United Nations: Preliminary Observations on Internal Oversight
and Procurement Practices (31-OCT-05, GAO-06-226T).
This testimony discusses internal oversight and procurement in
the United Nations (UN). The findings of the Independent Inquiry
Committee into the UN's Oil for Food Program have rekindled
long-standing concerns about internal oversight and procurement
at the United Nations. In addition, the UN's 2005 World Summit
called for a host of reforms, from human rights, terrorism, and
peace-building to economic development and management reform.
Specifically, this testimony conveys our preliminary observations
on the UN's budgeting processes as it relates to the ability of
the UN's Office of Internal Oversight Services (OIOS) to perform
independent and effective oversight. We will also discuss some of
the UN's efforts to address problems affecting the openness and
professionalism of its procurement system. We would like to
emphasize that our comments reflect the preliminary results of
two ongoing GAO engagements examining the UN's internal oversight
and procurement services. We will issue reports covering a wide
range of issues in both areas early next year.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-06-226T
ACCNO: A40817
TITLE: United Nations: Preliminary Observations on Internal
Oversight and Procurement Practices
DATE: 10/31/2005
SUBJECT: Budget activities
Budgeting
Internal controls
International organizations
Procurement evaluation
Procurement practices
******************************************************************
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GAO-06-226T
Testimony
Before the Permanent Subcommittee on Investigations, Committee on Homeland
Security and Governmental Affairs, U.S. Senate
United States Government Accountability Office
GAO
For Release on Delivery Expected at 1:00 p.m. EST
Monday, October 31, 2005
UNITED NATIONS
Preliminary Observations on Internal Oversight and Procurement Practices
Statement of Thomas Melito, Director International Affairs and Trade
GAO-06-226T
Mr. Chairman and Members of the Subcommittee:
I am pleased to be here today to discuss internal oversight and
procurement in the United Nations (UN). The findings of the Independent
Inquiry Committee into the UN's Oil for Food Program have rekindled
long-standing concerns about internal oversight and procurement at the
United Nations. In addition, the UN's 2005 World Summit called for a host
of reforms, from human rights, terrorism, and peace-building to economic
development and management reform.
Today, I will share with you our preliminary observations on the UN's
budgeting processes as it relates to the ability of the UN's Office of
Internal Oversight Services (OIOS) to perform independent and effective
oversight.1 I will also discuss some of the UN's efforts to address
problems affecting the openness and professionalism of its procurement
system. I would like to emphasize that my comments today reflect the
preliminary results of two ongoing GAO engagements examining the UN's
internal oversight and procurement services. We will issue reports
covering a wide range of issues in both areas early next year.2
To conduct our work to date, we met with senior Department of State
officials in Washington, D.C., and senior officials with the U.S. Missions
to the UN in New York, Vienna, and Geneva. At these locations, we also met
with the UN Office of Internal Oversight Services management officials and
staff; UN Procurement Service officials and staff; representatives of
several UN funds, programs, and specialized agencies; and the UN external
auditors-the Board of Auditors (in New York) and the Joint Inspection Unit
(in Geneva). We reviewed relevant OIOS program documents, manuals, and
reports. To assess the reliability of OIOS's funding and staffing data, we
reviewed the office's budget reports and discussed the data with cognizant
officials. We determined the data were sufficiently reliable for the
purposes of this report. To conduct our work on UN procurement, we
reviewed past GAO, UN audit, and expert reports on UN procurement
practices. We also reviewed the UN's procurement manual, training
materials, ethics rules, and financial rules and regulations. In addition,
we interviewed UN and U.S. government officials. We made the Department of
State and UN officials aware of the contents of our testimony. We
performed our work between April 2005 and October 2005 in accordance with
U.S. generally accepted government auditing standards.
1In our previous report on this topic (United Nations: Status of Internal
Oversight Services, GAO/NSIAD-98-9, Washington, D.C., Nov. 19, 1997), we
recommended that the Secretary of State encourage the Under
Secretary-General for Internal Oversight Services to do more to help
maintain OIOS's independence and establish the office as the authoritative
internal oversight mechanism the General Assembly intended it to be.
