oas quarterly resource management report as of september 30, 2007 committee on administrative and...

OAS Quarterly Resource Management Report

As of September 30, 2007

Committee on Administrative andBudgetary Affairs (CAAP)

1

SECRETARIAT FOR ADMINISTRATION AND FINANCEOctober 2007

ORGANIZATION OF AMERICAN STATES GENERAL SECRETARIAT (GS/OAS) 1889 F Street, N.W., Washington, D.C. 20006, USA (202) 458-3000 / www.oas.org

EOSAF/101-07 Original: English

October 30, 2007

OAS QUARTERLY RESOURCE

MANAGEMENT REPORT SEPTEMBER 30, 2007

An overview of the financial position of the General Secretariat for the 3rd quarter (July—September) of 2007,

and a status report on other management activities

October 2007

Secretariat for Administration and Finance (SAF)

04/10/23 2

What is covered in this presentation?

I. Context

II. Report’s content and 3rd quarter resource management results

III. Next Steps for CAAP and GS/OAS

OAS Quarterly Resource Management Report as of SEP-07

04/10/23 3

IContext


04/10/23 4

ContextBoard of External Auditors

■ Reports to the Permanent Council and Secretary General.

■ Identifies internal control issues and opportunities to improve efficiency.

■ Oversees audits of financial statements.

■ Assesses the resources, work, and plans of the OIG.

■ Recommends corrective action and follow-up.


04/10/23 5

ContextRecommendation from the Board of External Auditors (March 30, 2007)

“Continue to develop financial reports that provide, to the extent possible, a link between the use of resources and achievements of strategic goals and objectives in a manner that is most useful to member states, management, and donors…”

ORGANIZATION OF AMERICAN STATES GENERAL SECRETARIAT

REPORT TO THE PERMANENT COUNCIL

ANNUAL AUDIT OF ACCOUNTS AND FINANCIAL STATEMENTS

For the years ended December 31, 2006 and 2005

2006

By the Board of External Auditors ADM

Annual Audit of Accounts Quarterly ReportsProgram-Budget




October 30, 2007





October 2007


ContextAnnual OAS Management Cycle:Annual Audit, RF Program-Budget and Quarterly Reports aligned to CAAP’s Agenda

Jun 30

Mar 31 1st Quarterly Report

2nd Quarterly Report

Sep 303rd Quarterly Report

Dec 31Jan 1

ORGANIZATION OF AMERICAN STATES GENERAL SECRETARIAT

REPORT TO THE PERMANENT COUNCIL

ANNUAL AUDIT OF ACCOUNTS AND FINANCIAL STATEMENTS

For the years ended December 31, 2006 and 2005

2006

By the Board of External Auditors ADM

Publication of Annual Audit of Accounts

Phase 2SAF inputs budgetInformation

Phase 1Program-Budget formulation and planning

Phase 6Publication and distribution of the Budget by no later than 60 days after approval

Phase 5(Jun 1st – Jun 6th)Approval of Program-Budget by the GA

Phase 4Discussion and review by CAAP and recommendation to the Preparatory Committee 15 days prior to GA

Phase 3Budget analysis, preparation and presentation 90 days prior to GA

Publication ofRF Program-

Budget

Year-round financial

planning and performance assessment

Preliminary Audit of Accounts(SEP to OCT)

Audit of Accounts(JAN to APR)

Report from the Board of External

Auditors(end of MAR)

Legend

Annual Audit

RF Program-Budget

Quarterly Reports



October 30, 2007





October 2007




October 30, 2007





October 2007




October 30, 2007





October 2007


04/10/23 7

IIReport’s content and 3rd quarter

resource management results


04/10/23 8

OAS Quarterly ResourceManagement Report

■ It is an unaudited but authoritative source of information for Member States, Management and donors.

■ Provides a comprehensive resource management overview of the Organization, as of the date of the Report.

■ Provides a status on the recommendations from the Board of External Auditors.

■ Assesses the performance of all components included in the Annual OAS Management Cycle.

■ Identifies management challenges and opportunities within GS/OAS.




October 30, 2007





October 2007


04/10/23 9

OAS Quarterly ResourceManagement Report

■ Report format follows similar reports done by private and public

organizations:


Management Discussion and AnalysisProvides an overview of the financial position of the Organization and a status report on other management activities.

SECTION I

Financial Statements and ReportsProvides detailed financial statements and projections.

SECTION II



October 30, 2007





October 2007


04/10/23 10

Highlights from 3rd quarter resultsBudget Execution as of September 30, 2007 (pages 4-5)

■ Most of the approved budget

has been committed, as most

areas have obligated more

than 95%.

■ This level of commitment

leaves areas with little or no

spending flexibility for the last

quarter of 2007.


