Logistics . Giới thiệu về IMO financial regulations and financial rules 1 jan 2024. Phục vụ cho các bạn học về chuyên ngành Logistics và quản lý chuỗi cung ứng
APPLICABILITY
REGULATION 1.1 These Regulations shall govern the financial administration of the International Maritime Organization
101.1.1 These Rules are established in accordance with the provisions of the Financial
Regulations as adopted and amended by the Assembly through resolutions
101.1.2 The Financial Rules are applicable to all officials and, irrespective of the source of funds, to all financial transactions of the Organization
101.1.3 The Financial Rules become effective as from the date of issue Amendments made by the Secretary-General become effective as from the date of issue
101.1.4 In case of doubt as to the interpretation of any of the Financial Rules, the Secretary-
101.1.5 The Secretary-General is responsible to the IMO Assembly for the implementation of the Financial Rules
The Secretary-General has the authority to delegate certain powers necessary for effective administration of these rules This delegation can include re-delegation, ensuring flexibility and efficiency in implementing the regulations Such processes enable the Secretary-General to manage responsibilities effectively while maintaining proper oversight and compliance.
THE FINANCIAL PERIOD
REGULATION 2.1 The financial period shall be a calendar year from 1 January to 31 December inclusive.
THE BUDGET
REGULATION 3.1 The proposed budget, covering two consecutive financial periods, shall be prepared on a biennial basis by the Secretary-General
The proposed budget must outline both income and expenditure for each financial period within the specified biennium It should be prepared in pounds sterling to ensure clarity and consistency.
The proposed budget must allocate resources aligned with the Organization’s Strategic Plan to achieve strategic results It should ensure transparency by clearly linking required resources to expected outcomes The budget must include estimates for income, expenditures, and transfers of the regular budget and all Funds established by the Assembly, as well as reflect the availability of extra-budgetary resources Additionally, the budget submission should be supported by necessary annexes, explanatory statements, and relevant information requested by the Assembly or Council, along with any further details the Secretary-General considers necessary.
According to Regulation 3.4, the Secretary-General is responsible for presenting an outline of the projected budgetary implications at the first regular session of the Council in the second year of the biennium This ensures transparency and clarity in financial planning for the upcoming period.
"List of outputs", to be annexed to the Strategic Plan for the following biennium
Under Regulation 3.5, the Secretary-General must transmit the proposed budget for the next two-year period to all Member States at least one month before the Assembly's regular session, ensuring timely review The Council is responsible for submitting the proposed budget to the Assembly, accompanied by its comments and recommendations, after its own regular session and prior to the Assembly's session This process ensures transparency and allows Member States adequate time to consider the budget proposal.
In the second year of a biennium, the Assembly is responsible for adopting the budget for the upcoming biennium They must approve budget appropriations by strategic direction, including "Other work," as well as in total for the relevant financial period This process ensures strategic financial planning and governance for the organization.
REGULATION 3.7 The Assembly shall prescribe the conditions under which unforeseen and extraordinary expenses may be incurred
The Secretary-General may submit supplementary or revised budget proposals whenever necessary to ensure effective organizational management These proposals are prepared in a format consistent with the approved budget and are submitted to the Council for approval This process allows for timely adjustments to the budget, supporting the organization’s financial flexibility and operational needs.
103.1.1 The proposed budget, both for income and expenditure, shall be prepared on a gross basis
The Directors are responsible for preparing resource requirement data, including work months, meeting weeks, travel, consultants, and other expenditures, supported by divisional business plans aligned with the Organization's Strategic Plan This comprehensive data must be submitted to the Director of the Administrative Division according to the procedures and deadlines established by the Secretary-General.
The Director of the Administrative Division is responsible for consolidating divisional business plans and essential estimates into a single comprehensive presentation This consolidated report is then submitted to the Secretary-General, in accordance with Article III of the Financial Regulations, to ensure streamlined financial planning and effective oversight.
Divisional business plans must clearly outline specific objectives aligned with the organization's strategic directions, including relevant initiatives from the overall strategic plan These plans should detail measurable deliverables for each objective and include success indicators to assess the effectiveness of their implementation This comprehensive approach ensures that divisional activities are focused, goal-oriented, and contribute to the organization’s strategic progress.
