form (UNS), which after being reviewed allows DOITS staff to make all necessary recommendations to the areas in order to be able to understand thoroughly user requirements before starting any development. DEPARTMENT OF PLANNING AND EVALUATION (DPE) Mandates Management and FollowUp During the first quarter of 2010, the DPE provided continuous technical support to the CAAP Working Group on Reengineering as it analyzed alternatives to improve efficiencies and potentially reduce costs of the Organization. Part of this process included a presentation of the Mandates Management Module. That Module, which is still under development, groups approximately 1,800 mandates into pillars, sub pillars, and mandate groups. It will facilitate reporting on the human and material resources programmed in furtherance of these mandates. Eventually, it will allow the GS/OAS to report on results by mandate groups. Support for Cost Estimations in Draft Resolutions DPE, together with DFAMS, provided assistance to the technical areas to instruct them on how to cost draft resolutions, in according with the template approved by the Permanent Council in December Support to the Reengineering Process DPE presented to CAAP a draft resolution to shift the budget formulation cycle from OctoberJune to JanuarySeptember. Planning and Follow/Up During the first quarter of 2010, the DPE received and processed twentyfour (50%) th Quarter Control reports from all of the areas of the General Secretariat. DPE also assisted in the formulation of ten (20%) 2011 Operating Plans; published, distributed, and uploaded to the Intranet the 2008 Followup of Annual Operating Plans; and both updated and uploaded the followup manual and a planning manual. Work on the 2009 Followup of Annual Operating Plans is nearly complete and is expected to be posted in the Intranet in April. Evaluation of Project Proposals The DPE, in its role as Technical Secretariat of the Project Evaluation Committee (PEC), continues to organize and facilitate meetings of the PEC Working Group and of the PEC. During this quarter, PEC has evaluated ten project proposals presented by the Secretariat of Multidimensional Security, the Secretariat of Political Affairs, the Secretariat of Integral Development, the Executive Secretariat of IACHR, and the Secretariat of External Relations: Misión de acompañamiento al Proceso de Selección del Consejo de Participación Ciudadana y Control Social (SPA0110) Approved 18

19 Section I GS/OAS Improvements And Efficiencies Comprehensive Humanitarian Mine Action Program. (SMS100) Approved Enriqueciendo el Debate Hemisférico a través de la Cátedra de las Américas (SRE0901) Approved Promoción de la Democracia entre la Juventud de las Américas a través del Modelo de Asamblea General de la OEA (MOEA) para Estudiantes Universitarios y de Colegios Secundarios del Hemisferio. (SRE0903) Approved Access to Justice for Women Victims of Sexual Violence in the Economic and Social Rights Spheres (CDH1001) Approved Access to Justice in the Americas: Improvement of the Capacity of the IACHR for Bringing Cases to the InterAmerican Court of Human Rights. (CDH1002) Approved OAS Mediation CapacityStrengthening Project (SPA1002) Pending of approval Protección y Uso Sostenible de los Acuíferos Transfronterizos de Mesoamérica (SID1002) Approved Implementación de las Medidas de Fomento de la Confianza entre Belice y Guatemala (SPA0919) Approved Development of a National Security Strategy for Costa Rica based on its National Security Program and Institutional Capacity Building Support for the InterAmerican Coalition for the Prevention of Violence (IACPV) SMS1002) Approved Project Formulation and Followup The DPE has received and reviewed 17 proposals (profiles) and has continued advising other areas of the General Secretariat on using resultsbased project design methodology. DPE provided technical support for the formulation of nine project documents presented by the InterAmerican Children s Institute, the InterAmerican Commission of Women (CIM), the Secretariat for Multidimensional Security, the Secretariat for Political Affairs, the Executive Secretariat of IACHR, and the Secretariat for External Relations. Additionally, the DPE has received and reviewed eight progress and final reports of projects being executed since 2006, 2007, 2008 and 2009 and funded by Spain. DPE also prepared the verification reports for those projects. MidTerm Evaluation of Programs The DPE is coordinating the mediumterm evaluation of two programs, PUICA (Civil Registries Strengthening), in the Department of State Modernization and Governance, and Strengthening of the InterAmerican Human Right System, executed by the InterAmerican Human Rights Commission and the InterAmerican Human Rights Court. Besides the FEMCIDI projects, that are executed by the Member States, this is the first occasion in which programs executed by the General Secretariat are subject of independent evaluations. Training on Project Formulation One Workshop on Project Monitoring and Evaluation entitled Resultsbased Monitoring and Evaluation was carried out (in Spanish) for 21 participants from various departments of the GS/OAS and from the InterAmerican Defense Board. The objective of this workshop was to provide General Secretariat employees and consultants who work directly with cooperation projects and programs with a better understanding of resultsbased monitoring and evaluation of projects. OFFICE OF PROCUREMENT SERVICES (OPS) Purchasing/Procurement During this period, the Office of Procurement Services (SAF/OPS) produced a report summarizing its operations during The data highlighted key workload chokepoints where greater efficiencies are needed to streamline OPS processes. The key operational processes requiring reengineering include the automation of routine transactions for travel and fellowship processing, as well as the introduction of procurement cards to streamline the processing of small and emergency purchases. As a followup to this internal study, and in conjunction with DFAMS and DOITS, OPS has begun 19

