UNICEF Executive Board First Regular Session 2014
UNICEF Executive Board
First Regular Session 2014
Report of the Board of Auditors 2012
Statement by Estonia, Germany, Ireland, New Zealand, The Netherlands
NEW YORK, 5 FEBRUARY 2014
I have the honor to deliver this statement on behalf of Estonia, Germany, Ireland, New Zealand and my own country, the Netherlands.
Let me start by welcoming the Report of the Board of Auditors for the year 2012, and the opinions expressed therein.
We support UNICEF’s commitment to greater transparency and accountability with regard to reporting on both success and challenges against development and humanitarian results, and on expenditures, including the decision to sign up to the International Aid Transparency Initiative IATI.
The Report of the BOA is an important benchmark for UNICEF’s financial management performance. Its observations bring out the strong and the weak parts of the organization, and we welcome the recommendations of the Board.
We commend UNICEF for the successful implementation of the IPSAS accounting framework. The BOA concludes that with the adoption of IPSAS, UNICEF has enhanced the transparency and accountability of its financial processes and improved the quality and credibility of its financial reports.
The Board also identifies several weaknesses in governance structures and risk management, including a lack of sufficient oversight of the implementation of the cooperation agreements with the National Committees. I would like to focus my comments specifically on three areas of concern, which were also mentioned in the BOA Report for the biennium 2010-2011.
First: The National Committees are important fund raisers and partners of UNICEF. We acknowledge that they are legally independent NGO’s which have cooperation agreements with UNICEF. However, the actions and policy of one reflect on the whole of UNICEF. We are concerned about the deficiencies noted by the BOA, and the possible negative effects on the UNICEF brand and reputation worldwide.
We welcome therefore the progress made over the last years by UNICEF, in strengthening its oversight and monitoring of the activities of the National Committees, including of their financial performance. But more still needs to be done to improve the relationship between UNICEF and the National Committees. It is important that the conditions of the cooperation agreements with the National Committees are transparent, and are consistently monitored and implemented. In this respect, we support the use of Joint Strategic Plans and Roadmaps as part of the cooperation agreements, and urge the National Committees to develop and implement them.
Furthermore, we would welcome the creation of some sort of Peer Review system among the National Committees, to learn from each other and keep each other accountable. We would be interested to hear whether there such initiatives are being explored, to improve transparency and accountability.
In our view the target retention rate should be enforced and at least 75% of the funds raised by the National Committees should be transferred to UNICEF in a timely manner. Policies on reserves should be transparent and reserves should be kept at a reasonable level, normally at the level of three month operating expenditures. The remaining 25% of the funds should be well and transparently accounted for by National Committees.
Second: The BOA report shows that oversight by UNICEF in the area of cash transfers is still weak and has to be strengthened. The Board is concerned, that insufficient capacity assessment and assurance activities will expose UNICEF to a risk of being unable to obtain adequate assurances as to appropriate utilization of cash transfers made to partners, and even to a risk of fraud and error. In order to strengthen UNICEF’s risk management it is important to follow up on the recommendation of the BOA expeditiously. We are interested to hear what progress has been made in this respect.
Third and final: We would like to underline the concern that in some country offices the program budget has been used to cover operational expenditures not associated with specific programs and projects. This is a serious shortcoming and we hope that UNICEF has taken up this matter with the country offices concerned in the past year.