CHAPTER
IX
ADVISORY
SERVICES, AUDITING, AND FISCAL CONTROL
SUBCHAPTER A:
THE INSPECTOR GENERAL
Article 117. Internal
Audit. The Office of the
Inspector General shall be the dependency responsible for exercising the
functions of financial, administrative, and operational auditing, for the
purpose of determining the level to which the General Secretariat achieves
the objectives of diverse programs and the efficiency and economy with which resources are used, as well as
issuing recommendations to improve management of the General
Secretariat.
To achieve the aforementioned purpose,
the Inspector General shall establish appropriate internal auditing
procedures that reflect international best practices, to verify compliance
with the standards and regulations in force, through critical, systematic,
and impartial examination of official transactions and operational
procedures related to the resources administered by the General Secretariat.
To that end, the Secretary General shall issue an Executive Order regulating
such activities.
Article 118.
Activity
Plan.
In accordance with the approved budget,
and in accordance
with these General Standards, the Inspector General shall present to the
Permanent Council, before the end of each year, a plan of activities for
investigation and audit of the programs, services, and activities of the
General Secretariat for the next two years and shall update it annually. The
Permanent Council may request the inclusion of specific investigations or
audits, once it reviews the plan.
Article 119.
The Inspector General.
The Inspector General is responsible for carrying out the audit and
investigation functions mentioned above. To that end, he shall enjoy the
independence needed to initiate, perform, and report to the Permanent
Council and to the Secretary General on the audits, investigations, and
inspections required to ensure the correct use and administration of the
Organization's resources and to safeguard its assets. The Inspector General
shall also enjoy the necessary independence to report to the Permanent
Council on the overall efficacy of the functions of the Office of the
Inspector General and on the overall qualifications and performance of the
staff and independent contractors providing services in the Office of the
Inspector General. The Inspector General shall make recommendations directly
to the Secretary General on the need to hire or terminate the services of
staff and independent contractors providing services in the Office of the
Inspector General.
The Inspector
General and the professional staff of the Office of the Inspector General
should have the ideal character, skills, and experience necessary to fulfill
these functions, based on integrity and proven ability in one or more of the
following disciplines: accounting, auditing, financial analysis, law,
management skills, public administration, or investigation. The Inspector
General shall have held a position with similar functions for a minimum
period of fifteen years.
Article 120.
Appointment, length of appointment, and removal of
the Inspector General.
a. The Secretary General shall appoint
the Inspector General from among the five candidates selected according to
the following process:
i.
The candidates for Inspector General shall be selected in an open
competition publicized broadly throughout the member states.
ii. The process of selecting the candidates for Inspector
General shall be conducted by an internationally prestigious company
specializing in human resources and executive recruitment, selected by
the General Secretariat for this specific purpose.
iii. The terms of reference for the selection of the company
charged with the selection of the candidates for Inspector General shall
be approved in advance by the CAAP.
iv. The terms of reference for the selection of candidates for
Inspector General shall be approved in advance by the CAAP. These terms
of reference shall reflect the guidelines provided in the second
paragraph of Article 119 of these General Standards.
v.
In
selecting the candidates, paramount consideration shall be given
to competence and integrity, with due regard for the principles of
rotation and equitable
geographical representation that are priorities in the Organization.
vi.
Before presenting the five selected candidates to the Secretary General,
the company shall
submit the
qualifications of these
candidates to the Board of External Auditors for certification.
vii.
The company
shall
present to the Secretary General the five candidates selected for the
post of Inspector General.
b. In the event the Inspector
General’s post becomes vacant, the Secretary General may appoint an Interim
Inspector General, who shall perform these functions until such time as the
new Inspector General assumes the post. No more than 12 months shall elapse
between the time the post becomes vacant and the time the new Inspector
General assumes it.
c. The
appointment of the Inspector General shall be for a period of four years,
renewable only once for an additional period of four years.
