United Nations: Management Reforms and Operational Issues	 
(24-JAN-08, GAO-08-246T).					 
                                                                 
Longstanding problems in United Nations (UN) management 	 
underscore the pressing need to reform and modernize the United  
Nations in areas ranging from management, oversight, and	 
accountability to operational activities in specific countries.  
The United States has strongly advocated the reform of UN	 
management practices and has also been critical of the		 
restrictions Burma's military regime has imposed on many	 
international organizations in Burma over the past 3 years. This 
testimony, based on recent GAO reports, discusses (1) management 
reform efforts at the UN Secretariat since 2006; (2) oversight	 
and accountability in selected UN organizations; and (3) UN and  
other international organizations' activities in Burma. 	 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-08-246T					        
    ACCNO:   A78870						        
  TITLE:     United Nations: Management Reforms and Operational Issues
     DATE:   01/24/2008 
  SUBJECT:   Accountability					 
	     Auditing standards 				 
	     Foreign aid programs				 
	     Internal audits					 
	     International agreements				 
	     International cooperation				 
	     International food programs			 
	     International organizations			 
	     International relations				 
	     Policy evaluation					 
	     Procurement practices				 
	     Program evaluation 				 
	     Program management 				 
	     Burma						 
	     United Nations Oil for Food Program		 

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GAO-08-246T

   

     * [1]Summary
     * [2]Background
     * [3]Progress on UN Management Reform Efforts Has Varied and Vari

          * [4]Progress on UN Management Reform Efforts Has Varied
          * [5]Various Factors Have Slowed the Pace of UN Management Reform

     * [6]Oversight and Accountability in Selected UN Organizations Co

          * [7]UN Internal Audit Offices Have Not Fully Implemented Key Com
          * [8]UN Evaluation Offices Have Not Fully Implemented UN Evaluati
          * [9]Governing Bodies Lack Full Access to Information That Could

     * [10]International Organizations' Assistance Programs Have Been C

          * [11]Burmese Regime Has Blocked or Impeded Human Rights Programs
          * [12]Burmese Regime Has Hindered Food, Development, and Health Pr
          * [13]UN Officials Say Meaningful Work Still Possible in Burma

     * [14]Concluding Observations
     * [15]GAO Contact and Staff Acknowledgments

          * [16]United Nations: Progress on Management Reform Efforts Has Va
          * [17]United Nations Organizations: Oversight and Accountability C
          * [18]International Organizations: Assistance Programs Constrained

     * [19]GAO's Mission
     * [20]Obtaining Copies of GAO Reports and Testimony

          * [21]Order by Mail or Phone

     * [22]To Report Fraud, Waste, and Abuse in Federal Programs
     * [23]Congressional Relations
     * [24]Public Affairs

                 United States Government Accountability Office

Testimony

GAO

Before the Permanent Subcommittee on Investigations, Committee on Homeland
Security and Governmental Affairs, U.S. Senate

For Release on Delivery
Expected at 10:00 a.m. EST
Thursday, January 24, 2008

UNITED NATIONS

Management Reforms and Operational Issues

Statement of Thomas Melito, Director
International Affairs and Trade

GAO-08-246T

GAO Highlights: 

Highlights of GAO-08-246T, a testimony before the Permanent 
Subcommittee on Investigations, Committee on Homeland Security and 
Governmental Affairs, U.S. Senate. 

Why GAO Did This Study: 

Long-standing problems in United Nations (UN) management underscore the 
pressing need to reform and modernize the United Nations in areas 
ranging from management, oversight, and accountability to operational 
activities in specific countries. The United States has strongly 
advocated the reform of UN management practices and has also been 
critical of the restrictions Burmaï¿½s military regime has imposed on 
many international organizations in Burma over the past 3 years. This 
testimony, based on recent GAO reports, discusses (1) management reform 
efforts at the UN Secretariat since 2006; (2) oversight and 
accountability in selected UN organizations; and (3) UN and other 
international organizationsï¿½ activities in Burma. 

What GAO Found: 

GAOï¿½s report on UN management reform efforts notes that (1) progress 
has varied in the five areas GAO examinedï¿½ethics, oversight, 
procurement, management operations of the Secretariat, and review of 
programs and activities (mandates)ï¿½and (2) various factors, such as 
disagreements among member states, have slowed the pace of progress. 
The UN ethics office has taken steps to improve organizational ethics, 
including implementing a whistleblower protection policy, but GAO 
identified issues that may limit the impact of the policy. The UN has 
taken steps to improve oversight, including establishing an Independent 
Audit Advisory Committee. However, UN funding arrangements continue to 
constrain the independence of the Secretariatï¿½s internal audit office 
and its ability to audit high-risk areas. The UN has taken steps to 
improve certain procurement practices but has not implemented an 
independent bid protest system or approved a lead agency concept, which 
could improve procurement services. The UN has taken steps to improve 
certain management operations of the Secretariat but has made little or 
no progress in others. Despite some limited initial actions, the UNï¿½s 
review of mandates has not advanced, due in part to a lack of support 
by many member states. Finally, the pace of UN management reforms has 
been slowed by member statesï¿½ disagreements on reform efforts, lack of 
comprehensive implementation plans, administrative issues that 
complicate certain internal processes, and competing UN priorities. 

