Organization of American States

1
Organization of American States

• Report of the Board of External Auditors
• to the
• Permanent Council
• May 7, 2008

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Presentation to the Secretary General
Board of External Auditors

• Members of the Board of External Auditors
• Bradford R. Higgins, Chair
• United States
• Terrance S. Bastian, Member
• The Bahamas
• Joseph Freamo, Member
• Canada

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Presentation to the Secretary GeneralResponsibil
ity of Board

• Oversee audits of OAS and related entities
  financial statements.
• Review OAS and related entities operations and
  identify internal control issues and
  opportunities to improve efficiency.
• Assess the resources, work, and plans of the
  Office of Inspector General.
• Issue report on these issues within the first
  four months of the year.

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Presentation to the Secretary General
Financial Statement Audit Results

• Ernst and Young performed the following audits
• Regular Fund, Voluntary Funds, and Specific Funds
  of the OAS
• Leo S. Rowe Pan American Fund (Rowe Pan American)
• Rowe Memorial Benefit Fund (Rowe Memorial)
• Trust for the Americas
• Medical Benefits Trust Fund (Medical Benefits)
• Inter-American Defense Board Fund (IADB)
• Retirement and Pension Fund (Pension)
• Agreed-upon procedures related to the Regular and
  Specific Funds
• Received unqualified (clean) opinions.
• One significant deficiency.
• Strengthen review process over significant
  accounts and processes.

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Presentation to the Secretary General
Regular Fund Financial Results and Projections
Notes A Income mainly consists of quota
collections, but also includes such items as
rental and interest income.
6
Presentation to the Secretary GeneralFINANCIAL
CONDITION

• Quota Collections
• OAS has chronic funding shortfall because quotas
  are not set to match mandatory cost increases.
• Situation made worse by irregular (late) timing
  of quota payments.
• Liquidity situation unacceptable (not in
  compliance with OAS policy for 30 percent
  reserve).
• Day-to-day funding requirements are driving
  strategic policy decisions.

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Presentation to the Secretary General FINANCIAL
CONDITION

• Budgetary Resources
• Annual quotas are not set to cover the operating
  budget.
• Continuing decline in critical cash reserves.
• Recommendation from Secretary General for
  semi-automatic mechanism has not been
  implemented.
• In order to maintain current services, Member
  States need to provide funding adjusted for
  inflation.
• Unless Member States invest in this important
  multi-lateral organization, OAS will have no
  choice but to drastically cut back programs and
  activities in the next five years.
• - New recommendations.

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Presentation to the Secretary GeneralMODERNIZATI
ON

• Integrated Real Property and Capital Plan
• Maximize the potential of OAS property, including
  alternative fundraising strategies.
• Make a decision on real property needs and goals.
• Begin to address the serious deferred maintenance
  needs.
• Sell the Pink Palace and use funds to cover some
  of the needed capital expenditures. Relocate
  IADB staff to acceptable accommodations.
• - New recommendations.

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Presentation to the Secretary GeneralMODERNIZATI
ON

• Recovery of Administrative and Oversight Costs
• The Board was pleased to see the ICR initiative
  was implemented, providing for more realistic
  cost allocation between Regular and Specific
  Funds.
• Important to institutionalize process and ensure
  it continues to be viable.
• Provides incremental funding for Specific Fund
  oversight and accountability.

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Presentation to the Secretary GeneralOTHER
MODERNIZATION ISSUES

• The Board recognizes various modernization
  initiatives within OAS that will lead to improved
  efficiencies, transparency, and accountability.
• STAMP Initiative
• Planning and Strategic Goals
• Accounting Standards
• Financial and Accounting Systems
• Project Management
• - New recommendations.

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Presentation to the Secretary GeneralOTHER
MODERNIZATION ISSUES

• Reliance on Short-term Staff
• Planning for the Aging Workforce
• Job Descriptions
• Reassessing the Procurement Process
• Contractor Oversight Process
• Travel Voucher Process
• Training
• Web Pages
• - New recommendations.

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Presentation to the Secretary GeneralOTHER
CONTROL ISSUES

• National Offices
• Vendor Listings
• Information Technology System Issues
• Accountable Advances
• Departure Process
• Performance Evaluation and Award Process
• Fixed Asset Tracking
• Ownership of Assets
• Personally Identifiable Information
• - New recommendations.

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Presentation to the Secretary GeneralIssues
Related to Other OAS Entities

• Trust for the Americas
• Develop a strategic plan to support the
  significant current growth and long-term
  potential of the Trust.
• IADB
• Consider consolidating administrative functions
  with GS/OAS.
• - New recommendations.

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Presentation to the Secretary GeneralOffice of
Inspector General Issues

• Staffing and Budget
• Training and Professional Development
• Professional Standards Review