United Nations Environment Programme: Audit of International Environmental Technology Centre (AA2005-220-02), 7 Sep 2005
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United Nations Office of Internal Oversight Services (UN OIOS) 7 Sep 2005 report titled "Audit of International Environmental Technology Centre [AA2005-220-02]" relating to the United Nations Environment Programme. The report runs to 21 printed pages.
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UNITED NATIONS NATIONS UNIES
Office of Internal Oversight Services
Internal Audit Division II
AUD: UNEP (051/2005) 7 September 2005
TO: Dr. Klaus T�pfer, Executive Director
United Nations Environmental Programme (UNEP)
FROM: Egbert C. Kaltenbach, Director
Internal Audit Division
Office of Internal Oversight Services (OIOS)
SUBJECT: Audit of UNEP�s International Environmental Technology Centre
(AA2005/220/02)
1. I am pleased to submit the final report on the audit of UNEP�s International
Environmental Technology Centre (IETC), which was conducted in Osaka and Shiga, Japan
in March and April 2005, by Mr. Obin Silungwe and Ms. Jaydene Kana. A draft of the report
was shared with Mr. P. Bakken, Officer-in-Charge, International Environmental Technology
Centre and Ms. M. Barbut, Director, Division of Technology, Industry and Economics
(DTIE) in July 2005, whose comments, which were received in August 2005, are reflected in
the attached final report, in italics.
2. I am pleased to note that most of the audit recommendations contained in this final Audit
Report have been accepted and that IETC and DTIE have initiated their implementation. The
table in paragraph 71 of the report identifies those recommendations, which require further
action to be closed. I wish to draw your attention to recommendations 1, 2, 3, 6, and 7, which
OIOS considers to be of critical importance.
3. I would appreciate if you could provide Mr. C. F. Bagot with an update on the status of
implementation of the audit recommendations not later than 30 November 2005. This will
facilitate the preparation of the twice-yearly report to the Secretary-General on the
implementation of recommendations, required by General Assembly resolution 48/218B.
4. Please note that OIOS is assessing the overall quality of its audit process. I therefore
kindly request that you consult with your managers who dealt directly with the auditors,
complete the attached client satisfaction survey form and return it to me.
5. I would like to take this opportunity to thank you and your staff for the assistance and
cooperation extended to the audit team.
Attachments: final report and client satisfaction survey form
cc: Mr. S. Goolsarran, Executive Secretary, UN Board of Auditors (by e-mail)
Ms. M. Barbut, Director, DTIE, UNEP (by e-mail)
Mr. P. Bakken, Officer-in-Charge, IETC, UNEP (by e-mail)
Ms. K. Autere, Audit Focal Point, UNEP (by e-mail)
Mr. M. Tapio, Programme Officer, OUSG, OIOS (by e-mail)
Mr. C. F. Bagot, Chief, Nairobi Audit Section, IAD II, OIOS (by e-mail)
Ms. J. Kana, Auditor in Charge, IAD II, OIOS (by e-mail)
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UNITED NATIONS NATIONS UNIES
Office of Internal Oversight Services
Internal Audit Division II
Audit Report
Audit of UNEP�s International Environmental Technology Centre
(AA2005/220/02)
Report Date: 7 September 2005
Auditors: Obin Silungwe
Jaydene Kana
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UNITED NATIONS NATIONS UNIES
Office of Internal Oversight Services
Internal Audit Division II
Audit of UNEP�s International Environmental Technology Centre
(AA2005/220/02)
EXECUTIVE SUMMARY
Between March and April 2005, OIOS conducted an audit of UNEP�s International Environmental
Technology Centre (IETC) at Osaka, Japan. The audit followed up on the previous audit conducted in
1999 (AA1999/55/7). OIOS is pleased to note an improvement in performance established by the
current IETC management, however, the proposals below would further enhance the effectiveness of
IETC's operations.
UNEP has accepted most of the recommendations made and has initiated action in the majority of the
areas identified. OIOS is pleased with progress made.
Organisation structure and functions
� Develop a clear and transparent statement of objectives for each part of the IETC structure,
including properly defined roles and responsibilities linking the activities of each part of the IETC
structure to its mandate; and
� Determine and document the delegation of authority with respect to IETC's administrative matters
such as Finance (Budgets, Budget Revisions, Corporate Contracts, Memoranda of Understanding
and Procurement) and Human Resources (Recruitment of Fixed Term and Temporary Staff,
Contract Extensions, Post Classifications and Special Service Agreements).
Work programme planning, monitoring and reporting
� Ensure that all IETC staff members involved in Project Formulation, Approving, Monitoring and
Evaluation are provided training and copies of the guidance documents in this respect, namely, the
UNEP Project Formulation, Approval, Monitoring and Evaluation Manual and ST/SGB/2000/8 -
Regulations and Rules Governing Programme Planning, the Programme Aspects of the Budget,
the Monitoring of Implementation and the Methods of Evaluation; and
� Develop a system to allow IETC Programme Managers to monitor and report against activities
carried out not just at the individual activity and DTIE level, but the IETC level also.