Unobligated

Legend: Execution Appropriation

Ch 3 - Autonomous and/or Decentralized Entities 10.8$ 5.7$

Ch 9 - Basic Infrastructure and Common Costs 10.6 1.3

Ch 2 - Assistant Secretary General 18.6 1.0

Ch 7 - Executive Secretariat for Integral Development 7.8 0.3

Ch 1 - Secretary General 7.8 0.2

Ch 8 - Secretariat for Administration and Finance 10.1 0.2

Ch 5 - Secretariat for Multidimensional Security 3.6 0.1

Ch 6 - Secretariat for Political Affairs 3.8 0.2

Ch 4 - Department of International Legal Affairs 2.3 -

75.4$ 9.0$

Personnel

Non-Personnel

Unobligated Appropriation

29%

79%88% 88%

84% 88%94%

87%37%

89%

15%7% 7% 14%

10%4%

13%

34%

11%6% 5% 5% 2% 2% 2%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Ch 3 Ch 9 Ch 2 Ch 7 Ch 1 Ch 8 Ch 5 Ch 6 Ch 4

$16.5

Modified Appropriation $84.4 (J anuary 1, 2007)

$11.9 $19.5 $8.3 $8.1 $10.3 $3.6 $3.9 $2.3

04/10/23 11

Highlights from 3rd quarter resultsQuota Payments as of September 30, 2007 (pages 6-7)

■ For the third quarter of 2007, quota payments have exceeded prior

years (Figure 3), while arrears are at the lowest level in the past six

years (Figure 4).


Figure 3 Quota Payments As of September 30, 2007 (in millions)

7.6

16.5

20.5

23.529.0 16.1

25.4

15.9

14.524.8

22.817.5

0

10

20

30

40

50

60

70

2004 2005 2006 2007

1st. Quarter 2nd. Quarter 3rd. Quarter

$61.0

$55.9$53.5

$63.7

Figure 4 Quotas in Arrears As of September 30, 2007 (in millions)

$20.7

$3.0$4.1

$12.9

$10.0

$6.5

$12.7

$6.6

0.0

5.0

10.0

15.0

20.0

25.0

2000 2001 2002 2003 2004 2005 2006 2007

04/10/23 12

Highlights from 3rd quarter resultsRegular Fund Liquidity Analysis as of September 30, 2007 (pages 7-8)

■ Considering the absence of quota payment plans from most Member States at the beginning of the year, cash projections are primarily based on historical information. In addition to payment plan projections, the cash flow projection considers payments of 2007 assessed quotas of $6.4 million and an advance of $4.9 million of 2008 assessed quotas, based on informal discussions with Member States.


Figure 5 2007 Actual and Projected Cash Balance of the Regular Fund (in millions)

12.4

8.0

15.8

17.918.9

12.1

16.6

11.4

18.9

12.2

5.3

21.6

-

5

10

15

20

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Actual Projected

Backed by payment plans:

OCTOBER$0.06 million

DECEMBER$11.4 million

04/10/23 13

Highlights from 3rd quarter resultsFinancing surplus (deficit)

■ The Reserve Sub-fund is a temporary cushion to finance budgetary

execution pending full receipt of quotas and other income as

programmed in the Regular Fund Budget.

■ A financing surplus or deficit is the difference between projected

sources of financing and actual financing.

■ Consecutive financing deficits have an unfavorable direct impact on the

Reserve Sub-fund and are not sustainable in the long term.


04/10/23 14

Highlights from 3rd quarter resultsFinancing surplus (deficit)


■ As of September 30, 2007 there is a financing deficit of $18.5 million ($65.9

million - $84.4 million).

■ By year-end, the GS/OAS expects that the $2.9 million from the Reserve

Sub-fund will not be required to finance the 2007 Program-Budget.

■ An additional $1.8 million will increase the Reserve Sub-fund by this

amount.

■ The Reserve Sub-fund will be further increased with unappropriated

resources.

Regular Fund Program-Budget

Actual for fiscal period through

9/ 30/ 2007

Projected for fiscal period through

12/ 31/ 2007Sources of Financing: Quotas 77.3 63.7 81.8 Other Income 4.2 2.2 4.4 Reserve Sub-fund 2.9 - (1.8)

84.4 65.9 84.4

04/10/23 15

Highlights from 3rd quarter resultsSpecific Funds as of September 30, 2007 (pages 11-13)

■ The level of contributions to Specific Funds reached $40.7 million, lower

than the past three years, as shown below:

■ Specific Fund estimates are unpredictable.

■ The GS/OAS needs the ability to expand and contract in line with level

of Specific Fund contributions.


2007 2006 2005 2004

Member States 21,060.2$ 24,190.6$ 30,082.8$ 76,203.3$

Permanent Observers 11,920.9 13,913.5 6,130.5 6,782.4

Other Countries and Institutions 7,691.0 9,466.6 11,763.9 9,975.2

Total Contributions 40,672.1$ 47,570.7$ 47,977.2$ 92,960.8$

04/10/23 16

Highlights from 3rd quarter resultsOAS Annual Audit of Accounts (pages 14-15)

■ Although behind schedule, Ernst & Young was selected this week to

conduct the 2007-09 Annual Audit of Accounts.

