OIOS Role Clarified and Independence Strengthened, but Some Funding and Oversight Issues Remain

The UN General Assembly is addressing some previously identified  impediments to OIOS’s ability to provide independent oversight, but  certain UN funding arrangements and oversight relationships continue to  limit the independence and authority of OIOS. An  independent review of UN oversight commissioned by the Secretary- General noted, however, that the arrangements used to fund OIOS’s  audits of those separately administered entities that choose to utilize its  audit services do not meet Institute of Internal Auditors (IIA) standards for  independence. OIOS also reported that it is not able to issue  consolidated audit reports for joint UN activities that included entities over  which OIOS does not have oversight authority, even when directed to do  so by the General Assembly. In January 2003, the  General Assembly adopted a resolution that reaffirmed the prerogatives  of separately administered funds and programs to decide their own  oversight mechanisms and their relationship with OIOS. In May 2011, in  response to her request, the UN’s Office of Legal Affairs issued a  memorandum to the Under-Secretary-General stating that the General  Assembly, through the 2003 resolution, clarified OIOS’s jurisdiction over  the funds and programs, which suggested that the involvement of OIOS  in their internal oversight functions is contingent on the consent of the  funds and programs. The UN General Assembly has supported OIOS’s independence in audits  of organizations within the Secretariat and peacekeeping missions by  creating the Independent Audit Advisory Committee (IAAC), which  reviews OIOS’s audit plans and budget requests, and compares them to  the Secretary-General’s proposed budgets for oversight to ensure that  they reflect the resources OIOS needs to audit identified risks. Staffing Shortages Have Hindered OIOS Performance, but Efforts Are Under Way to Address Them

High vacancy rates for authorized positions, for both rank-and-file and  senior staff, have historically hindered OIOS’s ability to provide sufficient  oversight. OIOS has had staffing shortages in its three divisions, and the UN’s  external auditors (the Board of Auditors) found that these shortages  hampered the Internal Audit Division’s completion of its work plans. The  UN Secretariat and OIOS have prioritized filling vacant positions,  particularly since the start of the new Under-Secretary-General’s term in  2010. The IAAC also expressed concern that vacancies at the senior  management level would make it difficult for OIOS to accomplish its work,  but OIOS has recently filled the two director-level positions that had been  vacant for more than a year. Further, the Under-Secretary-General has  begun an initiative within OIOS to strengthen OIOS’s management and  coordination; this involves a comprehensive review of the office’s  responsibilities and capabilities, and may result in requests for additional  management resources. As of the  end of July 2011, OIOS data indicated that 19 percent of its approved  staff positions were unfilled and that, as shown in figure 6, the vacancy  rates were highest in the Internal Audit and Investigations Divisions, with  the highest rate (30 percent) for investigations of peacekeeping activities. The UN and OIOS have made reducing staffing shortages a priority. The UN General Assembly has taken steps to help strengthen OIOS— most notably, by creating the IAAC to review OIOS’s budgets and work  plans for audits of entities within the Secretariat and peacekeeping  missions to ensure that OIOS resources are sufficient to address risks in  the UN. Recommendation for Executive Action

We recommend that the Secretary of State and the Permanent  Representative of the United States to the United Nations work with the  General Assembly and member states to address remaining impediments  to OIOS’s ability to provide independent oversight resulting from its  relationships with certain UN funds and programs and other clients. Appendix I: Objectives, Scope, and Methodology

Our objectives were to examine actions being taken to address (1)  impediments to OIOS’s ability to provide independent oversight and (2)  staffing issues that may have hindered its performance.
Why GAO Did This Study

The United States has long advocated for strong oversight of the United Nations (UN). In 2005, GAO raised long-standing concerns that the ability of the UN's Office of Internal Oversight Services (OIOS) to carry out its mandate was constrained in scope and authority, and in 2006, GAO found that funding arrangements impeded OIOS's ability to operate independently. The U.S. Mission to the UN also expressed concern that OIOS's independence is limited in that it cannot make final hiring decisions for senior staff. In response to such concerns, the UN General Assembly in 2006 created an Independent Audit Advisory Committee (IAAC). GAO was asked to examine actions taken to address (1) impediments to OIOS's ability to provide independent oversight and (2) staffing issues that may have hindered its performance. GAO assessed OIOS's independence based on internationally recognized auditing standards, analyzed OIOS and other UN documents and data, and interviewed agency officials.

What GAO Found

The UN has taken worthwhile steps to enhance OIOS's independence, but certain UN funding and oversight arrangements continue to impede OIOS's ability to provide independent oversight. The General Assembly has supported OIOS's independence by creating the IAAC, which reviews OIOS's budgets and work plans for audits of the Secretariat and peacekeeping missions, and by recommending that OIOS base its planning and budget requests on risk in accordance with standards of the Institute of Internal Auditors (IIA). The General Assembly also clarified the role OIOS plays in internal oversight of funds and programs by adopting a resolution that reaffirmed the prerogatives of separately administered funds and programs to decide their own oversight mechanisms and relationship with OIOS. However, an independent review found that the arrangements for funding OIOS audits of those entities that choose to utilize its audit services do not meet IIA standards for independence. OIOS also remains constrained in its ability to issue consolidated audit reports for joint UN activities that include entities over which it does not have oversight authority, even when directed to do so by the General Assembly. High vacancy rates for authorized positions have hindered OIOS's ability to provide sufficient oversight, but the UN and OIOS are taking steps to address this issue. As of July 2011, 19 percent of OIOS staff positions were unfilled, and 30 percent were vacant for investigations of peacekeeping activities--the most challenging positions to fill. The UN's external auditor found that OIOS's staffing shortages hampered its Internal Audit Division's completion of its work plans. The UN and OIOS have made filling vacant positions a priority, and OIOS has hired 82 staff members since the start of the term of the new Under-Secretary-General for Internal Oversight Services in September 2010. The IAAC also expressed concern that vacancies at the senior management level would make it difficult for OIOS to accomplish its work. In August 2011, OIOS filled two director-level positions that had been vacant for more than a year. Further, the Under-Secretary-General has begun an initiative to strengthen OIOS's management and coordination and has requested an additional staff position for her front office. The Secretary-General has concurred with this request.

What GAO Recommends

GAO recommends that the Secretary of State and the U.S. Permanent Representative to the UN work with the General Assembly and member states to address remaining impediments to OIOS's ability to provide independent oversight resulting from its relationships with certain UN funds and programs and other clients. State and OIOS generally concurred with GAO's findings and recommendation. However, State misinterpreted the report's discussion of OIOS's oversight authority. GAO added language to the report to clarify this discussion.