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 GENERAL STANDARDS TO GOVERN THE OPERATIONS OF THE GENERAL SECRETARIAT

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GENERAL STANDARDS TO GOVERN THE OPERATIONS OF THE GENERAL SECRETARIAT[1]

CHAPTER IX

ADVISORY SERVICES, AUDITING, AND FISCAL CONTROL

SUBCHAPTER A:  THE INSPECTOR GENERAL

           Article 117. Internal audit. The Office of the Inspector General is 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, economy, and transparency 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, in accordance with these General Standards, with the Permanent Council duly apprised.

          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.

          The Inspector General shall report to the Board of External Auditors on the progress on the activity plan or other relevant issues on a quarterly basis.

          Article 119.  Independence of the Inspector General. The Inspector General shall enjoy the functional 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, as well as on the overall efficacy of the functions of the Office of the Inspector General and on the qualifications and performance of the staff and independent contractors providing services in said office.

          To carry out his functions, including matters of audit selection, scope, procedures, frequency, timing, or report content, the Inspector General shall remain free from interference by any element in the General Secretariat, to permit maintenance of the necessary independence and objectivity.

          In accordance with these General Standards, 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.

          Article 120. Qualifications of the Inspector General and the Professional Staff of the Office of the Inspector General. The Inspector General and the professional staff of the Office of the Inspector General must have the suitable skills, training, 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 analysis, public administration, or investigations. The Inspector General shall have held a position with similar functions for a minimum period of fifteen years.

          Article 121. Appointment, length of appointment, and removal of the Inspector General.

a.     The Secretary General, in consultation with the Permanent Council, shall appoint the Inspector General from a list of three 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, with the Permanent Council duly apprised.

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 requirements provided in Article 120 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.           The company chosen shall submit the qualifications of those candidates to the Board of External Auditors for certification and interview.

vii.          The Board of External Auditors shall submit a list of three candidates 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 be certified by the Board of External Auditors in advance, and 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 Inspector General shall be appointed to a single term of six years.

d.       The Inspector General may not be terminated without just cause. In order for the Secretary General to terminate 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 reasons for it. Before consulting with the Permanent Council, the Secretary General shall offer the Inspector General a special hearing to hear his statement on the decision he intends to make. The Chair of the Permanent Council shall also be present at that hearing and, 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 of the General Secretariat after leaving the post.

          Article 122Reports of the Inspector General and the General Secretariat's Obligation to act.

a.       The Inspector General shall present the Secretary General with reports on the audits, investigations, and inspections he conducts, with copies to the Permanent Council and the Board of External Auditors. In submitting his reports, the Inspector General shall recommend such measures as he deems necessary to safeguard their confidentiality.

 

b.            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, it shall be deemed that the Inspector General’s report has been accepted and the Inspector General shall proceed to request implementation of his recommendations, and shall so report to the Permanent Council.

 

c.            The Secretary General may make observations and comments on the reports of the Inspector General and, if he deems it appropriate, may present said observations and comments to the Permanent Council and the Board of External Auditors.

 

d.            The Inspector General shall present quarterly and annual reports 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. Said reports are to 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. Furthermore, 60 days prior to the election of a new Secretary General, the Inspector General shall present to the Permanent Council a report that is to reflect the level of implementation of the recommendations made to improve management of the General Secretariat, pursuant to the first paragraph of Article 117 of these General Standards.

 

e.          The report of the Inspector General will be made available to the member states at Office of the Inspector General with clearly defined procedures and appropriate protection for sensitive information that could compromise pending legal action, expose sensitive organizational data of designated operators, endanger the safety and security of any entity, unit, or individual, or infringe on the privacy rights of any individual. 

          Article 123.  Publication of reports.  Annual summary reports of the Inspector General will be made available to the public on the General Secretariat’s website.

          Article 124. Meetings. The Inspector General shall meet as necessary with the CAAP and with CIDI, in order to exchange information and views on matters that fall within its purview.

          Article 125. Unrestricted access. The Inspector General has full freedom to interview the personnel and other human resources of the General Secretariat, as well as full, free, and unrestricted access to any accounting, financial, movable and immovable property, and personnel records of the General Secretariat that he may need to perform his functions under these General Standards. In all cases, the Inspector General shall adopt the necessary measures to avoid compromising pending legal action, exposing sensitive organizational data, endangering the safety of any entity, unit, or individual, or infringing on the privacy rights of any individual.

          Article 126. 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 127. Evaluation of the Audit Function. The Permanent Council may every three years request an external audit firm certified by the Board of Auditors to evaluate the activities of the Office of the Inspector General, in order to maintain conformance with international standards for the professional practice of internal auditing.  The review should assess the efficiency and effectiveness of the internal audit activity and identify opportunities for improvement.  Results of the assessment will be presented to the Permanent Council and the Secretary General for review and action as needed.

SUBCHAPTER B:  THE BOARD OF EXTERNAL AUDITORS

            Article 128.  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 129.  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 130.  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 131.  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 132.  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 133.  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 134.  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 135.  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 136.  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]



[1].  Adopted by the General Assembly through resolution AG/RES. 123 (III-O/73) and amended through resolutions AG/RES. 248 (VI-O/76), AG/RES. 256 (VI-O/76), AG/RES. 257 (VI-O/76), AG/RES. 301 (VII-O/77), AG/RES. 359 (VIII-O/78), AG/RES. 404 (IX-O/79), AG/RES. 438 (IX-O/79), AG/RES. 479 (X-O/80), AG/RES. 671 (XIII-O/83), AG/RES. 672 (XIII-O/83), AG/RES. 731 (XIV-O/84), AG/RES. 791 (XV-O/85), AG/RES. 842 (XVI-O/86), AG/RES. 981 (XIX-O/89), AG/RES. 1036 (XX-O/90), AG/RES. 1137 (XXI-O/91), AG/RES. 1321 (XXV-O/95), AG/RES. 1322 (XXV-O/95), AG/RES. 1. (XXV-E/98), AG/RES. 3 (XXVI-E/99), AG/RES. 1725 (XXX-O/00), AG/RES. 1839 (XXXI-O/01), AG/RES. 1873 (XXXII-O/02), AG/RES. 1909 (XXXII-O/02), AG/RES. 2059 (XXXIV-O/04), AG/RES. 2156 (XXXV-O/05), AG/RES. 2157 (XXXV-O/05), AG/RES. 2302 (XXXVII-O/07), AG/RES. 2353 (XXXVII-O/07), AG/RES. 2754 (XLII-O/12), AG/RES. 2755 (XLII-O/12), AG/RES. 2756 (XLII-O/12), AG/RES. 2778 (XLIII-O/13), AG/RES. 2817 (XLIV-O/14), AG/RES. 1 (XLVIII-E/14), AG/RES. 2889 (XLVI-O/16) and by the Permanent Council through resolutions CP/RES. 652 (1033/95), CP/RES. 703 (1122/97), CP/RES. 761 (1217/99), CP/RES. 910 (1568/06), CP/RES. 919 (1597/07) and CP/RES. 1062 (2069/16) pursuant to the authority conferred by the General Assembly in resolutions AG/RES. 1319 (XXV-O/95), AG/RES. 1382 (XXVI-O/96), AG/RES. 1603 (XXVIII-O/98),  AG/RES. 2257 (XXXVI-O/06) and AG/RES. 1 (L-E/15), respectively.

[2].  Paragraph added by resolution AG/RES. 2157 (XXXV-O/05) of the General Assembly at its thirty-fifth regular session in June 2005.