■ In regards to the Board of External Auditors, Mr. Joseph Freamo and Mr.

Terrance S. Bastian have been elected to serve a three-year and two-

year period, respectively.

■ The third member of the Board, serving his last year as a Board

Member and as Chairperson continues to be Mr. Howard Krongard.


04/10/23 17

Highlights from 3rd quarter resultsIndirect Cost Recovery (ICR) as of September 30, 2007 (pages 16-17)

■ The General Secretariat is working closely with Primary Dependencies (e.g.

executive Secretariats of the OAS) to consolidate the new ICR policy issued

on May 29, 2007.

■ These efforts have focused mainly on project management concepts (e.g.,

proper costing), through a new inter-departmental Committee on

Administrative Matters (CAM).

■ ICR collections will not meet expectations given the transition phase to the

new ICR policy:

i) ICR policy issued at the end of May 2007;

ii) “grandfathering” of existing agreements; and,

iii) Specific Fund contributions lower than expected.


04/10/23 18

Highlights from 3rd quarter resultsHuman Resources as of September 30, 2007 (pages 18-21)

■ The Headcount is as follows:

■ The GS/OAS is currently developing

a report that analyzes the

geographic representation at the

OAS.


■ As recommended by the

Board of External Auditors, the

GS/OAS has contracted the

services of a UN position

classification expert to review

job descriptions.

■ The GS/OAS is currently

implementing a new

Performance Evaluation

System to align individual

objectives to the

Organization’s goals.

Table 7 Headcount by Fund As of September 30, 2007

Fund July August SeptemberRegular 529 527 529

Specific 180 185 195

Total 709 712 724

*

04/10/23 19

Highlights from 3rd quarter resultsOAS Building Facilities as of September 30, 2007 (pages 21-22)

■ The approved 2007 Regular Fund Program-Budget provided the General

Secretariat with $4.8 million for the mortgage, management and upkeep

of its real estate resources. In addition, these costs are covered with

rental income as shown below. The available balance as of September 30,

2007 is $909 thousand.


Table 9 2007 Building Management and Upkeep As of September 30, 2007 (in thousands)

Source of Financing

Carryover Balance

(A)Financing

(B)Expenditures

(C)Commitments

(D)Total Execution

(E)=(C+D)

Available Balance

(F)=(A+B-E)

Regular Fund 2007 -$ 4,768$ 3,486$ 1,000$ 4,486$ 281$ Rental Income 501 1,133 893 113 1,006 628

501$ 5,901$ * 4,379$ 1,113$ 5,492$ 909$

* Does not include $412 thousand appropriated for Communications Technology.

04/10/23 20

Highlights from 3rd quarter resultsInformation Technology (IT) Services (pages 23-24)

■ The General Secretariat is upgrading various levels of hardware and software in close collaboration with end users.

■ The upgrade will help make OASES compatible with newer technology and more user-friendly, establishing the ground to implement further improvements such as Oracle Project Management.

■ This tool will include the full project lifecycle, from planning budgets to monitoring performance, enabling project managers to operate more efficiently and effectively.

■ Other important IT projects this year: i) modern network topology for the Main Building; ii) Voice Mail System Upgrade; iii) Secure Communications System (Groove); iv) OAS E-Mail Broadcasting System (OAS Mail Manager), among others.


04/10/23 21

Highlights from 3rd quarter resultsProcurement Services (pages 25-28)

■ The Board of External Auditors has requested to “continue to strengthen the CPR oversight process. Develop a plan to manage the CPR process…”

■ The GS/OAS has initiated a full scale review of the CPR requirements and processes to improve the application of this hiring mechanism.

■ In regards to travel related activities, the GS/OAS contracted Omega World Travel (Omega) since February, improving travel accountability and oversight, while enhancing reporting capabilities.

■ In regards to fixed assets, the Board recommended to “Improve the reconciliation of fixed asset tracking records and the inventory accounts.” The GS/OAS will upgrade to Oracle Fixed Assets software during 2008 to automate OAS asset management, simplifying accounting tasks such as reconciliations.


04/10/23 22

IIINext Steps for CAAP and GS/OAS

OPERATING PLAN – DBFS/FRC Section

04/10/23 23

Next Steps for CAAP and GS/OAS

■ Present methodology for setting the scale of quota assessments approved by the Permanent Council and General Assembly.

■ Support General Assembly’s approval of the 2009 Program-Budget.

■ Initiate training plan for GS/OAS staff on internationally-accepted accounting standards.

■ Continue to consolidate project management and the new ICR policy.

■ Address human resource needs in critical areas.

■ Reform procurement and contracting mechanism for temporary support personnel.

OAS Quarterly Resource Management Report as of SEP-07CP19079E

oas quarterly resource management report as of september 30, 2007 committee on administrative and...

Documents

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nd quarterly report

management discussion

management challenges

management activities

status report

budget analysis

financial reports