EXECUTIVE SUMMARY INTERNAL AUDIT REPORT IOM BANGUI CF August 2017

Transcription

1 EXECUTIVE SUMMARY INTERNAL AUDIT REPORT IOM BANGUI CF August 2017 Issued by the Office f the Inspectr General Page 1 f 14

2 Reprt n the Audit f IOM Bangui Executive Summary Audit File N. CF The IOM Office f the Inspectr General (OIG) cnducted an internal audit f the IOM Bangui, Central African Republic (the Cuntry Office ) frm 12 t 25 August The internal audit aimed t assess adherence t financial and administrative prcedures in cnfrmity with IOM s regulatins and rules and the implementatin f and cmpliance with its internal cntrl system. Specifically, the audit assessed the risk expsure and risk management f the Cuntry Office s activities, in rder t ensure these are well understd and cntrlled by the lcal management and staff. Selected samples frm the fllwing areas were reviewed: a. Management and Administratin b. Persnnel c. Finance and Accunting d. Prcurement and Lgistics e. Cntracting f. Infrmatin and Technlgy g. Prgramme and Operatins The audit cvered the activities f the Cuntry Office frm 1 August 2015 t 31 August The Cuntry Office recrded the fllwing expenses based n IOM financial recrds: August 2015 t July USD 8,750,354 representing 0.56% and 8.73% f IOM Ttal and Central and West African Regin, respectively. August 2016 t July USD 13,080,616 representing 0.81% and 13.16% f IOM Ttal and Central and West African Regin, respectively. The last internal audit f the Cuntry Office was February Because f the cncept f selective testing f data and inherent limitatin f the internal audit wrk, there is n guarantee that all matters f significance t IOM will be discvered by the internal audit. It is the respnsibility f lcal management f the Cuntry Office t establish and implement internal cntrl systems t assure the achievement f IOM s bjectives in peratinal effectiveness and efficiency, reliable financial reprting and cmpliance with relevant laws, regulatins and plicies. It is als the respnsibility f lcal management t determine whether the areas the internal audit cvered and the extent f verificatin r ther checking included are adequate fr lcal management s purpses. Had additinal prcedures been perfrmed, ther matters might have cme t internal audit attentin that wuld have been reprted. The internal audit was cnducted in accrdance with the Charter f the Office f the Inspectr General and in general cnfrmance with the Internatinal Standards fr the Prfessinal Practice f Internal Auditing. Page 2 f 14

3 Overall audit rating OIG assessed the Office as largely ineffective which means that significant cntrl gaps exist. Either cntrls d nt treat rt causes r they d nt perate at all effectively. This rating was mainly due t weaknesses nted in the fllwing areas: 1. Staff Cntracts 2. Delegatin f Authrity 3. Capacity training fr natinal staff 4. Security 5. Standard perating prcedures 6. Human resurces administratin 7. Selectin and emplyment f cnsultants 8. Emplyee persnal files 9. Unified Staff Regulatins and Rules 10. Financial mnitring 11. Vendr accunt maintenance 12. Cash payments 13. Prcurement 14. Fleet management 15. Warehuse management 16. Payments t implementing partners 17. IT backup prcedures 18. Prgramme management Key recmmendatins: Ttal = 26; Very High Pririty = 1; High Pririty = 21; Medium Pririty = 4 Very High Pririty Recmmendatin Prmpt actin is required within 1 mnth t ensure that prcesses will nt be critically disrupted and IOM will nt be critically adversely affected in its ability t achieve its strategic and peratinal bjectives. There is ne (1) Very High Pririty recmmendatin fr Persnnel as fllws: 1. All cntracts shuld be regularized t cnfrm with IOM staff cntract templates. High Pririty Recmmendatins Prmpt actin is required within three mnths t ensure that IOM will nt be adversely affected in its ability t achieve its strategic and peratinal bjectives. There are 21 High Pririty recmmendatins as fllws: 1. Fur (4) recmmendatins fr Management and Administratin and Persnnel, five (5) recmmendatins fr Prcurement and Lgistics, ne (1) recmmendatin each fr Cntracting and Infrmatin Technlgy, and three (3) recmmendatins fr Prgramme and Operatins. These recmmendatins aim t ensure that the assets f IOM are prperly safeguarded, staff welfare is secured and that IOM peratins are effective and efficient. Page 3 f 14