Co-operation with UN-Habitat
� Co-operate with UN-Habitat with respect to developing a new work programme as declared in
UN-Habitat Governing Council HSP/GC/20/10 � Joint progress report of the Executive Directors
of the United Nations Human Settlements Programme and the United Nations Environment
Programme.
Administration
� Develop a system to track the expiry dates of Memoranda of Understanding to ensure that they are
amended or extended before expiry;
� Develop a report to the Executive Director, UNEP outlining the inadequacy of current IETC
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staffing to provide adequate administration services;
� Obtain the UNON staffing table on at least a quarterly basis, reconcile the information with that
held by DTIE and IETC and advise UNON if there are any discrepancies;
� Develop and implement a formal training plan at the IETC level and a development plan at an
individual level in each staff member's PAS;
� Utilise UNON/IC/2002/3 � Official hours of work, compensation for overtime and night
differential - to develop and distribute procedures pertinent to local conditions in Japan;
� Co-ordinate with Information Technology Service, UNON to increase the access points and
performance of the IMIS through CITRIX system introduced in November 2004 to facilitate the
self-processing of IETC's financial transactions;
� Obtain the minimum number of quotations in accordance with the UN Procurement Manual, or
provide sufficient evidence to support why the minimum number of quotations were not obtained;
� Ensure all assets provided by the Global Environment Centre Foundation (GEC) and by the
International Lake Environment Committee Foundation (ILEC) are separately identified in the
IETC asset register and all IETC assets to be disposed of are properly approved by the Property
Survey Board, UNON; and
� Co-ordinate with the designated Security Official for Japan to ensure IETC complies with the
Minimum Operating Security Standards (MOSS) as detailed by the Department of Safety and
Security.
September 2005
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TABLE OF CONTENTS
CHAPTER Paragraphs
I. INTRODUCTION 1�16
II. AUDIT OBJECTIVES 17
III. AUDIT SCOPE AND METHODOLOGY 18
IV. AUDIT FINDINGS AND RECOMMENDATIONS 19-70
A. Host Country Agreement (HCA)
(a) International Advisory Board 19-20
B. Organisation structure and functions
(a) Delegation of authority for administration 21�24
(b) Structure of IETC 25-26
(c) Reporting lines 27
C. Memoranda of understanding, letters of agreement, contracts
with other organisations (programmatic)
(a) Memoranda of understanding/letters of agreement 28-29
(b) Contracts with other organisations 30
D. Provision of services (non-programmatic)
(a) United Nations Office for Project Services (UNOPS) 31-33
E. Work programme planning, monitoring and reporting
(a) Planning 34-35
(b) Monitoring and reporting 36-37
(c) Project administration 38-39
(d) Co-operation with UN-Habitat 40-42
F. Human resource management
(a) Staffing table 43
(b) Training 44-45
(c) Compensation for overtime 46-47
G. Special Service Agreements 48-50
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H. Financial Management
(a) Voluntary contributions 51
(b) Accuracy and completeness of financial 52-53
information/reporting
(c) Bank signatories 54
(d) Bank charges 55
(e) Petty cash 56-57
I. Procurement
(a) Number of quotations 58-59
(b) Receiving and inspection 60-61
J. Asset management 62-65
K. Information and communications technology (ICT) 66-67
L. Security and safety 68-70
V. FURTHER ACTIONS REQUIRED ON RECOMMENDATIONS 71
VI. ACKNOWLEDGEMENT 72
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I. INTRODUCTION
1. In March and April 2005, OIOS conducted an audit of UNEP�s International
Environmental Technology Centre (IETC), in accordance with the International
Standards for the Professional Practice of Internal Auditing.
2. The UNEP Governing Council inaugurated IETC in October 1992. IETC opened
its first office in Osaka City in April 1994. A second office was opened in the Shiga
Prefecture in March 1995. In 1998, IETC became a branch of UNEP's Division of
Technology, Industry and Economics (DTIE) and is fully backstopped by the main
DTIE office in Paris.
3. IETC's mandate is to promote the application of Environmentally Sound
Technologies (ESTs) to address urban environmental problems such as sewage, air
pollution, solid waste, noise, and the need to manage freshwater.
4. IETC is funded from two main sources:
Year Government of Japan Technical UNEP Environment Fund �
Cooperation Trust Fund � US$ US$
2001 1,911,000 547,730
2002 1,500,000 473,072
2003 500,000 1,000,204
2004 1,900,000 577,499
5. During the biennium 2004-2005, IETC received US$11 million from UNDG
Iraq Trust Fund earmarked by the Government of Japan for the project Support for
Environment Management of the Iraqi Marshland. In addition IETC received
US$210,000 for promoting and establish new networks using the ESTIS
(Environmentally Sound Technology Information System), a multi-language,
Information System (IS) management tool, developed by IETC to assist the transfer
of Environmentally Sound Technologies (EST).
6. During the 2004-2005 biennium, Executive Director, UNEP launched a
revitalisation exercise aimed at integrating IETC into the overall priorities and work
of UNEP, to focus more on programme and project implementation and to take
advantage of the geographical location and experiences in various environmental
areas already implemented or under implementation in Japan. Furthermore, the
exercise aimed to enhance IETC's activities' added value and it's complementarity
with other DTIE branches. This exercise was ongoing at the time of the audit.