GAOï¿½s report on oversight and accountability of selected UN 
organizations notes that, although the six UN internal audit offices 
GAO reviewed have made progress in implementing international auditing 
standards, they have not fully implemented key components of the 
standards. None of these six organizations require their internal 
oversight staff to disclose their financial interests. However, GAO 
found that five of the six organizations have made efforts to increase 
accountability by establishing whistleblower protection policies and 
one was developing such a policy. GAO also reported that while the six 
UN evaluation offices GAO reviewed are working toward implementation of 
UN evaluation standards, they have not fully implemented them. Finally, 
GAO reported that the governing bodies responsible for oversight of the 
six organizations lack full access to internal audit reports. 

GAOï¿½s report on Burma notes that Burmaï¿½s military regime has blocked or 
significantly impeded UN and other international organizationsï¿½ efforts 
to address human rights concerns and to help people living in areas 
affected by ethnic conflict. The regime frustrated international 
organizationsï¿½ efforts to monitor forced labor for years before signing 
an agreement in early 2007; restricted their efforts to assist 
populations living in conflict areas; and blocked their efforts to 
monitor prison conditions and conflict situations. The regime has, to a 
lesser degree, impeded UN food, development, and health programs. 
However, several UN and other international organization officials told 
GAO they are still able to achieve meaningful results in their efforts 
to mitigate some of Burma's humanitarian, health, and development 
problems. 

What GAO Recommends: 

GAOï¿½s November 2007 report on UN management reforms recommended that 
the Secretary of State and the U.S. Permanent Representative to the UN 
include in Stateï¿½s annual U.S. Participation in the United Nations 
report an assessment of the effectiveness of UN management reforms. 
GAOï¿½s June 2007 report on oversight and accountability recommended that 
the Secretary of State direct the U.S. missions to work with member 
states to improve oversight in UN organizations by (1) making audit 
reports available to the governing bodies and (2) establishing 
independent audit committees that are accountable to their governing 
bodies. State generally agreed with all of GAOï¿½s recommendations. 

To view the full product, including the scope and methodology, click on 
[hyperlink, http://www.GAO-08-246T]. For more information, contact 
Thomas Melito, (202) 512-9601 or [email protected]. 

[End of section] 

Mr. Chairman and Members of the Subcommittee: 

I am pleased to be here today to discuss United Nations (UN) operations 
in the context of three key issues: (1) the progress of management 
reform efforts at the UN Secretariat since 2006; (2) weaknesses in 
oversight and accountability in selected UN organizations; and (3) 
constraints upon UN and other international organizations' activities 
in Burma.[Footnote 1] Events over the past several decades indicate 
that there is a continuing need to reform and modernize the UN in areas 
including management, oversight, and accountability. While UN worldwide 
operations have expanded in complexity and significance, long-standing 
problems in UN management have contributed to scandals in the Oil for 
Food program and procurement operations.[Footnote 2] In addition, 
various challenges have hindered the ability of some UN organizations 
to address Burma's most pressing problems. As the largest financial 
contributor to the UN, the United States has strongly advocated the 
reform of UN management practices. The United States has also been 
critical of Burma's military regime, which has blocked or impeded 
activities undertaken by many international organizations in Burma over 
the past 3 years. 

The work supporting this statement is based on reports we issued in 
2007 that focused on management reform efforts at the UN Secretariat 
since 2006, oversight and accountability in selected UN 
organizations,[Footnote 3] and the operating environment for the UN and 
other international organizations in Burma. See appendix I for detailed 
information on the objectives, scope, and methodology of each report. 
We conducted our reviews in accordance with generally accepted 
government auditing standards. 

Summary: 

In our report on UN management reform efforts, we note that (1) 
progress has varied in the five areas we examined--ethics, oversight, 
procurement, management operations of the Secretariat, and review of 
programs and activities (known as mandates)--and (2) various factors, 
such as disagreements among member states, have slowed the pace of 
progress. The UN ethics office has worked to improve organizational 
ethics by increasing staff in its ethics office, developing ethical 
standards, enforcing financial disclosure requirements, and 
implementing a whistleblower protection policy. However, weaknesses in 
the UN's internal justice system may limit the impact of the 
whistleblower protection policy. The UN made some progress in improving 
oversight by creating an Independent Audit Advisory Committee (IAAC) in 
June 2007 and improving the capacity of its Office of Internal 
Oversight Services (OIOS) to carry out internal audits and 
investigations. However, UN funding arrangements continue to constrain 
the independence of OIOS and its ability to audit high-risk areas. 
Progress on procurement reform efforts has been mixed. The UN has 
strengthened its training program for procurement staff, including 
conducting courses in ethical conduct, but has not formally established 
an independent bid protest system and has not approved a lead agency 
concept, whereby specialist UN organizations would handle certain 
procurements in order to enhance division of labor, reduce duplication, 
and reduce costs. The UN has taken steps to improve certain management 
operations of the Secretariat, such as selected human resource 
functions and the UN's information technology system. However, the UN 
has made little or no progress in improving several budgetary, 
financial management, and administrative functions. Despite some 
limited initial actions, the UN's review of mandates has not advanced, 
due in part to a lack of support by many member states. Finally, the 
pace of UN management reforms has been slowed by (1) disagreements 
among member states on the priorities and importance of UN management 
reform efforts, (2) the lack of comprehensive implementation plans for 
some management reform proposals, (3) administrative policies and 
procedures that continue to complicate the process of implementing 
certain human resource initiatives, and (4) competing UN priorities, 
such as the proposal to reorganize the Department of Peacekeeping 
Operations, that limit the capacity of General Assembly members to 
address management reform issues. 

