United Nations Educational, Scientific and Cultural Organization Executive Board

Transcription

1 ex United Nations Educational, Scientific and Cultural Organization Executive Board Hundred and fifty-sixth Session 156 EX/31 PARIS, 15 April 1999 Original: English/French Item 8.4 of the provisional agenda REPORT BY THE DIRECTOR-GENERAL ON PROGRESS MADE IN THE IMPLEMENTATION OF THE RECOMMENDATIONS OF THE EXTERNAL AUDITOR SUMMARY In accordance with 155 EX/Decision 7.3, the Director-General presents herewith his report on progress made in the implementation of the recommendations of the External Auditor. This progress report refers to the paragraph numbers in the long form report of the External Auditor submitted to the Executive Board under document 155 EX/27 Add. Decision required: paragraph This progress report of the Director-General is structured to follow the relevant paragraphs of 155 EX/Decision 7.3 as follows: Reference to decision paragraph A. Education Sector 4 B. Status of outstanding issues related to the external audit recommendations 5 C. Timeliness of financial information 6 D. Information technology 7 E. Internal audit and the Brasilia Office 8 F. Human resource management 9

2 156 EX/31 - page 2 A. Education Sector (paragraphs 119 to 165 of the long form report) 2. The recommendations of the External Auditor on the Education Sector, together with the Director-General s progress report have been grouped under three headings. (i) There is increasing involvement by other international organizations in the field of education 3. This is true and UNESCO is proud to have been central in promoting greater awareness among major donors with regard to the need to increase the levels of funding for development cooperation in education. It has been particularly so since the Jomtien Conference on Education for All (Thailand, 1990). There is recognition that UNESCO s intellectual role and leadership in education strongly contributed to give high centrality to education in the development agenda. Funding for education by multilateral and bilateral donors has increased significantly, while UNESCO s allocations for education have remained between US $80 million and US $100 million annually for over a decade. 4. UNESCO s role in this context should be made very clear. UNESCO is not a funding agency. It is an intellectual organization and in that capacity fulfils completely its role of advocacy of Member States policy initiatives, as well as its capacity as a forum for policy dialogue and advice. Technical assistance, although important, is a subsidiary role. In many cases, UNESCO s financial allocations to education must be seen as seeds that help Member States to mobilize additional resources for their education development strategies. Donors are increasingly more selective in contracting with UNESCO for project execution. 5. This is not a UNESCO problem. Actually, the very nature, approaches and modalities of development cooperation have changed and are still changing significantly. Most multilateral and bilateral donors have adopted the principle of national execution and sector funding or lending. Experience shows that most bilateral donors have considerably increased their embassies or resident cooperation coordinators responsibilities with regard to decisions concerning funding (this is clearly the case for government agencies such as NORAD, FINIDA, SIDA, CIDA, USAID, DFID, GTZ, DANIDA, and The Netherlands Cooperation Ministry). But the major advantage of these new trends in development cooperation is the generation of an environment where policy dialogue and coordination at the country level among donors and between donors and governments are almost permanent. 6. This focus of donor coordination and sector funding at the country level was also crucial to the Director-General s decision to increase UNESCO s presence in the Member States by the establishment of additional field offices, thus enhancing not only UNESCO s capacity to be an active partner in the donor-country dialogue, but also its advocacy capacity. UNESCO s professional capacity and expertise in education policy development, research and technical assistance has gradually declined (...). 7. The argument that there is a decline in UNESCO s professional expertise, partly due to staff cuts, zero-growth budgets and the loss of experienced professionals through retirement incentives is true though only to a limited extent. The previous comment shows that the nature of development cooperation is changing and that the traditional role of technical assistance and project execution must be examined in accordance with this change. The