7. Preliminary results of the revitalisation exercise, have adjusted IETC's main
activities, which are now based on a three-legged strategy:
a) Water and sanitation (globally);
b) Disaster management and preparedness (globally); and
c) Production and consumption with emphasis on waste/3R (Asia/Pacific
region).
8. The adjustment of the main activities also comes with a shift in the main
operational structure from an academic focus to more implementation of projects,
with national governments, private sector and civil society as the main partners.
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9. While the change of main activities has gone smoothly, the workload has been
very heavy during the 2004-05 biennium, partly since a significant portion of
available resources have been used to implement a major project in the Iraqi
Marshland and partly because IETC has had a key role in the overall UNEP
preparations for two major international conferences in Japan related to disaster
preparedness (Kobe, January 2005) and the G8 3R conference (Tokyo, April 2005).
10. IETC's activities are supported and augmented by the expertise of two Japanese
foundations in accordance with the terms set out in two Memoranda of
Understanding (MOU) signed in August 1994.
11. The Osaka-based Global Environment Centre Foundation (GEC) provides the
expertise it has developed in urban environmental challenges such as air pollution,
solid waste/sewage management and noise abatement.
12. The International Lake Environment Committee Foundation (ILEC) at Shiga
provides the expertise it has developed in environmentally sustainable management
of the world's lakes and reservoirs.
13. At the time of the audit the approved staffing table for IETC was a D-1
(currently an Officer-in-Charge at the D-1 level) supported by eight Professional (P)
staff, one temporary staff (L Post) and seven General Service (GS) staff.
14. OIOS previously audited IETC in December 1999 (AA1999/02/07). The
findings and recommendations were reviewed as part of this audit and any issues,
which were still open, are discussed further in the body of the report. OIOS also
followed up on relevant recommendations raised in its audit of UNEP Division of
Technology, Industry and Economics (AA2003/02/03) carried out in 2003.
15. A draft of the report was shared with Mr. P. Bakken, Officer-in-Charge, IETC
and Ms. M. Barbut, Director, Division of Technology, Industry and Economics
(DTIE) in July 2005, whose comments, which were received in August 2005, are
reflected in this final report, in italics.
16. UNEP has accepted most of the recommendations made and is in the process of
implementing them.
II. AUDIT OBJECTIVES
17. The overall objective of the audit was to advise Executive Director, UNEP on
the adequacy of administrative arrangements for coordinating IETC activities. This
involved assessing whether:
a) The governance framework provided IETC adequate guidance and
support for the definition and execution of its responsibilities;
b) IETC management had established adequate mechanisms to ensure
that it understood and was only executing activities in support of its
mandate; and
c) The internal control systems for managing the structure programme
and resources were adequate and were operated in compliance with
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UN Regulations and Rules.
III. AUDIT SCOPE AND METHODOLOGY
18. The audit embraced activities for the period from January 2002 to December
2004 (and early 2005 where necessary). It was carried out in Nairobi and Japan and
involved staff of IETC, UNEP and UNON. The audit activities involved interviewing
staff and reviewing available documentation.
IV. AUDIT FINDINGS AND RECOMMENDATIONS
A. Host Country Agreement (HCA)
(a) International Advisory Board
19. Article IV of the HCA states, "For the purpose of advising on the activities of
the Centre, an international advisory board (IAB) shall be established, which will
meet at least once a year." IETC has established the IAB, which currently houses 31
members. However, the IAB last met in December 2003 and there were no meetings
scheduled for neither 2004 nor 2005.
20. Although the requirements of Article IV of the HCA have not been complied
with, discussions with IETC management reveal that the IAB structure and meetings
schedule will be reviewed as part of the IETC revitalisation exercise and as such, no
recommendation is made.
B. Organisation structure and functions
(a) Delegation of authority for administration
21. The previous OIOS audit (AA/1999/55/7) noted that IETC only had a verbal
understanding with UNON and DTIE regarding its delegated authority in the
following administrative areas: preparing travel actions, procurement of goods and
services, recruitment of consultants and individual contractors, and recruitment of
temporary staff.
22. The current audit identified the following Memoranda concerning the delegation
of authority to IETC for administrative areas:
a) From the UNEP Executive Director dated 2 October 2003, the DTIE
Director was delegated authority covering: recruitment of consultants
and individual contractors up to end of 2004; travel; hospitality; and
Memoranda of understanding (MOUs) and Letters of agreement
(LOAs).
b) From the UNON Chief of the Division of Administrative Services
dated 15 October 2003, the Director of IETC was delegated authority
for procurement.
23. The Memorandum from the UNEP Executive Director dated 2 October 2003
granted the authority in relation to recruitment of consultants and individual
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contractors "up to the end of 2004". Whilst IETC was continuing with the prior
delegation in this regard OIOS is of the opinion that further clarification should be
sought to confirm whether the arrangements are still valid and should obtain
documentation to that effect.
Recommendation:
To ensure that IETC can be held accountable for
administrative actions undertaken, the Office of the Executive
Director, UNEP in conjunction with the Division of Administrative
Services, UNON, Division of Technology, Industry and Economics
and the International Environmental Technology Centre (IETC)
should review and issue a statement of delegation of authority to
IETC with respect to administrative matters (Rec. 01).