4 Develp and dcument separate delegatin f authrity matrices fr the Cuntry Office and sub-ffices t be disseminated t all staff. Update rganizatinal chart. Establish a mre systematic training plan and apprach fr bth natinal and internatinal staff. Secure funding fr the psitin f Field Security Officer fr all future prject budget prpsals. Full cmpliance with IOM security plicies, regulatins and requirements. Create a prper regulatry framewrk by develping internal instructins t achieve a higher degree f cmpliance with IOM s Regulatins and Rules. Make every effrt t g live with the autmated HR system and crdinate with Head ffice fr a subject matter expert t assist them. Regularize all existing cnsultancy cntracts and fully cmply with IOM guidelines n selectin and emplyment f cnsultants. Ensure that all persnnel files cntain all the required dcuments. Infrm all staff abut the new United staff regulatins and rules (USRR) and have the staff sign a cpy f the USRR t be put in their files. The internal cntrl prcedures f the Prcurement Department shuld be strengthened in rder t prevent pssible future mismanagement. Suggest t recruit an internatinal IOM staff instead f a secndee fr this psitin. As such, he/she culd be held respnsible fr the prper functining f the Prcurement unit. Perfrm prper vendr assessment and gather all the required infrmatin as per IOM criteria. In additin, there shuld be regular vendr evaluatins. Develp and intrduce standard perating prcedures fr the use f vehicles allwing fr a prper versight f the fleet and accuntability f drivers and ther staff directly cncerned. Intrduce immediately standard perating prcedures fr warehuse management including inventry and stck cntrl. Any cntractual payments shuld be in line with the cntract s payment schedule. Any deviatins wuld require prir amendment f the cntract. A secnd air cnditiner shuld be installed in the server rm as backup. In additin, the Cuntry ffice shuld strictly fllw IOM Standards and Guidelines n backup prcedures. The Cuntry Office shuld revise its prjectizatin f Staff and Office csts using updated Prject planning tls. In additin, the Cuntry Office shuld implement prject-specific budget mnitring prcedures. 2. Three (3) recmmendatins n Finance and Accunting are directed twards the enhancement f the reliability and integrity f the Cuntry Office s financial and peratinal infrmatin. Imprve financial cntrl prcedures and take necessary steps t ensure timely psting f transactins and reprting is achieved ver the next three mnths. Cnsider pening different cashbks fr the main sub-ffices and establish a system wherein an peratinal advance is nly disbursed when the previus advance has been liquidated. Issue cheques whenever pssible in rder t limit large petty cash payments. Page 4 f 14

5 Except in the area f Cntracting, Infrmatin Technlgy and Prgramme and Operatins, there remains fur (4) Medium pririty recmmendatins cnsisting f ne (1) recmmendatin each in Management and Administratin, Persnnel, Finance and Accunting, and Prcurement and Lgistics, which need t be addressed by the Cuntry Office within ne year t ensure that such weaknesses in cntrls will nt mderately affect the Cuntry Office s ability t achieve its entity r prcess bjectives. There are n lw pririty recmmendatins fr the Cuntry Office. Management cmments and actin plans Except fr tw (2) high pririty recmmendatins and ne (1) medium that were partially accepted recmmendatin, the remaining 23 recmmendatins were accepted. Management is in the prcess f implementatin. Cmments and/r additinal infrmatin prvided have been incrprated in the reprt, where apprpriate. This reprt is intended slely fr infrmatin and shuld nt be used fr any ther purpse. Page 5 f 14