3 156 EX/31 - page 3 decentralization of staff to the new field offices has contributed to improve UNESCO s capacity to cooperate with the Member States and to influence donors with regard to the country s educational options for development. The examples of field offices such as San José, Brasilia, Maputo, New Delhi and others, are relevant in this regard. (ii) Strategic planning is deficient in that it does not deal with important policy questions in a formal way, programme and project sustainability issues and linkages between strategic and operational planning 8. The concept of strategic planning is not a rigid one and must be examined in accordance with each organization s culture and mission. In the case of UNESCO, strategy planning must be seen as a continuing dynamic process that enables the organization to respond to the most crucial educational issues faced by the Member States, by listening to what Member States and practitioners have to say. 9. More than ever, UNESCO has developed and shared with Member States, important strategies concerning different levels and issues of education. To mention only a few, but very significant examples, the World Declaration on Education for All (Jomtien, 1990), the New Delhi Declaration, adopted by the leaders of the nine high-population developing nations of the world on education for all (New Delhi, 1993), the Hamburg Declaration on Adult Learning and the Agenda for the Future (Hamburg, 1997), the World Declaration on Higher Education for the Twenty-first Century: Vision and Action (Paris, 1998), and the second International Congress on Technical and Vocational Education (Seoul, 1999) are considered as printmarks of a renovated educational agenda for most Ministers of Education. 10. The creation of centres of excellence in education such as the International Research and Training Centre for Rural Education in Baoding, the International Institute for Capacity- Building in Education in Addis Ababa, the International Institute of Education Technologies in Moscow, the International Institute on Higher Education for Latin America and the Caribbean, in Caracas and the International Centre for Girls and Women s Education in Ouagadougou have strongly contributed to promote and improve UNESCO s advocacy and guidance capacity to the Member States. 11. As far as the organizational structures are concerned, the organization chart of the UNESCO Secretariat for (it is worth noting that the organization chart is adjusted every two years, in line with the approved Programme and Budget) shows the various staff and line services, including the functional and authority links with institutes and field offices. The main instance responsible for policy and strategic decisions is the Director-General, on the basis of the decisions and recommendations made by the General Conference and the Executive Board. Many of the Director-General s decisions are prepared and assessed within the framework of regular meetings of the Directorate. Following the Director-General, the organic structure which has responsibilities for strategic planning is the Bureau of Studies, Programming and Evaluation (including Statistical Programmes and Services), the main product of which is the Medium-Term Strategy Obviously, this is done with the systematic and regular participation of all the programme sectors.

4 156 EX/31 - page 4 Important questions related to UNESCO s role in education are not being addressed. There is little evidence of formal analysis of high-level policy issues that would confirm or redirect UNESCO s present role in education. 12. To participate in the Organization s strategic planning it is recognized that information and analysis of crucial policy and strategic issues regarding education are fundamental. In our view, the question is not so much the existence of formal studies, but whether the various means and modalities that exist to collect information and review the education agenda are effective and relevant. 13. These means and modalities concern, in the first place, the General Conference. Besides approving the programme and budget for each biennium, the debates and reports of the several commissions of the General Conference provide important inputs for corrective or adjusted action, as well as for the preparation of the next programme and budget. The same approach applies to the debates of the Executive Board. In addition, the formal consultations of the National Commissions and the periodic Regional Conferences of Ministers (MINEDAF, MINEDARAB, MINEDLAC, etc.), also provide essential indications and information on issues, challenges and trends that may have to be considered for the reviewing of UNESCO s programme. As an intergovernmental organization, these formal instances of consultation and deliberation are actually central to UNESCO s strategic planning. In addition, the Director-General has adopted an innovative initiative to get advice from and listen to the expectations of Member States, NGOs, eminent professionals and intellectuals, by organizing the regional consultations, known as Audience Africa, Focus on the Caribbean, Focus on the Pacific. 14. Recognizing the intellectual nature of UNESCO s mission and action, the results of all these conferences and special meetings, associated to the reflexion conducted by UNESCO s specialized institutions, the biennial publication of the World Education Report and the Report prepared by the International Commission on Education for the XXI Century (also known as the Delors Report), have enabled UNESCO to develop a global vision on education, which is systematically shared with Member States. All or the main aspects of this vision are reflected in the major documents approved by the General Conference. 15. Less formal but also important are the meetings of experts, the field offices reports and the thematic research or studies produced by the specialized institutes, with particular reference to IIEP, UIE and the IBE. To what extent have the large donors and lenders affected UNESCO s role in education? What is UNESCO s comparative advantage in education? 16. In this regard, a special mention must be made to the Education for All (EFA) Forum and the Association for the Development of African Education (ADAE), the secretariat of which is provided by UNESCO s International Institute of Educational Planning (IIEP), both being unique mechanisms for promoting regular dialogue and exchange among donors and recipient countries. These initiatives actually reflect the new modalities and nature of modalities and nature of development cooperation in education. Education Sector s senior management participates regularly in the EFA and ADAE meetings, and leads some of the existing working groups, such as those on EFA Assessment and non-formal education and policy analysis. The leadership of UNESCO in these fora, is a clear sign of the recognition that is given to UNESCO s role in education by the donor community and Ministers of Education. This is also often the case, at the country level where UNESCO s role is