2Our report on OIOS, which will be issued in spring 2006, will examine,
among other issues, the Office's management structures and accountability
frameworks, including risk assessment and recommendations tracking. Our
report on the UN Procurement Service that will be issued in spring 2006
will, among other issues, examine the internal controls in place to ensure
compliance with procurement regulations. The Secretariat is currently
reviewing these controls in the wake of recent events concerning the UN's
Procurement Service, which is currently under interim leadership.
Summary
OIOS's ability to carry out independent, effective oversight over UN
organizations is hindered by the UN's budgeting processes for its regular
and extrabudgetary resources. In establishing OIOS in 1994, the General
Assembly passed a resolution stating that OIOS should exercise operational
independence in carrying out its oversight responsibilities and that the
Secretary-General should take into account the independence of the office
in preparing its budget. The Secretariat's budget office-over which OIOS
has oversight authority-exercises control over OIOS's regular budget,
which may result in conflicts of interest and infringe on OIOS's
independence. In addition, UN budgeting processes make it difficult for
OIOS to reallocate its regular budget resources among OIOS locations
worldwide or among its three oversight divisions-internal audit;
investigations; and monitoring, evaluation, and consulting services-to
meet changing priorities. OIOS officials provided us with several examples
of work funded through the regular budget that they were unable to
undertake due to resource constraints. In addition, OIOS does not have a
mechanism in place to identify or justify OIOS-wide staffing needs, except
for peacekeeping oversight services. OIOS also lacks control over its
extrabudgetary resources, which comprise 62 percent of its overall budget
in fiscal biennium 2004-2005. The UN funds and programs that OIOS oversees
maintain control over some of these resources since OIOS negotiates its
terms of work and payment for services with the managers of the programs
it intends to examine. If the entity does not agree to an OIOS examination
or does not provide sufficient funding for OIOS to carry out its work,
OIOS cannot adequately perform its oversight responsibilities.
The United Nations has made progress in improving the clarity of its
procurement manual but has yet to fully address previously identified
concerns affecting the lack of openness and professionalism of its
procurement system. Specifically, concerns remain relating to an
independent bid protest system, staff training and professional
certification, and ethics regulations. In 2002, the United Nations revised
its procurement manual, which now provides staff with clearer guidance on
UN procurement regulations and policies, including more detailed
step-by-step instructions of the procurement process than it had when we
reported in 1999. However, the Secretariat has yet to enhance the openness
of the procurement system by heeding a 1994 recommendation by outside
experts that it establish an independent bid protest process. At present,
vendors cannot file complaints with an independent official or office if
they believe that the UN Procurement Service has not handled their bids
appropriately. As a result, senior UN officials may not be made aware of
problems in the procurement process. In addition, the United Nations has
not fully addressed longstanding concerns affecting the professional
qualifications of its procurement workforce. The Procurement Service is
developing a new training curriculum and a professional certification
program. It has trained some procurement staff as instructors but has yet
to complete training curricula. In addition, the United Nations still
needs to develop the individual training profiles necessary to determine
the extent of its training requirements. A June 2005 report by an
independent contractor indicated that most headquarters procurement
officers and procurement assistants do not possess professional
procurement certifications. According to the contractor, the level of
certification was low in comparison to other organizations. Further, the
United Nations has yet to adopt several internal proposals to clarify UN
ethics regulations for procurement staff and vendors, such as a code of
conduct.
