FC 109/9

FINANCE COMMITTEE

Attached for the information of the Members of the Finance Committee is the 2004 Annual Activity Report of the Office of the Inspector-General.

Office of the Inspector-General

Annual Activity Report

2004

Highlights

Highlights of the work and achievements of the Office of the Inspector-General (AUD) during 2004 include the following:

• During the year, AUD issued 312 recommendations as a result of 60 internal audits and investigations conducted worldwide covering a wide range of areas. Recommendations were made to improve aspects of financial management, budgeting and procurement, establish and enhance certain policies and guidelines in the human resources, IT and security areas, improve accountability, and strengthen and enforce internal controls. Almost half of the 2004 recommendations have been implemented and nearly 20% are in progress.
• AUD also contributed to the overall process of management control by (i) providing senior management and the functions and programmes audited with analyses, counsel and information on the activities reviewed and (ii) participating in a number of important committees.
• AUD provides secretariat functions to the Audit Committee, which advises the Director-General and the Inspector-General on audit planning and reporting as well as other important substantive and technical areas.
• During 2004, AUD acted as the Organization’s focal point for liaison with the Independent Inquiry Committee for the Oil-for-Food Programme, established by the UN Secretary General to investigate allegations of misconduct by UN staff as well as the UN’s administration of the Programme. As at mid-February 2005, no concrete results related to FAO had yet been made available.

Table of Contents

I. Introduction

A. GENERAL

1. This is the ninth annual activity report of the Office of the Inspector-General (AUD). The first was developed in 1995 and was intended to provide the Director-General with a summary of the work carried out by AUD. Since 1996, the Director-General has made the annual reports available to the Finance Committee to enable its members to review the nature of the work carried out by AUD. This practice has since become a standing item on the agenda of the May sessions. The report is provided to the Secretary of the Committee for translation and distribution at the same time as it is presented to the Director-General. Since the establishment of the FAO Audit Committee in 2003, the report is also made available to Committee members at its first meeting of the year.

2. The annual report has generated discussion in the FAO Audit Committee and the Finance Committee. Both Committees have made certain suggestions for improvement in the presentation, which AUD has accommodated wherever feasible. The 2004 report has been enhanced to provide additional information on the results of audits and investigations.

B. MANDATE AND MISSION

3. AUD has responsibility for internal audit, inspection and investigation of misconduct and other irregular activities. AUD is also responsible for monitoring and evaluating the adequacy and effectiveness of the Organization's system of internal control, financial management and use of assets.

4. Together with the unit dealing with evaluation, PBEE, AUD provides comprehensive internal oversight coverage of the Organization. The External Auditor, with whom AUD cooperates, provides complementary external oversight.

5. AUD provides the Director-General and the functions and programmes audited with analyses, recommendations, counsel and information concerning the activities reviewed. In addition, it places emphasis on identifying possible means of improving the efficiency and economy of operations and the effective use of resources while promoting control at reasonable cost.

C. STAFFING AND BUDGET

6. Attachment D to this report depicts AUD’s staffing situation, with some demographic information, as at 31 December 2004. The regional auditor post in Cairo was re-advertised as replies received to the first vacancy announcement did not permit preparation of a short list of qualified candidates. The selected candidate is expected to be appointed in early 2005. The regional auditor post in Santiago was advertised and recruitment is also nearing completion. The two P-5 posts at headquarters were advertised and submissions have been made to the Professional Staff Selection Committee.

7. AUD hopes that it will soon approach full strength with a well-balanced team of highly-qualified and experienced staff both at the professional and general service levels. However, 2004 was a difficult year with significant staff vacancies and unexpected delays in filling those posts. Nonetheless, AUD compensated with the use of the partnership programme, short-term consultancies and work realignments where appropriate.