6 Internatinal Organizatin fr Migratin Office f the Inspectr General I. Abut the Cuntry Office The main ffice is lcated in Bangui, Central African Republic. As f July 2017, the Cuntry Office has 62 persnnel categrized int: 8 fficials, 44 staff and 10 nn-staff. The Cuntry Office recrded the fllwing expenses based n IOM financial recrds fr the fllwing perids: August 2015 t July USD 8,750,354 representing 0.56% and 8.73% f IOM Ttal and Central and West African Regin, respectively. August 2016 t July USD 13,080,616 representing 0.81% and 13.16% f IOM Ttal and Central and West African Regin, respectively. The Cuntry Office has a ttal prtfli f 33 prjects and ttal budget f USD 23,712,638. The tp tw prjects by type: Eleven prjects fr Cmmunity Stabilizatin amunting t USD 21,465, r % f the budget Six prjects n Displaced Persns amunting t USD 2,019,124 r 8.51 % f the budget. The last audit was in February 2015 wherein the verall rating was Partially Effective 1. Implementatin status f the previus OIG audit recmmendatins: Audit Reprt N.CF IOM Bangui; Ttal recmmendatins: 23; Implemented: All 23 accepted recmmendatins had been implemented. II. Scpe f the Audit 1. Objective f the Audit The internal audit was cnducted in accrdance with the Charter f the Office f the Inspectr General and in general cnfrmance with the Internatinal Standards fr the Prfessinal Practice f Internal Auditing. The fcus f the audit was adherence t financial and administrative prcedures in cnfrmity with IOM s rules and regulatins and the implementatin f and cmpliance with its internal cntrl system. 2. Scpe and Methdlgy In cmpliance with Internal Audit standards, attentin was paid t the assessment f risk expsure and the risk management f the Cuntry Office activities in rder t ensure that these are well understd and cntrlled by the lcal management and staff. Recmmendatins made during the internal audit fieldwrk and in the reprt aim t equip 1 (Previus ratings used (up t 2014) is ut f the three ratings: Satisfactry, Partially Satisfactry, and Unsatisfactry). Page 6 f 14

7 the lcal management and staff t review, evaluate and imprve their wn internal cntrl and risk management systems. III. Audit Cnclusins 1. Overall Audit Rating OIG assessed the Office as largely ineffective which means that significant cntrl gaps exist. Either cntrls d nt treat rt causes r they d nt perate at all effectively. IV. Key Findings and Very High and High Pririty Recmmendatins Very High Pririty Recmmendatins: 1. Staff Cntracts All f the Cuntry Office lcal emplyees have been issued special all-inclusive cntracts f duratins varying between ne t three mnths. These cntracts cntinue t get extended fr similar duratins reaching up t 17 cntract extensins in three years in many f the sampled files. Very High Pririty Recmmendatin: All cntracts shuld be regularized t cnfrm with IOM staff cntract templates. Management agreed with the recmmendatins and is implementing them. High Pririty Recmmendatins: 1. Delegatin f Authrity There is n Delegatin f authrity matrix in place in the Cuntry Office, nr in the sub-ffices, that is frmally endrsed and disseminated t staff. The rganizatinal chart is nt updated and reprting lines are nt clear. High Pririty Recmmendatin: Develp and dcument separate delegatin f authrity matrices fr the Cuntry Office and sub-ffices t be disseminated t all staff. Update rganizatinal chart. Management agreed with the recmmendatins and is implementing them. 2. Capacity training fr natinal staff Over the past years, the Cuntry Office has relied heavily n quick deplyment f clleagues frm ther regins n Shrt-Term Assignments. Hwever, there is a need t empwer the natinal staff thrugh their wn participatin in specialized training and mentring within the regin. Page 7 f 14

8 High Pririty Recmmendatin: Establish a mre systematic training plan and apprach fr bth natinal and internatinal staff. Management agreed with the recmmendatins and is implementing them. 3. Security issues Cnsidering the serius events that ccurred in 2015 and the still tense security situatin in the cuntry, cmpliance with security instructins has been challenging. In additin, the psitin f Field Security Officer is under cnsultancy cntract. High Pririty Recmmendatins: Secure funding fr the psitin f Field Security Officer fr all future prject budget prpsals. Full cmpliance with IOM security plicies, regulatins and requirements. Management agreed with the recmmendatins and is implementing them. 4. Standard Operating Prcedures The Cuntry Office des nt have any lcal standard perating prcedures r instructins in frce which cnsiderably weakens the internal cntrls and cmprmises the cmpliance with the institutinal guidance. High Pririty Recmmendatin: Create a prper regulatry framewrk by develping internal instructins t achieve a higher degree f cmpliance with IOM s Regulatins and Rules. Management agreed with the recmmendatins and is implementing them. 5. Human resurces administratin The Cuntry Office is ne f the very few cuntry ffices that has nt yet gne live with the autmated Human resurce (HR) system despite the cmpletin f training n said system. This cnditin seriusly affects verall human resurces management, including payrll and leave administratin. High Pririty Recmmendatin: Make every effrt t g live with the autmated HR system and crdinate with Head ffice fr a subject matter expert t assist them. Management agreed with the recmmendatins and is implementing them. 6. Selectin and emplyment f cnsultants Page 8 f 14

