WORLD HEALTH ORGANIZATION FIFTY-SIXTH WORLD HEALTH ASSEMBLY Provisional agenda item 16.2 A56/31 10 April 2003
Appointment of the External Auditor Report by the Director-General
1. Regulation 14.1 of the Financial Regulations of WHO states that the “External Auditor(s), each of whom shall be the Auditor-General (or officer holding equivalent title or status) of a Member government, shall be appointed by the Health Assembly, in the manner decided by the Assembly. External Auditor(s) appointed may be removed only by the Assembly.” 2. Although the duration of the appointment is at the discretion of the Health Assembly, previous practice has, however, been to appoint the External Auditor for two financial periods. In May 1999, the Fifty-second World Health Assembly, by resolution WHA52.8, reappointed the Auditor-General of the Republic of South Africa as the External Auditor of WHO’s accounts for the two financial periods 2000-2001 and 2002-2003. 3. The appointment of the External Auditor will need to be considered by the Fifty-sixth World Health Assembly in May 2003 and, if past practice is followed, the appointment will take effect from 1 January 2004 and would be for the financial periods 2004-2005 and 2006-2007. 4. A practice has been established as from the Forty-eighth World Health Assembly whereby proposals for the post of External Auditor were made by Member States upon invitation by the Director-General. That Health Assembly made its selection, as in other organizations of the United Nations Common System, by secret ballot, as would be the case for any election under Rules 80 and 81 of the Rules of Procedure of the World Health Assembly. This practice was also followed by the Fifty-second World Health Assembly. 5. In accordance with the practice referred to in paragraph 4 and existing in some other organizations of the United Nations system, all Member States were invited, by the Note Verbale C.L.30.2002 (4 September 2002, see Annex 1), to nominate a candidate for consideration by the Health Assembly for the position of External Auditor of the accounts of WHO for the financial periods 2004-2005 and 2006-2007. A deadline of 31 January 2003 was specified for the receipt of nominations. 6. Nominations were received before the deadline from the Governments of Germany (dated 29 January 2003, Annex 3); Ghana (dated 31 January 2003, Annex 7); India (dated 31 January 2003, Annex 8); Mauritius (dated 29 January 2003, Annex 4); Netherlands (dated 30 January 2003, Annex 5); South Africa (dated 27 January 2003, Annex 2) and Sweden (dated 31 January 2003, Annex 9). A nomination from the Government of Colombia, dated 31 January 2003, was received on 7 February 2003 (Annex 6). These nominations are summarized in Annex 10.
A56/31
7. Two nominations of private companies and one nomination of a private individual were received from a government before the deadline (dated 8 January 2003). In view of the requirement that the External Auditor be “the Auditor-General (or officer holding equivalent title or status) of a Member government”, the government concerned was asked to confirm that the companies and individual proposed met this qualification before consideration could be given to submitting the nominations to the Health Assembly. No such confirmation has been received at the time of preparation of this document and, consequently, the nominations have not been submitted to the Health Assembly.
ACTION BY THE HEALTH ASSEMBLY 8. Because several nominations have been received for the appointment as External Auditor, the Fifty-sixth World Health Assembly may wish to proceed in accordance with the practice established by the Forty-eighth and Fifty-second World Health Assemblies, namely, to select the External Auditor by holding a secret ballot. After the selection process, the Health Assembly may wish to consider the following draft resolution: The Fifty-sixth World Health Assembly 1. RESOLVES that [exact title to be inserted] of [title of Member State to be inserted] be appointed External Auditor of the accounts of the World Health Organization for the financial periods 2004-2005 and 2006-2007 and that he/she conduct his/her audits in accordance with the principles incorporated in Regulation XIV and the Appendix to the Financial Regulations, provided that, should the necessity arise, he/she may designate a representative to act in his/her absence; [if applicable] 2. EXPRESSES its thanks to the Auditor-General of the Republic of South Africa for the work he has performed for the Organization in his audit of the accounts for the financial periods 2000-2001 and 2002-2003.
