Key actions taken to date include:
- the creation of an internal audit and dedicated investigative function
- the application of robust financial controls including mandatory use of electronic financial management tools
- the introduction of a UNOPS ethics officer and whistleblower protection
- a comprehensive information disclosure policy
- the competitive recruitment of better qualified senior managers and financial staff
- stricter procurement rules and training
- circulation of clear rules and limits regarding hospitality expenses
- full financial disclosure by personnel
These and other management decisions have had concrete, positive effects. UNOPS today is far stronger and more professional than in years past. It offers higher quality services and operates with greater efficiency and accountability to serve the interests of its stakeholders.
These efforts have earned UNOPS objective recognition in the form of clean audit results (an unqualified external audit opinion for the past two biennia), new framework business agreements with the UN Secretariat, the European Commission, and the World Bank, as well as renewed partner confidence and rising partner satisfaction. For the first time ever the organization has been able to achieve the operational reserve target set by the Executive Board, proof of our financial stability. Business acquisition in 2009 exceeded targets at $1.44 billion, demonstrating confidence in the ability of UNOPS to contribute effectively to operations and outcomes.
The reaction from member states to the organization’s current status has been positive. For example the African Group highlighted the tangible results UNOPS delivers for its partners in highly challenging circumstances while Germany described UNOPS as a ‘valuable and efficient contributor in the fight against poverty and for the achievement of the Millennium Development Goals’.
UNOPS has developed new policies that have been endorsed by its Executive Board, on areas including: financial regulations and rules, accountability and oversight, and internal control and risk management.
Measures already taken to improve UNOPS financial controls and governance include:
Internal audit
The Internal Audit and Investigations Group (IAIG) was established in early 2008 and conforms to the standards of the Institute of Internal Auditors. The office provides assurance, offers advice, recommends improvements and helps to enhance the risk management, control and governance systems of the organization. It also seeks to promote and reinforce tight internal controls and manage risk within the organization.
The new audit office has more than doubled the number of qualified UNOPS staff involved in internal auditing. In 2008 project audits almost tripled and there was a sharp increase in field visits. In 2009, the Internal Audit and Investigations Group maintained the significant increase in the internal audit coverage of UNOPS over prior years, enhancing the overall internal control environment of the organization. In September 2009, the Internal Audit and Investigations Group assumed a centralized and dedicated role in managing and conducting investigations throughout the organization.
Advisory committee
A Strategy and Audit Advisory Committee was set up in 2007 made up of independent members with expertise from the private sector, bilateral and multilateral donors and other parts of the UN system. The committee meets four times a year and advises the Executive Director and other senior members of UNOPS management on key strategic issues, including risk management, internal and external audits, and financial and regulatory issues.
Financial management control
The 2008/2009 biennium marks a financial turnaround for UNOPS. Positive results were delivered and the replenishment of the operational reserves was attained according to the targets set by the Executive Board. UNOPS has been given an unqualified audit opinion by the United Nations External Board of auditors.
UNOPS monitors its results continuously through the management workspace on the intranet which is interfaced with the Atlas Enterprise Resource Planning system (ERP). During 2009, the finance practice group performed monthly closure of sub-ledgers and quarterly closure of the general ledger. This improvement in financial reporting processes has resulted in increased data accuracy, completeness and timeliness of financial reporting and monitoring.
UNOPS has continued its drive to reduce the volume of cash transactions and to eliminate opportunities for fraud and theft. UNOPS has successfully retired the manual imprest account modality and replaced these accounts with more than 70 Atlas bank accounts. UNOPS is preparing to implement IPSAS (International Public Sector Accounting Standards) by January 2012 in harmony with UNDP & UNFPA who are sharing the same Atlas ERP. UNOPS is project managing the transition to IPSAS on the ‘Prince2’ project management methodology.
Procurement
New procurement policies and guidelines now provide a clearer framework for staff. These include zero tolerance for gifts and favours from vendors and suppliers, anti-corruption provisions and a code of conduct for vendors, automatic recognition by UNOPS of vendors suspended by the UN Vendor Review Committee, an independent bid protest system etc. All UNOPS personnel must undergo mandatory ethics training. The new rules demand the highest ethical standards of both procurement staff and vendors. Quality assurance is provided at each critical step of the procurement process through the pre-clearance activities of procurement advisors. No UNOPS procurement authority can award contracts without mandatory pre-clearance by a procurement advisor.
New recruitment has raised the level of competence, further professionalizing procurement operations. Procurement staff receive regular, on-the-job training and all, including assistants, must obtain independent professional certification. UNOPS has embarked on a programme to obtain procurement certification through the Chartered Institute of Purchasing and Supply. This will complement UNOPS drive towards obtaining ISO 9001 certification.
Internal structure
Consistent with the UNOPS Strategic Plan 2010-2013, a major revision was made to the UNOPS global structure, institutionalizing the ‘practice approach’. This aligns policy, business processes, tools and people across functions, support, and geography. An important part of that Strategy was the introduction of Implementation Support Practices which help to articulate areas in which we can better support our partners: Infrastructure, Census and Elections, Health, Environment, and Justice and security sector reform.
To increase operational capacity and in preparation for ISO 9001 quality management certification, UNOPS developed the online Practice and Quality Management System. The system provides guidance to practitioners, manages the improvement agenda for practice leads and links to practice knowledge-sharing systems.
Project Management
Consistent with UNOPS adaption of the Prince2 project management methodology, guidance has been developed for all stages of the project cycle. The project management practice also developed information technology tools to strengthen project monitoring and capture lessons learned.
Human resources
New polices on recruitment have raised employee competence and removed opportunities for favouritism, with all recruitment now competitive. Post-employment restrictions have been introduced so that for one year following separation from service former staff members who participated in the UNOPS procurement process may neither seek nor accept employment with any UNOPS contractor or vendor of goods or services.
Hospitality
New instructions have been issued on UNOPS hospitality. These state clearly what can and cannot be done, reimbursement procedures and limits. The instructions emphasize that entertainment should be 'modest', primarily for non-UNOPS staff, and must avoid 'any semblance of extravagance or ostentation.'
Financial disclosure
New instructions make UNOPS disclosure rules the broadest in the UN system, with a declaration of interest mandatory for all staff at mid-level and above, as well as for all personnel involved in procurement or audit activities. Beyond this, all heads of operations centres and all project managers, irrespective of their level and including national staff, must make such declarations.
Ethics officer/Whistleblower protection
A UNOPS ethics officer was appointed in 2006. Later that year the UNOPS Executive Director reminded all UNOPS employees of their responsibility to report suspected fraud involving staff members, non-staff contract holders, vendors, contractors or any other party with a business relationship with UNOPS. Staff were also informed of the protection offered to ‘whistleblowers’ and the availability of an anonymous hotline for reporting suspected abuses. The policy to address fraud has been substantially revamped to clarify what fraud is and how to address it. UNOPS staff may also address issues to the UN Ethics Officer.
Accountability and transparency
A major effort was undertaken to collect and post online for public review all relevant documents, such as information on procurement activities, budgets, financial statements and audit reports under the Accountability and Ethics headings on the UNOPS website.
UNOPS also now has an information disclosure policy that outlines the type of information the organization will make available to the public and how this information can be obtained. The policy ensures that substantial amounts of information concerning UNOPS operations are available, except for limited and specified categories where confidentiality is required. These exceptions cover areas such as security, employee privacy and the deliberative process, and are listed in the policy.
The following information is accessible through the UNOPS website:
UNOPS is also currently developing an ‘extranet’ to allow partners direct access to more detailed project documentation, including more comprehensive financial information and real-time reporting tools.