Secretary-General proposes audit of UN programmes on hard currency, other issues;

first report, on Democratic People’s Republic of Korea, due in 90 days

The following statement was issued today by the Spokesperson for UN Secretary-General Ban Ki-moon:

The Secretary-General, as Chairman of the Chief Executives Board for Coordination (CEB) has decided to propose to the CEB that the Board of Auditors be requested, through the Advisory Committee on Administrative and Budgetary Questions (ACABQ), to undertake an overall risk assessment and audit of operations of the United Nations and its Funds and Programmes in countries where issues of hard currency transactions, independence of staff hiring and access to reviewing local projects, are pertinent.  Should the CEB and the Board of Auditors accept this proposal, action would be undertaken in stages with the first report, which would focus on the operations in the Democratic People’s Republic of Korea, to be completed by the Board of Auditors within a three-month time frame.  The report would be submitted to the second resumed sixty-first session of the General Assembly.

As the issues concern not only the United Nations, its funds and programmes, but also the specialized agencies, the Secretary-General intends, as Chairman of the CEB, to also seek the cooperation of the Panel of External Auditors, to provide their inputs to the CEB on system-wide aspects of the same set of issues to be reviewed by the Board of Auditors.  It is anticipated that the resulting report from the Panel of Auditors would be available to the General Assembly at its sixty-second session.  The terms of reference for the system-wide inquiry would be framed along the following lines:

Focus

Areas to be reviewed as part of risk assessment and to be audited:  hard currency transactions; independence of staff hiring; and access to reviewing local projects.

-- These issues will be examined in light of relevant Security Council resolutions, including, but not limited to, Security Council resolution 1718 (2006), as well as compliance with regulations and rules, economy, effectiveness and efficiency of the use of resources and funding, including in the context of the National Execution modality.

-- The inquiry would be conducted in compliance with international standards of auditing and within the provisions of Article VII of the United Nations Financial Regulations governing activities of the Board of Auditors.

-- To provide the system-wide inquiry around the globe, the same external audits will be simultaneously carried out in select cases of countries with similar conditions to be identified by the relevant funds and programmes in consultation with the Board of Auditors and the Panel of External Auditors.

The Secretary-General has also requested the Administrator of the United Nations Development Programme (UNDP) to provide information in detail concerning the corrective actions taken in response to the internal audit findings of 1999, 2001 and 2004 carried out by UNDP internal audit (OAPR), in particular regarding hard currencies and cash management, absence of independent hiring of local staff and restrictions to audit the ongoing local projects.

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For information media • not an official record