ANNEXES 9. The annexes referred to in the preceding paragraphs are listed below for ease of reference. Those for the nominations are listed in order of date. Annex 1 Annex 2 Annex 3 Annex 4 Annex 5 Annex 6 Annex 7 Annex 8 Annex 9 Annex 10 Note Verbale Nomination from the Government of South Africa Nomination from the Government of Germany Nomination from the Government of Mauritius Nomination from the Government of the Netherlands Nomination from the Government of Colombia Nomination from the Government of Ghana Nomination from the Government of India Nomination from the Government of Sweden Summary table of nominations
2
WORLD HEALTH ORGANIZATION FIFTY-SIXTH WORLD HEALTH ASSEMBLY Provisional agenda item 16.2 A56/31 Annex 10 Rev.1 11 April 2003
Appointment of the External Auditor Report by the Director-General
Following a revision to the nomination for the appointment of the External Auditor submitted by the Government of Sweden,1 the summary table of nominations has been amended accordingly and is attached as an Annex.
1
Document A56/31 Add.1.
2
A56/31 Annex 10 Rev.1
ANNEX SUMMARY TABLE OF NOMINATIONS Nominating country Colombia Financial period 2004-2005 2006-2007 Duration of auditing work 100 weeks 100 weeks Proposed audit fees (US$) 1 500 000 1 500 000 + 198 301 standard emoluments Germany Ghana = India Mauritius Netherlands South Africa Sweden = = Mr Rajun Jugurnath, Director of Audit, Government Audit Office Ms Saskia J. Stuiveling, President, The Netherlands Court of Audit Mr Shauket Fakie, Auditor-General of the Republic of South Africa, Office of the Auditor-General of the Republic of South Africa Mr Kjell Larsson, Auditor-General (as from 1 July 2003), The Swedish Supreme Audit Institution (as from 1 July 2003) 2004-2005 2006-2007 2004-2005 2006-2007 2004-2005 2006-2007 2004-2005 2006-2007 85 months 85 months 82.5 months 82.5 months 90 months 90 months 40 months 40 months 950 000 950 000 1 360 250 1 360 250 845 000 845 000 1 231 511 1 253 213 Mr Norbert Hauser, Vice-President, German Federal Court of Audit Mr Edward Dua Agyeman, Acting Auditor-General, Ghana Audit Service Mr Vijayendra N. Kaul, Comptroller and Auditor-General of India 2004-2005 2006-2007 2004-2005 2006-2007 2004-2005 2006-2007 68 months 68 months 95 months 95 months 87 months 87 months 827 000 840 000 875 000 875 000 790 000 829 500
Name and title of nominated candidate Dr César Augusto López Botero, Auditor-General of the Republic of Colombia
A56/31 ANNEX 2
AUDITOR-GENERAL REPUBLIC OF SOUTH AFRICA
PROPOSAL BY THE AUDITOR-GENERAL OF THE REPUBLIC OF SOUTH AFRICA FOR APPOINTMENT AS THE INDEPENDENT EXTERNAL AUDITOR TO THE WORLD HEALTH ORGANIZATION (WHO) FOR THE FINANCIAL PERIODS 2004-2005 AND 2006-2007
WORLD HEALTH ORGANIZATION FIFTY-SIXTH WORLD HEALTH ASSEMBLY Provisional agenda item 16.2 A56/31 Annex 10 Rev.2 12 May 2003
Appointment of the External Auditor Report by the Director-General
Following a revision to the nomination for the appointment of the External Auditor submitted by the Government of Colombia,1 the summary table of nominations has been amended accordingly and is attached as an Annex. The table shows the original information provided and any amendment necessary to reflect the revised submission of the Government of Colombia and that of the Government of Sweden.2
1 2
Document A56/31 Add.2. Document A56/31 Add.1.