In our report on oversight and accountability of selected UN 
organizations, we address the extent to which these organizations' (1) 
internal audit offices have implemented professional standards for 
performing audits and investigations, (2) evaluation offices have 
implemented UN evaluation standards, and (3) governing bodies are 
provided with information about the results of UN oversight practices. 
Although the six UN internal audit offices we reviewed have made 
progress in implementing international auditing standards, they have 
not fully implemented key components of the standards. None of the six 
organizations we examined required their internal oversight staff to 
disclose their financial interests, which could ensure that employees 
are free from conflicts of interest. However, we found that five of the 
six organizations have established whistleblower protection policies, 
and the United Nations Development Program (UNDP) was developing such a 
policy. In addition, none of the organizations has completed 
organization-wide risk-management frameworks, only half of the audit 
offices had sufficient staff to cover high-risk audit areas of the 
organization, and some of the audit offices have not fully implemented 
a quality assurance process, such as having external peer reviews. Some 
of the organizations also did not have professional investigators to 
probe allegations of wrongdoing. We also reported that while the six UN 
evaluation offices we reviewed were working toward implementation of UN 
evaluation standards, such as having sufficient resources and 
implementing quality assurance standards, they had not fully 
implemented them. Finally, we reported that the governing bodies 
responsible for oversight of the six organizations lacked full access 
to internal audit reports, which could provide greater insight into the 
organizations' operations and identify critical systemic weaknesses. 
International best practices suggest that oversight could be 
strengthened by establishing an independent audit committee. However, 
the audit committees at four of the six UN organizations we examined 
were not in line with international best practices, and one of the 
entities did not have an audit committee. 

In our report on Burma, we identify UN and other international 
organizations' principal efforts to address Burma's humanitarian and 
development problems and describe the impact of the regime's recent 
actions upon them. We found that the military regime that rules Burma 
has blocked or significantly impeded UN and other international 
organizations' efforts to address human rights concerns and to help 
people living in areas affected by ethnic conflict. The regime 
frustrated UN/International Labor Organization (ILO) efforts to monitor 
forced labor for 4 years before signing an agreement in February 2007, 
restricted efforts by the UN High Commissioner for Refugees (UNHCR) to 
assist populations living in areas affected by ethnic conflict, and 
blocked efforts by the International Committee of the Red Cross (ICRC) 
to monitor prison conditions and conflict situations. The regime has 
also, to a lesser degree, impeded UN food, development, and health 
programs by restricting their ability to move food and international 
staff freely within the country and to conduct research needed to 
determine the nature and scope of some of Burma's problems. 
Nonetheless, several UN and other international organization officials 
told us they are still able to achieve meaningful results in their 
efforts to mitigate some of Burma's humanitarian, health, and 
development problems. 

Background: 

Although the UN has undergone various cycles of reform since its 
creation in 1945, UN member states continue to have concerns about 
inefficient UN management operations. In September 2005, world leaders 
gathered at the UN World Summit in New York to discuss a variety of 
issues of importance to the UN, including management reforms. The 
outcome document from the summit called for the Secretary-General to 
submit proposals for implementing management reforms of the 
Secretariat. In October 2006, we reported that progress had been slow 
in five key UN management reform areas, with numerous reform proposals 
awaiting General Assembly review, and that many of the proposed or 
approved reforms lacked an implementation plan with time frames and 
cost estimates. 

Oversight is a key activity in governance that addresses whether 
organizations are carrying out their responsibilities and serves to 
detect and deter public corruption. Oversight functions include 
monitoring, evaluating, and reporting on the organization's 
performance; auditing of the organization's financial results and 
effectiveness of its internal controls; and holding senior management 
accountable for results. Oversight also includes investigation of 
allegations of fraud. The principal bodies responsible for conducting 
oversight in the three UN funds and programs we reviewed--The United 
Nations Development Program (UNDP), the United Nations Children's Fund 
(UNICEF), and the World Food Program (WFP)--and the three specialized 
agencies we reviewed--the Food and Agriculture Organization (FAO), the 
International Labor Organization (ILO), and the World Health 
Organization (WHO)--include member states in their capacity as members 
of the governing bodies, internal auditors, investigators, and 
evaluation offices. 

The UN and other international organizations have become important 
sources of assistance to Burma's impoverished people, as the country-- 
one of the world's poorest--has become increasingly isolated. This 
assistance includes programs aimed at mitigating the effects of prison 
conditions, forced labor, and conflicts in Burma's ethnic areas. The UN 
is also attempting to provide food to vulnerable populations, promote 
local economic development, improve health conditions, and strengthen 
the Burmese educational system. In recent years, UN entities have 
increased their funding for activities aimed at addressing Burma's 
problems. UN entities informed us that they spent about $218 million in 
Burma from 2002 through 2005. Nevertheless, Burma's military regime 
distanced itself from the international organizations and began 
adopting increasingly restrictive policies after the regime underwent 
an internal purge in 2004, according to UN officials. The regime 
published guidelines in 2006 to restrict the activities of the 
international organizations. UN officials consider provisions in these 

guidelines, which have yet to be fully implemented, to be unacceptable. 

