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Internal audit

Executive Committee Meetings

Internal audit

8 January 1997

8 January 1997

6th Meeting


1. It will be recalled that Project Delphi had originally recommended that the existing Inspection and Evaluation Service in UNHCR, and the UNHCR Section dealing with internal audit currently situated in the Audit and Management Consulting Division of the United Nations Office of Internal Oversight Services (OIOS) be brought together into an expanded UNHCR Internal Oversight Service (see Project Delphi: Plan of Action, EC/46/SC/CRP. 48, paras. 85-89).

2. This proposal was brought to the attention of the Under-Secretary-General for Internal Oversight Services by a letter from the Deputy High Commissioner on 4 September 1996. The Advisory Committee on Administrative and Budgetary Questions (ACABQ) was also invited to comment on this proposal.

3. In light of the comments of the ACABQ (A/AC.96/865/Add.4, para.33), the Executive Committee at its forty-seventh session (1996) requested that UNHCR prepare a comprehensive paper on this subject which would take into account the Report of the Secretary-General on enhancing the internal oversight mechanisms in operational funds and programmes, prepared pursuant to General Assembly resolution 48/218B. UNHCR was asked to present its report to the Standing Committee in the course of 1997 (A/AC.96/878, para. 25 (k)).

4. As this subject is still under discussion with Under-Secretary-General Paschke, and since the above-mentioned Report of the Secretary-General has not been finalized, this Conference Room Paper is simply an interim update on progress to now on the issue.


5. The question of UNHCR having its own internal audit service has been the subject of an exchange of letters between the Deputy High Commissioner and the Under-Secretary-General for Internal Oversight Services, and a series of meetings between officials of OIOS and of UNHCR. The Deputy High Commissioner addressed letters to Mr. Paschke on this issue on 4 September and 6 December 1996; replies to these letters were received from Mr. Paschke on 26 September and 19 December 1996 respectively. The meetings of the officials of both organizations took place on 10 September and 22-23 October 1996.

6. In these various communications, UNHCR pointed out that its objective in raising (in the context of Project Delphi) the question of the most appropriate location of the internal audit function for UNHCR was primarily to see this audit (as compared to external audit) play a larger and more effective role as a management tool for the High Commissioner in achieving greater operational efficiency in UNHCR, and, thereby, ensuring sustained donor support for its activities. It was stated that UNHCR's proposal was not meant to detract from the role of OIOS. Rather, UNHCR's proposal to have its own internal audit function, similar to the arrangements in UNICEF, WFP and UNDP, was intended to reap the specific managerial advantages of internal audits, and also bring about improvements to the current system. UNHCR noted that the reporting lines associated with current internal audit arrangements meant that, de facto, UNHCR had the equivalent of two external audits. It was UNHCR's belief that, just as in commercial and public service corporations, UNHCR should have, in the internal audit function, a management tool responsible to its Chief Executive. In arguing for its own internal audit function, UNHCR stated that it did not wish to detract from the independence of the internal audit function: without the necessary independence, any internal audit would lose its effectiveness.

7. Mr. Paschke stated his position on this proposal in his reply of 26 September 1996. Hefelt that the internal audit objectives, as set out in the Project Delphi Plan of Action, could be achieved with the same effectiveness by relying on the internal audit services rendered by an OIOS Audit Section exclusively dedicated to UNHCR. Mr. Paschke believes that the establishment of UNHCR's own internal oversight section would not be in the spirit of General Assembly resolution 48/218B; this resolution called for a coordinated approach to internal oversight under the umbrella of OIOS. In Mr. Paschke's opinion, the replacement of an audit body vested with a high degree of institutional and operational independence (through the appointment of the Under-Secretary-General for Internal Oversight Services and his staff, and through a reporting line to the General Assembly) by an audit body which would be reporting to and dependent on UNHCR's management, did not seem to coincide with General Assembly's intention when it created OIOS.

8. In his letter of 6 December 1996 to Mr. Paschke, the Deputy High Commissioner noted Mr. Paschke's position. The Deputy High Commissioner went on to say: "As UNHCR does not wish to go down a path which does not have your support, we have to recognise that, until the situation changes, the High Commissioner, notwithstanding the very considerable independent accountability of her Mandate, will not, therefore, have an internal audit function in the normally understood sense. UNHCR reserves the right, however, to revisit the important question of the most suitable location for the internal audit function...".

9. The focus of attention in the discussions between UNHCR and OIOS is now on how to improve existing audit procedures. The discussions relate, inter alia, to the following issues:

  • procedures for the establishment of the annual audit plan, and subsequent modifications to it;
  • additional audit arrangements to support UNHCR's operational and administrative decentralization process;
  • initiatives to better familiarize the auditors with the operations and management concerns of UNHCR;
  • procedures for ensuring early feedback and reporting on audit findings and recommendations;
  • resources to be dedicated to the internal audit function.

Considering the progress in discussions on these issues, it is hoped that a Memorandum of Understanding delineating the agreements reached will be signed by the High Commissioner and the Under-Secretary-General for Internal Oversight Services in the first quarter of 1997.


10. The High Commissioner will inform the Standing Committee of the outcome of these discussions. The Committee will have the opportunity to consider further this issue in the course of 1997. At a later stage, the Standing Committee will also have available to it the Report of the Secretary-General on enhancing the internal oversight mechanisms in operational funds and programmes.