20 Section I GS/OAS Improvements And Efficiencies the implementation process of an expense reporting tool, Concur, that is in line with these cards and that fits the needs of the GS/OAS and the current enterprise resource management system (OASES). At the same time, OPS has initiated actions with DOITS and other areas within SAF to develop a plan to reduce and simplify the steps required to perform routine transactions and redirect the freed resources to focus greater attention on the competitive bidding of recurring goods and services and on negotiating framework agreements that can translate into tangible savings for the GS/OAS. During this quarter, OPS issued over 8,500 purchase order transactions for a total of USD 26.7 million. These include over 3,600 transactions for travel and fellowships that are considered straightforward transactions. These latter ones could be done automatically in the near future. In addition, over 4,000 transactions were processed in amounts equal to or less than USD 500 and an additional 1,500 transactions were processed for amounts between USD 500 and USD 1,000, both of which can be processed without the required need of quote comparisons and could be performed directly by the areas. During the first quarter of 2010, OPS was able to achieve important efficiencies for the Organization. Examples follow: Efficiencies in Contracting During the first quarter of 2010, four (4) contracts were awarded through competitive methods. A tradeoff analysis was performed in each case in order to select the contractor that offered the best value to the GS/OAS. For instance, in March, Seguros COLPATRIA was hired to provide life and accident risk insurance policy for the Colombian soldiers who perform humanitarian demining tasks with the support of the OAS Mine Action Program, for the amount of USD 113,684. If the insurance contract with the incumbent insurance carrier (MAPFRE) was extended for a year instead of bidding out this service, the cost of the insurance policy to the Mine Action Program would have been approximately USD 120, higher. This important amount of saving achieved has substantial budgetary implications for the Mine Action Program in Colombia, which are even greater considering that the program is facing a budget shortfall for the current fiscal year. Likewise, OPS is currently handling three (3) ongoing bidding processes for consultancy services requested by the Dept. of Sustainable Development, the Secretariat for Political Affairs and CICTE. Two bids for renting of vehicles with drivers for the elections in Colombia and Bolivia were carried out during February and March. The proposals received were carefully analyzed and the respective contracts were awarded to the companies offering the most competitive prices and conditions. Finally, OPS started the revision of the procurement contract rules and regulations of the GS/OAS in order to improve the process and attain higher standard of transparency/accountability, competence and efficiency. The insurance division also received the final report for the comprehensive assessment of the GS/OAS insurance portfolio performed by Willis Limited. Along with the other GS/OAS members of the review team, OPS is performing a costbenefit evaluation of the recommendations included in the report with the goal of proposing the strategy to implement the proposals. Fixed Assets The transfer of the Receiving Room functions from OPS to the Office of General Services (OGS) was effective Feb 01, Transference of the fixed assets management activities to DFAMS was effective January 18, OPS has met several times with DFAMS and OGS to assist in the corresponding operational details. This reflects recommendations from the Office of the Inspector General and the Board of External Travel Activities AA Barter Card: The barter card agreement reached with American Airlines is allowing OPS to rescue tickets that would have been otherwise lost due to the expiration 20

21 Section I GS/OAS Improvements And Efficiencies of their validity. This represented USD 1,200 in savings to the OAS. At the end of March, we have accumulated over 80,000 Business ExtrAA points with American Airlines that can be redeemed to reduce travel costs to the GS/OAS. Corporate Agreements with Airlines: The savings from corporate agreements reached with other airlines during the first quarter of 2010 were as follows: COPA = over USD 5,000 TACA = USD 4,700 Avianca = USD 4,800 Hotels: Preferred Corporate Agreements, which will reduce lodging costs, were reached with the three hotels most used by the SG/OAS for seminars and conferences organized at headquarters. Theses hotels are: The State Plaza, The Lombardi and the Saint Gregory. Several areas have decided not to pay complete per diem to invited guests, but to pay the hotels directly, which will result in lower expenditures in comparison to paying the corresponding per diems. The exchange of direct payments to hotels versus per diem payments generates constant savings to different areas of the Organization. Based on information about guests using the OAS corporate discount and comparing them to the rates paid by the general public, estimated savings of over USD 5,000 have been realized for the first quarter alone. General Assembly: OPS has negotiated a travel discounts ranging from % with three leading airlines for specific travel to the annual General Assembly scheduled this year in Lima, Peru. These discounts on market rates are also applicable to staff members traveling to the General Assembly, as well as to the Missions attendees. This is the first time that the SG/OAS is able to extend the discount obtained to GA participants who are not staff members. It is estimated that these negotiated terms will translate into significant savings (for the OAS, the host nation and the participating missions). Other Activities Approximately 20 users were certified in the OASES purchasing module. The Office of Procurement Services continued to provide support to Electoral Observation Missions. OPS staff assisted in the undertaking (and even travelled to the location) to ensure continuity and smooth operations. Some of the more significant ones during this quarter were in Bolivia, Colombia, Costa Rica and Dominica. At the same time, OPS was responsible for responding to the recommendations from the Board of External Auditors, and for providing all relevant information for the various internal and external audits from the OIG and Ernst and Young. OFFICE OF GENERAL SERVICES (OGS) Urgent Repairs The urgent structural repairs and energy projects approved by the CAAP on August 20, 2009 are underway. The Office of General Services has worked closely with the Office of Procurement and the Department of Legal Services in order to ensure full compliance with OAS General Standards and procurement rules and regulations, as well as to address insurance and liability issues. The implementation of these projects is also being coordinated with the Office of Protocol in order to minimize disruptions to events that take place in the MNB. The firm CCSI was awarded the Multiproject Management Services Contract to provide technical support to the GS/OAS in the implementation of these urgent structural repairs and energy projects. This contract was signed on December 15, Since that time, SAF/OGS has been working with CCSI to review proposals for the individual activities, including design, scheduling and construction supervision. The first project initiated was the structural repairs to the threelevel garage in the General Secretariat Building. As a result of a bidding process, the ex 21