8. The final 2004 allotment totaled US$ 2.5 million, compared with $ 2.2 million for 2003. AUD operated within its allotment and ended the year with a small surplus, due mainly to savings from four vacant posts, offset by the cost of consultants. AUD lost a post in the budget cuts at the beginning of 2004. Therefore, it held 21 posts in 2004 as opposed to 22 in 2003. In addition, the assignment of the dedicated auditor for the Oil-for-Food programme ended in mid-2004.

D. AUDIT RECOMMENDATIONS AND RESOLUTIONS

9. In 2004 AUD issued 60 reports containing 312 recommendations (2003 – 68 reports with 562 recommendations) to improve efficiency and effectiveness, enhance internal controls and raise fraud awareness. The decrease vis-à-vis 2003 is mainly attributable to four professional vacancies during most of 2004 – two Senior Auditor posts at headquarters and two Regional Auditor posts in Cairo and Santiago, respectively – as well as the abolition of one para-professional post due to the biennial budget cuts. Furthermore, improved focus of recommendations on key areas has resulted in fewer recommendations.

10. Attachment B lists the 2004 reports by organizational group and also compares the work done to the work planned for the year. Statistics on implementation status of recommendations are presented in Attachment C (i), while Attachment C (ii) presents 2004 recommendations statistics by process.

11. The matter of audit resolution is taken very seriously at FAO. The FAO Audit Committee systematically reviews the implementation status of recommendations and has made suggestions to increase implementation rates and to take action in specific cases of non- or delayed implementation.

12. Implementation of recommendations was also addressed at a Senior Management Meeting in 2004, when the Director-General gave specific instructions on the time given to divisions for review and comment on draft internal audit reports and for submission of detailed timetables for implementation in response to final reports. As a result, departments identified focal points to facilitate such management response. AUD follows up on the status of recommendations regularly, both at the prescribed time after the issue of each report, and, subsequently, at least twice a year.

13. Furthermore, the Directeur de Cabinet follows up on the most important audit recommendations. He accomplishes this task by informing individual programme managers of the Director-General’s instructions relating to implementation, setting specific dates for information on action taken or to be taken, and following up when necessary.

14. Enhanced follow-up in 2004 has resulted in improved implementation rates. At 31 December 2004, 48% of the recommendations made in 2004 had already been closed, as compared to 33% of the 2003 recommendations at the end of 2003. A similar improvement is seen for older recommendations. For example, by 31 December 2004, 83% of 2003’s recommendations had been closed, while only 37% of the 2002 recommendations had been closed by the end of 2003.

II. Matters of special importance

15. This section highlights key matters arising from the work of AUD, or impacting on its work.

A. FAO AUDIT COMMITTEE

16. The FAO Audit Committee, established in April 2003, met three times in 2004. The Committee provided advice to the Director-General and the Inspector-General on planning and reporting on the work of AUD. Furthermore, it addressed the rate of implementation of recommendations and suggested ways to improve audit resolution.

17. The FAO Audit Committee is informed of all internal audit reports issued and chooses some of these reports for review. In particular, in 2004 the Committee focused on Iraq, with emphasis on audit of procurement and the work of the Independent Inquiry Committee into the Oil-for-Food Programme. The Committee also stressed the importance of AUD’s recommendations on disaster recovery and letters of agreement and followed implementation closely

B. DISCRETIONARY REPORTS

18. The Charter for the Office of the Inspector-General, included in the Administrative Manual of the Organization, provides an opportunity, at the discretion of the Inspector-General, to submit any specific report to the Finance Committee where the Inspector-General deems that senior management has failed to deal appropriately with any issues raised. Again this year no such situation prevailed.

C. INTERNAL CONTROLS OVER THE USE OF THE ORGANIZATION’S RESOURCES

19. AUD’s report “Follow-up to the review of internal controls over the use of the Organization’s resources”, issued in 2003, stimulated considerable action during 2004. In particular, (i) AF has issued a Policy on Fraud; (ii) LEG has prepared a position paper on whether civil or criminal actions should be instituted before national courts against staff members accused of fraud and related malpractices; (iii) AF is conducting a comprehensive review of the FAO Administrative Manual; and (iv) OCD has issued several important guidelines to enhance office management and raise fraud awareness in the decentralized offices. In addition, OCD expects to finalize in 2005 the much-needed update of the FAOR Handbook.

