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Follow-up to Audit Recommendations on Programme and Financial Issues and the Integrated Management Information System

Executive Committee Meetings

Follow-up to Audit Recommendations on Programme and Financial Issues and the Integrated Management Information System

9 April 1997

9 April 1997

7th Meeting



1. As requested by the Executive Committee (A/AC.96/860, para. 21 (g)), the Standing Committee is to undertake a systematic review of the recommendations and observations raised in various oversight reports. This paper focuses on issues raised in the Report of the Board of Auditors (A/AC.96/869) relating to programme budgeting and budgetary control, programme management, the Integrated Management and Information System (IMIS), and Financial Statements.

2. Each audit recommendation is considered below, with an explanation of the current status of implementation. This paper should be read in conjunction with the UNHCR response to the Board of Auditors Recommendations (A/AC.96/869/Add.1) presented to the forty-seventh session of the Executive Committee. The present comments build on those found in that document.


3. Recommendation 10 (b): The reasons for variations between the initial and revised budgets and the actual expenditures in respect of programme components should be analyzed and the findings should be submitted to the Executive Committee every year.

3.1. UNHCR will continue to keep the Executive Committee informed of variations between initial and revised budgets and subsequent expenditures rates. This information is presented to each annual session of the Executive Committee in the "Overview of UNHCR Activities" document and its addenda. Budgetary and expenditure information, broken down by operational, programme delivery and administrative support costs, is provided for each region and for Headquarters for the previous year (expenditure), the current year (revised estimates) and the following year (initial estimates). An analysis of variations for Programme Delivery and Administrative Support costs for both the Field and Headquarters is also included. Furthermore, updates on regional developments presented to Standing Committee meetings also provide region-specific budgetary and expenditure figures, and explanations.

4. Recommendation 10 (c): Inputs for budget estimation should be worked out more reliably in concert with field offices. For this purpose, the database of caseloads (number of beneficiaries) and other required inputs should be updated periodically.

4.1. UNHCR is committed to improving its beneficiary registration procedures and systems. As previously noted, a number of recommendations concerning budgetary parameters, including the need to establish benchmark cost data, were made within the framework of Project Delphi. These recommendations have been further refined by the Operations Management System Project Team (document EC/47/SC/CRP.13 refers). In particular, the Team has stressed the need for integrated information technology systems which would allow the establishment of direct links between, inter alia, regularly updated planning information, progress reports and beneficiary statistics.

5. Recommendation 10 (d): A factor for inflation multipliers and exchange rate variations should be included in respect of the field office budgets of major expenditure centres. The method of computing the vacancy factor also needs refinement.

5.1. As noted in document A/AC.96/869/Add.1, UNHCR maintains that the additional human and financial resources required to analyze and forecast inflation and exchange rate variation factors with any degree of reliability would provide very little added value to the Organization. However, and as also noted previously, UNHCR has agreed to refine the method of computation of vacancy rates. This issue will be incorporated in the information technology upgrades required by the implementation of Project Delphi.

6. Recommendation 10 (e): Financial Management Information System (FMIS) should be modified to provide for common staff costs percentages separately for general service and professional staff.

6.1. As noted in document A/AC.96/869/Add.1, the changes in the account code structure and the consequent modification of the FMIS system which would be required to implement the Board's recommendations will be taken into account in the development of new account code structures within the Project Delphi framework.


7. Recommendation 10 (f): The impact of uneven funds availability on project formulation and implementation should be reviewed. The inputs for programme planning should be assessed more reliably.

7.1. UNHCR maintains that a prioritization of activities within the project formulation process is the preferred method of dealing with funding shortfalls, particularly under certain Special Programmes which may not attract sufficient donor response.

8. Recommendation 10 (g): Appropriate criteria should be established for selection of beneficiaries for projects, after obtaining adequate data and information. The process of beneficiary selection should be documented to enable subsequent evaluation of achievements.

8.1. UNHCR agreed with the Board's recommendations and has continued its efforts to improve the related mechanisms and procedures.

9. Recommendation 10 (h): The instructions issued to the field offices regarding preparation of work plans on a selective basis should be reviewed. The Administration should also review the format of the work plan provided in the UNHCR Manual to make it more programme specific and an effective management tool.

9.1. As noted previously, as a result of a Board's recommendation the requirement to submit workplans was reintroduced as a mandatory component of projects. Subsequent inadequate compliance with this requirement led UNHCR to insist on the submission of workplans only for operations in which these plans would serve as a meaningful and effective management tool, leaving the judgement on the necessity of preparing such plans to the project managers concerned. With the introduction of the new Operations Management System, however, there will be an increased focus on operations plans within a framework of integrated objectives of the operations themselves.