24. UNEP commented that the Executive Director granted the authority to Director,
DTIE in his memorandum dated 15 June 2005, which states that Chiefs of outposted
DTIE Units need to obtain approval of the Director. Such authority covers:
recruitment of consultants and individual contractor up to six months, travel, for all
DTIE staff, hospitality, MOUs and LOAs, to receive contributions on the imprest
accounts, to decide on the short-list of candidates for P posts and approval of L posts
up to L-3 level on counterpart contributions. Therefore, UNEP disagreed with the
recommendation to issue a statement on delegation of authority to IETC with respect
to administrative matters. Moreover, DTIE pointed out that all the requested
approvals on any of the above-mentioned issues are obtained from the DTIE
Director within three days. OIOS appreciates the clarification and the issuance of a
statement on delegated authority covering DTIE and its outposted offices. The
memorandum referred to does not mention procurement and as such OIOS is not in a
position to close the recommendation until it receives clarification on what, if any,
written delegation of authority will be given to IETC for procurement matters.
(b) Structure of IETC
25. There was no clear and transparent statement of objectives for each part of the
IETC structure, including properly defined roles and responsibilities. IETC stated
that the revitalisation exercise should include a review of the current structure and
the linkages between the activities of each part of the structure and the IETC
mandate.
Recommendation:
To clearly define the International Environmental
Technology Centre (IETC) structure and it's relationship to IETC's
activities and mandate, IETC should undertake a review of the
current structure as part of the revitalisation exercise, and prepare a
report for consideration by Executive Director, UNEP outlining the
revised structure with clear and transparent statements of objectives
for each part, including properly defined roles and responsibilities
and linkages between the activities and the mandate (Rec. 02).
26. UNEP commented that the recommendation would be implemented before the
end of 2005. OIOS thanks UNEP for the prompt action taken and will close the
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recommendation upon receipt of a copy of the report outlining the revised structure
of IETC with clear and transparent statements of objectives for each part, including
properly defined roles and responsibilities and linkages between the activities and the
mandate.
(c) Reporting lines
27. According to the 2004 UNEP Operational Manual, the IETC Director reports to
the Director, DTIE who then reports to the Executive Director, UNEP. OIOS were
pleased to note that the reporting lines were clear and being followed.
C. Memoranda of understanding, letters of agreement, contracts
with other organisations (programmatic)
(a) Memoranda of understanding/letters of agreement
28. IETC issued more than 30 MOUs worth approximately US$1million between
January 2002 and the date of the audit. The audit team reviewed twelve MOUs
worth approximately US$565,000 and noted that IETC had made good progress in
improving the formulation of MOUs issued from the 2002-2003 period to the 2004-
2005 period with the following two exceptions:
a) There was no system to track the expiry dates of MOUs to ensure that
they were amended or extended before expiry; and
b) The MOU template utilised by IETC per IC/UNON/2002/07 �
Guidelines for Memorandum of Understanding (MOU) and Letters of
Agreement (LOA) did not take into account rights of audit access to
the project documents for OIOS or the requirement of an audit
certificate on the project financial statement. OIOS has issued a note
to the Director, Division of Administrative Services, UNON
requesting changes to be made and as such, no recommendation is
made in this respect.
29. UNEP commented that DTIE Paris had put in place a system to track the expiry
dates of MOUs as well as a complete management system of projects which allows
DTIE to track, date of project approval, donors, contributions, pledges, travel, etc.
The Information Technology Officer based in IETC will be transferred to Paris,
effective 1 October, to provide this kind of support to all DTIE offices. In view of
this additional information, OIOS does not propose any recommendation.
(b) Contracts with other organisations
30. IETC issued more than 20 contracts with other Organizations worth
approximately $565,000 from January 2002 to the date of the audit. The audit team
reviewed four contracts worth approximately US$209,000 and was pleased to note
that IETC has made good progress in improving the formulation of contracts with
other Organizations issued from the 2002-2003 period to the 2004-2005 period. For
example, in 2002, IETC entered into a corporate contract for approximately
US$58,000. OIOS noted travel expenditure of approximately US$26,000 in relation
to the same contract resulting in a contract total of approximately US$84,000. OIOS
was concerned at the lack of documentation to justify the total amount expended on
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this contract but were pleased to note no such instances in the review of contracts
from 2003 onwards, due to the controls implemented by the Officer-in-Charge and as
such, no recommendation is made.
D. Provision of services (non-programmatic)
(a) United Nations Office for Project Services (UNOPS)
31. OIOS noted that there is no detailed analysis within the Memorandum of
Understanding dated 12 February 2001 between UNEP and the United Nations
Office for Project Services (UNOPS), to stipulate the responsibilities to UNEP
agencies contracting UNOPS to perform administrative services for project
execution.
32. As a result, the administrative services offered by UNOPS to IETC with respect
to the execution of the Support for Environment Management of the Iraqi
Marshlands Project (the Project) are not sufficiently clarified.
Recommendation:
To enable UNEP to hold the United Nations Office of
Project Services (UNOPS) accountable for administrative work it
does on its behalf, the Executive Director of UNEP should review
and revise the existing MOU with UNOPS to clarify the nature and
type of administrative services UNOPS is required to provide for
UNEP project activities (Rec. 03).