D. INDEPENDENT INQUIRY COMMITTEE INTO THE OIL-FOR-FOOD PROGRAMME (IIC)

20. The UN Secretary General established a special Independent Inquiry Committee, under the chairmanship of Mr. Paul A. Volcker, to conduct an investigation into allegations of misconduct by UN staff as well as the UN’s administration of the Oil-for-Food Programme.

21. Since July 2004, the IIC has requested FAO to provide details of documents and information relating to the Oil-for-Food programme. In consultation with TC and AF, AUD has made available to the IIC all requested documentation and information. No concrete results have yet been made available to the Organization.

E. DESERT LOCUST PROGRAMME

22. The audit requirements relating to the Emergency Desert Locust Programme represent a significant emerging issue. Following the Director-General’s approval, AUD engaged an officer from 4 January 2005 for a three-month assignment in Rome to review procurement under this programme. In the meantime, AUD provided support by attending the periodic ADG meetings on the Locust Campaign, ensuring immediate action on AFSP’s requests for tender openings and responding quickly to pertinent requests for advice or review.

III. Results of audit operations

23. AUD plans its work on a biennial basis, using risk assessment planning methodology, coupled with its institutional knowledge of the Organization and current policy directions. In addition, AUD responds to emerging needs, such as requests from senior management for special reviews and investigations. This section of the annual report outlines key audit results, organized by major process. Decentralized offices and projects are audited in a holistic manner, covering several major processes in one audit of the office or of the operations (see section E below).

24. During 2004, AUD performed 48 audits and 12 investigations. Of these, 23 audits plus three investigations were conducted at headquarters and 25 audits plus nine investigations in decentralized offices. All audit work results in the production of specific audit reports. However, AUD contributes to the overall process of management control in the Organization in a variety of ways and goes considerably beyond the issuance of formal reports. Attachment A outlines the nature and extent of the work carried out throughout the year by each of the three audit groups comprising AUD. Attachment B lists the audits performed in 2004.

A. FINANCIAL MANAGEMENT AND BUDGETING

Headquarters

25. AUD completed 13 reviews of various aspects of financial management and budgeting at headquarters. These reviews covered features of the financial statements of the Organization, budgetary control, inventory management, cost control, financial reporting to extra-budgetary donors, internal control and policies and procedures, as well as efficiency and effectiveness. Of particular note is the lack of a clear definition of the responsibilities of budget holders. A working group is currently addressing this issue in order to define and confirm the relevant roles and responsibilities.

26. Recommendations for improvements in the chart of accounts and related budgetary monitoring information addressed the use of the “other funds” ledger. Action is currently under way to streamline accounting and facilitate budgetary control in this respect.

27. During the year, AUD made 59 recommendations related to financial and budgetary matters at headquarters. Fourteen of these have already been closed; action is under way on 14, and 31 recommendations remain open, i.e. some have been agreed but have not yet been implemented while others are being studied.

28. Certain extra-budgetary donors, in particular some financing institutions, have pressed FAO for special audits of projects financed by them. In the past, similar pressure came from the World Bank, with which an acceptable solution is now being finalized. AUD has assisted TC and AF in working towards resolution of these issues, both through the provision of exceptional special audit reviews and through negotiations with the donors to arrive at a mutually acceptable compromise, as close as possible to the World Bank solution, in the spirit of harmonization.