10. Recommendation 10 (i): Precise and well-defined performance indicators should be included in the sub-project agreements.

10.1. The Operations Management System Project Team has made a number of recommendations in the context of objective setting, needs assessment and design, which include the definition of global as well as specific indicators to, inter alia, assist in monitoring and self-evaluation. The inclusion of performance indicators in sub-project agreements will be taken account of as new project management procedures are developed in the context of Project Delphi.

11. Recommendation 10 (j): Programme deliveries should be designed and provided in accordance with a pre-determined time-schedule to suit the needs of beneficiaries.

11.1. This recommendation will be considered at the next meeting of the Standing Committee when the subject of audit observations on procurement are scheduled for discussion.

12. Recommendation 10 (k): The capabilities of implementing partners to implement major projects should be assessed in more detail. The deficiencies noticed in the implementation of a project by an implementing partner in Tanzania, should be investigated for taking appropriate remedial measures, including recoveries of overpayments.

12.1. This recommendation will be considered at the September 1997 meeting of the Standing Committee when the subject of audit observations on implementing partners is scheduled for discussion.

13. Recommendation 10 (l): UNHCR should ensure that PMRs are received on time and used for project monitoring purposes by all programme managers. Implementing agencies should be advised to submit sub-project monitoring reports (SPMRs) regularly and with complete details.

13.1. As with the previous recommendation, this recommendation will also be considered at the September 1997 meeting of the Standing Committee.

14. Recommendation 10 (m): Appropriate procedures should be established by field offices to evaluate programme achievements and outputs. The findings of such evaluations shall be utilized in programme planning and implementation.

14.1. The Operations Management System Project Team emphasized the importance of this process. Based on the assumption that staff responsible for an operation are in the best position to identify problems and the means to correct them, the new System will introduce formal self-evaluation exercises to be undertaken by the staff within each operation. Thus, staff will review the decisions they have taken, the progress achieved towards their objectives, and what they require to improve the operation. Detailed procedures will be elaborated on further in the course of Project Delphi implementation.


15. Recommendation 10 (r): UNHCR should establish a strategy for developing and updating its information system (IS) compatible with the organization's corporate objectives. The strategy should include the steps required to customize IMIS to meet the specific requirements of UNHCR and priorities for implementation.

15.1. The Information Systems Strategic Plan is currently being developed by the Information and Communications Systems Section and it will be completed prior the Standing Committee meeting in June 1997. The paper referenced in paragraph 130 of the Report of the Board of Auditors ("to be prepared by August 1996") was in fact a framework document defining the methodology to be used in the preparation of the Strategic Plan and was issued on schedule. The need for careful examination of IMIS/Human Resources (HR) system modules and IMIS/Financial system modules figured prominently in this planning document. In addition to IMIS, the planned Operations Management System (OMS) will have a significant impact on the direction of programme, budget, and financial systems development within UNHCR. IMIS and OMS will form the cornerstones of the Information Systems Strategic Plan referred to in paragraph 131 of the Report of the Board of Auditors.

15.2. As noted in the Board's comments, UNHCR has reviewed its plans in respect of implementation of IMIS. Following an evaluation of the latest release in 1996 and an assessment of the outputs of Project Delphi, UNHCR notified the United Nations of its intention to proceed with implementation of the Human Resource modules of IMIS. A project has been initiated to this end and the first essential stage, the recruitment of a Project Manager, has been completed. The latest version of the IMIS Release 1 software is now installed at UNHCR headquarters.

15.3. During the course of 1997/1998 UNHCR plans to progressively implement the IMIS Human Resource system modules necessary for transition into the new IMIS payroll system, which is expected to become available towards the end of 1998. UNHCR will analyze the software and specify any additional functions necessary to support UNHCR operations, but which are not available in the present version of IMIS. As noted, IMIS/HR forms part of UNHCR's new information systems strategy. Considerable attention will be given to the integration of the IMIS account coding structure and IMIS technology with other major systems required by UNHCR.

15.4. As more agencies in the United Nations system use or plan to use IMIS, a number of issues arise relating to the maintenance of a common system. UNHCR attended the first inter-agency meeting devoted to IMIS management issues in January 1997 and played an active role in the joint determination of plans for the future direction of IMIS.


16. Recommendation 10 (s): The Accounting policies and notes to the accounts should be provided in the financial statements distinctly and clearly with cross-references to individual statements.

16.1. This has been completed and the Notes to the Accounts of the Voluntary Funds Administered by the High Commissioner of Refugees for the period ending 31 December 1996 reflect the accounting policies separately in Note 1 and Note 2 of that document.