FC 108/3
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FINANCE COMMITTEE
Hundred and Eighth Session |
Rome, 27 September – 1 October 2004 |
AFF Abolished Posts and Effect on Internal Controls |
EXECUTIVE SUMMARY
1. In May 2004, at its Hundred and Seventh Session, during discussion of document FC 107/14 Adjustments to the Programme of Work and Budget 2004-05 in connection with Finance Division (AFF), the Finance Committee expressed “concern that the abolition of the five general service posts in AFF could put the Organization’s internal control at risk and requested that these posts be restored as the first call against additional efficiency savings if and when they became available” (Cf. Report of the Hundred and Seventh Session of the Finance Committee, 10-18 May 2004, Document CL 127/14).
2. This document is prepared at the Committee’s request to provide an update on the status of the posts, information on the types of posts abolished and the work performed, and comments on the effect of the abolition of the posts on the internal controls over the processing of financial transactions.
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I. DESCRIPTION OF THE ABOLISHED POSTS AND THEIR CURRENT STATUS
3. The five general service posts which were abolished were four Accounting Clerks and a Clerk Typist. The work that clerical staff within AFF are required to perform includes the processing of transactions, the reconciliation of accounts, performing validation controls on data entered in the accounting systems at field locations and dealing with queries from suppliers, consultants and staff members. A clerk-typist performs clerical duties in addition to providing secretarial support. The abolished posts have not been restored at the time of preparation of this document.
II. EFFECT OF ABOLITION OF POSTS ON INTERNAL CONTROLS
4. The abolition of the clerical posts has meant that, overall, within AFF there has been an increase in the backlogs in the following areas:
- processing of payments and ensuring that the correct accounts are charged;
- processing of project account returns and ensuring allocation of expenditures to appropriate project accounts;
- follow up and resolution of queries from users of the Field Accounting System (FAS);
- follow up and resolution of payment related enquiries from suppliers, consultants and staff members;
- processing of staff related transactions including terminal emoluments and other entitlement related payments and charging the relevant accounts.
5. The further impact on internal control of the abolitions is that a higher volume of transactions is dealt with by remaining staff, which increases the risk of errors and may prevent timely detection of errors. AFF confirms that the risks which were outlined in paragraph 115 of document FC 107/14 “...reduced staffing will not only cause delays in response times and generate backlogs, but the increased work volumes for the remaining staff may heighten the risk of errors and could weaken internal control and impact financial management” remain. A further consequence of the abolition of the posts is that it has not been possible to implement any new measures to strengthen internal controls, an ongoing and expected function of AFF, due to the fact that professional staff have had to take a more active role in the day to day processing of transactions and the follow up of queries. Furthermore, it can only be expected that a continued increase in the backlog of transactions and queries will mean a decreased level of service from AFF to stakeholders both internal and external to the Organization.