33. At the time of issuing this report a response had not yet been received on this
recommendation, which is therefore kept open pending clarification from UNEP
whether it will revise the existing MOU with UNOPS to clarify the nature and type
of administrative services UNOPS is required to provide for UNEP project activities.
E. Work programme planning, monitoring and reporting
(a) Planning
34. In contrast to the process used to develop the submission to DTIE for IETC's
2004-2005 Programme of Work (POW), IETC utilised a more systematic approach
in developing the 2006-2007 POW whereby programme managers were afforded a
more active role in contributing to the POW presented to DTIE, for inclusion in their
submission to UNEP Headquarters. However, the effectiveness of this process was
diminished as some of the IETC staff members involved were not aware of the basic
documents to be utilised for this process, such as the guidance provided by the UNEP
Project Formulation, Approval, Monitoring and Evaluation Manual (UNEP Project
Manual) and ST/SGB/2000/8 - Regulations and Rules Governing Programme
Planning, the Programme Aspects of the Budget, the Monitoring of Implementation
and the Methods of Evaluation.
Recommendation:
To ensure that planning of the International Environmental
Technology Centre's (IETC) Programme of Work is carried out in
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accordance with UNEP and UN planning guidance, IETC should
ensure that all IETC staff members involved in Project
Formulation, Approving, Monitoring and Evaluation are provided
training and copies of the guidance documents in this respect,
namely, the UNEP Project Formulation, Approval, Monitoring and
Evaluation Manual and ST/SGB/2000/8 - Regulations and Rules
Governing Programme Planning, the Programme Aspects of the
Budget, the Monitoring of Implementation and the Methods of
Evaluation (Rec. 04).
35. UNEP commented that the recommendation was accepted and the documents
had been made available to IETC staff. OIOS thanks UNEP for the prompt action
taken and will close the recommendation upon notification of what training will be
provided to IETC staff.
(b) Monitoring and reporting
36. OIOS noted that at an individual activity level and the DTIE activity level, with
respect to the POW, monitoring and reporting is carried out on a regular basis by
IETC Programme Managers via the Integrated Monitoring and Documentation
Information System (IMDIS). However, at the IETC level, there were no tools or
systems available for IETC Programme Managers to monitor and report against the
activities carried out.
Recommendation:
To improve Management Information available at a
Divisional Level, International Environmental Technology Centre
(IETC) should liaise with Office of Deputy Executive Director,
UNEP, and Division of Administrative Services, UNON to seek
guidance of what systems could be developed to allow IETC
Programme Managers to monitor and report against activities
carried out at an IETC level (Rec. 05).
37. UNEP commented that consultations would be concluded by the end of 2005.
OIOS thanks UNEP for the prompt action taken and will close the recommendation
upon notification of the outcome of the discussions on what systems could be
developed to allow IETC Programme Managers to monitor and report against
activities carried out at an IETC level.
(c) Project administration
38. IETC's current administrative infrastructure is better geared to service the
administration for running the office than providing financial assistance and
information to Programme Managers with respect to activities in the POW. This was
evidenced by IETC Programme Managers experiencing difficulties in tracking the
funds expended on IETC activities.
Recommendation:
To ensure International Environmental Technology Centre
(IETC) Programme Managers are provided with adequate project
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administration assistance, IETC, as part of the revitalisation
exercise should prepare a report for consideration by the Executive
Director, UNEP outlining the inadequacy of current staffing to
ensure there are adequate administrative resources to cover both the
administration for running the IETC office and the provision of
financial assistance and information to Programme Managers for
the activities within the Programme of Work (Rec. 06).
39. UNEP disagreed with the recommendation and pointed out that three staff, one
Professional and two General Services, were enough for the current workload in the
office. With IMIS implementation in Osaka and Shiga the Programme Managers
have a better, easier and more accurate access to Crystal reports which would allow
them to get the necessary financial information on the POW. OIOS appreciates the
clarification but is of the opinion that a formal analysis is required to establish
whether the current staffing is sufficient to cope with both office and programmatic
support. OIOS will close the recommendation upon clarification whether DTIE
intends to carry out a formal study to establish whether the current staffing is
sufficient to cope with office and programmatic support envisaged in the short to
medium term.
(d) Co-operation with UN-Habitat
40. The Joint progress report of the Executive Directors of the United Nations
Human Settlements Programme and the United Nations Environment Programme,
submitted to the UN-Habitat Governing Council (HSP/GC/20/10), states that the
UNEP IETC in Japan is developing a new work programme and initial contacts have
been established between the centre and the UN-Habitat Regional Office for Asia
and the Pacific to explore new areas of increased cooperation.
41. IETC advised OIOS that to date, work between UNEP IETC and UN-Habitat
has not been initiated with respect to developing a new work programme.
Recommendation:
To improve co-operation between the International
Environmental Technology Centre (IETC) and the United Nations
Human Settlements Programme Regional Office for Asia and the
Pacific (UN-Habitat ROAP) as outlined in HSP/GC/20/10 � Joint
progress report of the Executive Directors of the UN-Habitat and
United Nations Environment Programme, IETC should produce a
report for Executive Director, UNEP outlining which elements of
the Programme of Work will be done in consultation with UN-
Habitat (Rec. 07).