Decentralized locations

29. As of 21 November 2003, all UN agencies were required to terminate their operations under the Oil-for-Food Programme and transfer responsibility for administration of any remaining activity to the Coalition Provisional Authority. AUD was involved in the review of the arrangements made for the closure of the accounts and the hand-over of all the cash, vehicles and equipment, and project inputs. AUD completed a liquidation audit during the first quarter of 2004, which concluded that the handover of assets from the 13% account in the field broadly conformed to the strategy formulated by the UN Office of the Chief Humanitarian Coordinator for Iraq (UNOCHI) in consultation with the Coalition Provisional Authority (CPA). In this regard, to avoid duplication, AUD liaised with the External Auditor who was also conducting a similar review during the same period. Recommendations included the rapid transfer of the 2.2% account assets and resolution of minor outstanding differences. All recommendations are now closed

30. In November 2003, the UN Office of the Iraq Programme (OIP) asked FAO to transfer to the local authorities those assets from the 2.2% account in North Iraq that were no longer required. At the time of our liquidation audit, such assets had been identified, but the handover had not yet been effected. Handover of agreed assets was finalized on 1 June 2004 and all other remaining assets were seized by the local authorities in July.

Investigations

31. AUD investigated and reported on five cases of theft, cash losses and overpayments in decentralized offices, entailing a total amount of $ 59,000. Of this, the potential loss to the Organization might amount to $ 41,000. These included: (i) the theft of purchase order forms from an FAOR office and their subsequent fraudulent use by a separated consultant, which resulted in a loss of $ 5,700 after recovery of $ 13,000 worth of equipment; (ii) $ 5,103 was stolen from AUD safe at another FAO Representation, and, after police recoveries, the loss sustained by FAO was $ 443; (iii) approximately $ 1,000 was lost in a TCP project, (iv) three duplicate payments in another country, through falsified documentation, resulted in a loss of $ 14,029; (v) lastly, overpayments of staff entitlements in an FAOR office resulted in a loss to the Organization of some $ 20,000. In all these cases, internal control weaknesses contributed to the thefts and losses, and AUD made recommendations to establish, strengthen and enforce internal controls in order to prevent similar occurrences in future. Furthermore, where appropriate, AFH is reviewing the cases to determine suitable action to be taken in respect of the staff members concerned, including recovery action where applicable.

32. AUD investigated a case of potential conflict of interest and industry influence in an expert consultation in headquarters and made recommendations to enhance risk assessment and risk management in such cases. The recommendations have been accepted and implemented.

B. HUMAN RESOURCES

Headquarters

33. One audit at headquarters addressed the Organization’s policy relating to giving and receiving gifts and gratuities. The review did not reveal any serious problems in this respect; however, AUD identified the need for improving the practicality and applicability of the existing guidelines. The Organization is currently addressing AUD’s recommendations.

Investigations

34. In 2004, AUD investigated and reported on five cases of misconduct and lack of integrity in headquarters and decentralized offices. In one case, the results of the investigation demonstrated that the allegations were unfounded. In two cases, AUD’s work revealed that staff members at headquarters were involved in outside activities, contrary to the rules of the Organization. The fourth case involved investigation of outside activities of a staff member in the field. AFH is determining appropriate action to take in the three cases where AUD ascertained staff members’ wrongdoing. The fifth case relates to conflictive behaviour of a staff member in a decentralized office. Disciplinary action is already being taken against the staff member concerned.

C. PROCUREMENT

Headquarters

35. AUD conducted five audits at headquarters concentrating on procurement matters in the context of the Oil-for-Food Programme.

36. Two of these reviews covered procurement contracts that were pending approval of the UN New York prior to the war in Iraq, and were subsequently assigned to FAO for amendment under SCR 1472 (about $80 million) and SCR 1483 (about $517 million). AUD started this work in November 2003 and completed it in June 2004. The review covered all the contracts (194) that had been successfully amended, and concluded that contract amendments were generally made in compliance with the guidelines provided by OIP.

37. In addition, AUD issued three reports on the review of 17 large procurement contracts (approximately $159 million) AFSP processed ab initio during the second half of 2003. Recommendations arising from these audits include the use of “earnest money”, amendments to the terms for liquidated damages, improved in-house consultation regarding technical specifications, and relevant precautions to safeguard against the possibility of proprietary suppliers quoting unusually high rates.