The Directors are required to submit supplementary estimates with explanatory statements to the Director of the Administrative Division whenever necessary These supplementary estimates should closely resemble the original budget in format to ensure clarity and consistency.
Supplementary budget proposals for the current budget period must be reviewed by the Director of the Administrative Division Based on this review, the Secretary-General will decide which proposals should be submitted to the Council This process ensures that additional budget requests are thoroughly evaluated before approval.
103.1.7 Revised budget proposals may be submitted to the Council in respect of the ensuing budget period, as necessary, in the following instances:
The Secretary-General certifies that these activities are of the highest urgency and could not have been anticipated when the initial budget proposals were prepared.
(b) those involving changes in expenditure associated with inflation and currency fluctuations which could not have been foreseen or projected.
APPROPRIATIONS
Regulation 4.1 authorizes the Secretary-General to incur obligations, make payments and transfers, and build reserves within the limits of the appropriations approved by the Assembly This ensures that all financial activities are aligned with the specific purposes and amounts approved, providing clear financial governance.
REGULATION 4.2 The Secretary-General may enter into commitments for future financial periods, provided that such commitments:
(a) are consistent with the Organization’s Strategic Plan for those future financial periods and with the Organization’s normal operating practices; or
(b) are authorized by specific decisions of the Council
Appropriations should be available for the specific financial period they pertain to, as well as for subsequent periods if needed to fulfill commitments made during the original period This ensures that financial resources are appropriately allocated to meet obligations across current and future fiscal periods Proper management of appropriations is essential for maintaining financial accountability and compliance with regulatory requirements.
Under Regulation 4.4, the portion of appropriations needed to settle outstanding legal obligations as of the year's end remains available for twelve months, ensuring sufficient funds for legal commitments.
The Secretary-General is authorized to transfer funds between strategic directions, including "Other work," provided the transfer does not exceed 10% of the lower approved appropriation Transfers exceeding this limit require prior approval from the Council Additionally, the Secretary-General can transfer up to 50% of any uncommitted balance of appropriations from the first to the second financial period within the same strategic direction without Council approval However, transfers above 50% of uncommitted appropriations must receive prior Council approval.
REGULATION 4.6 The Secretary-General shall report to the Council appropriations carried forward or transferred to the following financial year in accordance with the provisions of regulations 4.3 and 4.5
The appropriations approved by the Assembly grant authority to incur obligations and make payments, limited to the allocated amounts for specified purposes However, no expenditures or payments can be made until the Secretary-General issues written allotments.
104.1.2 The assessment of Members, required to meet the appropriations voted by the
Assembly, shall be completed on the basis of the membership of the Organization as at the time the calculation of the assessment is made.
PROVISION OF FUNDS
Regulation 5.1 establishes that appropriations are financed through contributions from Member States based on the assessment scale determined by the Assembly, following the Council's proposals These contributions are subject to adjustments as outlined in Regulation 5.2 Until contributions are received, the appropriations may be temporarily funded from the Working Capital Fund.
REGULATION 5.2 In the assessment of the contributions of Members for each calendar year, adjustments shall be made in respect of:
(a) estimated funding for the work of the Organization from internal and external sources other than assessments;
(b) supplementary appropriations for which contributions have not previously been assessed on the Members
REGULATION 5.3 In respect of contributions for each calendar year, the Secretary-General, during the last two months of the preceding year, shall:
Members are encouraged to fulfill their obligations by making timely annual contributions to the budget and providing advances to the Working Capital Fund It is essential that all Members remit their outstanding contributions and advances promptly to support the organization's financial stability and operational efficiency.
Contributions and advances become due and payable in full within thirty days of receiving the Secretary-General's communication or from the first day of the relevant calendar year, whichever occurs later.
Contributions and advances to the Working Capital Fund shall be assessed in pounds sterling, with payment in currencies determined by the Council based on advice from the Secretary-General.
Payments made by a Member State shall initially be credited to the Working Capital Fund Subsequently, these payments will be applied to the contributions due, following the chronological order in which the Member was assessed This ensures an organized and transparent process for managing contributions and funding.
