Remarks by Andrew Haviland, before the UNDP/UNFPA Executive Board on the UNDP Board of Auditors Report for the 2006-2007 Biennium

U.S. Mission to the United Nations 
Andrew Haviland
New York, NY
January 21, 2009


As we indicated in our statement at the opening session of the Board meeting, we are pleased to see that the Board of Auditors (BOA) noted some important efforts by Management in addressing the issues identified by the Auditors in their last report. We encourage Management to build on this to continue to address weaknesses identified by the Board of Auditors.
While we have discussed many areas of concern with other members in formulating decision language for the Board to consider, we would like to highlight the following for particular attention:

-- Results-Based Management
The Boa found some serious weaknesses in how program indicators are constructed and measured. It recommends that UNDP review all indicators of achievement reflected in the results management database and ensure that they are specific, measurable, attainable, relevant and time-bound.

-- Treasury Management (pp. 61-66, paras 197-224)
BOA noted that UNDP’s internal audit office, the Office of Audit and Investigations performed an audit of the Treasury Division of UNDP covering the period from 1 July 2004 to 30 June 2007. An “unsatisfactory” rating was assigned to the Treasury Division based on the audit, due in part to UNDP's failure to complete monthly bank account reconciliations in 2006-2007. The BoA had the same finding for 2004-2005. Monthly reconciliation of bank statements is an essential internal control without which error and fraud could go undetected.

-- Audit Coverage of Headquarters
The BoA also found limited audit coverage of Headquarter functions by the Office of Audit and Investigation. This has been a persistent issue. We urge Management and the Office of Audit and Investigation to develop an audit plan to increase Headquarters audit coverage as soon as possible.

In closing, we would like to thank the member of the BOA for joining in this discussion and we join others in encouraging closer interaction between the BOA and the Executive Board. To that end, we would welcome the BOA member's insights on steps UNDP might take to further strengthen the procurement function, particularly a system to reduce risks surrounding the persistent problem of split procurement orders done to avoid mandatory reviews.


PRN: 2009/028