5 156 EX/31 - page 5 supporting the priorities of Ministries of Education in development and reconstruction of education systems. Programme and project sustainability and reporting on education activities funded by both the regular programme and extrabudgetary funds together. 17. These are issues that concern the whole Organization and not only the Education Sector. First, it should, however, be noted that no project can be prepared and funded, if it does not incorporate, as a rule, a comprehensive analysis of its sustainability, to which all parties agree: the donor, the recipient country and the executing agency, if any. Secondly, given the growing trend of national execution and establishment of field offices, project implementation and evaluation has been decentralized. (iii) Monitoring and evaluation functions are not fully utilized 18. There is actually a very interesting new dynamic of project implementation at the country level, characterized by regular, and many times informal, contacts and dialogue between the UNESCO Office, the government and the donor(s). Donors have different requirements in this regard. Some do not wish to be involved in the operational management of the project and limit their participation to the review meetings planned within the project. Others, such as the Norwegian Development Agency (NORAD), and the Netherlands, do require the establishment of steering committees or similar instances, for a more regular follow-up of project implementation and of its sustainability. 19. However, formal monitoring of project and programme implementation present some weaknesses as pointed out by the Auditor s report, due, mainly, to the changes introduced in both the decentralization process and budgeting system, as characterized below: (1) The decentralization process which requires new modalities of programme implementation, as well as new tools for programming, budgeting and monitoring. Decentralization is also a learning process for the Organization and the central services and programme sectors need time to adjust and adopt new and additional management procedures and tools. (2) The adjustment of the previous programming and budgeting system to the decentralization process (how to take into account programme proposals made by the field units and criteria to allocate funds for programme implementation) and introduction of the new results-based programming and budgeting system. 20. With regard to the discontinued use and updating of the Project Management Information System (PMIS) - although its coordinator has retired, it has been decided to learn from the introduction of the new programming, budgeting and monitoring system, in order to adapt or adopt a more adequate monitoring scheme concerning the implementation of extrabudgetary projects. It must be signaled that the previous PMIS was designed before field offices were connected to UNESCO s central computer. 21. The Education Sector, in close collaboration with the relevant central services, is currently working on these adjustments, including new modalities of computer-based reporting on programme implementation by units at Headquarters and in the field offices.

6 156 EX/31 - page 6 B. Status of outstanding issues related to the external audit recommendations (paragraphs 12 to 33 of the long form report) No. 46 Unliquidated obligations 22. As reported to the 155th session of the Executive Board, a working group of the Administrative Coordination Board (ACB/WGO) was established to address the External Auditor s observations on unliquidated obligations and to examine what other reforms were possible in order to conform more precisely to the spirit of the Financial Regulations and Rules. Its recommendations, which were endorsed by ACB, address, inter alia, the concerns expressed by the External Auditor regarding premature obligations and carrying out timely adjustments to unliquidated obligation balances so as to release funds for alternative programme activities after completion of contracts. 23. As a first step towards reforming the financial and administrative management of contracts and related obligations, an Administrative Circular (No dated 20 November 1998) was issued giving instructions that henceforth contracts (under a certain category of object-of-expenditure) will be limited to a maximum of six months and the related obligations for such contracts will be limited to eight months. The additional two month s period for obligations as compared with the contract is to enable programme sectors, field offices with electronic linkage to Headquarters and central services (BOC and DIT), respectively, to review and approve the work submitted by the contractor and any revisions thereto and to progress final payment or liquidation of the obligation. After the close of the eight-month cycle for these obligations, the obligation will be automatically liquidated unless payment authorizations are already in progress through field offices or by UNDP. 24. The Director-General, upon the proposal of ADG/MA, has approved the establishment of a task force whose objective will be to identify the administrative arrangements and instruments required to implement the above and other reforms recommended in ACB/WGO s report and adopted by ACB. The first meeting of this task force was held in December 1998 and a check list of tasks was agreed upon together with deadlines foreseen for the completion of each task. The target is that all reforms on the administrative and financial management of contracts and their related obligations as recommended by ACB will be in place by 1 January 2000, to the extent that the existing informatics system can accommodate them. No. 85 Training of field office personnel 25. The training of field office personnel is an ongoing process. As reported in document 155 EX/27 Add., the two workshops planned for administrative officers to be held in Africa took place in Harare and Dakar. A further workshop is planned for 1999 in Latin America. In addition to these courses for administrative officers, other courses for field office personnel have or will take place in 1999, including for example one on mobilization of extrabudgetary funds held in Dakar in February Nos. 98 and 99 Informatics development 26. Further comments on progress in informatics development may be found in paragraphs 33 to 60.

