This is the accessible text file for GAO report number GAO-06-226T 
entitled 'United Nations: Preliminary Observations on Internal 
Oversight and Procurement Practices' which was released on October 31, 
2005. 

This text file was formatted by the U.S. Government Accountability 
Office (GAO) to be accessible to users with visual impairments, as part 
of a longer term project to improve GAO products' accessibility. Every 
attempt has been made to maintain the structural and data integrity of 
the original printed product. Accessibility features, such as text 
descriptions of tables, consecutively numbered footnotes placed at the 
end of the file, and the text of agency comment letters, are provided 
but may not exactly duplicate the presentation or format of the printed 
version. The portable document format (PDF) file is an exact electronic 
replica of the printed version. We welcome your feedback. Please E-mail 
your comments regarding the contents or accessibility features of this 
document to Webmaster@gao.gov. 

This is a work of the U.S. government and is not subject to copyright 
protection in the United States. It may be reproduced and distributed 
in its entirety without further permission from GAO. Because this work 
may contain copyrighted images or other material, permission from the 
copyright holder may be necessary if you wish to reproduce this 
material separately. 

United States Government Accountability Office: 

GAO: 

Testimony: 

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

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.[Footnote 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.[Footnote 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. 

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.”[Footnote 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.[Footnote 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).[Footnote 5] 

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.[Footnote 6] Overall Secretariat 
procurement spending tripled between 1994 and 2004 as the number of UN 
peacekeepers in the field increased.[Footnote 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.[Footnote 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. 

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. 

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 independence 
[Footnote 9] and that the Secretary-General, when preparing the budget 
proposal for OIOS, should take into account the independence of the 
office.[Footnote 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.[Footnote 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). 

Figure 1: OIOS’s Regular Budget and Extrabudgetary Resources, Fiscal 
Biennium 1996-1997 to 2004-2005: 

[See PDF for image] 

1996-1997: 
Budget: $21.6 mllion; Regular: 70%; Extrabudgetary: 30%; 
Staffing: Regular: 80; Extrabudgetary: 40. 

1998-1999: 
Budget: $28 mllion; Regular: 64%; Extrabudgetary: 36%; 
Staffing: Regular: 80; Extrabudgetary: 50. 

2000-2001: 
Budget: $32.4 mllion; Regular: 58%; Extrabudgetary: 42%; 
Staffing: Regular: 80; Extrabudgetary: 60. 

2003-2003: 
Budget: $40.1 mllion; Regular: 52%; Extrabudgetary: 48%; 
Staffing: Regular: 80; Extrabudgetary: 70. 

2004-2005: 
Budget: $63.8 mllion; Regular: 38%; Extrabudgetary: 62%; 
Staffing: Regular: 80; Extrabudgetary: 150. 

Source: GAO analysis of UN data. 

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. 

[End of figure] 

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.[Footnote 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. 

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.[Footnote 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.[Footnote 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.[Footnote 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. 

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.[Footnote 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.[Footnote 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.[Footnote 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. 

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. 
[Footnote 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. [Footnote 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. 

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.[Footnote 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. 

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, Valérie Nowak, Barbara Shields, and Pierre Toureille. 

[End of section] 

Related GAO Products: 

United Nations: Sustained Oversight Is Needed for Reforms to Achieve 
Lasting Results, GAO-05-392T (Washington, D.C.: Mar. 2, 2005). 

United Nations: Oil for Food Program Audits, GAO-05-346T (Washington, 
D.C.: Feb. 15, 2005). 

United Nations: Reforms Progressing, but Comprehensive Assessments 
Needed to Measure Impact, GAO-04-339 (Washington, D.C.: Feb. 13, 2004). 

United Nations: Progress of Procurement Reforms, GAO/NSIAD-99-71 
(Washington, D.C., Apr. 15, 1999). 

[End of section] 

Footnotes: 

[1] In 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. 

[2] Our 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. 

[3] In December 2004, the General Assembly passed a resolution making 
all OIOS’s audit reports available to any member state upon request. 

[4] A new Under Secretary-General for Internal Oversight Services was 
appointed in July 2005. 

[5] OIOS’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). 

[6] For 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. 

[7] In 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. 

[8] In 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. 

[9] The 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. 

[10] Earlier 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. 

[11] OIOS’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. 

[12] GAO, United Nations: Oil for Food Program Audits, GAO-05-346T 
(Washington, D.C.: Feb. 15, 2005). 

[13] GAO, United Nations: Progress of Procurement Reforms, GAO/NSIAD-99-
71 (Washington, D.C., Apr. 15, 1999). 

[14] United Nations, High Level Expert Group Procurement Study Report 
(New York, N.Y., Dec. 1994). 

[15] GAO, United Nations: Progress of Procurement Reforms, GAO/NSIAD-99-
71 (Washington, D.C., Apr. 15, 1999). 

[16] UN Commission on International Trade Law (UNCITRAL) Model Law on 
Procurement of Goods, Construction and Services. 

[17] National Institute of Governmental Purchasing, Assessment of UNPS 
Procurement Processes, June 2005. 

[18] The 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. 

[19] These reports are summarized in United Nations: Progress of 
Procurement Reforms, GAO/NSIAD-99-71 (Washington, D.C., Apr. 15, 1999). 

[20] GAO/NSIAD-99-71. 

[21] The National Institute of Governmental Purchasing, Assessment of 
UNPS Procurement Processes, June 2005. 

[End of section] 

GAO's Mission: 

The Government Accountability Office, the audit, evaluation and 
investigative arm of Congress, exists to support Congress in meeting 
its constitutional responsibilities and to help improve the performance 
and accountability of the federal government for the American people. 
GAO examines the use of public funds; evaluates federal programs and 
policies; and provides analyses, recommendations, and other assistance 
to help Congress make informed oversight, policy, and funding 
decisions. GAO's commitment to good government is reflected in its core 
values of accountability, integrity, and reliability. 

Obtaining Copies of GAO Reports and Testimony: 

The fastest and easiest way to obtain copies of GAO documents at no 
cost is through GAO's Web site [hyperlink, http://www.gao.gov]. Each 
weekday, GAO posts newly released reports, testimony, and 
correspondence on its Web site. To have GAO e-mail you a list of newly 
posted products every afternoon, go to [hyperlink, http://www.gao.gov] 
and select "Subscribe to Updates." 

Order by Mail or Phone: 

The first copy of each printed report is free. Additional copies are $2 
each. A check or money order should be made out to the Superintendent 
of Documents. GAO also accepts VISA and Mastercard. Orders for 100 or 
more copies mailed to a single address are discounted 25 percent. 
Orders should be sent to: 

U.S. Government Accountability Office: 441 G Street NW, Room LM: 
Washington, D.C. 20548: 

To order by Phone: 
Voice: (202) 512-6000: 
TDD: (202) 512-2537: 
Fax: (202) 512-6061: 

To Report Fraud, Waste, and Abuse in Federal Programs: 

Contact: 

Web site: [hyperlink, http://www.gao.gov/fraudnet/fraudnet.htm]: 
E-mail: fraudnet@gao.gov: 
Automated answering system: (800) 424-5454 or (202) 512-7470: 

Congressional Relations: 

Gloria Jarmon, Managing Director, JarmonG@gao.gov: 
(202) 512-4400: 
U.S. Government Accountability Office: 
441 G Street NW, Room 7125: 
Washington, D.C. 20548: 

Public Affairs: 

Paul Anderson, Managing Director, AndersonP1@gao.gov: 
(202) 512-4800: 
U.S. Government Accountability Office: 
441 G Street NW, Room 7149: 
Washington, D.C. 20548: