new audits by the external auditor part i audit...

196 EX/23.INF PARIS, 10 March 2015 English & French only

Executive Board

Item 23 of the provisional agenda

NEW AUDITS BY THE EXTERNAL AUDITOR

PART I

AUDIT OF THE UNESCO MULTISECTORAL REGIONAL OFFICE IN NAIROBI

SUMMARY

In accordance with Financial Regulation 12.4, the External Auditor submits his audit report on the UNESCO Multisectoral Regional Office in Nairobi. The short form of this report and the comments by the Director-General are contained in document 196 EX/23 Part I.

Hundred and ninety-sixth session

196 EX/23.INF

Office of the External Auditor of the United Nations Educational,

Scientific and Cultural Organization

AUDIT

OF THE

UNESCO MULTISECTORAL REGIONAL OFFICE IN NAIROBI

(KENYA)

Cour des comptes reference: UNESCO 2014-8

(i)

TABLE OF CONTENTS

LIST OF RECOMMENDATIONS ................................................................................................... 1

I. OBJECTIVE AND SCOPE OF THE AUDIT ........................................................................... 2

1.1 Method ......................................................................................................................... 2

1.2 Previous recommendations ....................................................................................... 2

II. SCOPE OF ACTION OF THE OFFICE .................................................................................. 4

2.1 Establishment agreement with the host country ...................................................... 4

2.2 The geographical scope of the Regional Office ....................................................... 4

2.3 Mandate of the regional Director ............................................................................... 7

III. MANAGEMENT OF THE OFFICE ......................................................................................... 9

3.1 Office operating standards ........................................................................................ 9

3.2 Team management ..................................................................................................... 9

3.3 Communication and information ............................................................................. 10

3.4 The Office’s resources ............................................................................................. 11

3.5 Ability to attract extrabudgetary funding ................................................................ 12

3.6 Self-assessment of internal controls ...................................................................... 12

3.6.1 Administrative controls ....................................................................................... 13

3.6.2 Control of purchases of goods and services ...................................................... 14

3.6.3 Monitoring of duty travel .................................................................................... 14

3.6.4 Conclusion on the self-assessment of internal controls ...................................... 15

IV. SPECIFIC OBSERVATIONS ON MANAGEMENT .............................................................. 15

4.1 Pooling with other United Nations agencies ........................................................... 15

4.2 Duty travel management .......................................................................................... 16

V. ACKNOWLEDGMENTS ...................................................................................................... 17

196 EX/23.INF

LIST OF RECOMMENDATIONS

Recommendation No. 1. The External Auditor recommends that the Regional Office either (i) actively seek a solution to enable readers to regain access to UNESCO and United Nations publications, in cooperation with United Nations agencies and the United Nations Office at Nairobi (UNON) or with the Kenya National Commission for UNESCO, or (ii) dispose, once and for all, of any unused document repository deemed surplus to requirements and whose storage results in unnecessary costs.

Recommendation No. 2. The External Auditor recommends that the management of vacant office space, stocks of documentation lying dormant and equipment waiting to be decommissioned be rapidly re-evaluated, taking into account programme needs and considering, among other things, the option of finding less expensive storage space outside the Gigiri complex so that more space may be returned to the United Nations Office at Nairobi (UNON) and, hence, additional savings could be made.

Recommendation No. 3. The External Auditor recommends that negotiations be initiated without delay, within the framework outlined by the continuing reform of the field network in Africa, with a view to aligning the establishment agreement with the actual current operating conditions of the Office in Nairobi.

Recommendation No. 4. The External Auditor recommends that a performance agreement be concluded with the Director of the Regional Office in Nairobi without delay; that it be consistent with the Organization’s regional and subregional strategy, as well as with the guidelines laid down by the Bureau of Strategic Planning (BSP), so as to enable him to focus and evaluate his actions in those two dimensions; and that it set clear and robust objectives, together with measurable performance indicators.

Recommendation No. 5. The External Auditor recommends that all decisions concerning the organization, operation and security of the Office, or concerning the employees’ conditions of service, should be recorded in formal numbered service notes signed by the Director and distributed in the Organization’s working languages.

Recommendation No. 6. The External Auditor recommends that internal Office meetings be more clearly divided between meetings on Office governance and programme coordination, on the one hand – which should both be formalized – and, on the other, information meetings for all staff and dialogue with local staff – the latter of which remains to be introduced – and that in all cases, concise records of decisions be kept and followed up. Implementation of this recommendation requires no time limits for preparation or consideration.

Recommendation No. 7. The External Auditor recommends that, by the end of the current biennium, the Office in Nairobi: (i) finalize its regional communication and information strategy, prioritize the use of Internet tools for its implementation, arrange for the regular updating of the information disseminated, and ensure that that information is made available in, at the very least, both of the Organization’s working languages; (ii) ensure that the Office’s entire staff and network of 13 countries are involved in the project; and (iii) initiate the regular production and dissemination of a newsletter and annual activity report.

Recommendation No. 8. The External Auditor recommends that the Office seek to subscribe more systematically to procurement on the basis of purchase orders placed by the other United Nations agencies present at the UNON complex, particularly for office equipment, data communication equipment and routine supplies, and that it justify any exceptions to that method through an officialized and traceable case-by-case study of its economic disadvantages.

196 EX/23.INF – page 2

I. OBJECTIVE AND SCOPE OF THE AUDIT

1. A team of two auditors visited the UNESCO Office in Nairobi (Kenya) from 3 to 14 November 2014. The audit was chiefly concerned with the management and activities of the Office.

1.1 Method

2. The audit was conducted in accordance with the International Standards of Supreme Audit Institutions,1 the standards of the International Organization of Supreme Audit Institutions2 and the prevailing regulations, especially Article 12 of the UNESCO Financial Regulations and the Annex on the Additional Terms of Reference Governing the Audit.

