Office of the Inspector General
2006 Annual and Activity Reports
CP/doc. 4248/07 and CP/doc.4247/07
Summary Presented by:
Linda P. Fealing
Inspector1 General
Introduction
Internal auditing is a management control
that operates by measuring and evaluating
the effectiveness of other management
controls.
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Mandate
Executive Order 95-05
Office of the Inspector General
Responsible to the Member States and the Secretary General for:
– Systematic review of the effectiveness of internal
management and accounting controls.
– Identifying areas of High Risk and assisting in strengthening
controls.
– Recommending improvements for the overall efficiency of all
GS/OAS offices, departments, programs, divisions, units,
activities and projects, both at Headquarters and in the
Member States.
– Reporting on audit activities.
– Providing follow-up action on implementation of approved
recommendations.
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Anti-Corruption Hotline
Executive Order 05-8 Corr. 1
 Provides protection for whistleblowers and
informants.
 Encourages the reporting of misconduct that
violate OAS financial and administrative
rules.
Allegations may be reported to the Inspector
General in person, by telephone, by e-mail, by
facsimile, by regular mail, anonymously or
identifying yourself.
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Summary of 2006 Activities Conducted
Annex 1 of CP/doc. 4247/07
13 Audits – operational (8) and compliance (5)
including 16 projects
6 Investigations – including 4 FEMCIDI projects
1 Evaluation of Staffing Needs
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Summary of 2006 Activities Conducted
 2006 audits of Operational processes
 Headquarters
 Educational Portal of the Americas
 Education Grants
 Recovery of Indirect Costs (Overhead)
 GS/OAS Offices
 Antigua and Barbuda
 Barbados
 Technical Secretariat of the Inter-American Children’s
Institute
 Risk Assessments
 Educational Portal
 OASES Reporting and Data Integrity
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Summary of 2006 Activities Conducted
 2006 Compliance audit activities
 CPR Mechanism
 Projects Managed by DTTC:
 CARANA (SG-TRD/008)
 OAS Executive Secretariat for Integral Development
Foreign Trade Information System (SICE)
 FTAA (SG-TRD/002)
 Overhead for Administration and Management
(SG-TRD/011)
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Summary of Investigations Conducted
 2006 Investigations:
 2005 OAS scholarship program expenditures.
 Fraudulent transactions processed in the GS/OAS
Office in Honduras.
 Four FEMCIDI funded projects
 Jamaica:
Supporting
the
Development
of
a
Neutraceutical Industry.
 Honduras: Let's save the first grade.
 Mexico: Pedagogical Supports for the Integration into
the Regular School System of Minors up to six years old
with Disabilities.
 Nicaragua: Initiative for the Development of the
Technical- Pedagogical Capacity in the Management of
Education and the Local Development.
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Recommendations
All OIG reports were approved by the Secretary General.
 74 recommendations issued
• 34% related to distribution of written instructions, compliance with
directives, and amendments to existing procedures.
• 35% related to operational processes for improved internal
controls.
• 16% were Systems related.
• 15% related to recovery of funds, staffing needs, etc.
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Follow-Up
 Thirty-seven (50%) of the seventy-four recommendations have
been implemented and thirty-seven (50%) are still in
various stages of implementation, of which 27 were considered
High Risk .
 19% of the High Risk relate to systems security and processes that
require upgrading of OASES. Expected implementation date is
December 2007.
 81% of the outstanding High Risk recommendations require
improved operational processes. Those recommendations require
implementation of a Business Continuity Plan, mapping of
business functions, development of a staffing plan-including
identification and classification of staffing needs supported by
proper job classifications and job descriptions and more effective
use of the performance contract mechanism.
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Results
 Board of External Auditors
 Determined that the Internal Control environment at the GS/OAS
was effective.
 Unqualified “clean” opinions were rendered.
 No material weaknesses were reported.
 Significant amounts identified in OIG reports that were due to
the OAS, have been reimbursed.
 Several procedures were amended and/or developed to correct
anomalies and strengthen internal controls, including:
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Specific Fund and Special Mission Handbooks
Fellowships Manual of Procedures
Recovery of Indirect Costs
Financial and other Operational Processes
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Other OIG Functions
 OIG observes OAS meetings to evaluate the effect on
the internal controls environment.
 Inspector General meets with managers of the
General Secretariat to discuss issues that may impact
internal controls and inherent risks, such as proposed
business processes, review of draft procedures,
implementation of recommendations and other areas
of concern.
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Quality of Work and Independence
 Quality of Work – OIG carries out its audit activities in accordance
with its mandate, rules and directives of General Secretariat and the
Standards for the Professional Practice of Internal Auditing approved
by the Institute of Internal Auditors (IIA). All professional staff
members are members of IIA.
 Independence - The Office of the Inspector General reports to the
Secretary General and performs its functions with full technical
autonomy and the broadest possible managerial autonomy.
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Staffing
 Current Regular Fund OIG positions are:
 Inspector General
–1
 P03
 P02
 P01 (trainees)
– 3 (two currently vacant)
–1
–2
 Audit Technician (G05) is paid from Specific Funds.
 The OIG utilizes the CPR Mechanism as necessary to
supplement resources. 14
Board of External Auditors
“Internal Control serves as the first line of defense in
safeguarding assets and preventing and detecting errors.”
March 30, 2007 - Quote from the Board of External Auditors


The Board of External Auditors continues to express concern for
inadequate OIG Staffing and recommends that additional resources be
given to the Office of the Inspector General for audit oversight, training
and peer review.
The Inspector General and the Department of Human Resources have
submitted a Staffing Plan for consideration by management, as
recommended by the Board.
Effect of Inadequate Resources
Lack of sufficient resources adversely affects, the timeliness of the
audit reports, as well as the audit coverage.
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Inspector General’s Concerns
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Data Integrity and Financial Reporting
Systems Security Controls
OASES upgrade
IPSAS
National Offices - OASES, Internal Controls
Need to consolidate some Operational Processes to eliminate
duplication, redundancy and to promote cost effectiveness.
Operational Policies and Procedures
Staffing Needs and the CPR Mechanism
The Implementation of ICR Process
Project Management and Results-Based Performance
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2007 Work Plan
Annex 3 of CP/doc. 4248/07
 The OIG Work Plan focuses on areas of Significant (High) Risk and
recommendations from the Board of External Auditors.
 2007 Audit activities include:
 Risk assessment of the Payroll, Accounts Payable, Disbursement and
Procurement processes
 Accountable advances
 Inventory
 Petty Cash
 Systems Security Controls
 GS/OAS Office in Venezuela and Selected Projects
 GS/OAS Office in Suriname and Selected Projects
 GS/OAS Office in Guyana and Selected Projects
 GS/OAS Guatemala and Selected Projects
 GS/OAS Nicaragua and Selected Projects
 Selected projects managed by the Department of Sustainable Development
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Thank You
To the Member States, the Secretary General and the
General Secretariat for continued support to the
Office of the Inspector General.
To my team for their dedication, hard work and
commitment.
OIG contact information
(202) 458-3468
lfealing@oas.org
Hotline
202-458-6888
202-458-3757 (fax)
OIGhotline@oas.org
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Questions?
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