Background
Established in 1994 to serve as the UN's main oversight body, OIOS
operated with a budget of $63.9 million in fiscal biennium 2004-2005 and
employs a workforce of 256 staff in 20 locations around the world. OIOS
was established to assist the Secretary-General in fulfilling internal
oversight responsibilities over UN resources and staff. The stated mission
of OIOS is "to provide internal oversight for the United Nations that adds
value to the organization through independent, professional, and timely
internal audit, monitoring, inspection, evaluation, management consulting,
and investigation activities and to be an agent of change that promotes
responsible administration of resources, a culture of accountability and
transparency, and improved program performance."3 The office is headed by
an Under Secretary-General who is appointed by the Secretary-General for a
5-year fixed term with no possibility of renewal.4 The Under
Secretary-General may be removed by the Secretary-General only for cause
and with General Assembly approval. OIOS's authority spans all UN
activities under the Secretary-General, namely the UN Secretariat in New
York, Geneva, Nairobi, and Vienna; the five regional commissions for
Africa, Asia and the Pacific, West Asia, Europe, and Latin America and the
Caribbean; peacekeeping missions and humanitarian operations in various
parts of the world; and numerous UN funds and programs, such as the United
Nations Environment Program (UNEP), United Nations Human Settlements
Program (UN-HABITAT), and the Office of the United Nations High
Commissioner for Refugees (UNHCR).5
3In December 2004, the General Assembly passed a resolution making all
OIOS's audit reports available to any member state upon request.
The UN Procurement Service is located within the UN Secretariat's
Department of Management, at the UN headquarters in New York City. As of
August 2005, the Procurement Service had a staff of 71 personnel that
included 21 procurement officers, 5 associate procurement officers, and 24
procurement assistants. The Procurement Service manages procurement for
the UN Secretariat headquarters and procures air services and items
costing more than $200,000 for the Secretariat's peacekeeping and other
field missions. While it also provides procurement guidance and support to
UN personnel who procure goods and services in the Secretariat's
peacekeeping and other field missions, it does not directly supervise
them.6 Overall Secretariat procurement spending tripled between 1994 and
2004 as the number of UN peacekeepers in the field increased.7
Past reviews of the UN's procurement system have identified problems in
each of the six commonly identified characteristics that define an
effective procurement system.8 In 1999, we found that the United Nations
had yet to fully address these problems. The United Nations has retained a
consulting firm to assess the Procurement Service's financial and internal
controls, following the decision of a former procurement official to plead
guilty to federal charges involving his receipt of funds from firms
seeking UN contracts. The Procurement Service is currently under interim
management.
4A new Under Secretary-General for Internal Oversight Services was
appointed in July 2005.
5OIOS's authority does not extend to UN specialized agencies such as the
Food and Agriculture Organization (FAO), International Labor Organization
(ILO), and World Health Organization (WHO).
6For example, the 135 procurement staff who work in the Secretariat's
peacekeeping field missions report to the Secretariat's Department of
Peacekeeping Operations rather than to the Procurement Service in the
Secretariat's Department of Management.
7In 1997, the Secretariat spent about $430 million on procurement and
fielded an average of about 21,000 peacekeepers per month. According to UN
figures, in 2004 the Secretariat spent more than $1.3 billion on
procurement and fielded an average of 57,300 peacekeepers per month. Most
(85 percent) of the $1.3 billion spent by the Secretariat on procurement
in 2004 was for peacekeeping.
UN Budgeting Processes Limit OIOS's Effectiveness
The ability of OIOS to carry out independent, effective oversight is
impeded by the UN's budgeting processes for the regular budget and funds
from the assessed peacekeeping budget and voluntary contributions from
funds and programs subject to OIOS's oversight, which are known as
extrabudgetary resources. The Secretariat's budget office-over which OIOS
has oversight authority-exercises control over OIOS's regular budget,
which may result in potential conflicts of interest. UN budgeting
processes make it difficult for OIOS to shift resources among OIOS
locations or divisions to meet changing priorities. In addition, OIOS
lacks control over extrabudgetary resources from UN funds and programs.
OIOS negotiates its terms of work and payment for services with the
manager of the program it intends to examine. However, if the entity does
not agree to an OIOS examination or does not provide requested funding for
OIOS to perform its work, OIOS cannot adequately perform its oversight
responsibilities. These regular budget and extrabudgetary processes have
impeded OIOS in its ability to complete some of its identified oversight
priorities and raise serious questions about OIOS's independence.