Investigations

38. AUD investigated an allegation of staff misconduct in the awarding of a contract related to the Oil-for-Food Programme. The review concluded that there was no evidence of pecuniary gain by the staff member.

D. INFRASTRUCTURE MANAGEMENT

Headquarters

39. One audit addressed physical security of the headquarters premises in 2004. The review arose as a result of a special request to look into repeated intrusions by a non-staff person attempting to obtain financial gain from the Organization. The report recommended formalizing policies and procedures concerning access to FAO premises, including requesting assistance from national police and ascertaining credentials of consultants and delegates.

E. INFORMATION TECHNOLOGY

Headquarters

40. Three audits addressed aspects of information technology in 2004. Change control and information security were reviewed, and recommendations made for risk assessment, improvements to physical access control and updating and communication of policies and procedures. As a result, arrangements for a comprehensive IT risk assessment are under way, and the tender for contracting out the work is under preparation.

F. OFFICE OVERVIEW AND OPERATIONS

Decentralized locations

41. The process heading “office overview” is used for the audit of FAO Representations. This covers all processes which are material collectively but not individually. Projects (including Trust Fund, TeleFood, emergencies, Special Programme for Food Security and Technical Cooperation Programme, and National Execution projects) are audited under the “operations” process. This includes monitoring impact and progress, backstopping as well as project management cycle.

42. During 2004, AUD performed 24 audits covering 14 countries and made recommendations covering all major processes. Generally, these have been accepted, and implementation is planned or under way. The essence of these recommendations appears in the following paragraphs.

43. Financial management and budgeting recommendations were made in audits of FAO Representations and projects covering such matters as electronic banking, replenishments of bank accounts, office budgetary monitoring, project budgetary monitoring and budget revisions, segregation of duties, project closure, internal control over payments, bank reconciliations, recording, filing and document retention, advances, cost sharing arrangements, controls over travel, custody of assets, telephone call cost recovery, and fund raising. Furthermore, matters related to use of the field accounting system were raised.

44. Human resource matters also received audit attention in decentralized offices and projects. Recommendations addressed training, staff motivation, job descriptions, performance appraisals, relations with government, filling of vacant posts, personnel management and procedural matters.

45. Procurement is considered a high-risk area in many offices. Recommendations included procedural suggestions and compliance matters. Infrastructure management is generally reviewed at FAOR offices, and recommendations made in 2004 included security and physical access issues. AUD also reviewed information technology and made recommendations for enhanced security.

IV. Management activities

A. AUDIT OUTREACH

46. The Inspector-General represented the Organization at the annual meeting of Representatives of Internal Audit Services of the United Nations and Multilateral Financial Institutions at UNESCO in Paris in June 2004. Highlights included governance, risk management, and donors’ requests for special and third party audits. The Inspector-General also participated in the fifth Conference of Investigators of UN Organizations and Multilateral Financial Institutions, organized by OLAF (European Anti-fraud Office) in Lyon in September 2004. The above meetings provided excellent opportunities for the exchange of views and experiences among internal auditors, investigators and other oversight bodies from the international community of audit and investigation professionals.

47. AUD continued its dialogue with senior oversight officials in other organizations within the UN family, as well as the international financial institutions. In particular, it exchanged views and experiences on topics of current concern, such as third party audits, the work of the Independent Inquiry Committee on the Oil-for-Food Programme, and other audit and investigation matters in order to find solutions to common problems. AUD also performed benchmarking exercises with the United Nations and other Specialized Agencies on IT investigations and internal audit software, among others. The Inspector-General continued to have regular meetings with counterparts from the Rome-based agencies.

