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United States Government Accountability Office GAO For Release on Delivery Expected at 10:00 a.m. EST Thursday, January 24, 2008 Testimony Before the Permanent Subcommittee on Investigations, Committee on Homeland Security and Governmental Affairs, U.S. Senate UNITED NATIONS Management Reforms and Operational Issues Statement of Thomas Melito, Director International Affairs and Trade GAO-08-246T January 24, 2008 UNITED NATIONS Highlights Highlights of GAO-08-246T, a testimony before the
    United States Government Accountability Office GAO TestimonyBefore the Permanent Subcommittee onInvestigations, Committee on HomelandSecurity and Governmental Affairs, U.S.Senate UNITED NATIONSManagement Reforms andOperational Issues Statement of Thomas Melito, DirectorInternational Affairs and Trade For Release on DeliveryExpected at 10:00 a.m. ESTThursday, January 24, 2008 GAO-08-246T  What GAO Found United States Government Accountability Office Why GAO Did This Study H ighlights Accountability Integrity Reliability   January 24, 2008   UNITED NATIONS Mana g ement Reform s and Operational I ss ue s   Highlights ofGAO-08-246T, a testimonybefore the Permanent Subcommittee onInvestigations, Committee on HomelandSecurity and Governmental Affairs, U.S.Senate Long-standing problems in UnitedNations (UN) managementunderscore the pressing need toreform and modernize the UnitedNations in areas ranging frommanagement, oversight, andaccountability to operationalactivities in specific countries. TheUnited States has stronglyadvocated the reform of UNmanagement practices and has alsobeen critical of the restrictionsBurma’s military regime hasimposed on many internationalorganizations in Burma over the past 3 years. This testimony, basedon recent GAO reports, discusses(1) management reform efforts atthe UN Secretariat since 2006; (2)oversight and accountability inselected UN organizations; and (3)UN and other internationalorganizations’ activities in Burma. What GAO Recommend s  GAO’s November 2007 report onUN management reformsrecommended that the Secretary of State and the U.S. PermanentRepresentative to the UN include inState’s annual U.S. Participationin the United Nations report anassessment of the effectiveness of UN management reforms. GAO’s June 2007 report on oversight andaccountability recommended thatthe Secretary of State direct theU.S. missions to work with memberstates to improve oversight in UNorganizations by (1) making auditreports available to the governingbodies and (2) establishingindependent audit committees thatare accountable to their governingbodies. State generally agreed withall of GAO’s recommendations. GAO’s report on UN management reform efforts notes that (1) progress has varied in the five areas GAO examined—ethics, oversight, procurement,management operations of the Secretariat, and review of programs andactivities (mandates)—and (2) various factors, such as disagreements amongmember states, have slowed the pace of progress. The UN ethics office hastaken steps to improve organizational ethics, including implementing awhistleblower protection policy, but GAO identified issues that may limit theimpact of the policy. The UN has taken steps to improve oversight, includingestablishing an Independent Audit Advisory Committee. However, UN fundingarrangements continue to constrain the independence of the Secretariat’sinternal audit office and its ability to audit high-risk areas. The UN has takensteps to improve certain procurement practices but has not implemented anindependent bid protest system or approved a lead agency concept, whichcould improve procurement services. The UN has taken steps to improvecertain management operations of the Secretariat but has made little or no progress in others. Despite some limited initial actions, the UN’s review of mandates has not advanced, due in part to a lack of support by many memberstates. Finally, the pace of UN management reforms has been slowed bymember states’ disagreements on reform efforts, lack of comprehensiveimplementation plans, administrative issues that complicate certain internal processes, and competing UN priorities.GAO’s report on oversight and accountability of selected UN organizationsnotes that, although the six UN internal audit offices GAO reviewed havemade progress in implementing international auditing standards, they havenot fully implemented key components of the standards. None of these sixorganizations require their internal oversight staff to disclose their financialinterests. However, GAO found that five of the six organizations have madeefforts to increase accountability by establishing whistleblower protection policies and one was developing such a policy. GAO also reported that whilethe six UN evaluation offices GAO reviewed are working towardimplementation of UN evaluation standards, they have not fully implementedthem. Finally, GAO reported that the governing bodies responsible foroversight of the six organizations lack full access to internal audit reports.GAO’s report on Burma notes that Burma’s military regime has blocked orsignificantly impeded UN and other international organizations’ efforts toaddress human rights concerns and to help people living in areas affected byethnic conflict. The regime frustrated international organizations’ efforts tomonitor forced labor for years before signing an agreement in early 2007;restricted their efforts to assist populations living in conflict areas; andblocked their efforts to monitor prison conditions and conflict situations. Theregime has, to a lesser degree, impeded UN food, development, and health programs. However, several UN and other international organization officialstold GAO they are still able to achieve meaningful results in their efforts tomitigate some of Burma's humanitarian, health, and development problems.   