CHAPTER
IX
ADVISORY
SERVICES, AUDITING, AND FISCAL CONTROL
Article 117. Internal
Audit. The Secretary
General shall establish appropriate internal auditing procedures to verify
compliance with standards and regulations in force, especially, through
systematic and selective examination of official transactions and
operational procedures related to the resources administered by the General
Secretariat. To that end, he shall issue an Executive Order regulating
such activities.
The Office of the Inspector General shall be the dependency
responsible for applying these procedures and exercising the aforementioned
functions.
Article 118. The
Inspector General. The
Inspector General is responsible for carrying out the audit and inspection
functions mentioned above. To
that end, he shall enjoy the freedom of action needed to initiate, perform,
and report on the audits, inspections, and evaluations required to ensure
the correct use and administration of the Organization's resources and to
safeguard its assets.
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 Secretary General shall submit names of candidates for the post
of Inspector General, including those proposed by the members of the
Permanent Council, to the Board of External Auditors for an opinion as to
their qualifications.
The Secretary General shall select the Inspector General from among
those candidates certified as qualified by the Board of External Auditors.
Article 119. Audit
Reports. The Secretary
General shall instruct the Inspector General to present reports on the
evaluations, audits, and investigations he carries out and then submit a
list of these activities to the Permanent Council.
The reports could be made available to the Permanent Council.
The Inspector General's reports shall be presented quarterly and
annually, with particular emphasis on the proposals made by the Board of
External Auditors and on the adequacy of the resources allocated to auditing
and inspection functions.
In special situations called to the attention of the Inspector
General by the Permanent Council, the Secretary General shall instruct the
Inspector General to inform the Council of the outcome of its request.
Article 120. 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 and shall proceed to
request implementation of his recommendations.
Article 121. 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 122. 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.
Article 123. 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 124. 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 125. 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 126. 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
127. 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 128. 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 129. 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 130. 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.
Article 131. 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]