Progress on UN Management Reform Efforts Has Varied and Various Factors 
Have Slowed the Pace of the Reform Efforts: 

Since our October 2006 report,[Footnote 4] the progress of UN 
management reform efforts has varied in the five areas we reviewed-- 
ethics, oversight, procurement, management operations of the 
Secretariat, and review of programs and activities (known as mandates). 
Various factors, such as member state disagreements on the priorities 
and importance of the remaining reform efforts, have slowed the pace of 
the UN's efforts to improve the management of the Secretariat, and a 
number of reforms cannot move forward until these factors are 
addressed. 

Progress on UN Management Reform Efforts Has Varied: 

Since our October 2006 report, the UN has taken steps to improve 
ethics. The ethics office has made substantial progress in increasing 
staffing and in enforcing a whistleblower protection policy. In 
addition, the UN has made some progress in developing ethics standards 
and in enforcing financial disclosure requirements. However, concerns 
have been raised that the success of the whistleblower protection 
policy is, in part, dependent on reforms in the UN internal justice 
system that are not projected to be completed until 2009. In addition, 
the policy is potentially limited by the ethics office's lack of 
jurisdiction over UN funds and programs. After we issued our November 
2007 report, the Secretary-General issued a bulletin calling for system-
wide ethics standards for the Secretariat, programs, and funds. The 
bulletin outlined the guidelines and responsibilities for UN ethics 
offices of programs and funds and also stated that, if a program or 
fund does not have a policy in place for protection against 
retaliation, staff members of that program or fund may request 
protection from retaliation under the Secretariat's policy. 

Although the UN has improved its oversight capability, the Office of 
Internal Oversight Services (OIOS) has not yet achieved financial and 
operational independence. In June 2007, member states created an 
Independent Audit Advisory Committee (IAAC) and, since then, the UN has 
made some progress in making it operational. The committee's five 
members were elected in November 2007, and the committee is expected to 
be operational by January 2008. Since October 2006, some progress has 
been made in strengthening OIOS. Although OIOS has improved the 
capacity of individual divisions, including internal audit and 
investigations, UN funding arrangements continue to constrain its 
ability to audit high-risk areas, and member states have not yet agreed 
on whether to grant OIOS financial and operational independence. 

The UN has taken steps to improve its procurement process, but some 
reform issues have not moved forward since October 2006. Activities on 
which some progress has been made are the strengthening of procedures 
for UN procurement staff and suppliers, developing a comprehensive 
training program for procurement staff, and developing a risk 
management framework. However, the UN has made little or no progress in 
establishing an independent bid protest system and creating a lead 
agency concept, whereby specialist UN organizations would handle 
certain procurements in order to enhance division of labor, reduce 
duplication, and reduce costs. In addition, since our October 2006 
report, the reorganization of the Department of Peacekeeping 
Operations, along with its related procurement activities, may affect 
the UN's overall procurement reform efforts, such as establishing lines 
of accountability and delegation of authority for the Departments of 
Management and Peacekeeping Operations. 

Since our October 2006 report, the UN has improved some of the 
management operations of the Secretariat, but many reform proposals 
have not moved forward. Some progress has been made on selected issues 
involving human resources and information technology. In contrast, 
little or no progress has been made in reforming the UN's internal 
justice system, budgetary and financial management functions, and the 
alternative delivery of certain services, such as internal printing and 
publishing. 

Despite some limited initial actions, the UN's review of all UN 
mandates has not advanced, due in part to a lack of support by many 
member states. Although some progress was made in Phase I of the 
review, which ended in December 2006, little or no progress has been 
made in Phase II because member states continue to disagree on the 
nature and scope of the review and lack the capacity to carry it out. 
As a result, the prioritization of this particular UN management reform 
effort has decreased, according to UN and State officials. In September 
2007, member states decided to continue reviewing mandates in the 62nd 
session of the General Assembly, but they did not determine how the 
review would proceed. 

Various Factors Have Slowed the Pace of UN Management Reform Efforts: 

Various factors have slowed the pace of UN management reform efforts, 
and some reforms cannot move forward until these factors are addressed. 
Key factors include the following: 

* Member states disagree on UN management reform efforts. Delegates 
from 15 of 17 member states that we met with, representing Africa, 
Asia, Europe, Latin America, the Middle East, and North America, told 
us that the number one challenge to continued progress on management 
reform efforts is member state disagreements on the priorities and 
importance of the remaining reform efforts.[Footnote 5] 

* Some management reform proposals lack comprehensive implementation 
plans, including time frames, completion dates, and cost and savings 
estimates for completing specific management reforms. In addition, the 
Secretariat has not submitted most of approximately 20 cost-benefit 
analyses and other assessments to the General Assembly as planned by 
March 2007. 

* Administrative policies and procedures continue to complicate the 
process of implementing certain complex human resource initiatives. 
These policies and procedures include proposals to outsource certain 
administrative services, such as payroll processes, staff benefit 
administration, and information technology support. 

* Competing UN priorities limit the capacity of General Assembly 
members to address management reform issues. For example, the 
reorganization of the Department of Peacekeeping Operations absorbed 
much of the General Assembly's attention throughout the spring 2007 
session and, as a result, progress on some issues was delayed while 
others were not taken into consideration by the General Assembly. 