48. Finally, AUD keeps its intranet site under continuous review to ensure that it is up-to-date.

B. TENDER PANEL OPERATIONS

49. The procurement of equipment, supplies and services is governed by the principles and procedures set out in the FAO Administrative Manual. This assigns to AUD responsibility for receiving, opening, recording and retaining under secure conditions all bids in response to tender invitations. This helps ensure the independence, objectivity, security and transparency of the tendering process.

50. In the past year, the Tender Panel met on 107 occasions and dealt with 329 tenders. For these tenders 5,976 firms were invited to submit bids and 1,624 were received. The number of tenders in 2004 (329) is marginally lower than for 2003 (368) mainly because of reduced activities in Iraq due to the end of the Oil-for-Food Programme. Towards the end of 2004, this was somewhat offset by increased procurement activity on locust control.

C. REPRESENTATION ON COMMITTEES

51. AUD is represented on a number of important “standing committees” in the Organization including the Programme Policy and Advisory Board, the Human Resources Committee, Information Management Technology Committee (and its sub-committees), the WAICENT Committee, the Sponsorship Committee and its working group, the Procurement Committee, the Advisory Committee on Medical Coverage, the Committee on Investments and its Advisory Committee, the Oracle Project Management Committee and Oracle HRMS Project Executive Board, the Joint Committee on Food Services, the TeleFood Policy Coordination Committee, the Corporate Communication Committee, the Field Programme Committee and the Board of the Credit Union. AUD also participates in ad-hoc internal review groups, task forces and evaluation panels. It follows closely the deliberations of the Programme and Finance Committees, Council and Conference, and its senior members meet from time to time with senior officials and representatives from Member Nations, the External Auditor, the Joint Inspection Unit and colleagues from oversight functions in other UN and international organizations.

D. STAFF DEVELOPMENT

52. Training and development continue to be important aspects of the overall management of AUD. This comprises three elements: professional audit training, language training and training in the use of office technology. On the professional side, AUD arranged two highly successful on-site workshops in Rome on ‘Basic Information Systems Auditing’ and ‘Report-Writing’. The IT workshop was conducted by a highly-skilled expert from the Inspector-General Auditor Training Institute from the U.S. and was attended by all AUD staff as well as audit colleagues from IFAD, UNESCO and OECD. The report-writing workshop was conducted by an international expert recommended by the Institute of Internal Auditors and was attended by AUD staff only.

53. AUD made good use of the facilities available within FAO for language and office technology training needs. In addition, two auditors completed MBA qualifications through distance learning and part time study in 2004, a third auditor qualified as a Certified Information Systems Auditor, and another as a Certified Internal Auditor.

54. Staff also participate from time to time in other training programmes arranged through the Human Resources Management Division or other divisions. This commitment to training is reflected in the percentage of staff time devoted to training activities, which was 3.9% in 2004.

E. STAFF MEETINGS

55. AUD continued to have regular theme-oriented staff meetings where experts both from FAO and other international organizations make presentations to the audit staff on current developments in their areas of expertise. This not only covers the traditional finance and administrative fields, but also draws on senior officers from technical divisions. In 2004, topics covered were electronic registries and the international alliance against hunger.

F. ADMINISTRATIVE ISSUES

56. AUD’s time reporting and control system represents a useful internal management device. All staff record their time in half-hour units of activity and the time sheets are reported to the Inspector-General, who uses them to monitor the audit effort against the target set at the beginning of the year. The target established for 2004 was 25% for headquarters activities, 50% for decentralized activities and 25% for special assignments and investigations. The actual audit effort reported in 2004 was 23% for headquarters activities, 51% for decentralized activities, and 26% for special assignments and investigations at headquarters. Accordingly, the current audit effort represents approximately a 50-50 split between headquarters and the field.

57. In closing, AUD would once again like to express its appreciation to all levels of staff contacted in the course of its audit work, and, particularly, to members of management for their support and positive responses, cooperation and assistance throughout the year.