2
A56/31 Annex 10 Rev.2
ANNEX SUMMARY TABLE OF NOMINATIONS Nominating country Colombia Financial period 2004-2005 2006-2007 Duration of auditing work months/weeks Original proposal 100 weeks 100 weeks Revised proposal 60 months 60 months Proposed audit fees (US$) Original proposal 1 500 000 1 500 000 + 198 30 standard emoluments 2004-2005 2006-2007 2004-2005 2006-2007 2004-2005 2006-2007 2004-2005 2006-2007 2004-2005 2006-2007 2004-2005 2006-2007 2004-2005 2006-2007 68 months 68 months 95 months 95 months 87 months 87 months 85 months 85 months 82.5 months 82.5 months 90 months 90 months 40 months 40 months 40 months 40 months 827 000 840 000 875 000 875 000 790 000 829 500 950 000 950 000 1 360 250 1 360 250 845 000 845 000 980 000 1 020 000 Revised proposal 1 200 090 1 200 090 + 150 011.25 standard emoluments 1 231 511 1 253 213
Name and title of nominated candidate
Dr César Augusto López Botero, Auditor-General of the Republic of Colombia replaced by Dr Clara López Obregón, Auditor-General of the Republic of Colombia Mr Norbert Hauser, Vice-President, German Federal Court of Audit Mr Edward Dua Agyeman, Acting Auditor-General, Ghana Audit Service Mr Vijayendra N. Kaul, Comptroller and Auditor-General of India Mr Rajun Jugurnath, Director of Audit, Government Audit Office Ms Saskia J. Stuiveling, President, The Netherlands Court of Audit Mr Shauket Fakie, Auditor-General of the Republic of South Africa, Office of the Auditor-General of the Republic of South Africa Mr Kjell Larsson, Auditor-General (as from 1 July 2003) The Swedish Supreme Audit Institution (as from 1 July 2003)
Germany Ghana
= India
= = Mauritius Netherlands South Africa Sweden
WORLD HEALTH ORGANIZATION FIFTY-SIXTH WORLD HEALTH ASSEMBLY Provisional agenda item 16.2 A56/31 Annex 10 Rev.3 16 May 2003
Appointment of the External Auditor Report by the Director-General
1. On 13 May 2003, the Director-General was advised that the Government of Ghana has withdrawn its nomination for the position of External Auditor for the financial periods 2004-2005 and 2006-2007. 2. On 16 May 2003, the Director-General was advised that the Government of Germany has withdrawn its nomination for the position of External Auditor for the financial periods 2004-2005 and 2006-2007. 3. The summary table of nominations has been amended and is attached as an Annex.
2
A56/31 Annex 10 Rev.3
ANNEX SUMMARY TABLE OF NOMINATIONS Nominating country Colombia Financial period 2004-2005 2006-2007 Duration of auditing work months/weeks Original proposal 100 weeks 100 weeks Revised proposal 60 months 60 months Proposed audit fees (US$) Original proposal 1 500 000 1 500 000 + 198 30 standard emoluments 2004-2005 2006-2007 2004-2005 2006-2007 2004-2005 2006-2007 2004-2005 2006-2007 2004-2005 2006-2007 2004-2005 2006-2007 2004-2005 2006-2007 68 months 68 months 95 months 95 months 87 months 87 months 85 months 85 months 82.5 months 82.5 months 90 months 90 months 40 months 40 months 40 months 40 months 827 000 840 000 875 000 875 000 790 000 829 500 950 000 950 000 1 360 250 1 360 250 845 000 845 000 980 000 1 020 000 Revised proposal 1 200 090 1 200 090 + 150 011.25 standard emoluments 1 231 511 1 253 213
Name and title of nominated candidate
Dr César Augusto López Botero, Auditor-General of the Republic of Colombia replaced by Dr Clara López Obregón, Auditor-General of the Republic of Colombia Mr Norbert Hauser, Vice-President, German Federal Court of Audit Withdrawn Mr Edward Dua Agyeman, Acting Auditor-General, Ghana Audit Service Withdrawn Mr Vijayendra N. Kaul, Comptroller and Auditor-General of India Mr Rajun Jugurnath, Director of Audit, Government Audit Office Ms Saskia J. Stuiveling, President, The Netherlands Court of Audit Mr Shauket Fakie, Auditor-General of the Republic of South Africa, Office of the Auditor-General of the Republic of South Africa Mr Kjell Larsson, Auditor-General (as from 1 July 2003) The Swedish Supreme Audit Institution (as from 1 July 2003)
Germany
Ghana
= = = Mauritius Netherlands South Africa Sweden India
A56/31 ANNEX 7
GHANA AUDIT SERVICE
PROPOSAL BY THE AUDITOR-GENERAL OF GHANA FOR APPOINTMENT AS THE EXTERNAL AUDITOR TO THE WORLD HEALTH ORGANISATION (WHO) FOR THE FINANCIAL PERIODS 2004-2005 AND 2006-2007
WORLD HEALTH ORGANIZATION FIFTY-SIXTH WORLD HEALTH ASSEMBLY Agenda item 16.2 A56/31 Annex 10 Rev.4 21 May 2003
Appointment of the External Auditor Report by the Director-General
1. On 20 May 2003, the Director-General was advised that the Government of Ghana no longer wishes to withdraw its nomination for the position of External Auditor for the financial periods 2004-2005 and 2006-2007, and that the original submission contained in document A56/31 Annex 7 remains valid. 2. The summary table of nominations has been amended to reflect this communication and is attached as an Annex.