3. Each finding or recommendation has been discussed with the Office managers. An exit meeting was held on 14 November 2014 with the Director and the Administrative Officer. The senior management had sight of the draft report and an opportunity for input. Its comments and its replies to the audit findings, together with those made by the Headquarters services, to whom the draft report was sent, have been fully taken into account as warranted in the External Auditor’s final position.

1.2 Previous recommendations

4. The previous report by the External Auditor on the management of the UNESCO Office in Nairobi (182 EX/47 dated 11 August 2009) made 12 recommendations for which it was said that the Director-General “accepts all of the recommendations contained in the report and will endeavour to implement them to the extent possible”. Despite the guidelines set by documents 184 EX/INF.8, 186 EX/INF.6 and 190 EX/INF.9, it was not possible to implement a number of the recommendations.

5. Document 182 EX/47 – Recommendation No. 1: the UNESCO Office in Bujumbura still exists, but no longer reports to the UNESCO Multisectoral Regional Office in East Africa.

6. Document 182 EX/47 – Recommendation No. 2: the UNESCO documentation centre was shut down in 2013, enabling substantial savings to be made on the annual cost of rent. The closure of the library has resulted in the restitution to UNON of a quarter of the premises previously occupied,3 generating a net annual saving of $37,121.4 This aspect of the recommendation has thus been implemented.

7. There is no longer a single library or documentation centre at the United Nations complex at Gigiri. That decision was taken in response to concerns over savings and, above all, security. The books and periodicals of the UNESCO Office’s former library are now kept in storage in several empty offices on the ground floor of the complex. This is unsatisfactory from the point of view of both cost per square metre of renting the premises from the United Nations Office at Nairobi,5 and the fact that it has deprived teachers, students and researchers from Kenya and the rest of the subregion of access to potentially useful documentation.

8. However, the closure of the library at the UNESCO Office in Nairobi, which has also generated savings, concomitant with that of the UNON documentation centre at its complex in Gigiri, has left the population of teachers, researchers and students without physical access to UNESCO publications, other than at the small library of the Kenya National Commission for UNESCO in central Nairobi.

1 ISSAI. 2 INTOSAI. 3 284 m2 out of 978 m2, which are now allocated to UNICEF. 4 United States dollars. 5 UNON.


Recommendation No. 1. The External Auditor recommends that the Regional Office either (i) actively seek a solution to enable readers to regain access to UNESCO and United Nations publications, in cooperation with United Nations agencies and the United Nations Office at Nairobi (UNON) or with the Kenya National Commission for UNESCO, or (ii) dispose, once and for all, of any unused document repository deemed surplus to requirements and whose storage results in unnecessary costs.

9. Document 182 EX/47 – Recommendation No. 6: as reflected in document 192 EX/27.INF, the effectiveness of projects funded or implemented by the Office is only partially measured by the SISTER software. The consequences of the announced development of results-based management (RBM) were not measured during the auditors’ visit.

10. Document 182 EX/47 – Recommendation No. 8: in response to the recommendation on temporary contracts and the geocultural diversity of consultants, it was reported to the Executive Board that a communication had been sent to managers/AOs6 to highlight the need to reinforce geographical diversity when recruiting consultants and that the recommendation had been applied in January/February 2010.

11. Between early 2012 and November 2014, the Office in Nairobi recruited 188 consultants of whom 138 were African (74% of contracts), 24 were European (13% of contracts), 16 Latin American or North American (8%) and 10 Asian or Australian (5%). The large number of local projects partly explains the preponderance of consultants from Africa. Since 65% of the Office’s staff members with international status are from the African continent, the directive on geographical diversity remains locally very limited in scope. The Office considers that consultants from Africa are both less expensive and more efficient because of their experience of the region and the countries where they are called upon to work. It therefore deems it difficult to truly aim at a reasonably balanced diversity. The External Auditor considers that the argument is ultimately irrelevant. Moreover, it is debateable that consultants from a vast continent have greater knowledge and expertise concerning local problems and the cost cannot be prioritized over any other factor when diversity is a policy for which the Organization must bear the cost; decisions – and waivers – in this area must therefore be conducted knowingly and not systematically.

12. Document 182 EX/47 – Recommendation No. 9: even though a standard distribution list of Office documentation has been drawn up, several offices remain cluttered with numerous boxes of documents, booklets and publications, some of which have been in storage for several years. This largely dormant stock, together with office equipment and furniture waiting to be decommissioned, should be re-listed and either disseminated or decommissioned. Combined with the previous recommendation on the storage of the stocks of publications from the former library and, should the stocks be maintained, with the more rational use of the 10 vacant offices and the search for a more economical archiving room outside the Gigiri complex, this would help to vacate additional space and make further savings on the cost of renting premises from UNON.

Recommendation No. 2. The External Auditor recommends that the management of vacant office space, stocks of documentation lying dormant and equipment waiting to be decommissioned be rapidly re-evaluated, taking into account programme needs and considering, among other things, the option of finding less expensive storage space outside the Gigiri complex so that more space may be returned to the United Nations Office at Nairobi (UNON) and, hence, additional savings could be made.