8In our previous report on this topic (United Nations: Progress of
Procurement Reforms, GAO/NSIAD-99-71, Washington, D.C., Apr. 15, 1999), we
noted that openness and a professional workforce are two of six commonly
identified characteristics of effective procurement systems. An open
procurement system is characterized in part by a clear and formal bid
protest process, a procurement manual, standard operating procedures, and
policies and procedures that are understood by all participants. A
professional workforce is characterized by competent and knowledgeable
staff who have undergone professional training programs. Other commonly
identified characteristics of effective procurement systems are integrity,
competitiveness, accountability, and value. These characteristics were
discussed by a high level group of procurement experts who reviewed the UN
procurement system in 1994.
OIOS's Oversight Capacity Is Hindered by the UN's Budgeting Processes for the
Regular Budget
OIOS's ability to carry out independent, effective oversight is hindered
by the UN's budgeting processes for its regular budget. A General Assembly
resolution in the creation of OIOS stated that the new internal oversight
body shall exercise operational independence9 and that the
Secretary-General, when preparing the budget proposal for OIOS, should
take into account the independence of the office.10 OIOS receives its
funding from two sources, the UN's regular budget and funds from the
assessed peacekeeping budget and voluntary contributions from funds and
programs subject to OIOS's oversight-known as extrabudgetary resources.11
UN rules and regulations preclude the movement of funds between the
regular budget and extrabudgetary resources. From 1996-1997 through
2004-2005, the number of staff funded by the regular budget has been
relatively flat while the number funded by extrabudgetary resources has
increased steadily. During that same period, OIOS's regular budget
increased from about $15 million to about $24 million; its extrabudgetary
resources grew from about $7 million to about $40 million. OIOS officials
stated that the increase in extrabudgetary resources has been largely due
to growth in oversight for UN peacekeeping (see fig. 1).
9The Institute of Internal Auditors (IIA) International Standards for the
Professional Practice of Internal Auditing defines independence as freedom
from conditions that threaten objectivity or the appearance of
objectivity. The Standards state that the chief audit executive should
report to a level within the organization that allows the internal audit
activity to fulfill its responsibilities. The Lima Declaration of
Guidelines on Auditing Precepts adopted by the International Organization
of Supreme Auditing Institutions defines independence in terms of the
independence of supreme audit institutions, the independence of their
members and officials, and financial independence.
10Earlier this year, the General Assembly directed the Secretary-General
to report on how to achieve full operational independence for OIOS, in
accordance with its original mandate. The Secretary-General plans to issue
the report before the end of 2005.
11OIOS's regular budget resources are funds from assessed contributions
from member states and cover normal, recurring activities such as the core
UN functions of the Secretariat. OIOS extrabudgetary resources are
voluntary or assessed contributions made by member states to support a
specific program or activity, including, for example, peacekeeping, war
crime tribunals, and the UN's various, separately administered funds and
programs.
Figure 1: OIOS's Regular Budget and Extrabudgetary Resources, Fiscal
Biennium 1996-1997 to 2004-2005
Note: Regular budget data are the appropriated amounts for the biennium.
Extrabudgetary resources are estimates of the amounts allotted to OIOS
that it expects to receive from UN entities not funded from the UN's
regular budget.
The Secretariat's budget office-over which OIOS has oversight
authority-exercises control over OIOS's regular budget, which infringes on
the office's independence. In developing the biennium budget, the Under
Secretary-General of OIOS sends its biennial budget request to the
Secretariat's budget office for review. While OIOS can negotiate with the
budget office on suggested changes to its budget proposal, it has limited
recourse regarding the budget office's decisions. This process limits
OIOS's ability to independently request from the General Assembly the
resources it has determined it needs to provide effective oversight and
also poses a conflict of interest.
UN budgeting processes make it difficult for OIOS to reallocate its
regular budget resources among OIOS locations worldwide or among its three
divisions-internal audit; investigations; and monitoring, evaluation, and
consulting services-to meet changing priorities. For example, OIOS
officials requested a reallocation of 11 investigative posts from New York
to Vienna to save travel funds and be closer to the entities that they
investigate. This change was approved only after repeated requests by OIOS
over a number of years. In addition, although OIOS officials stated that
they routinely identify high-risk and high-priority audits and
investigations after the biennial budget has been determined, it is
difficult to mobilize the resources required to carry out the work.