42. UNEP accepted the recommendation and informed that discussions between
UN-Habitat Fukuoka office and IETC had already been held and that a progress
report should be ready by the first quarter of 2006. OIOS appreciates the update and
will close the recommendation upon receipt of a copy of a progress report outlining
which elements of the Programme of Work will be done in consultation with UN-
Habitat.
F. Human resource management
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(a) Staffing table
43. There was no regular reconciliation between the IETC staffing table records held
by IETC, DTIE and Human Resources Management Service (HRMS), UNON.
Consequently, OIOS noted discrepancies in the total number of posts encumbered
and vacant. Encumbered posts per IETC were 17, 15 per DTIE and 20 per HRMS,
UNON. With respect to vacant posts, IETC depicted 6, DTIE 4 and HRMS, UNON
3. UNEP commented DTIE would request HRMS before the end of 2005 to provide
all branches of DTIE with their respective staffing tables on a monthly basis. In
view of this information no recommendation is raised.
(b) Training
44. Whilst appreciating the positive development of carrying out a training needs
assessment in the 2004-05 biennium, IETC did not utilise these results nor did they
undertake a similar assessment for the 2006-07 biennium. The results of these
assessments should be used to develop and implement a training plan at the IETC
level and a development plan in staff members PAS at an individual level.
Recommendation:
To ensure the results of the training needs assessment are utilised, the
Director, International Environmental Technology Centre (IETC) should
review and allocate resources to develop and implement an IETC training
plan and reflecting individual needs in the development plan of each staff
member's PAS (Rec. 08).
45. UNEP agreed with the need of training not only for IETC staff, but for all
UNEP staff, but DTIE disagreed on the way to develop and implement a training
plan. DTIE cannot accept the use of counterpart funds for this purpose. The funds
should come from other sources, i.e. overhead costs. OIOS appreciates the
clarification and will close the recommendation upon receipt of a training plan
together with details of how the training will be funded.
(c) Compensation for overtime
46. OIOS reviewed CTO and overtime records maintained by IETC and were
satisfied that they were kept in accordance with ST/AI/1999/13 - Recording of
Attendance and Leave. However, procedures could be enhanced by:
a) Adapting UNON/IC/2002/3 � Official hours of work, overtime,
compensatory time off and night differential guidelines for IETC
conditions, including a definition of working hours to determine when
staff are accumulating CTO or overtime; and
b) Distributing these guidelines to all IETC staff.
Recommendation:
To ensure International Environmental Technology Centre (IETC) staff
members are provided with appropriate procedures to follow with respect to
earning, approving and payment of compensation for overtime and night
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differential, IETC should review the guidance issued by UNON in respect
of compensation for overtime and leave and adapt these to the prevailing
local conditions in Japan (Rec. 09).
47. UNEP commented that the recommendation would be implemented before the
end of 2005. OIOS notes the response and will close the recommendation upon
receipt of a copy of guidelines dealing with overtime of IETC staff.
G. Special Service Agreements
48. IETC used more than 60 Special Service Agreements (SSA) to remunerate
consultants and individual contractors costing approximately US$430,000 from
January 2002 to the date of the audit. The audit team reviewed 8 consultant and 5
individual contractor agreements entered into by IETC and noted that IETC had
made good progress in improving the formulation of agreements issued from the
2002-2003 period to the 2004-2005 period. For example, OIOS reviewed 5 SSA
entered into by IETC in 2002 and were concerned with the lack of documentation to
justify whether the SSA was compensated in accordance with Office of Human
Resources Management (OHRM) guidelines. OIOS is pleased to note no further
instances from 2004 onwards due to the controls implemented by the Officer-in-
Charge.
49. To further enhance arrangements and ensure full compliance with
ST/AI/1999/7 � Consultants and Individual Contractors IETC should:
a) Confirm the credentials of selected candidates; and
b) Obtain a good health statement from the candidate.
50. A number of recommendations of this type have already been raised
with UNEP. As the Office of the Deputy Executive Director, UNEP is
currently developing a checklist to be circulated to all UNEP offices, no
recommendation is raised.
H. Financial Management
(a) Voluntary contributions
51. A review conducted by UNEP Evaluation and Oversight Unit in October 1998
expressed concerns that IETC was too heavily reliant on funding from the Japanese
Government. Consequently, the previous audit, AA/1999/55/7/004, noted that IETC
should formulate a strategy annually for seeking new funding. OIOS observed that
in the last two biennia, IETC has received additional funding from the Dutch
Government, which has been increasing gradually from approximately US$91,000 in
2003 to US$110,000 in 2005. IETC also received US$11 million from the UNDG
Iraq Trust Fund earmarked by the Government of Japan for the project Support for
Environment Management of the Iraqi Marshlands Project. Furthermore, IETC
management confirmed that they are actively taking part in the overall UNEP
resource mobilization strategy, which is ongoing. As such OIOS is satisfied that the
previous audit recommendation has been closed.