2
A56/31 Annex 10 Rev.4
ANNEX SUMMARY TABLE OF NOMINATIONS Nominating country Colombia Financial period 2004-2005 2006-2007 Duration of auditing work months/weeks Original proposal 100 weeks 100 weeks Revised proposal 60 months 60 months Proposed audit fees (US$) Original proposal 1 500 000 1 500 000 + 198 30 standard emoluments 2004-2005 2006-2007 2004-2005 2006-2007 2004-2005 2006-2007 2004-2005 2006-2007 2004-2005 2006-2007 2004-2005 2006-2007 2004-2005 2006-2007 68 months 68 months 95 months 95 months 87 months 87 months 85 months 85 months 82.5 months 82.5 months 90 months 90 months 40 months 40 months 40 months 40 months 827 000 840 000 875 000 875 000 790 000 829 500 950 000 950 000 1 360 250 1 360 250 845 000 845 000 980 000 1 020 000 Revised proposal 1 200 090 1 200 090 + 150 011.25 standard emoluments 1 231 511 1 253 213
Name and title of nominated candidate
Dr César Augusto López Botero, Auditor-General of the Republic of Colombia replaced by Dr Clara López Obregón, Auditor-General of the Republic of Colombia Mr Norbert Hauser, Vice-President, German Federal Court of Audit Withdrawn Mr Edward Dua Agyeman, Acting Auditor-General, Ghana Audit Service Mr Vijayendra N. Kaul, Comptroller and Auditor-General of India Mr Rajun Jugurnath, Director of Audit, Government Audit Office Ms Saskia J. Stuiveling, President, The Netherlands Court of Audit Mr Shauket Fakie, Auditor-General of the Republic of South Africa, Office of the Auditor-General of the Republic of South Africa Mr Kjell Larsson, Auditor-General (as from 1 July 2003) The Swedish Supreme Audit Institution (as from 1 July 2003)
Germany
Ghana
= = = Mauritius Netherlands South Africa Sweden India
A56/31 ANNEX 6 ORIGINAL: SPANISH
PROPOSAL OF THE AUDITOR-GENERAL OF THE REPUBLIC OF COLOMBIA
CÉSAR AUGUSTO LÓPEZ BOTERO
AS EXTERNAL AUDITOR OF THE WORLD HEALTH ORGANIZATION (WHO)
CONTENTS Proposal of the Auditor-General of the Republic of Colombia – César Augusto López Botero – as External Auditor of the World Health Organization (WHO) 1. 2. Introduction Curriculum vitae Personal data Professional background Professional training Courses and seminars Work experience Representation and delegations Academic activities Essays 3. Auditing standards, procedure and methods Standards Basic postulates General standards Field standards Reporting standards Procedures Planning of audits Execution phase Reporting and notification phase Methods 4. 5. 6. 7. Outputs Total number of auditor work months Fees Requests for information Nature Scope Timetable 8. Conclusion
2 2 3 3 3 3 3 4 4 4 5 5 5 5 6 6 7 8 8 8 9 9 9 10 10 11 11 11 11 11
–2–
Proposal of the Auditor-General of the Republic of Colombia – César Augusto López Botero – as External Auditor of the World Health Organization (WHO)
1.