7 156 EX/31 - page 7 No. 105 Role of Internal Auditor 27. While noting that the Inspectorate General has increased the range and impact of its activities, the External Auditor is still concerned about staffing. The group of internal auditors of the Inspectorate General responsible for accountancy and financial audits was reinforced during the previous biennium by the appointment of a senior auditor and a senior audit clerk. In addition, the services of a private firm were used to carry out accountancy and administrative audits. Since it is difficult to outsource management audits, as the External Auditor noted, the Inspectorate General made a special effort to discharge to the full the mandate assigned to internal audit and to meet the various requirements of the External Auditor. The Inspectorate General should thus be better equipped to provide analyses, evaluations, recommendations and other information to management to improve the operations of the Organization, which should enable it to serve as a positive influence as an agent of change, as stressed in the report of the External Auditor. It should be noted that since the professional and personal qualities required of auditors are of an exceptionally high order, the Inspectorate General in its staff policy makes use of two complementary criteria: to attract staff with the requisite skills, but also to select the best elements. No. 106 Outsourcing of Internal Audit 28. As stated in the report of the External Auditor, the Inspectorate General made use of the services of a private firm in 1997 to carry out accountancy and administrative audits. Audits of the accounts and financial audits of field offices will no doubt be outsourced again in view of the cost-effectiveness of the operation. It should be noted, however, that management audits do not lend themselves to being outsourced since they imply an in-depth knowledge of the functioning of the Organization and its policy. C. Timeliness of financial information (paragraph 45 of the long form report) 29. As reported to the Executive Board at its 155th session, there had always been an understanding between successive External Auditors and the Secretariat that the date for submission of accounts for audit by 31 March specified in the Financial Regulations referred to the establishment of the final computerized budget and general ledger accounts rather than the financial statements themselves. This understanding has been accentuated in recent years, following significant decentralization of financial transactions to field units, in order that these transactions can be fully reflected in the final accounts which form the basis of the financial statements submitted for audit. 30. The Director-General nevertheless accepts the recommendation of the External Auditor that UNESCO s accounts and financial statements should be prepared on a more timely basis with the ultimate objective of meeting the 31 March deadline specified in the Financial Regulations, and has noted the External Auditor s comment that the Secretariat should set an objective of eventually meeting the 31 March deadline. 31. In this respect, the closing of the interim accounts as of 31 December 1998 is being made with the objective of meeting the 31 March deadline, partly through advancing the schedule for closing the accounts both in the field and at Headquarters and partly through giving a much higher priority to the preparation of the financial statements themselves. 32. At the time of writing it is too early to report on the outcome of this plan. However, despite the continuing problem with the old mainframe computer based legacy system which is the cause of many of the inconveniences and delays encountered together with delayed

8 156 EX/31 - page 8 submissions of field offices accounts, it is most probable that the financial statements will be finalized, if not by 31 March, during the first half of April at the latest. D. Information technology (paragraphs 15 to 26 and 34 to 44 of the long form report) 33. Further to 155 EX/Decision 7.3, paragraph 7, the Director-General reported on the implementation of the recommendations in paragraphs 26 and 44 to the Chairperson of the Executive Board and the President of the General Conference, and gives hereunder his comments under the headings Computer problems of the year 2000 and Support to UNESCO s financial information needs. (i) Computer problems of the year Analyses and preparatory and planning work related to the year 2000 issue were carried out during the biennium. The corresponding budget was considered in document 29 C/ The work being carried out is being coordinated by the Bureau of Documentation, Informatics and Telecommunications (DIT), whose Director has been designated to that end, with the collaboration of the Director of the Plan Implementation Unit (PIU). Thanks to the Information Systems Coordination Committee (ISCC) and technical literature on the subject there is at the Organization s disposal a fairly exhaustive list of systems to be checked outside central computer programmes: lifts, air-conditioning, alarms, cars, medical equipment, and so on. 36. The Director-General has given very high priority to action to ensure that the Organization effects a smooth changeover to the year Some of the most important objectives are: (a) (b) (c) To avoid any major disruption in the life and work of the Organization. This means concentrating on systems critical to the functioning of UNESCO and also having remedial measures ready to cope with unforeseen problems in any system, whether considered critical or not. There is general agreement among experts that even when organizations like UNESCO have addressed the issue and embarked upon the necessary corrective measures a substantial risk is still posed by unforeseeable and unforeseen factors due to the very complexity of such organizations and their dependence on systems that are not always within their control. To minimize the total cost of the operation so as to spend as little as possible of the Organization s budget on this problem. A detailed analysis undertaken by UNESCO s information technology specialists with the assistance of outside consultants has enabled costs to be contained, indeed very significantly reduced. It thus appears reasonable to hope that the costs will not exceed those provided for in the work plans ($600,000). To mobilize all the Secretariat resources concerned by these actions. 38. An important stage in the preparatory work was the identification of systems to be checked and, where appropriate, modified. This inventory focused on various fields and adopted the approach appropriate to each field.