To encourage UN member states to continue to pursue the reform agenda 
of the 2005 World Summit, we recommended in the report we issued on 
November 14, 2007, that, as management reforms are implemented over 
time, the Secretary of State and the U.S. Permanent Representative to 
the UN include in State's annual U.S. Participation in the United 
Nations report an assessment of the effectiveness of the reforms. 

State generally endorsed our main findings and conclusions and noted 
that our assessment of UN progress on management reform efforts was 
accurate and balanced. State also agreed fully with the need to keep 
Congress informed of the effectiveness of management reforms, adding 
that the department will continue to monitor and inform Congress, as we 
recommended. State did not agree with our statement that successful 
whistleblower protections are dependent, in part, on the reform of the 
UN's internal justice program. During our review, we found that UN and 
nongovernmental organization staff had concerns about weaknesses in the 
UN internal justice system and the potential impact of these weaknesses 
on the implementation of a successful whistleblower protection policy. 
We agree with these concerns. 

Oversight and Accountability in Selected UN Organizations Could Be 
Strengthened by Further Instituting International Best Practices: 

Although the six UN internal audit offices we reviewed have made 
progress in implementing international auditing standards, they have 
not fully implemented key components of the standards. In addition, 
while the six UN evaluation offices we reviewed are working toward 
implementing UN evaluation standards, they have not fully implemented 
them. Moreover, the governing bodies responsible for oversight of the 
six UN organizations we reviewed lack full access to internal audit 
reports and most lack direct information from the audit offices about 
the sufficiency of their resources and capacity to conduct their work. 
In addition, most UN organizations do not have an independent audit 
committee, as suggested by international best practices. 

UN Internal Audit Offices Have Not Fully Implemented Key Components of 
International Auditing Standards: 

Most of the six UN organizations we examined are in various stages of 
adopting ethics policies, such as requiring conflict of interest and 
financial disclosure statements and adopting whistleblower policies to 
protect those who reveal wrongdoing. Ethics policies could strengthen 
oversight by helping to ensure more accountability and transparency 
within the organizations. Some internal oversight units rely on their 
staff to comply with a general declaration that all UN employees sign 
when they are employed by the organization. We earlier reported that: 

* UNDP and WFP rely on their oversight staff to self-report any 
conflicts of interest, though WFP's investigative unit was developing a 
conflict of interest policy to cover investigations staff in fall 2006, 
and: 

* none of the six organizations we examined require their internal 
oversight staff to disclose their financial interests, a practice that 
could help to ensure that employees are free from conflicts of 
interest. 

Five of the six of the organizations we studied have established 
whistleblower protection policies to protect those who reveal 
wrongdoing within their respective organizations. UNICEF, FAO, WFP, 
WHO, and ILO have whistleblower protection policies in place, and UNDP 
was developing such a policy. 

We reported that all six audit offices are developing and implementing 
risk-based work plans and five of the six internal audit offices have 
contributed to their respective organizations' development of a risk 
management framework. However, the organizations' senior management has 
not completed an organization-wide risk management framework that would 
assist in guiding the audit offices' work plans. Moreover, only three 
of the six audit offices told us that they had sufficient resources to 
achieve their audit work plans, which could include high-risk areas. 
For example, WFP's audit chief informed us that the audit office did 
not have sufficient resources to conduct its planned work for 2007 and 
as a result, it has had to defer audits to future years. 

We also reported that a number of internal oversight units do not have 
professional investigators and rely on other parties who may not be 
qualified, such as auditors, to determine whether wrongdoing has 
occurred. As a result of the limited capacity of organizations to 
conduct investigations, many internal oversight units have backlogs of 
investigative cases and are unable to complete their planned audits. A 
number of the organizations we examined indicated that they were 
working on increasing their investigative capacity in order to meet new 
organization-wide initiatives. For example, UNDP senior officials 
reported that they needed additional investigative staff because the 
number of cases had increased, due to the establishment of a fraud 
hotline. 

UN Evaluation Offices Have Not Fully Implemented UN Evaluation 
Standards: 

We reported that five of the six evaluation offices we reviewed stated 
that they lack sufficient resources and staff with expertise to manage 
and conduct evaluations--conditions that have impacted their ability to 
conduct high-quality and strategically important evaluations. For 
example, FAO's evaluation officials informed us that because FAO does 
not have sufficient resources to manage and conduct evaluations to 
reasonably address management's concerns, it relies heavily on the use 
of outside consultants for expertise. 

Governing Bodies Lack Full Access to Information That Could Provide 
Greater Insights into UN Organizations' Operations and Identify 
Critical Systemic Weaknesses: 

The governing bodies of the six organizations we examined lack full 
access to internal audit reports, which would increase transparency and 
their awareness of the adequacy and effectiveness of the organizations' 
system of internal controls. Currently, member states are not provided 
with the internal audit office's reports; however, member states 
including the United States have stated that access to audit reports 
would help them exercise their oversight responsibilities as members of 
the governing body. International best practices suggest that oversight 
could be strengthened by establishing an independent audit committee 
composed of members external to the management of the organization and 
reporting to the governing body on the effectiveness of the audit 
office and on the adequacy of its resources. However, the audit 
committees at four of the six UN organizations we examined are not in 
line with international best practices, and one of the entities does 
not have an audit committee. 