Introduction
The Office of the Auditor-General of the Republic of Colombia is a second-level financial supervisory body responsible for monitoring the fiscal management of the country’s national, departmental and municipal comptrollers’ offices and ensuring that fiscal supervision is conducted in an ever more efficient and effective manner. The Office of the Auditor-General of the Republic came into being as a result of the 1992 constitutional reforms, given the crisis previously suffered by the financial watchdog institutions. In order to secure an adequate profile for the post of Auditor, the Supreme Court of Justice was entrusted with shortlisting three candidates, who were then referred to the Council of State for the final selection. The role of the Auditor is a little more complex than the general run of what is required of auditors elsewhere in the world since, in addition to watching over financial management, he is entrusted with conducting budgetary, legality, environmental and management-and-results checks; not to mention work of jurisdictional content consisting in prosecuting those who misuse the resources of the State and replenishing the Treasury from the assets of the parties involved, through a process referred to as “fiscal responsibility”. One of the major challenges of the present Auditor, elected in 2001, was the design of mission methodologies – including those of the audit process, based on international auditing and accounting standards, and those to do with the fiscal responsibility processes - and the administrative methodologies of the institution, which were drawn up in the year he took office. Concomitantly with the above, the strategy of technological development and unified rationalization of the entire, previously dispersed process in Colombia was implemented. With these tools audits were conducted of all the country’s comptrollers’ offices, both full audits and some horizontal audits, the latter being focused on the most sensitive points and culminating in a scheme for the structural reform of fiscal supervision in Colombia that is under consideration by the National Government and the Congress of the Republic. That work did not just come about of its own accord, as it were, since the Auditor-General had for more than a decade been managing the public finances, particularly in the Ministry of Finance and Public Credit in the financial, budgetary and legal areas, besides his university teaching of public finance and presence in international bodies managing public resources as president of the Colombian branch of the Public Budget International Association (ASIP). The aforesaid prompts us to put forward the name of the present Auditor-General of the Republic of Colombia, César Augusto López Botero, being the first candidature from the American continent, for the post of External Auditor of the World Health Organization (WHO) and, simultaneously, of the International Agency for Research on Cancer (IARC), of the Joint United Nations Programme on HIV/AIDS (UNAIDS) and, if so decided, of the Pan American Health Organization (PAHO), which serves as the Regional Office for the Americas. We are convinced that he will be able to make a major contribution to sound management and good WHO practice.
–3–
2.
Curriculum vitae
Personal data Name Place and date of birth César Augusto López Botero Armenia – Quindío – Colombia 13 November 1961 N° 63950 of the Higher Council of the Judiciary Married Carrera 11 número 118 – 51 apto 401 Telephone 6 29 77 58 Bogotá Carrera 10 número 17 – 18 piso 9 auditorgeneral@auditoria.gov.co Telephone 3 18 68 30
Professional card Civil status Residence Office
Professional background Lawyer with extensive experience in the area of public finance and fiscal supervision; good knowledge of public treasury management and basic proficiency in English. Professional training Master of Arts in Economic and Social Studies Victorian University of Manchester United Kingdom March 1993 Thesis: Commodity Booms and Economic Policy Postgraduate Diploma in Economic and Social Studies Victorian University of Manchester United Kingdom July 1991 Lawyer Pontificia Universidad Javeriana Bogotá November 1988 Thesis: El Ciclo Presupuestal Colombiano – Comentarios y Recomendaciones (The Colombian budgetary cycle – comments and recommendations) Socio-economist Pontificia Universidad Javeriana Bogotá November 1984 Courses and seminars Public Budget International Association (ASIP) Seminar: Present Problems of Public Finances Berlin, Germany, 1998
–4– Public Budget International Association (ASIP) Seminar: Collaboration of the State Authorities in Financial Administration Lima, Peru, 2001 Victorian University of Manchester Pre-session Intensive English Course United Kingdom, 1990 Work experience Office of the Auditor-General of the Republic Duties: Auditor-General of the Republic April 2001 to date Ministry of Finance and Public Credit Duties: Head of Legal Unit Secretary General Director-General of the National Budget Legal Adviser to the National Budget Directorate Budget Delegate before the Office of the Prosecutor General of the Nation Inspector of the Sub-directorate of Budgetary Supervision Lawyer of the Labour Affairs Office of the Ministry between 1986 and 1990 and between 1993 and 2001 Representation and delegations President of the Colombian Association of Public Budgetary Law (ACOLDEP) Member of the José Ignacio de Márquez Foundation Decorated by the College of Lawyers of Quindío with the Order Honoured with the Order of Merit by the Government Ministry of Quindío Delegate of the Ministry of Finance and Public Credit before the Governing Boards of: Banco Central Hipotecario (central mortgage bank) Fondo Nacional de Ahorro (national savings fund) Fondo de Bienestar Social de la Contraloría General de la República (social welfare fund of the Office of the Comptroller General of the Republic) Counsellor Adviser of the Solidarity Fund of Savers and Depositors of Cooperative Entities under Liquidation. Academic activities Professor, Chair of Public Finance Faculty of Legal Sciences Pontificia Universidad Javeriana Bogotá Professor of economic and legal subjects in postgraduate courses of the Universities of El Rosario, Los Andes, Externado de Colombia, and Sergio Arboleda Bogotá
–5– Essays Appropriate Technology The Experience of Import-Substitution Industrialization Aid in Less Developed Countries La Fiducia Pública (The public fiduciary function) La Enajenación Accionaria Pública, un dilema reciente (Disposal of public shareholdings, a recent dilemma) Algunas notas sobre el Crédito Público (Some notes on public credit) El nuevo Sistema de Control Fiscal Colombiano (Colombia’s new system of fiscal control) La Contratación Estatal en el Presupuesto Público (State contracting in the public budget) Los Principios Presupuestarios Públicos (Public budgeting principles) Manual de presupuesto del Sistema Nacional de Salud (Budget manual of the National Health System) Editorialist of the review Sindéresis of the Office of the Auditor-General of the Republic, 2001-2003.