REGULATION 5.7 The Secretary-General shall submit to the regular session of the Assembly a report on the collection of contributions and advances to the Working Capital Fund
A new Member must contribute according to the scale applied to existing Members in the year it joins, and potentially the following year, including an advance to the Working Capital Fund The contribution for the year of membership is calculated based on the full remaining months after the Convention takes effect for the new Member Payments for that year and the advance are due within thirty days of receiving the Secretary-General’s notification of the Assembly’s determinations, while contributions for the next year follow the payment schedule outlined in regulation 5.4.
Under Regulation 5.9, a Member State that withdraws from the Organization is not entitled to any adjustments regarding contributions paid or assessed If the Organization's latest financial statements indicate net liabilities, the withdrawing Member State will be required to pay a closing contribution proportional to its share of the overall appropriation from the previous financial period This ensures that the Member State's financial responsibilities are settled based on its proportional contribution at the time of withdrawal.
The Secretary-General shall report at each session of the Assembly, the Council, and the Committees on the implementation of Article 61 of the Convention This ensures transparency and accountability in the application of the Convention's provisions Regular reporting by the Secretary-General facilitates oversight and promotes consistent enforcement of the relevant regulations within the Organization.
FUNDS
A General Fund shall be established to manage the Organization's expenditures, unless the Assembly designates other funds per regulation 6.7 Contributions from Member States under regulation 5.1, miscellaneous income, and advances from the Working Capital Fund for general expenses are credited to this fund.
A surplus of revenue over expenditure in a fund during a financial period is credited to the fund's reserves, ensuring financial stability Conversely, if expenditures exceed revenues in a fund, the reserves are debited to reflect the deficit Maintaining accurate reserve accounts helps manage financial health and ensures proper fund management.
A Working Capital Fund shall be established by the Assembly, with its amount and purpose determined periodically New Members joining the Organization are required to make an initial advance to the Fund based on the contribution scale for their year of accession The Fund will be incrementally increased by these advances until the Assembly decides to set a new level for the Working Capital Fund.
REGULATION 6.3 Advances made by Member States to the Working Capital Fund shall be carried to the credit of the Members which have made such advances
Advances from the Working Capital Fund to finance budgetary appropriations during a financial period must be reimbursed promptly once resources become available This ensures the Fund is maintained and replenished efficiently, supporting continuous financial stability Timely reimbursement of these advances is essential for effective financial management and adherence to regulatory guidelines.
Advances from the Working Capital Fund for unforeseen, extraordinary expenses, or other authorized purposes must be reimbursed through the submission of supplementary estimates However, these advances are exempt from reimbursement if they are recoverable from an alternative source.
REGULATION 6.6 Income derived from investments of the Working Capital Fund shall be credited to the General Fund
(a) Trust, reserve and special funds may be established by the Secretary-General or the
The Assembly is responsible for delivering work in accordance with the Organization’s Strategic Plan as needed The Secretary-General must report to the Council on the establishment of any new funds to ensure transparency and proper governance.
The purpose and limits of each trust, reserve, and special fund must be clearly defined by the appropriate authority unless otherwise specified These funds shall be managed in accordance with the established Regulations to ensure proper governance and accountability Clear delineation of each fund’s objectives and scope is essential for effective administration and compliance with regulatory standards.
Following the adoption of a new six-year Strategic Plan by the Assembly, the Secretary-General conducts a comprehensive review of all the Organization’s funds and reserves to evaluate their adequacy, funding levels, and operational mechanisms The findings of this review are then reported to the Council, accompanied by recommendations aimed at enhancing the organization’s financial management and reserve strategies.
106.1.1 The Financial Rules also govern credits made available from the Working Capital
Fund for unforeseen and extraordinary expenses
"Unforeseen expenses refer to costs that arise unexpectedly or incidentally during the execution of a programme in accordance with IMO's approved policies These expenses were not anticipated at the time the initial estimates were prepared."
"Extraordinary expenses" refer to costs for items or objects that fall outside the original budget estimates, meaning they are beyond the scope of the initial program on which the estimates were based.
106.1.4 The Director of Administrative Division shall be responsible to the Secretary-
The preparation of information on all commitments related to unforeseen and extraordinary expenses must be submitted to the Council Additionally, supplementary estimates should be prepared to address these expenses and forwarded to the Assembly for approval.