9 156 EX/31 - page The relevant modifications have begun on systems under UNESCO s control, on the basis of knowledge of how they operate. Otherwise, following established practice in all organizations, including those in the United Nations system, official contacts are established to ensure that the service provider concerned takes the necessary measures. A formal assessment of the state of preparation of services for the transition to the year 2000 is requested from each provider. 40. For systems under UNESCO s control, the appropriate tests will be conducted to ensure that the changes made enable normal functioning to continue after the deadline. For each system, in addition to the tests carried out a plan will be drawn up on ways of coping with unforeseen emergencies. 41. Concerning UNESCO s action vis-à-vis Member States, the Organization, through the Intergovernmental Informatics Programme, is prepared to provide assistance in formulating policies and preparing action plans to those countries which request it. 42. Central computer systems (payroll and personnel, finance, and so on). These systems are critical for the Organization as a whole and the most expensive to modify. UNESCO has taken on a specialist subcontractor with the appropriate computer tools to help in systems conversion and testing. The programme modification phase was completed on schedule, at the end of January, and testing began in February. 43. The procedures for computer systems linked to the activities of certain services that are no less important but which do not affect the Organization as a whole (publications, UNESCO Courier, USLS, and so on), are similar to those followed for programmes: (a) (b) (c) (d) Library. Concerns above all subscriptions to periodicals. Modifications and tests already completed. UNESCO Courier. Modifications and tests already completed. OPI, PGI (stock management and document distribution). Modifications under way. USLS modifications completed end January. Testing under way. 44. Central computer hardware and software. Overall, 65 per cent of the system s components are ready. Two out of 14 hardware elements have not yet been converted: one is due to be replaced in the first half of 1999, the second is being installed. More than half the software has already been converted, and work is under way to resolve the problems with the remaining software. 45. Network hardware and software. Most of the active elements of the network are new and year 2000 compatible; two minor elements (a switch and a hub) should be changed. The software changes required for the routers will be made to those which are being kept, and two older ones will be replaced; these changes were already included in technological development plans for the site. Regarding the servers, the inventory provided information which enabled the identification of those in need of conversion (less than 30 per cent of the total), which will be carried out in the first half of Workstation hardware and software. The information gleaned from the inventory gave a fairly clear picture of the tools needed for the modifications. Tools available on the market

10 156 EX/31 - page 10 were then tested and evaluated. From the beginning of February 1999 these tools are being applied to all the personal computers of the Secretariat and Permanent Delegations, and work will be completed in the first half of Solutions may be very straightforward (for instance, turning off the computer on the evening of 31 December 1999 and turning it on again on 1 January 2000), or require the intervention of a technician (to install or replace software) or even, in certain cases, entail the replacement of the unit in question. 47. Applications used on workstations. Following the inventory, users were informed that they were responsible for application compliance, with possible assistance from DIT. In general, these are non-critical applications. Work is under way on the few more important applications and should be completed in March The same elements, in field offices. The inventory of field offices is under way. This inventory is naturally more complex. In fact, with few exceptions, the applications critical for these offices are those which either come from the central system or are being dealt with at Headquarters as a whole. 49. Telecommunications systems. Telecommunications equipment, including fax equipment, is already year 2000 compliant. The software for certain services (voice mail, switchboard operators computers, internal video information) needs to be updated, and that is under way. Telecommunications providers (France Télécom, SITA and Cégétel) have been contacted and have informed us of their efforts to implement the necessary measures to ensure continuity of service for all their activities. 50. Technical and control components of UNESCO installations other than personal computers, such as lifts, air-conditioning, clocks, lighting, generators, cold storage, detection equipment, surveillance equipment, fire protection equipment, vehicles, electricity and gas, heating, compressed air, water, and control equipment used in their connection. The providers of critical elements which might be disrupted have been asked in writing to indicate the steps to be taken in each case. 51. The General Services Division, which is in charge of this aspect of the work, has started to receive replies from suppliers enabling it to start carrying out the necessary corrective measures. 52. The same approach has been used in the field offices. The Secretariat has alerted all offices to the need to check elements other than actual computers, and the persons in charge have contacted local suppliers and are beginning to receive their replies. 53. In general, the aim is to complete the work on critical elements in July For computer programmes, which account for the bulk of the work to be done, this means that as of February 1999 the different types of test will be carried out, including comprehensive tests simulating dates from 1 January A specific technical installation will be used for this activity, which should take place in parallel with, and without disrupting, the normal work of the Organization. 54. In view of the measures taken, and given that the operations are being carried out on schedule, everything seems to indicate that major disruptions are not to be expected at UNESCO. Although because of the way in which it operates UNESCO is not heavily dependent on outside providers of industrial products, which would make it more vulnerable, and although its installations are not so up-to-date as to depend to a large extent on sophisticated systems, the Organization is nevertheless situated in a local and international