The renewal shall be made by the Secretary General in
consultation with the Permanent Council.
d. In order that the Secretary
General may proceed to remove the Inspector General, or to apply any other
disciplinary measure, he shall consult with the Permanent Council on his
decision and inform it of the grounds on which it is based. Before
consulting with the Permanent Council, the Secretary General shall offer the
Inspector General a special hearing to hear his statement concerning the
decision that he intends to take. For
purposes of the consultation, the file on the special hearing shall
be made available to the Permanent Council, which shall take such measures
of confidentiality as it deems necessary. The articles of these General
Standards and of the Staff Rules pertaining to disciplinary measures do not
apply to the Inspector General.
e.
A person who has been appointed Inspector General may not work for the
General Secretariat, whether as a
staff
member, as an independent contractor, or as an employee of or consultant to
an independent contractor, after leaving the post.
Article 121.
Audit Reports. The Inspector General shall provide the Secretary
General with reports on the audits, investigations, and inspections he
conducts. These reports shall be made available to the Permanent Council,
which shall take such measures of confidentiality as it deems necessary.
The Inspector General shall present reports quarterly and annually to the
Permanent Council on the observations and recommendations emanating from the
audits conducted, as well as on measures taken by the General Secretariat to
implement them. Likewise, said reports shall pay particular attention to
proposals made by the Board of External Auditors and to the adequacy of the
resources allocated to auditing and inspection functions.
Article 122. Obligation
to Act. The Secretary
General shall have thirty days in which to respond to the Inspector
General's reports or to take steps to ensure compliance with his
recommendations. If no
observations are put forward within that period of time, the Inspector
General shall assume that his report has been accepted, shall proceed to
request implementation of his recommendations, and shall so report to the
Permanent Council.
Article 123. Meetings.
The Inspector General shall meet as necessary with the CAAP and with
CEPCIDI, as appropriate, in order to exchange information and views
on matters that fall within their purview.
Article 124.
Budget of the Office of the Inspector General. Any decision that
would involve a reduction in the budget appropriated to the Office of the
Inspector General in accordance with the program-budget approved by the
General Assembly shall be consulted upon in advance with the Permanent
Council.
Article 125. Evaluation
of the Audit Function. The
Permanent Council may request that an external audit firm evaluate the
activities of the Office of the Inspector General.
SUBCHAPTER B:
THE BOARD OF EXTERNAL AUDITORS
Article 126. Board
of External Auditors. The
Board of External Auditors shall examine the accounts of the General
Secretariat in accordance with resolutions AG/RES. 123 (III-O/73), adopted
by the General Assembly on April 14, 1973, and CP/RES. 124 (164/75), adopted
by the Permanent Council on June 30, 1975; and with the Rules of Procedure
of the Board, approved on June 30, 1976.
The Board shall consist of three members designated by the General
Assembly.
Article 127. Access
to Books and Records. The
external auditors shall have access at all times to the books, records,
documents, and vouchers that, in their opinion, are necessary to the audit.
The Secretary General shall grant the Board access to any financial
records that it may request, cooperating with it as needed, so that the
Board may make its audits in a timely and effective way.
Article 128. Certification
of the Examination of Accounts. The
external auditors shall examine the accounts and certify to the following:
a.
That
the annual accounts presented by the Secretary General agree with the books,
records, documents, and vouchers of the General Secretariat;
b.
That
the transactions reflected in the financial statements are in accord with
these General Standards, the Budgetary and Financial Rules, and other
applicable provisions; and
c.
That
the securities and cash on deposit have been checked by means of
certifications from the depositories of the General Secretariat, and that
the cash on hand has been checked by physically counting it to the extent
the Board of External Auditors deems appropriate, applying generally
accepted standards of auditing.
Article 129. Verification
of the Efficacy of Internal Accounting Control.
The external auditors may check the efficacy of internal accounting
control and shall present to the General Assembly the reports that they
consider pertinent with respect to that control.
The external auditors, after satisfying themselves that the books,
records, documents, and vouchers have been examined and certified as correct
by General Secretariat staff, may, at their discretion, and bearing in mind
the nature of the examination, accept such certification in whole or in
part.
