Rome, 17 - 22 September 2001
Review of Working Practices regarding Appointment of the External Auditor
1. At its ninety-sixth Session, following discussion of working methods, Finance Committee members requested that the agenda for the ninety-seventh Session include an item covering further refinement of procedures to be applied when next selecting and appointing the External Auditor. Whilst it was recognised that the next appointment of an External Auditor was not likely to take place for some time as the Committee had just completed the selection process and proposed appointment of the new Auditor for the next two biennia, Members felt that further debate on this topic would be helpful while the matter was still fresh in their minds.
II. Selection Procedures
2. The selection process followed in 2001 by the Secretariat and Finance Committee to appoint the External Auditor had been more structured than in the past, with clear guidelines being issued to Member Nations regarding how bids should be presented. This had resulted in good quality bids that were reasonably uniform in format and content, thus facilitating the review and evaluation process. A similar process and approach should be used in future, adjusted as necessary to meet the requirements.
3. In spite of the more structured approach adopted in 2001, Members felt that there was scope for improvement in certain areas of the process and that these should be discussed with a view to strengthening procedures. Matters which should be considered by the Finance Committee with a view to proposing new procedures include:
- the amount of time to be dedicated by Members to the process of selecting the External Auditor (including presentations and discussion of bids by Members).
Of relevance here is the question of whether Members should review all bids and presentations or whether only a shortlist of bidders should be presented to Members. One option would be to adapt the current procedure to make it more similar to that followed by WFP. In this case, the Chairman or Chairman and Vice-Chairman of the Finance Committee could work together with the Secretariat to review bids and arrive at a shortlist of bids to be presented to the Finance Committee for review and selection. This would have the benefit of having certain Members of the Finance Committee involved at all stages of the process and reducing the workload of the full Committee during the Session(s) at which the selection process is undertaken. In particular, it would only be necessary to invite shortlisted bidders to present to the Finance Committee;
- whether the selection process should be spread over two Sessions or limited to one Session. To some extent this is related to the previous point in that the time pressure to complete the selection process in a satisfactory manner during a single session is largely dependent upon how many presentations are made by Auditors-General to the Finance Committee. A second consideration in this regard is whether it is more efficient to deal with the whole selection process in a single session or whether similar efficiency can be achieved by splitting the process over two sessions;
- whether in addition to the schedules prepared by the Secretariat summarising the content of bids received, copies of the original proposals submitted by bidders should be provided to all members for review rather than simply being available for review during the Session. In this regard, the Secretariat could request that original proposals be submitted in multiple copies in order that each Member receives a copy of all original proposals;
- whether members should formalise the scoring process during the evaluation and, if so, in what way;
- whether it is necessary to make any statement in relation to the practice of lobbying;
- whether a formal procedure should be introduced whereby in the case in which proposals are received from countries whose representatives happen to be Members of the Finance Committee, those Members should absent themselves from the evaluation process.
4. The following related documents, which may assist Members in discussing the above matters, are attached:
- FC 96/14 Appointment of the External Auditor
- FC 95/11 Arrangements for the Selection and Procedures for Appointment of the External Auditor
5. Following discussion of the above, the Committee should provide additional guidance, as necessary, to improve the procedures to be followed during selection and appointment of the external auditor.