11 156 EX/31 - page 11 environment that could easily be disturbed more seriously and affect it in ways that cannot be predicted at this point. 55. Year 2000 compliance activities are being carried out at the same time as the Organization s normal activities. This involves a level of mobilization and hard work which are worthy of mention. (ii) Support to UNESCO s financial information needs 56. The Secretariat has given significant priority to work to optimize the financial and budgetary information operations of its present computer system. The person recently appointed to be in charge of the system, with a small team, has revised procedures, with the aim of detecting and avoiding pitfalls that might cause delays in data processing. Of course, this is within the limits of the specific characteristics of the current system, designed many years ago, which is very rigid and for which any modification is lengthy and expensive. As has been pointed out on several occasions, the system should be replaced with one based on the latest technology. 57. This need to modernize UNESCO s in-house informatics system is becoming more and more evident as in spite of the efforts summarized in the above paragraph, there are frequently problems in the day-to-day running of the financial systems, which in addition to being based on outdated technology, are over reliant on a few staff members, all of which place the Organization in a highly vulnerable position. Also, the interfaces for recently developed software programmes, including that for results-based programming and budgeting, are complex and need special attention and competences. 58. In the light of all this, UNESCO contacted several consultancy firms concerning a possible contract to provide strategic guidance during the first preparatory phase (Phase 1) of identifying possible software packages for finance and budget that could accommodate the critical requirements of UNESCO (e.g. budget and constant dollar) that are unable to be changed, to prepare the necessary systems specifications and gap analyses and to assist in the initial choice of a software package. 59. Additionally, one of the consultancy firms was requested to prepare cost estimates for the implementation phase (Phase 2) for the finance and budget, human resources and payroll, which depending on various parameters, amounted to some $20 million. Although this estimate would be refined and revised during the Phase 1 preparatory phase, the finance and budget part being planned to commence in May 1999, it is already evident that any major change to UNESCO s informatics system will require funds of approximately $10 million for the implementation of the finance and budget part (UNICEF invested $14 million for theirs) and a similar amount for human resources and payroll. 60. The budget proposals presented in document 30 C/5 under the two scenarios of zero nominal and zero real growth are insufficient in themselves to implement either the finance and budget or the human resources and payroll systems in their entirety next biennium. Various options for obtaining the necessary funding, bearing in mind that the greater the delay in implementing the change, the greater the cost in maintaining the legacy system and the risk in a systems collapse, will be presented to the General Conference.

12 156 EX/31 - page 12 E. Internal audit and the Brasilia Office (i) Internal audit (paragraphs 27 to 33 of the long form report) 61. Every two years the Inspectorate General draws up provisional plans of a strategic nature as far as possible, for studies, audits and inspections. These plans, which take into account the audit needs expressed by the various Secretariat units and by the Organization s governing bodies and the External Auditor, are submitted for approval to the Director-General. It should be stressed that a proactive approach is adopted as the audit plans are revised each year in order better to meet the Organization s needs. They are not distributed in the units for reasons of confidentiality. Periodic reports are drawn up on the implementation of the recommendations made. 62. The Inspectorate General will continue to undertake audits of field offices at a rate which is geared to needs and to the means available. It should be noted that the Inspectorate General has begun to broaden the scope of its decentralization-related activities to include audits of the UNESCO institutes. 63. As has been pointed out, only accounting and financial audits may be outsourced; this mode of action may be adopted, provided due account is taken of the cost-effectiveness of the operation. 64. Having been particularly encouraged by the External Auditor s remarks, the Inspectorate General will continue to develop the battery of performance indicators for field offices and the integrated model for measurement of their strategic importance. Since the last session of the Executive Board, methodological work has been focused on preparation of a handbook for the Inspectorate General. 65. The Inspectorate General will endeavour to follow up this recommendation by following developments in this field very closely. (ii) Brasilia Office (paragraphs 49 to 53 of the long form report) 66. With regard to the Brasilia Office, despite the increasing volume of activities related to extrabudgetary projects under implementation and the lack of resources currently available to cope with the related administrative workload, there have been substantial improvements in strengthening the budgetary financial and accounting procedures during Further to the recruitment of a new Administrative Officer, the Brasilia Office received extensive briefing and help from Headquarters staff missions and as a result of this has succeeded in catching up on the backlog in processing the imprest accounts. All accounts of the office have been analysed and brought to account at Headquarters within the time limit for the closure of the 1998 accounts. The Brasilia Office is taking the necessary measures to reinforce its administrative unit and in particular the staff in charge of financial and accounting tasks. It is expected that the constant improvement in financial and accounting administration will be fully achieved by the end of 1999 and that the accounts will remain up to date. 68. The UNESCO Office in Brasilia aims at keeping its excellent relationships with the Federal Government of Brazil and all the other institutions with which it cooperates. It also aims at focusing on further improvement of its administration in order to be prepared for the expected growth in implementation of operational projects in terms of human resources, finance and deadlines to be respected.