ATTACHMENT A

Headquarters Activities

1. One of the most important clients of the Headquarters group is the Administration and Finance Department, encompassing finance, information technology, human resources and administrative services. However, technical departments at headquarters have also been important audit clients. The main expertise in this group continues to embrace the disciplines associated with finance, treasury, accounting and administration, but it also serves as the focal point for office technology, information systems and other aspects of electronic data processing.

2. The Headquarters group also carries out annual reviews of the Credit Union and the Commissary, on a fixed-fee basis, and plays an important role in advising other units at headquarters on audit-related issues. In addition, this group is responsible for the review of audit arrangements and audit clauses contained in partnership and similar agreements. In 2004, 58 such agreements were reviewed.

3. A total of 11 specific audit reports were released by this group in 2004. These are identified in Attachment B.

Decentralized Activities

4. This group deals with audits, special reviews and investigations carried out at the FAO Regional, Subregional and Liaison Offices, Representations, and selected projects in the various regions. It also covers elements of decentralized activities at headquarters. The group is responsible for the supervision of the outposted audit function, including planning, clearance and review of all audits conducted at field level.

5. This group is the prime source of expertise on decentralization, regionalization and operational management arrangements for the field programme. It follows closely the work of the local audit firms engaged by the Finance Division, and frequently refers to their reports for planning audit work and monitoring management performance. This group also discusses audit concerns as part of the briefing and orientation programme for newly-appointed FAO Representatives and other senior staff. This also involves subsequent contributions to the evaluation of FAORs’ performance, and the handover arrangements on the termination of FAOR assignments, as necessary.

6. In 2004 this group produced 39 reports addressing various administrative and operational aspects of Regional and Subregional Offices, FAO Representations, field investigations and specific projects and other field operations. These are outlined in Attachment B.

Special Assignments and Investigations

7. This group is responsible for detecting and investigating cases of fraud, presumptive fraud, waste of resources, abuse of authority, misconduct and other malfeasance and for assessing potential areas of fraud through analysis of the corporate control system.

8. As AUD’s prime source of expertise on contracts and procurement, it reviews requests for waivers from the competitive process, oversees tender panel operations and represents the Inspector-General on the Procurement committee. The group also performs value-for-money audits of significant operational components and contracts (i.e. travel, health insurance, employee benefits and maintenance contracts for the FAO premises) in addition to responding to special requests from senior management and other organizational entities.

9. The Special Assignments and Investigations group is also responsible for reviewing and reporting to the Director-General on the financial situation and monthly expenditures in his immediate office as well as any related expenses carried in the budgets of other departments. The group also represents the Office of the Inspector-General on several committees including the Procurement Committee and the Joint Advisory Committee on Medical Coverage (JAC/MC).

10. A total of 10 specific audit reports were produced in the course of the year. These are reflected in Attachment B.

ATTACHMENT B(i)

Headquarters Activities

N.B. Due to realignment of priorities as a result of emerging audit needs and the prevailing staffing situation, three reviews planned for 2004 are still in progress, and five have not been carried out. Two of these are planned for 2005, and the others will be considered in future biennia as appropriate.

ATTACHMENT B (ii)

Decentralized Activities

N.B. Due to realignment of priorities, as a result of emerging audit needs and the prevailing staffing situation, 11 reviews planned for 2004 are still in progress, and 19 have not been carried out. Seven of these are planned for 2005, and the others will be considered in future biennia as appropriate.

ATTACHMENT B (iii)

Special Assignments and Investigations

N.B. Due to realignment of priorities, as a result of emerging audit needs, reassessment of risk and staff shortages, one review planned for 2003 is still in progress, and four have not been carried out. Three of these are planned for 2005 and the remaining review will be considered in future biennia if warranted.

ATTACHMENT C(i)

ATTACHMENT C (ii)

ATTACHMENT D (i)

* This vacant post funds the G-6 audit assistant in the headquarters activities group.

ATTACHMENT D(ii)

The following countries are represented in the above:

* This vacant post funds the G-6 audit assistant.