3.
Auditing standards, procedure and methods
Standards The accounts and financial statements of WHO will be audited with due regard to the provisions of the Financial Regulations of WHO and to the additional responsibilities regarding external audit of the accounts of WHO, based on the accounting principles and practices of the Organization, its Financial Regulations and the United Nations System Accounting Standards. The audits will be conducted in accordance with the Auditing Standards of the International Organization of Supreme Audit Institutions (INTOSAI), which are divided into four parts: Basic postulates The basic postulates for auditing standards are basic assumptions, consistent premises, logical principles and requirements which help in developing auditing standards and serve the auditors in forming their opinions and reports, particularly in cases where no specific standards apply. In performing the auditing exercise at WHO, account will be taken chiefly of the following postulates: Audit evidence plays an important part in the auditor’s decision concerning the selection of issues and areas for audit and the nature, timing and extent of audit tests and procedures. The terms of the auditing mandate with WHO override any accounting or auditing conventions with which they conflict, and hence have a crucial bearing on the auditing standards applied. WHO will facilitate the obtaining of control, evaluation and reporting data in the audit process. For auditing purposes, measurable and clearly stated objectives will be determined between the External Auditor and WHO, and performance targets set for those objectives. Acceptance by WHO that consistency in application is a prerequisite of fairness means that in the audits, accounting standards must be applied that are appropriate in the circumstances and must be applied consistently. It is the responsibility of WHO and not of the auditor to establish adequate internal control systems to protect its resources.
–6– WHO is also under an obligation to ensure that controls are in place and functioning to help ensure that applicable statutes and regulations are complied with, and that probity and propriety are observed in the decision making. In any case, should he find controls to be inadequate or missing, the External Auditor will submit to WHO the corresponding proposals and recommendations. The expanding role of the auditors will require them to improve and develop new techniques and methods to assess whether WHO uses reasonable and valid criteria to gauge its management. The auditors will, as necessary, use the techniques and methods of other disciplines. General standards These standards describe the qualifications of auditors and auditing institutions enabling them to carry out the tasks related to field and reporting standards competently and effectively. In use of the General Auditing Standards to audit WHO, account will be taken of the following: The auditors and the External Auditor will be independent. The auditors and the External Auditor will exercise due care and concern in complying with the auditing standards and the rules set by WHO. This embraces due care in planning, specifying and evaluating evidence, and in reporting findings, conclusions and recommendations. The External Auditor will adopt policies and procedures to recruit personnel with suitable qualifications; prepare or improve manuals and other written guidance and instructions concerning the conduct of audits, as may be necessary; make use of the skills and experience available and identify the skills which are absent; provide a good distribution of skills to auditing tasks and assign a sufficient number of persons to each task; have proper planning and supervision to achieve its goals at the required level of due care and concern; review the efficiency and effectiveness of WHO’s internal standards and procedures. Field standards The purpose of field standards is to establish the criteria or overall framework for the purposeful, systematic and balanced steps or actions that the auditor has to follow. These steps and actions represent the rules of research that the auditor, as a seeker of audit evidence, implements to achieve a specific result. In auditing WHO the following field standards will be those taken chiefly into account: The External Auditor will plan the audit in such a manner as to ensure that an audit of high quality is carried out in an economic, efficient and effective way and in a timely manner. The work of the audit staff at each level and audit phase will be properly supervised during the audit, and documented work will be reviewed by the coordinator of the appointed team of auditors or directly by the External Auditor. In determining the extent and scope of the audit in WHO, the reliability of internal control will be studied and evaluated. In conducting financial audits, a test will be made of compliance with applicable laws and regulations. The auditor will design steps and procedures to provide reasonable assurance of detecting errors, irregularities and illegal acts that could have a direct and material effect on the financial statement amounts.
