Exclusive: Auditors are the boring but vital front-line warriors in any battle against waste, corruption and inefficiency—and at the United Nations, where tens of billions of dollars are spent each year, they are often under-qualified, overstretched, impeded and ignored by their bosses, according to a report by an elite inspection unit examining the U.N.’s efficiency world-wide.
The report, by members of the U.N. Joint Inspection Unit (JIU), a small squad of top-level bureaucratic analysts based in Geneva, is supposed to be presented to the United Nations General Assembly during its current session, which began on Jan. 6.
The inspector’s 70-page investigation, titled “The Audit Function in the United Nations System,” at the time this story was published had not appeared among documents available for the General Assembly’s powerful Fifth Committee, which oversees financial and administrative issues.
While they applaud the still-expanding system of U.N. organizations around the world for “significant progress” over the past decade, the three JIU authors paint a dismaying picture of the internal policing at 21 U.N. organizations they surveyed.
Among the observations in a copy of the report examined by Fox News:
--“Professional certifications in audit or accounting are not required at more than half of the organizations,” while the heads of four U.N. audit departments declared that “competency was one of their main challenges.”
--Only 57 percent of the U.N. organizations had manuals for their auditors to follow, though more are apparently on the way.
--Turnover is a major problem, reaching 20 percent in some peacekeeping areas.
--“Threats and interferences” with the independence of auditors is a “major issue” at six U.N. organizations the JIU inspectors did not name. But similar threats appeared to crop up throughout much of the U.N. system. In all, “only half” of the organizations surveyed were able to report no “impairment” or “interference” in their objectivity in the past five years. The roadblocks covered everything from planning areas of coverage, communicating results, choice of the top auditors and their staff, and even access necessary records.
--“Only at one-third of the organizations” are internal auditors required to submit financial statements that would disclose any potential conflicts of interest.
--Only about half of U.N. organizations have managed to focus their audits on their highest levels of financial and other risk—and when they have, the scheduling of audits is not “adequate” to bring those risk levels down. Translation: they are chronically ineffective.
The JIU inspectors did not tally the financial and other damage that those failings have caused the U.N.: their mandate was to “contribute to improving system-wide coherence among the competent entities dealing with the audit function.”
But the inspectors did make clear that aside from lack of competence, the most widespread reason why U.N. watchdogs cannot do their job effectively is that the top bureaucratic bosses of U.N. organizations have too much say in who the auditors are and what they do—and the nations who are supposed to oversee the organizations’ performance don’t have enough direct access to the auditors’ work.
In 76 percent of the U.N. organizations surveyed, the inspectors report says, the chief executive of the bureaucracy under inspection approves the plan of what will be audited. At eight of the U.N. organizations, the same top bureaucrat chooses the top internal auditor—and at the remainder, approves the selection, even if it is made by someone else. In every case, the boss has “the possibility to pre-empt any appointment,” the report says.
The same bureaucracies that are supposed to be under examination have excessive say over auditors’ budgets—and apparently are unafraid to use it.
“Nine of the organizations reviewed report that the auditees interfere with or control in some way the internal audit budget process,” the report notes. About 40 percent of the organizations surveyed said lack of resources was a “significant” restraint.
When auditors make recommendations to tighten up procedures or improve policies, they often find that U.N. organizations are slightly deaf, or worse. The JIU inspectors cite a 2008 audit review at UNICEF that discovered about one-third of the changes accepted by the bureaucracy over a previous five-year span were “not maintained” over time.
The inspectors suggest that things might improve if the audit recommendations, and the follow-up, were published on the organizations’ websites. (Some U.N. organizations, like the United Nations Development Program, do better at follow-up than others.)
The JIU inspectors make a distinction between “internal” auditors who examine the operation of their bureaucracies piecemeal, and “external” auditors who are truly independent—they usually work for national governments-- and usually report their findings about U.N. performance to the member states who are charged with supervising each organization.
But even here the JIU experts found problems. “Less than half” of the external auditing organizations they surveyed said they were required to report any potential conflicts of interest for themselves under certain circumstances. In the same vein, the “majority” of U.N. organizations do not explicitly prevent external auditors from being able to take up jobs in the organizations they monitored as soon as their auditing stints are over.
However, some auditors are in the job far too long: in the case of three smaller U.N. organizations, the JIU noted, the same auditors had been hired “since the organizations were established.” One of those cited, the Universal Postal Union, was established in 1874. For their part, the inspectors suggested a single six-year term was a better idea. If, as, and when the U.N. General Assembly ever considers the JIU report, how likely are its suggestions for improvement to be adopted? Since the U.N. bureaucracy is still keeping the report under formal wraps, it’s hard to say. But one yardstick of the challenge is the fact that the current JIU report is a follow-on to a similar report done in 2006—and many of the recommendations remain the same.
George Russell is executive editor of Fox News