OIOS officials have stated that the office is under resourced, but they do
not have a mechanism in place to determine appropriate staffing levels or
to justify budget requests, except for peacekeeping oversight services.
Officials provided us with several examples of work funded through the
regular budget that they were unable to undertake due to resource
constraints. For example, although the Board of Auditors recommended on
several occasions that OIOS develop the capacity to perform more
information technology audits, OIOS officials said that they lack the
financial and human resources to do so. We found that OIOS does not have a
mechanism in place to determine its overall staffing requirements, which
would help justify requests for additional resources. On the other hand,
for peacekeeping audit services, OIOS has a metric-endorsed by the General
Assembly-that provides one professional auditor per $100 million annual
peacekeeping budget. Although OIOS has succeeded in justifying increases
for peacekeeping oversight services consistent with the large increase in
the peacekeeping budget since 1994, it has been difficult to support staff
increases in oversight areas that lack a comparable metric.
OIOS Lacks Control Over Extrabudgetary Resources
OIOS lacks control over the extrabudgetary resources funded by UN funds
and programs. OIOS's reliance on extrabudgetary resources has been
steadily increasing over the years-from 30 percent in fiscal biennium
1996-1997 to 62 percent in the last fiscal biennium, 2004-2005 (see fig.
1). According to OIOS officials, the growth in the office's budget is
primarily due to extrabudgetary resources for audits and investigations of
peacekeeping. OIOS is dependent on UN funds and programs and other UN
entities for resources, access, and reimbursement for the services it
provides. Heads of these entities have the right to approve or deny
funding for oversight work proposed by OIOS. By denying OIOS funding, UN
entities could avoid OIOS audits, and high-risk areas could potentially be
excluded from adequate examination. For example, we have previously
testified that the UN Office of the Iraq Program refused to fund an OIOS
risk assessment of its program management division.12
UN funds and programs limit OIOS's ability to independently set its work
priorities in that they exercise the power to decide and negotiate whether
to fund OIOS oversight activities and at what level. OIOS officials stated
that because of OIOS's budgetary structure, some high-priority work has
not been undertaken. For example, according to a senior OIOS official, the
office has not been able to adequately oversee the extrabudgetary
activities of many entities, particularly those based in Geneva. In
addition, the office also has not been able to oversee the UN Framework
Convention on Climate Change or the UN Convention to Combat
Desertification. OIOS reports that if funding is not forthcoming, OIOS may
have no choice but to discontinue auditing certain extrabudgetary
activities as of January 2006. In addition, in some cases, the fund and
program managers have disputed the fees OIOS charges for its services. For
example, 40 percent of the $2 million billed by OIOS after it completed
its work are currently in dispute, and since 2001, less than half of the
entities have paid OIOS in full for investigative services it has
provided. If the funds and programs fail to pay or pay late, this also
adversely affects OIOS's resources.
The United Nations Has Made Progress but Has Yet to Fully Address Previously
Identified Procurement Concerns
The United Nations has improved the clarity of its procurement manual,
which now provides procurement staff with clearer guidance on UN
procurement regulations and policies. However, the United Nations has yet
to fully address several problems affecting the openness and
professionalism of its procurement system. Specifically, concerns remain
relating to an independent bid protest system, staff training and
professional certification, and ethics regulations.
12GAO, United Nations: Oil for Food Program Audits, GAO-05-346T
(Washington, D.C.: Feb. 15, 2005).
The UN Procurement Service Has Improved the Clarity of its Procurement Manual
The UN Procurement Service has improved the clarity of its procurement
manual. The manual guides UN staff in their conduct of procurement actions
worldwide. The Procurement Service is responsible for ensuring that the
manual reflects financial rules and regulations and relevant
Secretary-General bulletins and administrative instructions. An open and
effective procurement system requires the establishment of processes that
are available to and understood by vendors and procurement officers alike.
