FAO REFORM MOVING FORWARD: UNTAI PROGRESS REPORT

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TAGS: PREL EAID FAO UN
SUBJECT: FAO REFORM MOVING FORWARD: UNTAI PROGRESS REPORT


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2. (SBU) Summary. As part of this mission's regular reporting
on reform of the UN's Food and Agriculture Organization (FAO),
we offer below our assessments on eight key issues covered in
our latest report for the USG's United Nations Transparency and
Accountability Initiative (UNTAI),covering the period from
January - June, 2009. In light of the continuing progress with
FAO's implementation of its major reform package, and
improvements in the UNTAI scoring for FAO, we recommend that we
fulfill payment of our remaining arrears to FAO, particularly
the last tranche of our 2008 assessment. Such a payment will
help ensure U.S. credibility and leadership at a crucial time
for FAO reform and in light of major global initiatives to
ensure food security. End summary.




3. (SBU) Tracking with the UNTAI reporting areas (eight focal
areas),the following captures many of the key areas of the FAO
reform program (or, "Immediate Action Plan") and highlights
areas where progress has been made and where additional emphasis
is needed.



-- Independence of Internal Oversight Function: The Office of
the Inspector General (OIG) reports directly to the Director
General (DG),with a "dotted line" to the Governing Bodies
through the Finance Committee. The OIG prepares an annual
activities report which becomes public through the Finance
Committee. Its scope of work is largely determined by biennial
budgetary allotment. The OIG "Charter" was recently modified
and will be presented soon to the Finance Committee, making more
explicit the independence of the OIG. It will also separate
investigative from internal auditing functions and clarify the
OIG's access to/by the Finance Committee. The biennial audit
plan is updated on an ongoing basis and subsequently presented
to the Director General. When the OIG conducts internal
investigations, notice of investigations are reported to the DG,
who has 24 hours to communicate questions or objections (not
done to date). Also, the OIG recently revisited previous
recommendations and redefined definitions of high/medium/low
risks. There are now 43 recommendations considered "high risk,"
compared with 225 in 2008. And, the OIG has adopted standards
of the Institution of Internal Auditors to ensure consistency
with the International Standards for the Professional Practice
of Internal Auditing.



-- Disclosure of Internal Audit Reports to Members: There have
been no concrete changes during this past rating period
concerning disclosure of internal audit and oversight reports to
Member States. Though a topic of review in a recent independent
external evaluation, there is still no formal policy to share
specific reports with Member States. There may be exceptional
instances whereby the Inspector General, as determined
necessary, may allow a Member Representative to read a specific
report in the office of the OIG, particularly if relevant to a
Member's project or initiative. In terms of policy adjustments
on this issue, there remains no consensus on this topic and no
formal action has been taken within the governing bodies to
allow disclosure of reports.



-- Access to Information Relevant to Operations: As part of its
overall reform efforts, FAO has been enhancing its
communications focus, both internally and for the general
public. While more work needs to be done, the public website,
along with a separate Member's access site, provides the vast
majority of documentation sought for an overview of governance,
administrative procedures, and substantive issues. It is also
envisioned that a new "Chief Information Officer" will feature
in the coming years as a key component of reform.



-- Independent Ethics Function: The FAO is close to hiring an
Ethics Officer at P-5 level, as part of its reform package, with
a target date of September for hiring. The Ethics Officer will
report directly to the DG and work closely with the Legal Office
and OIG. The Ethics Officer will be responsible for the

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financial disclosure program, but there remains no explicit
"whistleblower policy" - a function that remains largely the
purview of the OIG. An oath of office and general standards of
conduct for international civil service form the guidelines for
acceptable staff behavior. The Ethics Officer will be
accountable to a new "Ethics Committee" which in turn will be
accountable to the Finance Committee and the Committee on
Constitutional and Legal Matters (CCLM). A Charter for this
committee will be released to the Finance Committee in late
July. FAO staff tell us it is the only UN technical agency (not
including financial institutions) with such an Ethics Committee.




-- Whistleblower Protections: The protections and recourse
described above are expected to form part of the
responsibilities of the Ethics Office, once established,
according to FAO's OIG and Legal Counsel. The OIG investigates
matters and the Legal Counsel takes action on the basis of
internal reports. Legal Counsel staff tell us that all "staff,"
including contractors, interns, etc, are afforded the same
protections by the OIG as full-time employees. A separate
investigative panel deals with sexual harassment issues. There
is no explicit whistleblower policy, as stated above.
Regardless, there is a public website that provides staff with
information on how to report fraud or misconduct. The site
contains a confidential hotline number, email address, and a
confidential fax hotline. An "Integrity Roadmap" report is also
being prepared and will be sent to the DG. The report includes
recommendations on how to improve the integrity framework of FAO
and recommends an explicit whistleblower policy.



-- Financial Disclosure Program: The Ethics Officer will be
responsible for the financial disclosure function, which at
present is partial in nature and in need of strengthening. The
Ethics Officer, with the help of the OIG, will establish and
implement a more robust program. D1 employees and above (and
those with specific financial responsibilities) must complete a
financial disclosure form (the same as that used by the UN
Secretariat. The Ethics Committee is expected to have
sufficient authority to compel staff to react to issues of
concern cited during review of their disclosure forms. It is
not clear if the new disclosure program will cover spouses and
family members of FAO employees. A conflict of interest policy
remains in place.



-- Implementation of IPSAS: FAO is working toward full IPSAS
implementation by 2012. Funding is currently available from the
Program of Work and Budget for IPSAS implementation. The OIG
conducted a gap analysis of IPSAS project implementation and
offered recommendations. The FAO IPSAS Project plan is divided
into six-month stages. Finance Committee approval is required
before commencement of each stage, based upon bi-monthly
progress reports and a final 6-month report. There are plans to
integrate FAO's Field Accounting System (FAS) Project into
IPSAS, for consistency between HQ and field offices. The next
IPSAS Progress Report to the Finance Committee will report on
the impact of this integration.



-- Transparent Support Costs for Voluntarily-Funded Programs:
In regards to transparency regarding support costs for projects
funded from voluntary contributions, the FAO Secretariat reports
annually on application of the support cost policy to the
Finance Committee and proposes changes to the policy as needed
to improve recoveries. With a new budget cycle to be proposed
in July, 2009 it is expected that additional cost recovery
strategies will be reviewed by the Finance Committee and the
Membership during coming governing body meetings.
BRUDVIGLA