Office of the Inspector General Followup Process Status

Office of the Inspector General Follow-up Process & Status of OIG Recommendations Presented by Garry La. Guerre, Acting Inspector General

Introduction 2

Follow-up on Internal Audit Recommendations • OIG follows up on all recommendations issued from internal audits, evaluations/inspections and investigations • OIG also follows up on the implementation status of recommendations • Follow-up on outstanding recommendations is performed within the Team. Central© module of Team. Mate© (the audit and investigation management software that we implemented in 2015). • The Team. Mate Basic Manual and the Principles and Guidelines include the procedures for following-up on open recommendations. 3

OIG Audit Findings v Every recommendation issued is a result of a finding noted during the execution of an audit or investigation v Basic elements of an OIG Audit Finding: - Observation - what’s actually noted as a result of test procedures performed ( e. g. , non compliance with OAS rules and regulations, internal control – related, inefficient processes, etc. ) - Risk – it’s the potential impact of the observation on the achievement of objectives (could be at the process, unit or entity level, etc. ). Impact could be High, Medium or Low - Properties - include: 1) ERM components impacted (i. e. , internal environment, control activities, monitoring, etc. ) 2) Auditable Family ( i. e. , is the finding related to IT, Expenditures, Financial Management , Human Capital, Project Cycle, or Governance, etc. ? ) 3) Auditable Segment (i. e. , what segment of the audit universe or auditable unit is impacted? – e. g. , Specific Funds, Project Execution , Ethics, Procurement, Payroll Administration , Budget Execution, Knowledge Management, Compensation and Benefits, etc. ) 4

OIG Recommendations v Basic elements of an OIG recommendation: • • Title of the recommendation Recommendation description Priority (High, Medium Low) State or Status, includes the following options: - Open, Pending, Implemented, Closed – Verified, Closed – Not-Verified, Closed – No Longer Applicable Management response Implementation date (facilitates aging analysis) Contact (Owner or Observer) Area responsible for the implementation 5

Illustrative Example of a Recommendation v Audit SG/OIG/AUD- 02/16 – Department of Financial Services (DFS) - Regular Fund Transition Costs ( OIG Activity Report January – June 2016 presented to the PC in September 2016, page 6): Recommendation No. 2 (IN TEAMMATE) Title Description Enhance Internal Control over Expired Benefits In order to enhance the accuracy of the reporting of costs associated with the transition to the new administration, we recommend the following: DFS should take appropriate actions and reduce the expenses recorded to fund 114 by USD 56, 079, the amount of expired termination benefits that will not be paid out. DHR should review on a case-by-case basis the termination benefits associated with the transition to the new administration and expiration of such benefits and communicate the results to DFS in a timely manner to allow for prompt adjustments to the financial reports. Priority Status High Closed- Verified 6

Illustrative Example of a Recommendation (Cont ’d) Management Responses DHR: On February 26, 2016, the DHR received a communication via e-mail from DFS providing a list of former staff members and requesting confirmation on any pending repatriation benefits (repatriation travel and repatriation grant) to be paid. Otherwise, and as indicated in the email, DFS would refund the funds to the liability accounts. After a validation with the Benefit and Staffing Section, on March 4 th, 2016 the DHR confirmed to DFS there were not pending payments for those former staff members. DFS: Following DHR’s communication to DFS on March 4, 2016 indicating these repatriation benefits had expired, DFS is in the process of recording the corresponding adjustments original account the return funding as to to of December 2015. This will be reflected in the revised December 31, 2015 Transition Costs report. Implementation date 9/29/2016 Contact Person (s) Javier Arnaiz and Rodrigo Torres Areas Responsible for Implementation Department of Financial Services and Department of Human Resources 7

Status of OIG Recommendations by Secretariat v Total Recommendations: 179 as of December 31. 2016 By Status: 8

Status of OIG Recommendations by Secretariat (Cont’d) By Level of Risk: 9

Status of OIG Recommendations by Year, Status and Level of Risk By Year and Status: By Year and Level of Risk: By Level of Risk and Status: 10

Status of OIG Audit Activities (Jan – Dec 2016) v Audits completed and Recommendations issued: Total No. of Recommendations Total No. of Observations Audit No. Subject 03/15 Disbursement Process for Specific Funds 4 2 02/16 Regular Fund Transition Costs 2 2 04/16 OASES Data Integrity 6 6 05/16 GS/OAS Office of Peru 7 7 06/16 GS/OAS Office of Bolivia 7 7 TOTAL 26 24 11 Level of Risk Level of (HIGH) Risk MEDIUM 1 1 4 5 2 STATUS 1 Completed 2 Completed 5 Completed

Thank You To the Chair of the CAAP, the distinguished delegations of the Member States, the Secretary General for his support and prompt responses to OIG reports. Questions? 12