9 The Cuntry Office has ver 130 active cnsultant cntracts fr psitins with varying titles. Based n the sampled files, these cntracts did nt cmply with IOM generic cnsultancy templates. High Pririty Recmmendatin: Regularize all existing cnsultancy cntracts and fully cmply with IOM guidelines n selectin and emplyment f cnsultants. Management agreed with the recmmendatins and is implementing them. 7. Emplyee persnnel files Many persnnel files were missing with basic mandatry dcumentatin. In additin, typgraphical errrs and incnsistencies were identified. High Pririty Recmmendatin: Ensure that all persnnel files cntain all the required dcuments Management agreed with the recmmendatins and is implementing them. 8. United Staff regulatins and rules The United staff regulatins and rules (USRR) were intrduced in the Cuntry Office effective 1 September 2016, hwever, such regulatins and rules were nt implemented by the Cuntry Office as intended. High Pririty Recmmendatin: Infrm all staff abut the new USRR and have the staff sign a cpy f the USRR t be put in their files. Management agreed with the recmmendatins and is implementing them. 9. Financial Mnitring The Cuntry Office has weak financial mnitring in place. There were nted delays in psting f transactins and reprting in the Checklist fr Missin accunts clsure. High Pririty Recmmendatin: Imprve financial cntrl prcedures and take necessary steps t ensure timely psting f transactins and reprting is achieved ver the next three mnths. Management agreed with the recmmendatins and is implementing them. 10. Vendr Accunt Maintenance The Cuntry Office has large utstanding pen peratinal advances, part f which is unrecverable due t staff members that were n lnger in service r supprting dcuments being lst in the ffice lting in Page 9 f 14

10 High Pririty Recmmendatin: Cnsider pening different cashbks fr the main sub-ffices and establish a system wherein an peratinal advance is nly disbursed when the previus advance has been liquidated. Management agreed with the recmmendatins and is implementing them. 11. Cash Payments The Cuntry Office has a special apprval t make cash payments valid until March 2018, which shuld be crdinated with Staff Security Unit (SSU). While cash transfers t the field are mstly dne by SSU by air, there is n standard prcedure fr cash handling and/r physically transferring funds. High Pririty Recmmendatin: Issue cheques whenever pssible in rder t limit large petty cash payments. Management agreed with the recmmendatins and is implementing them. 12. Prcurement There were sme Purchase Orders (POs) which remained lng-utstanding due t errrs, pending delivery and payments etc. In additin, there were invices received which lacked necessary details fr validatin, missing gds receipt dcuments and prcurement files lacking bid evaluatin dcumentatin. The Head f the prcurement department is a secndee frm anther agency and started with IOM in February 2017, fr nine mnths. N specific cntract is available in the ffice except the IOM-MSB agreement. There is n prper Vendr screening taking place. In additin, Vendrs are nt evaluated regularly. High Pririty Recmmendatins: The internal cntrl prcedures f the Prcurement Department shuld be strengthened in rder t prevent pssible future mismanagement. Suggest t recruit an internatinal IOM staff instead f a secndee fr this psitin. As such, he/she culd be held respnsible fr the prper functining f the Prcurement unit. Perfrm prper vendr assessment and gather all the required infrmatin as per IOM criteria. In additin, there shuld be regular vendr evaluatins. Management agreed with the recmmendatins and is implementing them. 13. Fleet Management There are n standard perating prcedures n usage f vehicles which clearly defines the duties and respnsibilities f the drivers, prcedures fr inspectin and reprts related t the vehicles. Page 10 f 14

