UN REFORM: OIOS CHIEF WARNS NEW STUDY COULD LEAD

C O N F I D E N T I A L USUN NEW YORK 001265

SIPDIS

SIPDIS

E.O. 12958: DECL: 06/09/2011
TAGS: AORC UUNR UNGA ASIG
SUBJECT: UN REFORM: OIOS CHIEF WARNS NEW STUDY COULD LEAD
TO WEAKENING OF OVERSIGHT

REF: 06/07/06 USUN (HILLMAN)-IO/S (GLOCKNER) E-MAIL

Classified By: AMBASSADOR MARK D. WALLACE: REASONS: 1.5 (B) AND (D).


1. (C) SUMMARY: Under Secretary-General for Internal
Oversight Inga-Britt Ahlenius met privately June 9 with
Ambassador Wallace to present her vision of a strengthened,
more independent OIOS, but warned the soon-to-be released
independent external evaluation of UN oversight prepared by
Price-Waterhouse-Coopers (PWC) will likely recommend a
significant reduction in OIOS functions, including the
transfer of investigations to the UN Office of Legal Affairs
(OLA) and the shifting of responsibility for inspections and
evaluations to the UN Department of Management. Ahlenius
made a strong case for OIOS' retention of its core oversight
functions -- audit, inspection and evaluation -- while
suggesting a lesser role for investigations. She suggested
that the current review of sexual exploitation and abuse were
better suited to a "task force" approach separate from normal
OIOS activities. Ahlenius suggested that the UN Steering
Committee, which was responsible only for guiding PWC in the
preparation of its report, had actually inserted the
proposals to transfer current OIOS responsibilities to other
UN departments. END SUMMARY.

AHLENIUS' CALL FOR A
NEW STRUCTURE AND
INCREASED INDEPENDENCE
FOR OIOS
--------------


2. (C) Requesting a private meeting with Ambassador Wallace,
UN OIOS U/SYG Ahlenius, accompanied by OIOS Program Officer
Mika Tapio, outlined her vision of a strengthened, more
independent OIOS focused on its core functions as originally
defined by the General Assembly in paragraph 5 of Resolution
48/218B -- namely, "initiate, carry out and report on any
action which it considers necessary to fulfill its
responsibilities with regard to monitoring, internal audit,
inspection and evaluation, and investigations." Ahlenius
said she welcomed the call in the World Summit Outcome
Document (para 164 a) for a significant strengthening of
OIOS' audit and investigations functions, and was pleased
this proposal appeared to enjoy broad support among Member
States. Ahlenius underscored that a key to a strengthened
OIOS would be its financial independence, particularly
eliminating OIOS' need to solicit funds from the very UN
programs it was responsible for auditing, through the
provision of additional funding from the regular UN budget or
through creation of a trust fund devoted to supporting OIOS
activities.


3. (C) Ahlenius also proposed that OIOS be strengthened
through a reorganization of its core functions, with emphasis
on audit, evaluation and inspection. Ahlenius said she
favored a single audit division that carried out risk-based
audits and assessments, with systematic additional training
for her already professional and qualified staff. Ahlenius
underscored the importance of strengthening independent
evaluations and increasing the number of evaluations
conducted annually from 2-3 to 6-8. She said more support
also was needed for increased program self-evaluation. She
also recommended that the OIOS inspection function be
strengthened, including by increasing the number of
inspections conducted yearly to 8 to 10, rather than the
current total of 1 to 3. Ahlenius noted that all of these
proposed changes, however, did not automatically imply the
need for a significant increase in OIOS posts. While some
additional resources would be required, simply reorganizing
current OIOS staffing patterns, e.g. reducing investigations
staff, could, in the short term, enable OIOS to increase the
number of studies completed in such areas as evaluation and
inspection.

A TASK FORCE APPROACH
FOR SPECIAL INVESTIGATIONS
--------------


4. (C) Ahlenius expressed concern that OIOS' current role in
conducting two special investigations now underway, sexual
exploitation and abuse, and procurement, were consuming
significant resources that otherwise could be devoted to
audits, evaluations, and inspections. She suggested that
technically, these types of inquiries did not fall into the
more traditional areas for investigation such as management,
finance, assets and contracts. Ahlenius said she feared OIOS
would be called upon more frequently in the future to handle
similar inquiries, when, in fact, it would be better to
create special task forces to handle such investigations of
this nature. While Ahlenius said she opposed transferring
the investigation function from OIOS to the UN Office of
Legal Affairs, a proposal presently in the draft version of
the PWC study, she suggested that there was a need to
consider who other than OIOS might be better suited to handle
future investigations.

PREVIEW OF INDEPENDENT
EVALUATION OF UN AUDIT
AND OVERSIGHT
--------------


5. (C) Ahlenius said she had seen several draft versions of
the independent external evaluation of UN audit and oversight
prepared by Price-Waterhouse-Coopers. (Note: USUN had an
opportunity June 7 privately to review and summarize the PWC
report on OIOS, which was reported ref e-mail. End note.) A
number of recommendations in the draft version would
effectively weaken, rather than strengthen, OIOS. For
example, Ahlenius said the PWC report recommended that OIOS'
inspection and evaluation functions be moved to the
Department of Management, while investigations, as previously
noted, would be moved to OLA. Such transfers would
significantly reduce OIOS' mandate and restrict its future
functions to conducting audits. In response to a question
posed by Ambassador Wallace as to the basis of these
recommendations, Ahlenius noted that the original PWC draft
did not/not contain such proposals, but rather they were
apparently added later after the report was reviewed and
discussed by the Steering Committee. This Committee is
composed of five independent experts, including former UN
Comptroller Halbwachs, who were assigned to assist and advise
PWC in preparing the independent external assessment of UN
audit and oversight.


6. (C) Ahlenius did acknowledge that the PWC report
recommended new funding and hiring arrangements for OIOS,
both of which would help to strengthen OIOS. However, moving
the investigation, inspections, evaluations, monitoring and
consulting functions out of OIOS and into other areas of the
UN would weaken overall UN oversight and undermine the
independent nature of current OIOS functions. At one point,
however, she suggested that there may be a case for moving
the monitoring and consulting functions but not the
evaluation and inspection functions. Ahlenius said the PWC
report likely would be released within the next few days and
would then need to be reviewed by ACABQ and considered by the
Fifth Committee.
BOLTON