(b) Accuracy and completeness of financial information/reporting
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52. Previous OIOS audit AA/1999/55/7/015 and 016 recommended that UNEP in
conjunction with DTIE and UNON should:
a) Develop procedures for reconciling the local IETC accounts with the
UN accounts on a monthly basis; and
b) Re-evaluate the need for annual visits to UNON to reconcile financial
data; if procedures requiring regular reconciliation of account data
throughout the year are implemented.
53. The introduction of the Integrated Management Information System (IMIS)
through CITRIX in November 2004 eliminated the need for a regular reconciliation
of accounts and resulted in a reduction in the number of visits to Nairobi. As such,
OIOS has closed these prior audit recommendations. However, OIOS noted that
IETC had an insufficient number of access points when compared to their user needs.
As a result, only three staff members can access IMIS through CITRIX at any given
time and the system performance deteriorates at certain times of the day. UNEP
commented that work was underway to address the issue, and consequently OIOS is
not raising any recommendation.
(c) Bank signatories
54. OIOS observed that none of the current bank signatories have been approved by
the designated official, the Director, Division of Administrative Services, UNON.
IETC management took immediate action during the course of the audit to request
approval of IETC's current signatories and as such, no recommendation is made.
(d) Bank charges
55. As IETC were paying an average of 23,000 Japanese Yen (JPY) per month for
bank charges (approximately US$230), they conducted a survey in 2001 of UN
organisations in Japan and found that at least seven of these organisations did not pay
bank charges due to a waiver provided by their various banks. UNEP commented
that UN agencies in Japan pay standard bank charges (either for residential or non-
residential) when making wire transfers while not paying the basic charges for the
maintenance of the account. IETC does not differ from this, but has taken steps to do
more payments on-line, and thereby reducing the fees. In view of this information
OIOS is not raising any recommendation.
(e) Petty cash
56. OIOS noted that the current petty cash balances of JPY150,000 (approximately
US$1,500) in the Osaka Office and JPY50,000 (approximately US$500) in the Shiga
Office were too high, and should reflect the average monthly petty cash payments of
JPY40,000 and JPY10,000 for Osaka and Shiga Offices respectively.
Recommendation:
To minimize the risk of loss, International Environmental Technology
Centre (IETC) should reduce the petty cash held by the Osaka and Shiga
Offices to reflect the average monthly petty cash payments and replenish the
balances on a monthly basis (Rec. 10).
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57. UNEP commented that the recommendation would be implemented before the
end of 2005. OIOS notes the response and will close the recommendation upon
notification of the new petty cash levels implemented for Osaka and Shiga, and
details of arrangements for replenishment.
I. Procurement
(a) Number of quotations
58. IETC issued more than 300 purchase orders worth approximately US$425,000
from January 2002 to the date of the audit. The audit team reviewed 13 items
procured by IETC at a value of approximately US$125,000 and assessed the
administrative arrangements as adequate, with the following exception. IETC had
not obtained a sufficient number of quotations in accordance with the UN
Procurement Manual, paragraph 9.3.4 for following reasons, IETC:
a) only considered vendors in close proximity to where a service was
delivered, impacting both on cost and ability to demonstrate that all
vendors who had the capability to supply the services were
considered; and
b) conducted procurement in a short time frame, impacting on its ability
to obtain the minimum required number of vendor quotations.
59. UNEP commented that procedures are now in place to ensure either the
minimum number of quotations is obtained for each item procured or to provide
sufficient evidence to support why the minimal number of quotations was not
obtained. In view of this additional information, no recommendation is being raised.
(b) Receiving and inspection
60. Previous audit AA/1999/55/7/020 recommended that IETC should issue
instructions requiring inspection and receiving reports to be prepared on delivery of
goods to avoid discrepancies against purchase orders.
61. OIOS noted for 5 of the 13 items reviewed between January 2002 and the date
of the audit, an inspection and receiving report was not prepared. However, OIOS
noted that the introduction of IMIS through CITRIX enables IETC to create an
electronic inspection and receiving report. For all items tested since the introduction
of this system at IETC, no exceptions were noted and as such, no recommendation is
raised. As such, OIOS is satisfied that the previous audit recommendation has been
closed.
J. Asset management
62. In July 2003, IETC conducted a physical inventory of all assets and noted the
following:
a) some items were disposed without proper approval from the Property
Survey Board (PSB), UNON;
b) some items were duplicated on the IETC inventory list;
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c) some items were missing from the IETC premises or unserviceable;
and
d) items provided by GEC and ILEC were not separately identified in the
consolidated inventory list.
Recommendations:
International Environmental Technology Centre (IETC) should
compile a list of missing or unserviceable items and request the
Property Survey Board, UNON to provide authorisation to write off
and/or dispose of these items (Rec. 11).
IETC should identify in the consolidated inventory list, assets that
belong to GEC and ILEC and prepare a report to update GEC and ILEC
of any changes in the status of their assets as required by Article 6 of
the respective Memoranda of Understanding (Rec. 12).
63. UNEP commented that the recommendations would be implemented by the first
quarter in 2006. OIOS notes the response and will:
a. Close recommendation 11 upon receipt of a copy of the paper sent to
Property Service Board (PSB) together with comments of PSB.
b. Close recommendation 12 upon receipt of a copy of the report to update
GEC and ILEC of any changes in the status of their assets as required by
Article 6 of the respective Memoranda of Understanding.