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In conducting performance audits, an assessment should be made of compliance with applicable laws and regulations since this is necessary to satisfy the audit objectives. Any indication that an irregularity, illegal act, fraud or error may have occurred which could have a material effect on the audit should cause the auditor to extend procedures to confirm or dispel such suspicions. Competent, relevant and reasonable evidence will be obtained to support the auditors’ judgement and conclusions regarding the organization, programme, activity or function under audit. Analysis of financial statements will be performed to such a degree that a rational basis is obtained to express an opinion on them. Reporting standards These standards are merely to assist and not to supersede the prudent judgement of the auditor in making an opinion or report. For the purpose of auditing WHO, account will be taken chiefly of the following reporting standards: The reports will take into account the needs of WHO, in both financial and performance auditing, and will cover the agreed time spans. Upon completion of the financial audit the conclusions will be given in the form of an opinion, which may be unqualified, qualified, adverse or a disclaimer of opinion. Upon completion of the performance audit the conclusions will be given in the form of opinions providing an assessment of the extent to which WHO has complied with the principles of economy, efficiency and effectiveness. Before the final audit reports are submitted, WHO will be apprised of the preliminary report, which will be discussed with the group of auditors. The reports will be duly signed, with the inclusion of dates, users and grounds. Every effort will be made to ensure that the audit dates agreed upon with WHO are timely. For the purpose of auditing WHO, the External Auditor will also take into account: The auditing standards of the International Federation of Accountants; The international accounting standards; and A Manual of Conduct seeking to ensure that the auditors foster an ethical and operationally professional working atmosphere through due knowledge and application of the auditing standards; public accountability concerning information and communication; accountability to WHO with regard to performance of work and confidentiality. Respect for others by respecting ideas, beliefs, opinions and lifestyles, and taking a positive and constructive attitude towards them. An atmosphere free of discrimination on grounds of sex, race or religion.
–8– Procedures On submitting the audit report to the World Health Assembly, the External Auditor will need to issue and sign his report in the terms regulated by WHO. The audits will be effected in strict compliance with the planning, execution and reporting stages. The auditing work will be reviewed directly by the External Auditor. Planning of audits The audit planning stage would be as follows: Objective selection of a group of highly professional and qualified auditors. In this respect, professionals from different specialist fields will be selected in accordance with the purpose pursued. The auditors will be given prior training to familiarize them thoroughly with WHO, and also on the special features of the auditing to be conducted. The previous audit reports will be given special consideration, not only to ascertain the characteristics of the work to be done but also to follow up on the observations made in those reports and detect the degree of compliance and improvement secured. Examination of the global budget of the institution and of the percentage earmarked for the area to be audited, in order to ascertain the relative financial importance of the work for WHO and the extent and coverage of prospective field work. Account will be taken at this stage of the WHO Strategic Plan so as to ascertain the expected outcomes in particular areas subject to auditing. As an important audit planning source, account will be taken of WHO reports of the Internal Auditor. In addition, the projects, areas and components of the most important matters for evaluation will be identified by means of risk maps. Finally, the nature and scope of the audit evidence to be applied will be determined. On completing the planning stage, the audit team will draw up a planning memorandum featuring the scope, objectives, specific tasks, areas for evaluation, working times and supervisory responsibilities. Execution phase This phase of field auditing involves collecting documents, conducting tests and analysing evidence to ensure adequacy, competence and relevance, for the sake of securing sufficient bases for issuing effective and duly justified observations, conclusions and recommendations, and to ensure that the examination has been carried out in accordance with established quality requirements. In this phase, auditing procedures and techniques are applied, including: audit evidence and evaluation, identification of findings (condition and criterion) and the making of observations (including condition, criterion, and cause and effect).