6 Administrative Officers.


II. SCOPE OF ACTION OF THE OFFICE

2.1 Establishment agreement with the host country

13. The UNESCO Regional Office in Nairobi has been operating in Kenya by virtue of an establishment agreement,7 signed on 8 February and 24 March 1965. That agreement no longer fits the circumstances. The agreement concerns:

– the establishment in Kenya of a Centre for Science and Technology in Africa, which became the Regional Office for Science and Technology for Africa in 1973 before being physically shut down in 1985 when UNESCO, together with most of the agencies represented in Kenya, moved to the United Nations’ Gigiri complex;

– a building and equipment made available to UNESCO by the Kenyan Government when the premises for the Centre for Science and Technology in Africa were returned to their owner in 1985;

– the guarding of the surroundings of UNESCO premises by the Kenyan police force, while the security of the Gigiri complex is provided by the United Nations Office at Nairobi (UNON);

– an annual national contribution of 160,000 Kenyan shillings to pay the salaries of 11 locally recruited staff 8 and the Office’s operating expenses; nonetheless, this amount has not been revalued since 1985 and is 10 times lower than the $22,800 currently paid annually by the Kenyan authorities.

14. When asked about the validity of this agreement, the Office said, without documenting its response, that it had raised the issue with the Kenya National Commission for UNESCO.

Recommendation No. 3. The External Auditor recommends that negotiations be initiated without delay, within the framework outlined by the continuing reform of the field network in Africa, with a view to aligning the establishment agreement with the actual current operating conditions of the Office in Nairobi.

2.2 The geographical scope of the Regional Office

15. The reform creating five UNESCO regions in Africa was endorsed at the 36th session of the General Conference and formalized by the Director-General in DG/Note/14/2 dated 3 January 2014. The Office in Nairobi therefore now covers a geographical scope of 13 countries9 in East Africa and the Indian Ocean, in a multisectoral dimension.

16. If we compare this geographical scope to the main regional integration organizations of the subregion,10 we see that UNESCO’s categorization of the East Africa region is close to that of the Common Market for Eastern and Southern Africa (COMESA):

7 Agreement A/280/1, dated 24 March 1965. 8 Four secretaries, six office staff and one driver. 9 Comoros, Djibouti, Eritrea, Ethiopia, Kenya, Madagascar, Mauritius, Rwanda, Seychelles, Somalia, South Sudan,

Uganda, United Republic of Tanzania. 10 East African Community (EAC); Intergovernmental Authority on Development (IGAD); Common Market for

Eastern and Southern Africa (COMESA).


Table No.1: Regional categorization

EAC IGAD COMESA (*)

UNESCO Regional Office (**)

Burundi Burundi Comoros Comoros Djibouti Djibouti Djibouti Eritrea Eritrea Eritrea Ethiopia Ethiopia Ethiopia Kenya Kenya Kenya Kenya Madagascar Madagascar Mauritius Mauritius Rwanda Rwanda Rwanda Somalia Somalia Seychelles Seychelles South Sudan South Sudan South Sudan Sudan Sudan Uganda Uganda Uganda Uganda United Republic of

Tanzania United Republic of Tanzania

4/13 6/13 11/13 13/13

* COMESA includes other Eastern and Southern African States; ** In bold italics: the three national offices of the region. Source: UNESCO

17. Unlike of Rwanda and the United Republic of Tanzania, we see that Burundi, although a member of EAC and COMESA, is not part of UNESCO’s East African region, while its geography, history, culture and economy link it to East Africa.

18. This broad geographical scope covers a disparate administrative structure, as it contains no less than six different institutional arrangements: a regional office based in Nairobi, whose Director (at grade D1) is also representative to the Kenyan authorities; there is no deputy director, a post that could, by delegation, ensure the monitoring of bilateral relations with Kenya and the supervision of the Office’s management, thus assisting the Director with his many tasks:

– three national offices (Ethiopia, South Sudan and United Republic of Tanzania) for which the heads of office are also UNESCO representatives to the national authorities;

– a liaison office in Addis Ababa, whose Director (at grade D-1) – also UNESCO representative to Ethiopia – is responsible for relations with the African Union;

– three antennas (Djibouti, Rwanda and Madagascar) managed by the Office in Nairobi and for which the regional Director serves as UNESCO representative to the countries where the antennas are located;

– two project offices (Comoros and Uganda) for which the regional Director serves as UNESCO representative to the countries where the antennas are located;

– four countries where UNESCO has non-resident status, where the regional Director is UNESCO representative (Eritrea, Mauritius, Seychelles and Somalia).

19. The regional Director must thus lead and coordinate UNESCO’s action in the region based on several organizational structures (regional office, national office, antenna, liaison office, project office, no office). The effectiveness and efficiency of the regionalization require the clarification of the respective responsibilities of the heads of office, the regional Director and authorities at Headquarters.


20. A first Director-General Note (DG/Note/14/2 of 3 January 2014), on the UNESCO reformed field network in Africa, provides that all national offices, antennas and project officers report to their respective regional offices. It also states that the regional offices:

– are responsible for compiling reports on all activities in their region;

– have full authority in their respective regions with regard to the coordination of programme design, implementation, monitoring, evaluation and reporting;

– are fully responsible and accountable for the delivery of UNESCO country and regional programmes in all countries under their coverage, except where national offices are established;

– and must:

(i) develop their own four-year plan for the region, describing its objectives over the C/5 period;

(ii) break down the four-year plan into biennial work plans with key expected results and performance indicators;

(iii) strategize the use of the biennial budget as a tool for realizing the expected results and other management targets;

(iv) define their partnership strategy and annual targets for resource mobilization and delivery of extrabudgetary programmes, paying due attention to their quality control and management and coordinating contacts with donors.

21. A second Director-General Note (DG/Note/14/3 of 3 January 2014), on the enhanced delegation of authority to UNESCO field offices and revised reporting lines, provides in paragraph I.4.i that directors of multisectoral regional offices in Africa report on their performance to the responsible programme ADGs.11

22. Field offices in Africa nevertheless have the possibility to report to the Africa Department. This link with the Africa Department is ambiguous as it is not specified whether it is direct or goes through the multisectoral regional Director concerned. It is clear, however, that the three national offices for Ethiopia, South Sudan and the United Republic of Tanzania manage matters concerning their staff, budget and finances directly with Headquarters. The Liaison Office in Addis Ababa receives its instructions from Headquarters.