To improve oversight in UN organizations, we recommended that the 
Secretary of State direct the U.S. missions to work with member states 
to make internal audit reports available to the governing bodies to 
provide further insight into the operations of the UN organizations and 
identify critical systemic weaknesses; and establish independent audit 
committees that are accountable to their governing bodies, where such 
circumstances do not currently exist. While State, FAO, UNDP, WFP, and 
WHO generally agreed with our recommendations, ILO and UNICEF expressed 
concerns about implementing them. Specifically, ILO expressed 
reservations about making internal audit reports available to governing 
bodies, while UNICEF expressed concerns about establishing independent 
audit committees. 

International Organizations' Assistance Programs Have Been Constrained 
in Burma: 

We found that the military regime that rules Burma has blocked or 
significantly impeded UN and other international organizations' efforts 
to address human rights concerns and to help people living in areas 
affected by ethnic conflict. The regime has also, to a lesser degree, 
impeded UN food, development, and health programs. Nonetheless, several 
UN and other international organization officials told us they are 
still able to achieve meaningful results in their efforts to mitigate 
some of Burma's humanitarian, health, and development problems. 

Burmese Regime Has Blocked or Impeded Human Rights Programs and 
Programs in Conflict Areas: 

Burma's military regime has blocked international efforts to monitor 
prison conditions, and, until recently, forced labor in Burma. The 
regime halted ICRC's prison visit program by insisting that pro-regime 
staff observe ICRC meetings with prisoners. Similarly, the regime 
frustrated ILO efforts to conclude an agreement establishing an 
independent complaints process for forced labor victims for 4 years. It 
eventually signed an agreement with ILO in February 2007 to establish a 
complaints mechanism for victims of forced labor. The regime has also 
impeded international efforts to address the needs of populations in 
conflict areas by restricting international access to those areas. For 
example, it has limited UNHCR efforts along the Thai border, while 
halting or impeding efforts in conflict areas by ICRC and other 
organizations. 

Burmese Regime Has Hindered Food, Development, and Health Programs: 

The regime has also impeded UN food, development, and health programs, 
although programs that address health and development issues in Burma 
have generally been less constrained by the regime's restrictions than 
the ILO and ICRC human rights efforts. Delays in obtaining transport 
permits for food commodities from the current regime have hindered WFP 
efforts to deliver food to vulnerable populations. The regime's time- 
consuming travel procedures have also impeded the ability of 
international staff to move freely within the country to ensure the 
timely provision of assistance. Officials of eight of the nine UN 
entities that provide humanitarian, health, and development assistance 
in Burma told us that the regime requires at least 3 to 4 weeks' 
advance notice to authorize travel, which impedes the planning and 
monitoring of projects through field visits and reduces the scope of 
their activities. UN officials told us that the regime has also impeded 
their ability to address the needs of the Burmese population, conduct 
strategic planning, and implement programs in Burma by restricting 
their ability to conduct their own surveys and freely share the data 
they gather. 

UN Officials Say Meaningful Work Still Possible in Burma: 

Despite these restrictions, many of the international officials we 
spoke with told us that they are still able to achieve meaningful 
results in their efforts to mitigate some of Burma's many problems. For 
example, UN officials working in the health sector told us that the 
Burmese regime had been increasingly cooperative in efforts to address 
HIV/AIDS prevalence and recently worked with several UN entities to 
develop a multisectoral plan that targets all victims of the disease in 
Burma. Several officials also emphasized that restrictions have had the 
least effect on organizations that tend to work closely with the 
regime. For example, an FAO official told us that FAO generally has 
good relations with the technical ministries it cooperates with due to 
its close work with these ministries in providing technical assistance 
and supporting knowledge transfer. 

Our report on Burma included no recommendations. We obtained comments 
on a draft of this report from the Secretary of State and cognizant UN 
and ICRC officials. State commented that the draft report was thorough, 
accurate, and balanced. While the UN Country Team commented that the UN 
and its partners had in the past decade achieved "a significant opening 
of humanitarian space on the ground," it did not dispute our specific 
findings about the regime's restrictions over the past 3 years. In 
response to recent protests in Burma, the UN Country Team noted the 
urgent necessity to address Burma's deteriorating humanitarian 
situation and appealed for an improved operating environment for 
humanitarian organizations working there. 

Concluding Observations: 

The UN is increasingly called upon to undertake important and complex 
activities worldwide, including responding to conflict and humanitarian 
crises. As the UN's role and budget expand, so do attendant concerns 
about weaknesses in accountability, transparency, and oversight. The UN 
Secretariat and UN-affiliated organizations face internal and external 
challenges in undertaking, administering, and overseeing their 
respective mission-related activities. UN organizations have worked to 
implement needed internal reforms to improve ethics, oversight, 
procurement, and management operations with varied degrees of progress. 
For example, the UN has worked to improve oversight by establishing an 
IAAC, but funding arrangements within the Secretariat's internal audit 
office continue to constrain the office's operational independence and 
its ability to audit high-risk areas. In addition, UN organizations 
face external challenges in operating environments such as Burma, where 
the military regime has blocked or impeded some UN activities aimed at 
improving human rights. Addressing these challenges will require 
concerted and sustained actions by member states and UN organizations' 
management, staff, and oversight mechanisms. 