13 156 EX/31 - page 13 F. Human resource management (paragraphs 60 to 118 of the long form report) Introduction 69. With regard to the recommendations made by the External Auditor on human resource management, the Director-General confirms the observations and comments made by him on the report of the External Auditor and submitted to the Executive Board in Annex II to document 155 EX/27 Add. In his comments, the Director-General referred, inter alia, to the streamlining that has taken place in UNESCO which resulted in a significant reduction in staff since 1986 (827 posts or 27 per cent). Furthermore, considerable transformations were introduced not only as a consequence of the departure of the United States, the United Kingdom and Singapore but also as a result of the recommendations on personnel policy made by the Hammarskjöld Commission and the Wilenski report. Due to the long-term nature of these reforms, the identification and indication of specific and concrete results, particularly in the area of human resource management, would require more time than has elapsed since the presentation of the Auditor s report. Furthermore, as part of the United Nations common system of organizations, UNESCO s autonomy in responding to its own human resources requirements is limited by some basic policies established by the International Civil Service Commission (ICSC) and judgements of the International Labour Organization Administrative Tribunal (ILOAT) which, once they are delivered, provide no possibility for organizations to appeal, a situation which the Director-General considers as not reflecting democratic principles which should always be followed in such sensitive issues. Nevertheless, it is expected that, within the context of a results-oriented budgetary policy, appropriate initiatives in the area of human resource management will contribute significantly to the capacity of UNESCO to better select its staff. In common with other United Nations organizations, further efforts are being made to develop reforms of personnel policies, placing greater emphasis on efficiency and cost-effectiveness. Given the reduction in staff costs in favour of the programme over the past 10 years, and taking into account the 3 per cent lapse factor, it is most important that the human resources available to the Organization both at the international and national levels are optimized to the maximum extent possible. New reforms need to ensure that the most highly qualified and competent candidates are recruited into UNESCO, taking account of geographical and gender balance, that the skills and knowledge of the staff are further developed to enhance managerial and technical competences and that the performance of staff is managed to ensure the provision of service at the highest possible standards, while at the same time providing appropriate encouragement for the enhanced mobility and advancement of staff. Notwithstanding the above, the Director-General would like to draw attention to the complicated and unique range of human resource issues prevailing in United Nations organizations and in particular in an intellectual organization such as UNESCO, which he feels has not been dealt with comprehensively in the External Auditor s report. Improvements made to the recruitment process (in response to paragraph 76 of the External Auditor s recommendations) 70. A number of initiatives have been undertaken with a view to improving and accelerating the recruitment process. The Handbook on Recruitment is now being widely used by managers, and preparations are under way to further enhance the skills of managers by conducting training programmes in interviewing techniques. The professional skills and expertise of recruitment staff are being further developed in line with best practices within the United Nations system.