–9– Reporting and notification phase The main steps in the reporting and notification phase will be the following: A preliminary audit report will be drawn up and communicated to the Director-General’s Office. It will be discussed and the Office given the opportunity to put forward such observations as it may consider relevant. Once the preliminary report has been discussed and the relevant observations made, the final report will be prepared and submitted via the Executive Board to the World Health Assembly. On relevant topics the External Auditor will make constructive recommendations and communicate the duly supported findings, which will be treated by the auditors confidentially. In any case, timely communication of reports will be a permanent feature so that corrective measures may be taken with due promptness. If necessary, and should the Director-General’s Office consider it so, an Improvement Plan will be drawn up together with the executors of WHO resources in any area audited, to enable them to reorganize their management and follow the matter up in subsequent audits or to enable the adjustments to be monitored by the internal audit and oversight service or by senior management. Methods The work will be mainly concerned with reporting on the financial statements and carrying out audits to determine the degree of compliance with the objectives set, taking care to ensure that WHO guidelines are respected. Financial auditing will be based on generally accepted auditing standards to establish whether the financial statements reasonably reflect the outcome of the operations of WHO and the changes in its financial situation, ensuring that in their preparation and in the transactions and operations giving rise to them the universally accepted accounting principles and those prescribed in the WHO Financial Regulations were observed and fulfilled. As a complement, the WHO budgets will be analysed to determine whether the will of the entity approving them is being observed in the use of resources. It will thus be possible to achieve performance auditing that examines the efficiency and effectiveness of the administration of WHO’s resources and the extent to which objectives are achieved and the plans, programmes and projects adopted by WHO are fulfilled. Finally, emphasis will be placed on checking that the activities of those responsible for administering WHO’s resources are conducted in accordance with the rules and regulations of the Organization.
4.
Outputs
The auditing results will be submitted to the Health Assembly via the Executive Board. The outputs obtained in the work of the External Auditor will be as follows: • The audit of the financial report for each biennium submitted by the Director-General. • A report every biennium on the efficiency of the financial processes, the accounting system, the internal financial controls, and the management of administration.
– 10 – • The reports requested by the Health Assembly on specific matters. • The final audit reports generated as an output of the programming of the General Audit Plan, with the corresponding opinion.
5.
Total number of auditor work months
To carry out the audits, a General Audit Plan would be drawn up with a tentative schedule of activity designed in accordance with a risk map to be established and with WHO’s priorities. This General Audit Plan will be submitted for consideration to the WHO Audit Committee; likewise, each of the final audit reports and the reports on the financial accounts will be submitted to the Committee for examination in due course. The progress of WHO projects will be an important factor in the design stage of the timetable, in order that the audits may have a useful effect and be about the status or outcome of projects and not about activities at the design stage. The basic idea is to visit the regional offices, APOC, IARC and UNAIDS, at least every two years and give priority to some countries in which WHO has a special interest. The intensity of the field work of each of the audits depends in part on the complexity being handled, on the availability of information and on the coverage of the auditing work chosen for each financial period. In the course of the same field work a preliminary report will be produced for discussion with those in charge of the projects and offices, and it will be submitted to the WHO Director-General’s Office. Once the right of reply has been exercised, the report will be conveyed to the governing bodies as stated above. The consolidated work on the financial statements will be done once a year and will also be submitted to the Director-General’s Office and the governing bodies of WHO. The intensity of the work will be about 100 weeks in each two years, which will at times be done by one auditor and at others by a group of auditors, as the field work may dictate. This period includes the work of analysing the financial statements and the field work and reports needing to be submitted. The breakdown of the various types of auditing work will be determined in the General Audit Plan to be designed.
6.
Fees
The fees calculated for this auditing assignment amount to US$ 1,500,000 (one million five hundred thousand United States dollars) in respect of each of the periods (2004-2005 and 2006-2007), comprising auditing of WHO’s regular programme and of activities funded from extrabudgetary resources; in addition to secretarial and auxiliary staff costs and the travel and subsistence expenses of assistants. Payment will be made quarterly in advance, with uniform emoluments of US$ 198,301 throughout the period of office of the External Auditor, upon presentation of the billing statement.
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7.
Requests for information
Nature The information sought is that strictly necessary to do the work, but sufficient to be able to issue reports that are of use to WHO. Should it be necessary to have access to any restricted information, the governing bodies will be notified of the reasons why the information is important. Scope In order to perform the auditing work effectively and diligently, it is necessary before any visit to know the main features of the region concerned, to be acquainted with the consolidated accounts for recent months at WHO Headquarters in Geneva, to examine the internal control reports and previous audit reports, to check the budget for the region in the coming years, to be familiar with the administration’s strategic and operational plans in respect of the region and with the special rules laid down for the handling of resources and the extent to which the corresponding countries collaborate in WHO’s projects. For consolidated review of the financial statements, permanent access would be required, for the sake of comparison with what is happening in each of the parts where WHO has resources involved. Timetable The above information will be sought one month in advance of the field work, as agreed with senior management.
8.
Conclusion
This proposal deals with the major aspects of the likely work of the External Auditor. A more detailed approach can be provided should WHO deem this necessary, and the specific aspects would be agreed when the appointment is formalized.