Mr. Chairman, this concludes my statement. I would be pleased to answer 
any questions that you or other Members of the Subcommittee may have at 
this time. 

GAO Contact and Staff Acknowledgments: 

Should you have any questions about this testimony, please contact 
Thomas Melito at (202) 512-9601 or [email protected]. Major contributors 
to this testimony were Cheryl Goodman, Zina Merritt, and Phillip Thomas 
(Assistant Directors); Debbie J. Chung; Lyric Clark; Andrea Miller; 
George Taylor; and Pierre Toureille. 

[End of section] 

Appendix I: Objectives, Scope, and Methodology: 

This testimony is based on three reports we issued during 2007--United 
Nations: Progress on Management Reform Efforts Has Varied (Nov. 2007); 
United Nations: Oversight and Accountability Could Be Strengthened by 
Further Instituting International Best Practices (June 2007); and 
International Organizations: Assistance Programs Constrained in Burma 
(Apr. 2007). The objectives, scope, and methodology of each of these 
reports follows. 

United Nations: Progress on Management Reform Efforts Has Varied: 

For this report, we assessed progress in ethics, oversight, 
procurement, management operations of the UN Secretariat, and mandate 
review.[Footnote 6] To assess the progress of specific UN management 
reform efforts within each of these five areas, we developed the 
following three categories: little or no progress, some progress, and 
substantial progress.[Footnote 7] However, we did not assign an overall 
level of progress to each of the five reform areas because the various 
initiatives within each area are highly diverse. During our review, we 
determined which category of progress to assign to each reform effort 
based on documents we collected and reviewed and discussions we had 
with State Department, UN, and other officials. After we had made our 
initial assessments of progress, three other GAO staff members not 
involved in this review used the evidence and the categories to make 
their own assessments independently of each other. These staff members 
then met with each other to reconcile any differences in their initial 
assessments. Finally, they met with us and confirmed that we were all 
in agreement on our assessments. To address our objectives, we reviewed 
documents proposing UN management reforms and interviewed officials 
from several UN departments in New York. We reviewed reports and 
bulletins published by the UN General Assembly and Secretariat, 
relevant UN resolutions, and related budget documents. The majority of 
the cost estimates for the proposed reform initiatives are preliminary, 
and detailed cost estimates are being developed; therefore, we did not 
analyze the assumptions underlying these estimates to determine whether 
they are reasonable and reliable. We met with officials from the 
General Assembly Office of the President, the Office of the Deputy 
Secretary-General, the Department of Management, and the Office of 
Internal Oversight Services (OIOS). We also met with representatives 
from 17 of 192 member states from various geographic regions to obtain 
a balance of views on the most critical challenges to reforming UN 
management. We discussed the status of UN management reforms with 
officials from the Department of State in Washington, D.C., and the 
United Nations in New York. We performed our work on UN management 
reforms from March to November 2007 in accordance with generally 
accepted government auditing standards. 

United Nations Organizations: Oversight and Accountability Could Be 
Strengthened by Further Instituting International Best Practices: 

For this report, we selected 6 UN organizations from among the 10 funds 
and programs and 15 specialized agencies that comprise the universe of 
all UN funds and programs and specialized agencies, including the Food 
and Agriculture Organization, International Labor Organization, United 
Nations Children's Fund, United Nations Development Program, World Food 
Program, and the World Health Organization.[Footnote 8] On the basis of 
their budgets for biennium 2004-2005, we selected the three largest 
funds and programs and three of the largest specialized agencies. 
Therefore, our results cannot be generalized to the full universe of 
all funds and programs and specialized agencies and may not represent 
the practices of the smaller UN organizations. 

To examine the extent to which the six organizations' internal audit 
offices have implemented professional standards for performing audits, 
we reviewed relevant standards issued by the Institute of Internal 
Auditors. To conduct our review, we selected key audit standards that 
were based on previous GAO work. In addition, we examined documents and 
conducted interviews with various officials, including officials of the 
internal audit offices, finance division, human resources, audit 
committees, legal offices, and external auditors. Regarding 
investigations, the six UN organizations we examined have adopted the 
UN Uniform Guidelines for Investigations, which are intended to be used 
as guidance in the conduct of investigations in conjunction with each 
organization's rules and regulations. 

To examine the extent to which the six organizations' evaluation 
offices have implemented UN evaluation norms and standards, we reviewed 
the relevant standards and norms issued by the UN Evaluation Group. We 
examined documents from the six organizations, including reports 
prepared by the organizations' evaluation offices and external peer 
reviewers, and annual reports of the evaluation offices. In addition, 
we conducted interviews with various officials of the evaluation 
offices. 

To examine the extent to which governing bodies are provided 
information about the results of UN oversight practices, we reviewed 
documents from the six organizations, including reports prepared by the 
organizations' external auditors, the oversight unit chiefs, the 
governing bodies, and the audit committees, where applicable. We also 
examined the charters of the audit offices and the audit committees, 
where applicable. In addition, we interviewed selected representatives 
from UN member states, including representatives from the U.S. missions 
to the UN in Geneva, Rome, and New York and U.S. representatives to the 
governing bodies of the UN organizations we examined. In Geneva, we 
spoke with members of the Geneva Group, including representatives from 
the United Kingdom, Canada, the Netherlands, Australia, and Germany. In 
Rome, we spoke with additional members of the Geneva Group, including 
representatives from the United Kingdom, Spain, Canada, Sweden, South 
Korea, Germany, Switzerland, Finland, Italy, France, Russia, New 
Zealand, Japan, and the Netherlands. In addition, we met with 
representatives of the Group of 77 from Zimbabwe, Madagascar, Iraq, 
Dominican Republic, Bangladesh, Brazil, Cameroon, China, Egypt, Kuwait, 
Nicaragua, Peru, the Philippines, Sri Lanka, and Thailand. In New York, 
we spoke with mission representatives to the UN from Belgium, 
Australia, the United Kingdom, Canada, Japan, and Pakistan. 