14 156 EX/31 - page Reduced deadlines have been introduced in the evaluation of candidates by the sectors. Internal vacancy notices are now available on the Intranet, thus ensuring a wider and more immediate distribution of vacancy notices for internal candidates. This will reduce the delay in announcing vacancies to staff members in field offices, and will enhance the interest of such staff in mobility. Further computer applications are being developed which will facilitate the initial screening and pre-selection of applicants. 72. A recruitment mission was undertaken in December 1998 to southern Africa in order to identify potential sources of candidates from non-represented Member States in the region. A further mission to non-represented Member States in the South Pacific region is planned for May The approach used for the recruitment of staff under the Young Professionals Programme (advertisement in every under- and non-represented country, screening of applicants, tests and interviews) will be examined to determine the extent to which this process can be applied to other recruitment in the Secretariat. In developing further proactive approaches to the recruitment process, greater emphasis will be placed on the identification of diversified sources of recruitment with the intention to rendering the recruitment process more effective. 74. While much can be achieved by reforming recruitment strategies as an integral part of a progressive personnel policy, difficulties still remain in United Nations organizations in separating poor performers and staff that no longer possess the required skills for programme implementation. The Director-General feels that in the context of the overall reforms taking place within the United Nations common system, greater flexibility in personnel management must be accorded to each organization without the current negative consequences of costly litigation procedures. Improvements made to the performance appraisal system (in response to paragraph 81 of the External Auditor s recommendation) 75. Prior to the introduction of reforms, and in common with the performance appraisal systems of other United Nations organizations, the practice was to over-rate performance to avoid confrontation and potential appeals. Since the revision of UNESCO s performance appraisal system in 1994, a more realistic distribution of performance ratings has been observed. In continuing the Organization s efforts to improve the performance appraisal system, and to highlight the importance of setting objectives at the beginning of the appraisal period against which staff members are subsequently evaluated, training sessions on objective setting for supervisors began in March The training also focuses on the purpose and the fundamentals of performance appraisal, with a view to sensitizing the supervisors to the importance of the process. 76. The situation with regard to the performance appraisal of field staff and temporary assistance will be reviewed and appropriate action taken where necessary. Reviewing promotion processes (in response to paragraphs 94, 107 and 116 of the External Auditor s recommendations) 77. Given the significant link between performance management and promotion, a review will also be undertaken of the promotion system within the context of developing a comprehensive and integrated approach to human resource management. This will include a study of the career development of staff and an evaluation of competency-based management

15 156 EX/31 - page 15 systems which foster a more objective approach to promotion, which could in addition complement the classification system. Other forms of incentive and reward, both at the individual and team level, will be explored as alternatives to promotion for all categories of staff at Headquarters and in the field. Review of the various categories of temporary assistance (in response to paragraph 103 of the External Auditor s recommendation) 78. A unified system to keep track of supernumerary contracts has been designed and the testing phase started at the beginning of This new system is intended to facilitate the management of supernumerary contracts and should provide more accurate and up-to-date information for decision-making. 79. During the course of 1999 and the year 2000, a study of all types of contracts presently in use will be carried out (regular, temporary, supernumerary, consultant and fee contracts). The purpose of this study will be to adapt contractual arrangements to the real needs and uses of the Organization at Headquarters and in field offices. As an example, the Director-General would like to draw attention to the regularization of the staff of the Security Services who had been serving the Organization on short-term contracts for a significant period of time. Post classification system (in response to paragraphs 107 and 108 of the External Auditor s recommendations) 80. A new seven-grade post classification standard for General Service and related categories at Headquarters has been approved by ICSC and will be implemented in January 2000, following the salary survey to be carried out in the spring of The seven-grade system will enable finer and more appropriate distinctions to be made between jobs of different levels of complexity and responsibility. 81. As previously explained by the Director-General, the post classification system for Professional and above categories is a system common to all United Nations organizations and UNESCO is therefore not at liberty to adopt its own system. However, UNESCO continues to take every opportunity to draw the attention of the International Civil Service Commission (ICSC) to the need to review the current post classification system as well as to the need to make it compatible with effective career management. UNESCO last raised these issues during the meeting organized by ICSC in December 1998 in New York. 82. In spite of the limited human resources to manage UNESCO s post classification system, desk audits are undertaken whenever possible in considering the reclassification of posts in order to ensure that higher graded functions are in fact being carried out before the relative request for upgrading is recommended. Ensuring the availability of sufficient specialized expertise to carry out reforms, strengthen the role of PER and clarify the roles and responsibilities in managing human resources (in response to paragraphs 117 and 118 of the External Auditor s recommendation) 83. The Director-General recognizes the difficulty, given the present resources in the Bureau of Personnel, of combining the day-to-day provision of personnel services with the development of new and innovative approaches to human resource management. However, current budgetary constraints preclude the creation of additional posts for the Bureau. Efforts are however continuing to provide Professional staff members of the Bureau of Personnel

16 156 EX/31 - page 16 with training and development in the field of best practices in human resource management. The Director-General invites Member States to consider the possibility of providing assistance for the recruitment of experts in this area. 84. As already reported by the Director-General to the Executive Board at its 155th session, a revised personnel policy is under development, defining the roles and responsibilities for human resource management in the Organization. 85. The Executive Board may wish to adopt a decision along the following lines: TheExecutiveBoard, 1. Having examined document 156 EX/31, 2. Notes the report by the Director-General on progress made in the implementation of the recommendations of the External Auditor; 3. Requests the Director-General to report further on the status of the implementation of the recommendations of the External Auditor to the General Conference at its 30th session.