In 1999, we reported that the manual did not provide detailed discussions
of procedures and policies.13 The United Nations has addressed these
concerns in the current manual, which was endorsed by a group of outside
experts. The manual now has detailed step-by-step instructions of the
procurement process for both field and headquarters staff, including
illustrative flow charts. It also includes more guidance that addresses
headquarters and field procurement concerns, such as delegations of
procurement authority, more specific descriptions of short- and long-term
acquisition planning, and the evaluation of requests for proposals valued
at more than $200,000. However, the United Nations has yet to add a
section addressing renovation construction to the manual.
The United Nations Has Not Established an Independent Bid Protest Process
The United Nations has not heeded a 1994 recommendation by a group of
independent experts to establish an independent vendor bid protest process
as soon as possible.14 As a result, UN vendors cannot protest the
Procurement Service's handling of their bids to an independent official or
office. We reported in 1999 that such a process is an important aspect of
an open procurement system.15 A process that allows complaints to be
adjudicated by an independent office could promote the openness and
integrity of the process and help alert senior UN officials to the failure
of procurement staff to comply with stated procedures.
The current UN bid protest process is not independent of the Procurement
Service. Vendors are directed to file protests through a complaints ladder
process that begins with the acting Chief of the Procurement Service and
moves through his immediate supervisor, currently the Secretariat
Controller. The Chief of the Procurement Service at the time of our audit
stated that there is no vendor demand for an independent process.
13GAO, United Nations: Progress of Procurement Reforms, GAO/NSIAD-99-71
(Washington, D.C., Apr. 15, 1999).
14United Nations, High Level Expert Group Procurement Study Report (New
York, N.Y., Dec. 1994).
15GAO, United Nations: Progress of Procurement Reforms, GAO/NSIAD-99-71
(Washington, D.C., Apr. 15, 1999).
In contrast to the UN's approach to bid protest, the U.S. government
provides vendors with an agency-level bid protest process. In addition, it
also provides vendors with two independent bid protest forums. Vendors
dissatisfied by a U.S. agency's handling of their bids may protest to the
U.S. Court of Federal Claims or to the GAO. The GAO receives more than
1,100 such protests annually. Several other countries provide vendors with
independent bid protest processes. Moreover, the United Nations has
endorsed the use of similar independent bid protest mechanisms by other
member nations. In 1994, the General Assembly approved a model procurement
law that incorporates independent bid protest. In its comments on the law
it drafted for the General Assembly, the UN Commission on International
Trade Law stressed that a bid protest review body should be independent of
the procuring entity.16
The United Nations Has Not Fully Addressed Concerns Regarding Certification and
Training of Its Staff
The United Nations has not fully addressed longstanding concerns regarding
the qualifications of its procurement staff. Although the Procurement
Service is developing new training curricula and has initiated a
certification program, most Procurement Service staff at headquarters have
not been professionally certified. In addition, it has yet to determine
the extent to which its training budget may need to increase to pay for
these new programs.
A June 2005 report by a UN contractor indicated that most UN headquarters
Procurement Service officers and assistants have not been certified as to
the level of their procurement experience and education.17 The report
indicated that only 3 of the 20 procurement officers and 21 procurement
assistants responding to a survey had been certified by a recognized
procurement certification body.18 The contractor informed us that the UN's
level of certification was low compared with the level at other
organizations. Their report concluded that it was imperative that more UN
procurement staff be certified. Although the experts did not address the
qualifications of field procurement staff, UN headquarters officials
informed us that field procurement staff are also in need of more
training.
16UN Commission on International Trade Law (UNCITRAL) Model Law on
Procurement of Goods, Construction and Services.
17National Institute of Governmental Purchasing, Assessment of UNPS
Procurement Processes, June 2005.
18The experts reported that about 90 percent of the personnel in these
categories were represented in the survey. As of August 2005, the
Procurement Service staff included 21 procurement officers and 24
procurement assistants.