Article
130. Observations on
Accounts, Deficiencies, and Irregularities.
The external auditors shall not be empowered to change items in the
accounts, but they shall call to the attention of the Secretary General, for
appropriate action, any transaction about whose legality or correctness they
have any doubt.
The external auditors may call attention in their report to any
deficiency or irregularity that they have noted in performing their work,
but first they shall inform the Secretary General thereof in order to give
him an opportunity to explain or correct it.
Article 131. Observations
on Financial Management. In
addition to certifying the financial statements, the external auditors may
make any observations they believe necessary as to the internal financial
and budgetary regulations, the accounting system, the efficiency of the
internal auditing, control procedures, management activities and programs,
and, in general, the financial consequences of the administrative actions of
the General Secretariat.
Article 132. Content
and Scope of the Report. The
external auditors shall refer in their report to the extent and nature of
the examination of the financial statements certified, the exactness and
correctness thereof, as well as any other matter of which the General
Assembly should be informed, including but not limited to:
a.
Wasteful or improper
expenditure of funds, notwithstanding the correctness of the accounting;
b.
Cases of fraud or presumptive
fraud;
c.
Expenditures likely to lead
to further outlays on a large scale;
d.
Expenditures that are not in
accord with the provisions authorizing them, or excessive expenditures;
e.
Expenditures that exceed the
amount of appropriations, taking into account the changes resulting from
transfers duly authorized in the General Assembly resolution approving the
program-budget; and
f.
Any deficiency in the general
system governing the handling of income and expenditures or of supplies and
equipment, or in the corresponding administrative services.
Article 133. Submission
of the Report of the Board of External Auditors to the Permanent Council and
the General Assembly. The
Board shall submit its report to the Permanent Council within the first four
months of the year. The report
shall include the preliminary comments of the General Secretariat.
Additional formal comments on the plans for adopting measures
relating to the recommendations of the report shall be furnished by the
General Secretariat and the Office of the Inspector General. The Permanent Council shall make such observations and
recommendations as it sees fit. The
report shall be submitted to the General Assembly at its next regular
session, together with the observations from the Permanent Council, the
General Secretariat, and the Office of the Inspector General.
SUBCHAPTER C:
BUDGETARY AND FINANCIAL REPORTS
Article 134. Budgetary
and Financial Statements and Reports.
The Secretary General shall present to the General Assembly at each
regular session, together with the corresponding report of the external
auditors, a final financial report on the preceding fiscal year.
The Secretary General shall also present a quarterly report to the
Preparatory Committee of the General Assembly and to all the organs of the
OAS that have responsibility in administrative and budgetary matters, on:
a.
Compliance with the decisions
regarding the program-budget taken by the General Assembly and the Permanent
Council;
b. The progress made in carrying
out programs and providing services in implementing the program-budget, with
the corresponding explanations;
c. The situation as regards the
collection of quotas and contributions, miscellaneous income, and any other
resources received from public or private sources, especially those referred
to in Articles 74, 75, and 82; and
d. The financial condition of each of the funds, with an indication of
their income, expenditures, and balances.
The Secretary General shall submit to the
Permanent Council a semi-annual report in January and June of each year on
all the performance contracts (CPRs) funded by any source for the preceding
semester. This report shall include for each CPR in force during the
reporting period: (a) the source of funds used; (b) the name of the
independent contractor, by legal persons (entities) first, followed by
natural persons (individuals); (c) the duration of the contract, including
beginning and ending date; (d) the contract amount; (e) the number of CPRs
the independent contractor has had since January
2000; (f) the
number of times the present contract has been renewed or extended; (g) the
total duration, including renewals and extensions, of all the CPRs with the
particular contractor since January
2000; (h) a
detailed justification of the need for the contract; and (i) an explanation
as to why the functions or work product assigned cannot be performed or
produced by current staff member(s). This information should be organized by
department or office of the General Secretariat, or other entity, as
appropriate, and applies to the Offices of the General Secretariat in the
Member States and all operations away from headquarters.[2]