64. In order to improve control over inventory even further, the Director, IETC
should implement procedures to identify all inventory located in each IETC office
which is signed by the office occupier to attest ownership and accountability for the
property in their possession.
Recommendation:
International Environmental Technology Centre (IETC) should
introduce inventory lists in all IETC offices, which should be signed by
officers occupying the offices attesting to ownership and accountability
for the property in their possession (Rec. 13).
65. UNEP commented that the recommendation would be implemented by the first
quarter in 2006. OIOS notes the response and will close the recommendation upon
notification of the introduction of inventory lists in all IETC offices, which are
signed by officers occupying the offices attesting to ownership and accountability for
the property in their possession.
K. Information and Communications Technology (ICT)
66. IETC has achieved tremendous progress in public information sharing by
developing a Web based tool for information transfer and knowledge management
called Environmentally Sound Technology Information System (ESTIS). Through
ESTIS organisations, projects, communities and individuals have access to a cost-
effective internet-based tool, which enables them to share information on EST.
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67. Furthermore, OIOS was pleased to note that IETC has implemented an effective
and efficient Information Technology infrastructure that affords effective backup and
recovery procedures, support and maintenance and as such, no recommendation is
raised.
L. Security and safety
68. The Rector of the United Nations University (UNU) in Tokyo is the designated
Security Official for Japan. The Officer-in-Charge, IETC advised that there is
currently no country security plan for Japan, however the UN Security Management
Team for Japan is currently developing a security risk management report.
69. The following security enhancements have been undertaken by IETC:
a) Purchase of satellite phones for Osaka and Shiga Offices and the
installation of shatter-proof windows in offices facing car parks;
b) Meeting with the Ministry of Foreign Affairs, Japan and the Osaka
and Shiga police which culminated in increased patrols around the
IETC offices and residential areas of senior staff members;
c) Completion by all staff members of the UN Security training; and
d) Increased access control to the premises for UN staff members
through the issuance of ground passes. However OIOS were
concerned that visitors were not required to present identity
documents even though they were registered and given temporary
passes.
Recommendation:
To ensure that the International Environmental Technology Centre
(IETC) complies with the Minimum Operating Security Standards
(MOSS) as detailed by the Department of Safety and Security, IETC
should obtain written guidance from the Designated Official (DO) for
Japan on what IETC must do to achieve full compliance and request
official recognition from DSS, via the DO for Japan, after these
requirements are implemented (Rec. 14).
70. UNEP commented that the recommendation would be implemented by the end of
2005. OIOS notes the response and will close the recommendation upon
confirmation that IETC is MOSS compliant.
V. FURTHER ACTIONS REQUIRED ON RECOMMENDATIONS
71. OIOS monitors the implementation of its audit recommendations for reporting to
the Secretary-General and to the General Assembly. The responses received on the
audit recommendations contained in the draft report have been recorded in our
recommendations database. In order to record full implementation, the actions
described in the following table are required:
Recommendation No. Action Required
Rec. 01 Clarification on what, if any, written delegation of authority
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will be given to IETC for procurement matters.
Rec. 02 Receipt of a copy of the report outlining the revised structure
of IETC with clear and transparent statements of objectives
for each part, including properly defined roles and
responsibilities and linkages between the activities and the
mandate.
Rec. 03 Clarification from UNEP whether it will revise the existing
MOU with UNOPS to clarify the nature and type of
administrative services UNOPS is required to provide for
UNEP project activities.
Rec. 04 Notification of what training will be provided to IETC staff.
Rec. 05 Notification of the outcome of the discussions on what
systems could be developed to allow IETC Programme
Managers to monitor and report against activities carried out
at an IETC level.
Rec. 06 Clarification whether DTIE will carry out a formal study to
establish whether the current staffing is sufficient to cope
with office and programmatic support envisaged in the short
to medium term.
Rec. 07 Receipt of a copy of a progress report outlining which
elements of the Programme of Work will be done in
consultation with UN-Habitat.
Rec. 08 Receipt of a training plan together with details of how the
training will be funded.
Rec. 09 Receipt of a copy of guidelines dealing with overtime of
IETC staff.
Rec. 10 Notification of the new petty cash levels implemented for
Osaka and Shiga, and details of arrangements for
replenishment.
Rec. 11 Receipt of a copy of the paper sent to Property Service Board
(PSB) together with comments of PSB.
Rec. 12 Receipt of a copy of the report to update GEC and ILEC of
any changes in the status of their assets as required by Article
6 of the respective Memoranda of Understanding.
Rec. 13 Notification of the introduction of inventory lists in all IETC
offices, which are signed by officers occupying the offices
attesting to ownership and accountability for the property in
their possession.
Rec. 14 Confirmation that IETC is MOSS compliant.
VI. ACKNOWLEDGEMENT
72. I wish to express my appreciation for the assistance and cooperation extended to
the audit team by the management and staff of IETC, UNEP and UNON.
Egbert C. Kaltenbach, Director
Internal Audit Division II
Office of Internal Oversight Services
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