Concerns regarding the qualifications of UN procurement staff are
longstanding. Since 1994, international procurement experts reported that
UN procurement staff were largely ill-trained or inexperienced and very
few had any recognized procurement qualifications. In 1998, OIOS reported
that the majority of the 20 professional headquarters procurement staff
had procurement-related experience and were qualified. However, OIOS also
stated that field procurement staff had limited procurement-related
experience. In addition, OIOS reported that field-level procurement
practices were at high risk due to continuing problems in training
peacekeeping procurement staff in the field.19 In 1999, we reported that
the UN Secretariat procurement training program did not constitute a
comprehensive curriculum to provide a continuum of basic to advanced
skills for the development of procurement officers.20
The UN Procurement Service has acknowledged that more needs to be done to
train and certify procurement staff. It has developed basic and advanced
training curricula and provided training to staff at headquarters and in
the field during 2004 and 2005. However, although the training curriculum
covers several key topics in procurement, it does not provide in-depth or
comprehensive coverage of some topics. For example, the training material
does not include in-depth information on procurement negotiation, which is
of particular importance in light of UN plans to renovate its headquarters
complex. UN data indicates that 1-week basic procurement training courses
are being provided to some field staff and that advanced procurement
training courses are being provided to some headquarters and field staff.
However, it is not clear whether all procurement staff have received
training in both the basic and advanced curricula.
19These reports are summarized in United Nations: Progress of Procurement
Reforms, GAO/NSIAD-99-71 (Washington, D.C., Apr. 15, 1999).
20GAO/NSIAD-99-71.
The Procurement Service has also begun developing a mandatory
certification program. Procurement officials stated that their goal is to
secure certification of all staff within 5 years. As part of this
certification program, UN officials will train procurement staff to serve
as trainers. According to UN officials, the curriculum for the trainers
has been finalized and the UN has trained some staff as trainers. However,
these staff have yet to receive the certification they need before they
can train UN procurement staff. Other uncertainties relating to the
certification program exist, including the number of staff who will
require certification training and the type of certification they will
receive.
Current budget levels for procurement training may not be adequate to
support the new training efforts. A June 2005 report by the National
Institute of Governmental Purchasing, advised the Procurement Service that
its training budget was not sufficient to maintain the levels of training
needed to ensure fair, open, and ethical procurement operations.21 It
recommended that the Procurement Service seek a larger budget. However,
the budget's adequacy cannot be assessed because the Procurement Service
has not yet developed training profiles for each staff member. Without
assessments of individual training needs, the Procurement Service cannot
accurately determine the funds it requires to address those needs.
The United Nations Has Yet to Finalize Procurement Ethics Regulations
The United Nations has not yet acted on several proposals forwarded by the
UN Procurement Service to clarify ethics regulations for procurement
staff. Although the United Nations has established general ethics rules
and regulations for all UN staff, the Secretary-General has directed that
additional rules be developed for procurement officers concerning their
status, rights, and obligations. The General Assembly also has asked the
Secretary-General to issue ethics guidelines for procurement staff without
delay. Several draft rules and regulations specifically addressing
procurement ethics are waiting internal review or approval; no firm dates
have been set for their promulgation.
If approved, the documents would emphasize that all procurement activities
in the Secretariat are conducted in the sole interest of the United
Nations. They include a declaration of ethics responsibilities for
procurement staff, a code of conduct for vendors, and an outline of the
policies in current rules and regulations as they relate to procurement
staff. The proposed policies would also address ethics standards on
conflict of interest and acceptance of gifts for procurement staff, and
outline UN rules, regulations, and procedures for suppliers of goods and
services to the United Nations.
21The National Institute of Governmental Purchasing, Assessment of UNPS
Procurement Processes, June 2005.
Mr. Chairman, this completes my prepared statement. I will be happy to
address any questions you may have.
Contact and Acknowledgments
For further information, please contact Thomas Melito at (202) 512-9601.
Individuals making key contributions to this testimony included Assistant
Director Phyllis Anderson, Jaime Allentuck, Jeffrey Baldwin-Bott, Richard
Boudreau, Lynn Cothern, Timothy DiNapoli, Etana Finkler, Jackson Hufnagle,
Kristy Kennedy, Clarette Kim, John Krump, Joy Labez, Jim Michels, Valerie
Nowak, Barbara Shields, and Pierre Toureille.
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