To view the full product, including the scopeand methodology, click onGAO-08-246T.For more information, contact Thomas Melito,(202) 512-9601 ormelitot@gao.gov.   United Nations Mr. Chairman and Members of the Subcommittee:I am pleased to be here today to discuss United Nations (UN) operationsin the context of three key issues: (1) the progress of management reformefforts at the UN Secretariat since 2006; (2) weaknesses in oversight andaccountability in selected UN organizations; and (3) constraints upon UNand other international organizations’ activities in Burma. 1 Events over the past several decades indicate that there is a continuing need to reform andmodernize the UN in areas including management, oversight, andaccountability. While UN worldwide operations have expanded incomplexity and significance, long-standing problems in UN managementhave contributed to scandals in the Oil for Food program and procurementoperations. 2 In addition, various challenges have hindered the ability of some UN organizations to address Burma’s most pressing problems. Asthe largest financial contributor to the UN, the United States has stronglyadvocated the reform of UN management practices. The United States hasalso been critical of Burma’s military regime, which has blocked orimpeded activities undertaken by many international organizations inBurma over the past 3 years.The work supporting this statement is based on reports we issued in 2007that focused on management reform efforts at the UN Secretariat since2006, oversight and accountability in selected UN organizations, 3 and theoperating environment for the UN and other international organizations inBurma. See appendix I for detailed information on the objectives, scope,and methodology of each report. We conducted our reviews in accordancewith generally accepted government auditing standards. 1 This testimony is based on recently completed GAO reports. See GAO, United Nations: Progress on Management Reform Efforts Has Varied ,GAO-08-84(Washington, D.C.: Nov.14, 2007); United Nations Organizations: Oversight and Accountability Could Be Strengthened by Further Instituting International Best Practices ,GAO-07-597(Washington, D.C.: June 18, 2007); and  International Organizations: Assistance ProgramsConstrained in Burma ,GAO-07-457(Washington, D.C.: Apr. 6, 2007). 2 We reported on the UN Oil for Food program in United Nations: Lessons Learned fromOil for Food Program Indicate the Need to Strengthen UN Internal Controls andOversight ,GAO-06-330(Washington, D.C.: Apr. 25, 2006) and other reports. We alsoreported on UN procurement in United Nations: Procurement Internal Controls Are Weak ,GAO-06-577(Washington, D.C.: Apr. 25, 2006) and other reports. 3 The funds and programs include the United Nations Development Program (UNDP), theUnited Nations Children’s Fund (UNICEF), and the World Food Program (WFP). Thespecialized agencies include the Food and Agriculture Organization (FAO), theInternational Labor Organization (ILO), and the World Health Organization (WHO). Page 1 GAO-08-246T    In our report on UN management reform efforts, we note that (1) progresshas varied in the five areas we examined—ethics, oversight, procurement,management operations of the Secretariat, and review of programs andactivities (known as mandates)—and (2) various factors, such asdisagreements among member states, have slowed the pace of progress.The UN ethics office has worked to improve organizational ethics byincreasing staff in its ethics office, developing ethical standards, enforcingfinancial disclosure requirements, and implementing a whistleblower protection policy. However, weaknesses in the UN’s internal justicesystem may limit the impact of the whistleblower protection policy. TheUN made some progress in improving oversight by creating anIndependent Audit Advisory Committee (IAAC) in June 2007 andimproving the capacity of its Office of Internal Oversight Services (OIOS)to carry out internal audits and investigations. However, UN fundingarrangements continue to constrain the independence of OIOS and itsability to audit high-risk areas. Progress on procurement reform effortshas been mixed. The UN has strengthened its training program for procurement staff, including conducting courses in ethical conduct, buthas not formally established an independent bid protest system and hasnot approved a lead agency concept, whereby specialist UN organizationswould handle certain procurements in order to enhance division of labor,reduce duplication, and reduce costs. The UN has taken steps to improvecertain management operations of the Secretariat, such as selected humanresource functions and the UN’s information technology system. However,the UN has made little or no progress in improving several budgetary,financial management, and administrative functions. Despite some limitedinitial actions, the UN’s review of mandates has not advanced, due in partto a lack of support by many member states. Finally, the pace of UNmanagement reforms has been slowed by (1) disagreements amongmember states on the priorities and importance of UN management reformefforts, (2) the lack of comprehensive implementation plans for somemanagement reform proposals, (3) administrative policies and proceduresthat continue to complicate the process of implementing certain humanresource initiatives, and (4) competing UN priorities, such as the proposalto reorganize the Department of Peacekeeping Operations, that limit thecapacity of General Assembly members to address management reformissues. Summary In our report on oversight and accountability of selected UN organizations,we address the extent to which these organizations’ (1) internal auditoffices have implemented professional standards for performing auditsand investigations, (2) evaluation offices have implemented UN evaluationstandards, and (3) governing bodies are provided with information about Page 2 GAO-08-246T United Nations
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