23. Also in paragraph I.4, the DG Note provides that:

– heads of national offices in Africa report to the Director of the concerned multisectoral regional office on the delivery of agreed expected results;

– directors and heads of national offices consult the concerned programme ADG when assessing the performance of international programme staff;

– directors and heads of national offices will be closely associated to the decision-making process concerning the appointment and removal of all international staff in countries under their coverage;

– regular consultations are held between programme officers and Headquarters providing that directors and heads of national offices are copied on all important communication.

11 Assistant Directors-General.


24. In all cases, it is not clearly stated whether the link established between the national offices and Headquarters is channelled through the multisectoral regional Director and in what form (information, advice, consent or decision). This is not a perfunctory remark as we can see that:

– the request for the accreditation of the new regional Director, in autumn 2012, was made without involving the Regional Office or even informing it of the course of the procedure;

– the recent recruitment of the head of the Office in Dar-es-Salaam was conducted without involving the regional Director in Nairobi in the selection process;

– the national authorities frequently receive correspondence from Headquarters that does not pass through the Regional Office or does not copy the Office on the communication.12

25. With regard to programme management, the ambiguity is the same: paragraph II.8.a states that Directors of regional offices and heads of national offices are authorized to adjust work plans and main lines of action in consultation with the concerned programme ADG. The role of the regional office is not specified.

26. Finally, in paragraph III.21.b it is stated that the Africa Department (AFR) is the focal point of UNESCO in its relations with the African States, the African Union and Africa’s Regional Economic Communities in close consultation with programme sectors, the liaison offices and national offices concerned. The multisectoral regional directorates are not mentioned in the organization of work.

Conclusion without recommendation. Considering the particular case of the Office in Nairobi, the modalities of the implementation of the Director-General’s notes DG/14/2 of 2 January 2014 and DG/14/3 of 3 January 2014 appear to lack clarity as to the respective responsibilities of the structures in place – whether or not they are expected to endure – given the new principles and wide-ranging responsibilities conferred upon the new multisectoral regional offices. Considering his project later in 2015 to audit the field network reform, and more particularly the implementation of that reform in Africa, the External Auditor refrains from concluding with a recommendation based on just one example but will keep his findings in mind with a view to extending his observations, as planned, to the other local structures in Africa.

2.3 Mandate of the regional Director

27. The new regional Director arrived in Nairobi on 12 January 2013. His appointment followed the procedure described below:

– an Ivory Note (DG/Note/12/18 dated 15 October 2012) informing the entire Organization of the appointment of a new Director of the UNESCO Multisectoral Regional Office in Nairobi, representing UNESCO in 10 countries in the subregion, effective as at 1 November 2012; in addition to the decision to appoint the person concerned, the note basically provides a summary of his career and, beyond stating his new duties, includes no indication of the substance of his mission;

– a letter from the Bureau of Human Resources Management (HRM) (HRM/SBL/BNF/FLD.1/2012/272 dated 19 December 2012) personally informing the person concerned of his reassignment from the Office for Iraq in Amman (Jordan) to the Regional Office in Nairobi – an administrative letter merely informing the Director of his conditions of remuneration;

12 For a recent example, see CL/4076, circular letter dated 11 September 2014 on the protection of museums and

their collections, addressed to the permanent representations of Member States but not communicated to the Regional Office in Nairobi.


– and a post description signed on 4 July 2013 by the Director of the Bureau of Field Coordination (BFC), i.e. nine months after the appointment decision and almost six months after the Director took up his duties.

28. The regional Director told the auditors that he had no knowledge of that document until it had been communicated to the Regional Office at the auditors’ request in preparation of their audit. The job description appears to have been drawn up hastily and clumsily copied and pasted since paragraph E.1 specifies that the Director “will account for progress made (…) in the Organization’s fields of competence in West Africa [sic.]” and paragraph E.4 states that he “will ensure active synergy with the National Commissions (…) of Ghana and Côte d`Ivoire [sic.]”.

29. Without prejudice to the inaccuracies identified in this document, the main responsibilities of the new regional Director are listed as follows:

– to develop and conduct the multidisciplinary programmes of the multisectoral regional office; to participate in the development of strategic UNESCO country programming documents (UCPD) for Common Country Assessments (CCA) and United Nations Development Assistance Frameworks (UNDAF) (the countries to which this responsibility applies are not specified; it is presumed that it applies to all countries where the Director represents the Organization);

– to manage efficiently the activities and resources of the Office;

– to take part in the efforts of UNCT 13 and SMT 14 (the countries to which this responsibility applies are not specified; it is presumed that it applies to all countries where the Director represents the Organization);

– to discharge the duties of the UNESCO representative in close conjunction with the national authorities of 10 countries; to be the Organization’s focal point in its relations with EAC and NEPAD15 for the subregion.

30. These objectives largely express obligations in terms of resources and no real obligations in terms of results; they are worded in very general terms and are hard to measure. They set the Director no precise objective and are therefore ineffective for appraising his performance at his level of employment, let alone at the regional level. In each paragraph the priority is placed on the national dimension of the work whereas – given the Organization’s ambitions and the Office’s staffing table – the chief emphasis should bear on decentralization and development policies in education, science and culture in East Africa.

31. The regional Director has not signed a performance agreement. A job description is no more a proper substitute than is the letter of appointment or notice of appointment (Ivory Note) given the way in which these documents are drafted.

Recommendation No. 4. The External Auditor recommends that a performance agreement be concluded with the Director of the Regional Office in Nairobi without delay; that it be consistent with the Organization’s regional and subregional strategy, as well as with the guidelines laid down by the Bureau of Strategic Planning (BSP), so as to enable him to focus and evaluate his actions in those two dimensions; and that it set clear and robust objectives, together with measurable performance indicators.