OTHER INCOME
The Secretary-General has the authority to accept extra-budgetary contributions that align with the Organization’s Strategic Plan These contributions must be used for purpose-specific activities, ensuring consistency with organizational goals Unless resources are provided through the approved budget or alternative funding sources, all direct and indirect costs related to activities funded by extra-budgetary contributions must be fully recovered to ensure financial transparency and sustainability.
REGULATION 7.2 Monies accepted for purposes specified by the donor shall be treated as trust or special funds under regulation 6.7
REGULATION 7.3 Monies accepted in respect of which no purpose is specified shall be treated as miscellaneous income and reported as “gifts” in the accounts
Rule 107.1 EXTRA-BUDGETARY FUNDING AGREEMENTS
Provisions for receiving, managing, reporting, and disbursing extrabudgetary contributions must be documented in written agreements between the Organization and donors The Director of the Administrative Division is responsible for ensuring these agreements comply with Financial Regulations, Financial Rules, and other applicable administrative provisions Standard Operating Procedures will be developed and maintained to specify the appropriate signatory levels and internal review processes for each agreement, ensuring transparency and compliance.
MANAGEMENT OF RESOURCES
REGULATION 8.1 The Secretary-General is responsible to the Council and the Assembly for the proper management of the Organization’s resources
108.1.1 The Director of Administrative Division is responsible to the Secretary-General for the management, receipt and disbursement of all funds of the Organization
108.1.2 Funds of the Organization will be deposited only in banks designated by the
Secretary-General All funds must be deposited in accounts in the name of the Organization and not of individual staff members
The Director of the Administrative Division is responsible for managing all banking accounts of the Organization, including trust and special purpose accounts They maintain a dedicated cash account to record all receipts and payments, ensuring accurate financial tracking within the organization's financial system.
108.1.4 A panel of signatures of approving officials shall be designated by the Secretary-
General and all cheques drawn or electronic payment instructions made on the Organization’s accounts shall be signed and approved by two officials of the appropriate panel
108.1.5 No interest will be payable on sums deposited with or retained by the Organization
Interest earned on investments made for a third party will only be paid if explicitly requested in advance and subject to conditions agreed upon with the Secretary-General.
All certificates and written confirmations of deposits or investments with financial institutions must be obtained in electronic format and securely stored within the Organization’s protected network system folder Access to these files should be restricted solely to authorized officials or staff to ensure confidentiality and data security.
INVESTMENT OF FUNDS
The Secretary-General is tasked with establishing an investment policy for managing surplus cash Under this policy, the Secretary-General may make short-term investments, lasting less than one year, for funds not immediately required Furthermore, the Secretary-General is responsible for periodically informing the Council about these investments to ensure transparency and accountability.
Under Regulation 9.2, the Secretary-General is authorized to make long-term investments exceeding one year, utilizing cash reserves not required in the short term, based on careful projected cash flow estimates This process must adhere to the established investment policy and involve consultation with the Council to ensure sound financial management and strategic investment decisions.
REGULATION 9.3 Income derived from investments shall be credited as provided in the rules relating to each fund
REGULATION 10.1 The Secretary-General shall:
(a) establish detailed financial rules and procedures in order to ensure effective financial administration and the exercise of economy;
All payments should be authorized only when supported by vouchers and documents that verify the receipt of goods or services and confirm that no previous payment has been made Ensuring proper documentation is essential for maintaining financial accuracy and transparency.
(c) designate the officers who may receive monies, incur obligations and make payments on behalf of the Organization;
(d) maintain an internal financial control which shall provide for an effective current examination and/or review of financial transactions in order to ensure:
(i) the regularity of the receipt, custody, and disposal of all funds and other financial resources of the Organization;
Ensuring that obligations and expenditures comply with the appropriations or other financial provisions approved by the Assembly is essential Additionally, adherence to the objectives and regulations governing trust and other special funds is critical for maintaining financial integrity and accountability.
(iii) the economic use of the resources of the Organization
REGULATION 10.2 No obligations shall be incurred until allotments or other appropriate authorizations have been made in writing under the authority of the Secretary-General
Under Regulation 10.3, the Secretary-General is authorized to make ex gratia payments deemed necessary for the organization's interests These payments must be accompanied by a detailed statement submitted to the Assembly along with the organization's financial statements, ensuring transparency and accountability.
