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Cablegate: Wmo Audit Committee Read Out

VZCZCXRO3615
RR RUEHAST RUEHHM RUEHLN RUEHMA RUEHPB RUEHPOD RUEHTM
DE RUEHGV #0926 3101350
ZNR UUUUU ZZH
R 051350Z NOV 08
FM USMISSION GENEVA
TO RUEHC/SECSTATE WASHDC 7386
INFO RUEHZN/ENVIRONMENT SCIENCE AND TECHNOLOGY COLLECTIVE
RUCNDT/USMISSION USUN NEW YORK 2857

UNCLAS GENEVA 000926

SIPDIS

STATE FOR IO/T FOR GROBERTS
STATE PASS NOAA FOR GENERAL J.KELLY AND DR. B.BOLHOFER

E.O. 12958: N/A
TAGS: SENV EFIN WMO UN ECOSOC
SUBJECT: WMO Audit Committee Read Out

1. Summary. The World Meteorological Organization (WMO) Audit
Committee (AC) met at WMO headquarters October 20 - 21, 2008 to
report on the status of implementation of audit recommendations
generated by the Internal Oversight Office (IOO) and the UN Joint
Inspection Unit. A representative from NOAA's Chief Financial Office
attended with support staff from NOAA and the U.S. Mission. This
was the 11th Audit Committee since it was first established in 2004
to address fraud and waste within the WMO. Of particular interest
to the U.S. was discussion on the internal progress report, planning
for the introduction of IPSAS (the accounting standard the WMO will
switch to in 2010) and the working capital fund. AC-XII is planned
for spring 2009. The U.S. Delegation was successful in meeting all
of its goals. End Summary

------------------------
Internal Progress Report
------------------------
2. The Audit Committee (AC) reviewed and accepted the proposed audit
plans by the Internal Oversight Office (IOO) Director and agreed
that the IOO has done a commendable job in prioritizing its actions.
The IOO reported that upwards of 75 percent of the auditor's
recommendations had been addressed. While members appreciated this
good news, they commented that the information about performance
tended to be more quantitative than qualitative. For example,
members had no way of understanding the relative impact on WMO
management of the recommendations that have been implemented, nor
the scope of its undertaking. Members questioned whether the
remaining 25 percent of recommendations still to be implemented
could be those that might have the most significant impact on
avoiding future fraud and mismanagement. Lastly, the AC asked the
IOO to provide more information about the risks associated with
delaying implementation on any of the recommendations.

-----
IPSAS
-----
3. The Implementation of Internal Public Sector Accounting Standards
(IPSAS) is required throughout the UN by 2010, consequently the
market for expert consultants is competitive and the risk of missing
this deadline is high throughout the UN. While some organizations
have to build IPSAS from the ground up, WMO believes that the
implementation will not be as major as once thought. A consultant
is in the process of determining what needs to be done. Certainly
the Oracle system will need to be upgraded and an RFP has been
signed to hire a consultant for this work.

--------------------
Working Capital Fund
--------------------
4. Given an anticipated shortfall to the Working Capital Fund (WCF),
the US delegations had some concerns as to how the IOO proposed to
meet the level approved by Congress. Fortunately, the IOO reported
that they expect to fund the shortfall through all interest to be
earned from short-term investments of the capital of the WCF in the
four-year Financial Period (15th) ending in 2011. The remaining
shortfall of CHF 465,293 (approximately USD 404,600) will be
addressed through interest earned during the 16th Financial Period.


5. Members also questioned whether 7 million francs (USD 6 million)
is a sufficient balance for the Working Capital Fund, particularly
as it is apparently an arbitrarily determined sum. The question of
how much should reside in the Working Capital Fund will need to be
determined during the 16th Financial Period. If desirable, a study
should be done to determine the appropriate level of funding for the
WCF.

-------
COMMENT
-------
6. As a sign of its success and maturity, the proceedings were calm
and deliberate. This meeting had few controversial issues, and so
the USG delegation met all of its goals.

STORELLA#

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