13 United Nations country team. 14 Security management team. 15 New Partnership for Africa’s Development.


III. MANAGEMENT OF THE OFFICE

3.1 Office operating standards

32. Contrary to an undocumented affirmation at the exit meeting, the Office does not have a collection of the rules, standard procedures or standing instructions governing the working environment, security, service administration, punctuality, leave entitlements and so on. This is partly because UNON independently lays down rules that apply to all staff working at the Gigiri complex. It would be appropriate, at the very least, to compile, clarify and make available in a clearly identified document the rules that are specific to UNESCO, which UNON has no business imposing.

33. While there is a handbook for staff members working at the Regional Office, it cannot replace the instructions that any director must formally issue for the organization, working environment and smooth operation of the service for which he or she is responsible.

34. It should be noted in that regard that there is no formal mechanism capable of verifying the punctuality and presence in the workplace of international or locally recruited staff. The Office claims that this is not causing it any difficulties: the prevailing calm cannot be seen as reason not to lay down rules that are applicable to one and all, in all places, for the long term.

Recommendation No. 5. The External Auditor recommends that all decisions concerning the organization, operation and security of the Office, or concerning the employees’ conditions of service, should be recorded in formal numbered service notes signed by the Director and distributed in the Organization’s working languages.

3.2 Team management

35. Three types of more or less periodic meetings are organized by the Office:16

– all-staff meetings on matters of general interest or substance (security, travel and duty missions, the regional situation, programming, etc.), which are held more or less regularly17 and form the subject of detailed minutes;

– meetings of project managers (seven or eight per year) whose proceedings or decisions are not recorded, even though they may be seen as an opportunity for discussion and guidance for programme implementation;

– meetings of administrative units (seven or eight per year), whose proceedings are not recorded.

36. Thus staff information meetings are mixed up with more substantive matters concerning the management of the Regional Office; meetings about steering and coordinating projects are inadequately recorded even though the very substance of the management of the Office is expressed there. Meetings are never convened for locally recruited staff in order, according to the Office, not to disrupt “the unity and harmony that has to exist between international and local staff members”. Although the concern is commendable, some of the characteristics specific to the status and management of local staff would nevertheless warrant equally specific attention.

37. The governance of both the Office – which would justify regular meetings of the programme managers and chiefs of service (establishment of a security management team – SMT) – and the

16 Several meetings at UNON and UNCT regularly involve the Director or the Administrative Officer. A special

meeting was also held in December 2013 (regional seminar) to which representatives from all offices and antennas in the region were invited.

17 Five to six per year in 2012 and 2013; two in 2014.

196 EX/23.INF – page 10

programmes would require specific, regular and formalized meetings, together with records of decisions that allow for follow-up from one meeting to the next.

Recommendation No. 6. The External Auditor recommends that internal Office meetings be more clearly divided between meetings on Office governance and programme coordination, on the one hand – which should both be formalized – and, on the other, information meetings for all staff and dialogue with local staff – the latter of which remains to be introduced – and that in all cases, concise records of decisions be kept and followed up. Implementation of this recommendation requires no time limits for preparation or consideration.

3.3 Communication and information

38. The Office in Nairobi does not publish an electronic newsletter. However, it is planning to produce such a tool, together with an instrument for information-sharing within regional teams. Both will provide an invaluable means of establishing the Office’s image and influence, and enhancing the cohesion of teams distributed across 10 different countries.

39. From 2012 to 2014, the Office produced 60 documents and four DVDs of all kinds, around half of which were for the PEER18 project, which is now dissolved. There is no specific budget for communication; the sectors’ project budgets provide for their respective communication needs.

40. The Office’s website is not “independent”; it has a web page on the UNESCO website. Since April 2014, it has been taken in hand by a communication officer assigned to UNESCO by Japan. The website is in English only, even though there are several French-speaking countries in the region. Despite repeated requests, the Office has had no feedback from Headquarters on visits to the website and has not been able to install the analytical tools necessary to track and analyse those visits. The website is updated regularly but still has some substantial errors that should be corrected immediately.

41. Lastly, the Office states that it is preparing a regional communication strategy whose development will be made possible through the recruitment of the Office’s new communication officer and an IT assistant responsible for uploading content on the Office’s website. Several workshops have been held to clarify the respective roles of the managers and stakeholders and the possible input. 19 Nonetheless, guideline and content design cannot be left to the communication officer alone and has to be seen by all staff as a key part of the Office’s work. The Kenya National Commission for UNESCO, met by the auditors, expressed high expectations in terms of communication and visibility of the Office’s activities. It is therefore important that the discussions initiated reach a conclusion quickly so that the Regional Office is given the necessary visibility for the credibility of its work.

Recommendation No. 7 The External Auditor recommends that, by the end of the current biennium, the Office in Nairobi: (i) finalize its regional communication and information strategy, prioritize the use of Internet tools for its implementation, arrange for the regular updating of the information disseminated, and ensure that that information is made available in, at the very least, both of the Organization’s working languages; (ii) ensure that the Office’s entire staff and network of 13 countries are involved in the project; and (iii) initiate the regular production and dissemination of a newsletter and annual activity report.

18 Programme of Education for Emergencies and Reconstruction 19 In November 2013: first consultation meeting of the offices of East Africa. In June 2014: collaborative regional

communication platform in relation to Priority Africa. In July 2014: regional consultation meeting of offices and East Africa’s National Commissions for UNESCO to develop the content of communication platforms.