Furthermore, to address our objectives, we spoke with senior officials 
from the Departments of State and Labor in Washington, D.C., and senior 
officials from State, Labor, Health and Human Services, and the U.S. 
Agency for International Development at the U.S. missions to the UN in 
Geneva, Rome, and New York. At these locations, we met with management 
and staff responsible for governance and oversight at FAO, ILO, UNDP, 
UNICEF, WFP, and WHO. We conducted our work on oversight and 
accountability of UN organizations from June 2006 through March 2007 in 
accordance with generally accepted government auditing standards. 

International Organizations: Assistance Programs Constrained in Burma: 

For this report, we examined documents relating to programs conducted 
in Burma by the UN Country Team (which includes ten UN entities located 
in that country) and the restrictions imposed on them by the Burmese 
regime.[Footnote 9] In New York and Washington, D.C., we met with 
officials of the U.S. Departments of State and the Treasury, the UN, 
the World Bank, and the International Monetary Fund. We also met with 
the Burmese UN mission in New York. In Rangoon, Burma, we met with 
officials of UN entities, the International Committee of the Red Cross, 
and several international nongovernmental organizations who asked that 
we not identify their organizations; and officials of the U.S. embassy 
and of the leading democratic organization in Burma. In and near 
Rangoon and Bassein, Burma, we met with recipients of UN assistance. We 
also traveled to Nay Pyi Taw (Burma's newly built capital) to meet with 
officials from the Burmese Ministry of National Planning and Economic 
Development and the Ministry of Health. In Bangkok, Thailand, we met 
with officials from three additional UN entities that operate programs 
in Burma from Thailand,[Footnote 10] as well as with representatives of 
other donor nations. We conducted our work on Burma from May 2006 to 
February 2007 in accordance with generally accepted government auditing 
standards. 

[End of section] 

Footnotes: 

[1] This testimony is based on recently completed GAO reports. See GAO, 
United Nations: Progress on Management Reform Efforts Has Varied, GAO-
08-84 (Washington, D.C.: Nov. 14, 2007); United Nations Organizations: 
Oversight and Accountability Could Be Strengthened by Further 
Instituting International Best Practices, GAO-07-597 (Washington, D.C.: 
June 18, 2007); and International Organizations: Assistance Programs 
Constrained in Burma, GAO-07-457 (Washington, D.C.: Apr. 6, 2007). 

[2] We reported on the UN Oil for Food program in United Nations: 
Lessons Learned from Oil for Food Program Indicate the Need to 
Strengthen UN Internal Controls and Oversight, GAO-06-330 (Washington, 
D.C.: Apr. 25, 2006) and other reports. We also reported on UN 
procurement in United Nations: Procurement Internal Controls Are Weak, 
GAO-06-577 (Washington, D.C.: Apr. 25, 2006) and other reports. 

[3] The funds and programs include the United Nations Development 
Program (UNDP), the United Nations Children's Fund (UNICEF), and the 
World Food Program (WFP). The specialized agencies include the Food and 
Agriculture Organization (FAO), the International Labor Organization 
(ILO), and the World Health Organization (WHO). 

[4] GAO, United Nations: Management Reforms Progressing Slowly with 
Many Awaiting General Assembly Review, GAO-07-14 (Washington, D.C.: 
Oct. 5, 2006). 

[5] Over half of the 17 member states we spoke with mentioned distrust 
between the member states and the Secretariat as another hindrance to 
the progress of reform efforts. Some member states also told us that 
these concerns have continued under the new Secretary-General, who 
appointed numerous high-level Secretariat officials without consulting 
with the member states first. 

[6] GAO, United Nations: Progress on Management Reform Efforts Has 
Varied, GAO-08-84 (Washington, D.C.: Nov. 14, 2007). 

[7] We assign "little or no progress" to reform efforts where there is 
evidence that few or no steps have been taken on the reform effort; 
"some progress" to those where there is evidence that some steps have 
been taken on the reform effort, while others remain; and "substantial 
progress" to those where there is evidence that the reform effort has 
been mostly or fully implemented. 

[8] GAO, United Nations Organizations: Oversight and Accountability 
Could Be Strengthened by Further Instituting International Best 
Practices, GAO-07-597 (Washington, D.C.: June 18, 2007). 

[9] GAO, International Organizations: Assistance Programs Constrained 
in Burma, GAO-07-457 (Washington, D.C.: Apr. 6, 2007). 

[10] The three UN entities that operate programs in Burma from Thailand 
are the UN Educational, Scientific, and Cultural Organization; the 
Inter-Agency Project on Human Trafficking in the Greater Mekong Sub- 
Region; and the UN Industrial Development Organization. 

[End of section] 

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