11 High Pririty Recmmendatin: Develp and intrduce standard perating prcedures fr the use f vehicles allwing fr a prper versight f the fleet and accuntability f drivers and ther staff directly cncerned. Management agreed with the recmmendatins and is implementing them. 14. Warehuse Management The Cuntry Office has an n-site warehuse which stres mainly nn-fd items. Hwever, the inventry is practically nn-existent and there was pr warehuse stck cntrl. High Pririty Recmmendatin: Intrduce immediately standard perating prcedures fr warehuse management including inventry and stck cntrl. Management agreed with the recmmendatins and is implementing them. 15. Implementing Partners There is a lack f clarity and missing quantifiable utputs and missing deadlines in the Agreements with Implementing Partners. Payments t Implementing Partners are nt linked t deliverables and payment schedules. High Pririty Recmmendatin: Any cntractual payments shuld be in line with the cntract s payment schedule. Any deviatins wuld require prir amendment f the cntract. Management agreed with the recmmendatins and is implementing them. 16. Infrmatin Technlgy backup prcedures The IT server rm in the Cuntry Office has nly ne air cnditiner. Als, there is n ff-site IT backup strage in place. High Pririty Recmmendatin. A secnd air cnditiner shuld be installed in the server rm as backup. In additin, the Cuntry ffice shuld strictly fllw IOM Standards and Guidelines n backup prcedures. Management agreed with the recmmendatins and is implementing them. 17. Prgram Management There is n planning tl in place t frecast prject-related spending. Prject mnitring spreadsheets exists but these had nt been updated since March A Page 11 f 14

12 review f the prject mnitring reprts als revealed underspending in this area, which cntributes t the lw burn rate. High Pririty Recmmendatin: The Cuntry Office shuld revise its prjectizatin f Staff and Office csts using updated Prject planning tls. In additin, the Cuntry Office shuld implement prject-specific budget mnitring prcedures. Management agreed with the recmmendatins and is implementing them. Page 12 f 14

13 ANNEXES Definitins The verall adequacy f the internal cntrls, gvernance and management prcesses, based n the number f audit findings and their risk levels: Descriptr Fully effective Substantially effective Partially effective Largely ineffective Nne r ttally ineffective Guide Nthing mre t be dne except review and mnitr the existing cntrls. Cntrls are well designed fr the risk, address the rt causes and Management believes that they are effective and reliable at all times. Mst cntrls are designed crrectly and are in place and effective. Sme mre wrk t be dne t imprve perating effectiveness r Management has dubts abut peratinal effectiveness and reliability. While the design f cntrls may be largely crrect in that they treat mst f the rt causes f the risk, they are nt currently very effective. Or, sme f the cntrls d nt seem crrectly designed in that they d nt treat rt causes, thse that are crrectly designed are perating effectively. Significant cntrl gaps. Either cntrls d nt treat rt causes r they d nt perate at all effectively. Virtually n credible cntrls. Management has n cnfidence that any degree f cntrl is being achieved due t pr cntrl design and/r very limited peratinal effectiveness. Page 13 f 14

14 Audit Recmmendatins Pririties The fllwing internal audit rating based n IOM Risk Management framewrk has been slightly changed t crystalize the priritizatin f internal audit findings accrding t their relative significance and impact t the prcess: Rating Definitin Suggested actin Suggested timeframe Very High Issue represents a cntrl weakness which culd cause critical disruptin f the prcess r critical adverse effect n the ability t achieve entity r prcess bjectives. Where cntrl effectiveness is nt as high as fully effective, take actin t reduce residual risk t high r belw. Shuld be addressed in the shrt term, nrmally within 1 mnth. High Issue represents a cntrl weakness which culd have majr adverse effect n the ability t achieve entity r prcess bjectives. Plan t deal with in keeping with the annual plan. Shuld be addressed in the medium term, nrmally within 3 mnths. Medium Issue represents a cntrl weakness which culd have mderate adverse effect n the ability t achieve entity r prcess bjectives. Plan in keeping with all ther pririties. Shuld be addressed nrmally within 1 year. Lw Issue represents a minr cntrl weakness, with minimal but reprtable impact n the ability t achieve entity r prcess bjective. Attend t when there is an pprtunity t. Discussed directly with management and actins t be initiated as part f management s nging cntrl. Page 14 f 14