196 EX/23.INF – page 11

3.4 The Office’s resources

42. The average number of staff members in the Office in Nairobi has increased relatively by 7% since the previous biennium. In 2011, the Office employed, directly or indirectly, 42 persons, including 14 with international status and eight consultants or staff under contract. There are currently 45 staff members, including 17 with international status and three under contract. Regionalization has led to the rise in available expertise, resulting in the professionalization of the workforce. The trend is similar in project offices and antennas, where the number has increased from 14 to 17, predominantly operational staff.

43. At the Office in Nairobi itself, there is currently a ratio of 23 support staff members to 22 operational staff members. Considering that the support staff also lend their support to country offices and antennas, which currently have no dedicated administrative staff, the ratio of support staff (27 full-time equivalent) to operational staff (35 full-time equivalent) across the region is around seven or eight to 10. This ratio should nonetheless be refined by in-depth examination as the “support” dimension of many staff members also involved in “operational” activities is not quantifiable without bias.

44. Among the 17 staff members with international status in Nairobi, there are 11 men and six women, giving a ratio close to 60/40. For staff recruited locally, the proportion is around the same, with 21 men and 13 women.

45. Interim arrangements for the post of Director of the Office during the Director’s frequent trips to the 13 countries in the region are not structurally organized. The possibility of appointing a deputy director could be considered, by either creating a new post or promoting one of the senior programme specialists.

46. For the 2014-2015 biennium, the Office has $813,000 available under the regular programme for running costs and $28,000 for security, discounting staff costs covered by Headquarters.20 These amounts have increased slightly since 2010, which reflects – only partly – the increase in expenses relating to the regionalization of the Office. The relatively low security budget is explained by the fact that most of the tasks are provided by UNON.

47. As might be expected, the regular programme funds for activities fell considerably from 2010 to 2014, with a decrease of almost 20% in appropriation. The decline, almost across the board, was particularly significant during the 2012-2013 period, primarily in the Natural Sciences Sector and secondarily in the Communication and Information Sector. This is the logical result of the priority given to educational issues under Priority Africa.

Table 2: Regular budget of the Office (in United States dollars)

Source: UNESCO

20 The Office is not informed by HRM of the salary cost of the employees whose salaries are paid by Headquarters.

2010-2011 2012-2013 2014-2015

Budget Expenditure Budget Expenditure Budget

Activities 2,574,612.88 2,470,232.47 950,614.00 934,619.95 2,094,465.00

Security 45,659.82 45,635.82 53,558.00 53,558.00 28,725.00

Operations 788,316.69 786,432.87 768,386.74 756,556.15 812,963.00

Total 3,408,589.39 3,302,301.16 1,772,558.74 1,744,734.10 2,936,153.00

196 EX/23.INF – page 12

48. The decline in regular resources is largely offset by extrabudgetary contributions, which increased annually from $3.2 million to $9.3 million from 2010 to 2014, particularly in the sectors of education and culture. Geographically, Somalia (+$3 million), Madagascar (+$0.9 million) and Uganda (+$1.4 million) have generated the most extrabudgetary funding. Extrabudgetary funding in Kenya remained stable at $2.1 million. The Regional Office benefits from the sectoral and geographical priorities of technical and financial partners operating in East Africa. The Office should be given credit for knowing how to capitalize on this.

3.5 Ability to attract extrabudgetary funding

49. A review of efforts from 2012 to 2014 to find partners and attract extrabudgetary resources points to encouraging results, with more than $31 million potentially raised.

Table 3: Extrabudgetary resources (in United States dollars)

Source: UNESCO

50. The Office’s attendance at United Nations country team (UNCT) meetings and the multisectoral dimension of its work give it good scope for joining in projects by other United Nations agencies. The Education Sector raised the largest amount of funding, which is consistent with the major educational challenges in the region.

3.6 Self-assessment of internal controls

51. During the 2012-2013 biennium, the Office submitted to Headquarters the responses to two self-assessment questionnaires. On the strength of the documents transmitted by the Office at the exit meeting, it was confirmed that the responses for 2013 – no definite trace of an equivalent procedure could be detected for 2012 – had been prepared only by the Director and his administrative assistant. Admittedly, the documents drawn up by these two managers in January 2014 were “shared” with the main officials of the Office, but at such short notice (one day before signature by the Director for dispatch to the Bureau of Financial Management – BFM) that this alleged sharing was procedural mere formality. The finalized documents – self-assessment and internal control certificate – were nonetheless copied to the office managers after being sent to Headquarters. The information provided in the documents remains highly succinct and, in some cases, incomplete.

52. Given that the ultimate aim is to assess internal control of the Office’s work and management with a view to improving quality and/or efficiency, it is essential – if it is to have meaning and achieve its full potential – that this annual exercise be the product of teamwork involving the Director, the administrative officers and programme managers.

PROGRAMMES RECEIVED COMMITTED PLEDGED TOTAL

CLT/14 projects 2,125,450 110,000 4,152,184 6,387,634

CI/31 projects 460,740 500,000 1,784,929 2,745,669

ED/15 projects 6,022,265 - 13,247,080 19,269,345

Gender/3 projects 614,769 - 0 614,769

SC/5 projects 867,440 - 1,849,375 2,716,815

SHS/nil

-

TOTAL 10,090,664 610,000 21,033,568 31,734,232

196 EX/23.INF – page 13

3.6.1 Administrative controls

53. Expenses incurred by staff on duty travel are adequately checked by the Office. Instructions from Headquarters suspended some of the checks 21 whereas the guide for field office Administrative Officers on checking travel and mission expenses instructs them:22

(i) to check documents confirming locally-incurred expenditure;

(ii) to deduct any free overnight stays or meals that the traveller may have enjoyed from duty travel reimbursement;

(iii) even to deduct any overpayments from their future salaries.

54. These justification documents should enable the administrative unit to check the staff’s declarations and their consistency with the mission programmes that accompany the travel request form. This supports the auditors in the opinion that there is an inconsistency – already noted several times previously – between the Administrative Manual and the internal control guide, and that the production of receipts must be required by administration.

55. The checks set out in the guide to checking duty travel expenses are sound administrative practice: the External Auditor can only encourage the Office to continue their use. They enable the administrator to be satisfied that reimbursement paid corresponds to genuine expenses incurred by staff on duty travel and not to indirect supplementary pay, which would be contrary to the interests of the Organization and its need to make savings.

56. The obvious contradiction between the guide to checking travel expenses and the circular on reimbursement of travel expenses should be removed and clear instructions should be issued to the field offices. This contradiction is, however, contested by the Organization, which considers the observation irrelevant on the grounds that senior management had refused in June 2013 to reintroduce the control of receipts, deeming that on the one hand it would not be consistent with the concept of a flat rate for DSA 23 and, on the other hand, that the control of receipts for accommodation would incur an excessive administrative burden in relation to the expected benefits.

57. The External Auditor maintains his position, however, since:

– it is in no way contradictory with the principles of a flat rate for DSA to impose conditions on payment of expenses;

– checking the receipts justifying that the staff member has incurred expenses on accommodation is a negligible administrative burden in the duty travel cost monitoring process;

21 UNESCO Administrative Manual, chapter 15-2, para. 5.10. Daily Subsistence Allowance (DSA) – (a) Standard

DSA rates. “The purpose of DSA is to assist in defraying additional personal expenses (such as board and lodging) incurred in travelling to, or while stationed at, the place of mission, or during authorized stopovers. The DSA is a lump sum and thus no justification documents (e.g. hotel bill) are necessary unless additional reimbursement is requested”.

22 Administrative Officer’s check-lists for mission travel – “Para 20: I reminded the traveler that his travel claim is a supporting document for verification and audit purposes so that he ensured that his travel claim was signed, dated, and updated with actual costs and with the correct duration and location of the mission. Para 21: I reminded the traveler to include all meals/accommodation/transportation offered free of charge to be deducted from the standard travel allowance. Where applicable, the traveler has taken note of a future salary deduction due to overpayment of travel allowances (if any). Para 22: Did I receive all the necessary supporting documents where applicable? Para 23: Have I ensured that the signed travel claim reports all the costs incurred as certified in SAP?”

23 Daily subsistence allowance.

196 EX/23.INF – page 14

– the responsibility of local authorities to deduct allowances paid for meals and accommodation provided free of charge cannot be realized effectively without this control.

3.6.2 Control of purchases of goods and services

58. A procurement plan was submitted to the Bureau of Field Coordination (BFC) for 2013, but its content was not approved by Headquarters. Concerning contracts of over $50,000, the Office works with other agencies with a view to assessing specific and workable selection criteria.

59. The self-assessment refers to a database of consultants currently under construction. Questioned on the matter, the Office presented a draft table that was in the course of being finalized. The support of IT services at Headquarters could help the Office to consider making the most of the VIP software and the list of suppliers already registered therein.

60. Purchases of goods and services, described in the summary of the self-assessment as “under control”, appear as a succession of purchases against invoice, the sum generally being below the thresholds defined in the Organization’s rules, and the supplier being already registered in the VIP software. According to the Office, the small volume and general nature of purchases, together with the availability in tranches of funds allocated under the biennial budget, justify the lack of a particular specification of requirements or procurement plan; the Office does not have a “duly documented plan for purchases of goods and services” but has attempted to introduce a quarterly inventory of supply needs.

61. This should have prompted the Office to seek agreements with the other United Nations agencies present at the UNON complex; such coordination, however, only covers travel and duty missions. According to local managers, it would appear that the constraints and organizational burdens relating to the common contracts and common services of UNON do not encourage the Office to use more services proposed by the Common Service Unit, especial owing to their relatively uncompetitive price.

62. However, the Office sporadically purchases office, data communications or air-conditioning equipment, maintenance products and office supplies. Rather than re-launching with every purchase a limited and time-consuming competitive process, it would appear more efficient to subscribe to the supply contracts of the other United Nations agencies.

Recommendation No. 8. The External Auditor recommends that the Office seek to subscribe more systematically to procurement on the basis of purchase orders placed by the other United Nations agencies present at the UNON complex, particularly for office equipment, data communication equipment and routine supplies, and that it justify any exceptions to that method through an officialized and traceable case-by-case study of its economic disadvantages.

3.6.3 Monitoring of duty travel

63. Several programme specialists have regional assignments or specific skills that require them to travel frequently. The Director is sometimes called upon by Headquarters to represent the Organization at meetings held in the region. Some staff members are physically present at the Office in Nairobi for less than 50% of working days. There is nothing to prevent anyone from thinking that some missions could have been provided by UNESCO staff at the site of the event justifying the mission. By seeking, where possible, an alternative to costly and time-consuming travel, the Office would save valuable working time and financial resources. The monitoring of expediency and savings, which should be exercised by the Director, should be strengthened.

196 EX/23.INF – page 15

3.6.4 Conclusion on the self-assessment of internal controls

64. The collective nature, use and purpose of the annual self-assessment exercise do not appear to have been integrated or even understood by the Office in Nairobi. Too many responses result of a piecemeal approach, not integrated into the available management tools, without looking for a consolidated view of operations (the programmes) and administration. The work of forecasting and planning procurement and contracts is done, but in a very fragmented way, particularly with regard to programme needs in terms of consultants and service providers. There are no plans to pool procurement, excluding travel and missions, with other United Nations agencies

Conclusion without recommendation. It falls to the Office to acquire the means for a collective, consolidated and – in terms of concise, reworded and measurable objectives – relevant response to the annual self-assessment of the quality of its internal controls. The exercise, as it stands, remains purely formal and of questionable relevance both for drawing up the consolidated statement on internal control signed annually by the Director-General, and for a genuine assessment of possible ways in which to streamline the controls at the local level and, hence, to improve the quality and effectiveness of the management of the Office and its programmes.

IV. SPECIFIC OBSERVATIONS ON MANAGEMENT

4.1 Pooling with other United Nations agencies

65. The presence in Nairobi of 29 different United Nations agencies has led a number of them to work together, in accordance with the provisions of Item 7.9 of the Administrative Manual relating to cooperation among United Nations system agencies in the field. This pooling of resources and procedures is conducted, in particular, through joint calls for tenders, the delegation of a chosen service provider to another agency, LTAs24, the use of a United Nations agency as service provider and the outsourcing by one agency of a part of its activities delegated to another.

66. For the Office in Nairobi, pooling takes place via the signing of a long-term agreement for the purchase of airline tickets, following a joint call for tenders carried out by UNON and the use of the Common Service Unit. The Gigiri complex houses 71 separate agencies.

67. UNON has introduced elements of coordination for the administrative management of the complex, based on the observation of common needs for the 71 agencies in terms of support functions. Common governing bodies have been established: CSB,25 for example, made up of the directors of the 21 main agencies, decides on the general policies on the basis of proposals made by technical steering committees.

68. Common services do exist, managed by UNON with cost-sharing according to a precise method of apportionment, usually according to the number of staff per agency.26 The Regional Office has little leeway to negotiate rates for these services. It could promote competition by calling on external providers and thus lower prices, but security constraints preclude this solution.

24 Long-term agreement. 25 Common Services Board 26 Compulsory services with payment according to the number of staff: security, medical service, stress

management, UN Cares programme on HIV and AIDS and a common services unit (support functions); optional services charged according to consumption: service for diplomatic relations with the host country, transportation of local employees; other services: office rental, STI, fluids, telephone and Internet.

196 EX/23.INF – page 16

69. The Office in Nairobi, like other agencies, is a captive customer of UNON and the services it provides to the United Nations community. It cannot really reduce the costs of renting its premises or paying for fluids, IT services and maintenance.

70. It is recognized that each time a long-term agreement is implemented by one of the 21 agencies of the UNON complex the other agencies on site have the opportunity to benefit from it. There is a long-term agreement (LTA) for the Office in Nairobi, launched by the UNESCO Office in Addis Ababa, to use geolocation radars.

71. In addition to this LTA, the Office in Nairobi also uses LTAs entered into by UNON for transportation and travel; these agreements are due to expire shortly. Two invitations to tender were launched by UNON for the renewal of contracts. The UNESCO Office in Nairobi participated in the technical evaluation of the bids to select a travel agency. This call for tenders was declared unsuccessful in July 2014. Moreover, the contract for the transportation of local employees is being finalized in order to be ready when the current LTA expires.

72. Pooling among the local United Nations agencies at Gigiri is therefore limited, although this is not necessarily owing to the UNESCO Office.

4.2 Duty travel management

73. The amount of duty travel by the Office in Nairobi increased by 57% between 2012 and 2013 and that trend could continue in 2014.

74. A sample of 30 missions (out of the 507 travel files opened between 2012 and 2014) was examined, for a total amount of $115,378.69, which represents 19% of mission expenses over the period. The control of travel files is satisfactory. Of the 30 files selected, all of them included all the papers tracing the mission undertaken and justifying the expenses incurred. The Office continues to archive in its travel files the receipts produced on returning from duty travel. This is very useful for monitoring duty travel in accordance with the initial programme.

Table 4: Trends in travel costs at the Office in Nairobi – 2012-2014 (in United States dollars)

2012 2013 2014 (as at 31/10)

Total Nairobi No. of days Amounts No. of days Amounts No. of days Amounts 739 104,906 1,158 272,717 1,039 234,823

No. of travellers 18 - 26 - 23 -

Annual averages Length/ traveller

$/staff member

Length/ traveller

$/staff member

Length/ traveller

$/staff member

41 days 5,828 44.5 days 10,489 45.2 days 10,209

$/day of duty travel 142 235.5 226

Source: UNESCO

75. The considerable amount of travel by the Office’s staff results in the limited amount of time spent in Nairobi by the programme specialists and managers, particularly the Director.

76. The regional nature of the Office could justify the fact that staff members leave on duty travel at least twice a year per country covered by the Regional Office. This number of journeys can be even higher for countries where the Office is implementing projects, because the implementation, steering and monitoring of activities and the participation in workshops, conferences and training

196 EX/23.INF – page 17

organized by UNESCO or co-organized with partners can make travel necessary. This amount of duty travel, however, can lead some staff members to be absent from the Office for the greater part of their normal working time (in one case up to two thirds of this time). The External Auditor was unable to check whether the requirements of the post justify such absence or whether their appropriateness was correctly documented. It is up to the Director to keep a watchful eye on this.

Table 5: Balance sheet for the duty travel of four staff members outside the average (in United States dollars)

2012 2013 2014 2012-2014

Staff member Missions Received Missions Received Missions Received Missions Received

A A 127 days 15,179.60 162 days 37,416.33 104 days 23,791.08 393 76.387

S V Y 135 days 25,891.60 88 days 26,657.11 95 days 24,550.74 318 77.099

D M 178 days 53,370.89 118 days 37,314.28 296 90.685

T S F 79 days 8,236.41 98 days 17,971.53 109 days 15,054.93 286 41.262

V. ACKNOWLEDGMENTS

77. The External Auditor expresses his gratitude to the management and staff of the Office in Nairobi for their availability and for the quality of the information provided during the audit.

End of audit findings

new audits by the external auditor part i audit...

Documents