Regulation 10.4 grants the Secretary-General the authority to write off losses of cash, stores, and other assets after a thorough investigation All amounts written off must be documented with a comprehensive statement and submitted to the External Auditor alongside the financial statements, ensuring transparency and accountability in financial reporting.
110.1.1 Requests for allotments for specific purposes shall be submitted in writing to the
110.1.2 Allotments shall be issued for any expenditure to be incurred by the Organization irrespective of the source of funds, including any expenditure to be made on a reimbursable basis
110.1.3 The Director of Administrative Division shall ensure that allotments are issued in accordance with the appropriate resolution and the policies of the Assembly and the Council
110.1.4 Officials to whom allotments are issued are responsible to the Secretary-General for the correct use of such allotments
110.2.1 Only those officials designated in writing by the Secretary-General are authorized to incur obligations against allotments
110.2.2 Obligations may be incurred only for the purpose indicated on the allotment and may not exceed the amount of the allotment
Proposals to incur obligations should primarily be submitted through the financial accounting system and must be thoroughly documented These proposals need to clearly specify the purpose of the proposed expenditure and identify the allotment to be charged, ensuring transparency and proper financial oversight.
110.2.4 One or more officers shall be appointed as certifying officers (budget holders) and shall be responsible for examining the proposed obligations to ensure that:
(b) the rules and regulations and procedures of the Organization are being observed;
(c) the financial situation of the Organization will not be prejudiced;
(d) the purpose of the proposed expenditure is in the interest of the work of the Organization
Alternates may be appointed to act in the absence of the certifying officer
110.2.5 The Director of Administrative Division shall reject any proposals for obligation or expenditure not complying with the provisions of rule 110.2.4
110.2.6 Revision of any obligations shall require the same treatment as the original obligation
According to section 110.3.1, contracts or purchase orders should generally not require advance payment for goods or services Exceptions are permitted only when normal commercial practice dictates such arrangements This policy helps ensure the organization's financial protocols are maintained and minimizes prepayment risks.
110.3.2 The Secretary-General may, when he or she deems it in the interests of the
Organization to do so, authorize progress payments
110.3.3 Payments shall not be made unless supporting documents are certified by the appropriate officials, confirming that:
(a) services have been rendered or delivery has been completed in accordance with the terms of the contract;
(b) the amount is correct and in accordance with the terms of the contract
110.3.4 Should the Director of Administrative Division feel there is any reason why payment of any claim should be withheld; such claim shall be referred to the Secretary- General
Staff members' claims submitted more than one year late are generally excluded from consideration, except for insurance or pension settlement claims.
110.4.1 Imprest cash advances of an amount to be fixed in each case shall be made where necessary to officials designated by the Secretary-General
110.4.2 Officials to whom an imprest cash advance is issued are responsible for these advances and must at all times be in a position to account for them
110.5.1 Travel advances may be made on request to officials to whom official travel authorizations have been issued Such advances are to be used in accordance with the provisions of the travel rules and must be accounted for when the travel is completed
110.5.2 Salary advances may be given to staff members, in accordance with staff rule
110.6.1 Asset records will be maintained of all property, plant and equipment, inventories and intangible and heritage assets, however acquired and from whatever source, containing full details
110.6.2 An annual physical inventory will be taken as at 31 December of each year of all assets recorded and accounted for in the system A copy of this inventory will be furnished to the External Auditor
110.6.3 The Secretary-General may declare property to be surplus if it is of no further use to the Organization
110.6.4 Surplus property shall be sold for the best possible returns to the Organization except:
(a) when the exchange of surplus property in partial payment for new articles will be more advantageous to the Organization than the sale of surplus property and separate purchase of new articles;
(b) when the destruction of the surplus or unserviceable material will be more economical, is required by law, or when the confidential nature of the materials so warrants;
(c) when the best interests of the Organization will be served by disposal by gift or at nominal prices to a non-profit organization
Goods and services can be supplied to Governments, the United Nations, specialized agencies, and other international organizations either on a reimbursable or reciprocal basis These transactions are conducted under terms and conditions set forth by the Secretary-General to ensure clarity and compliance.
110.7.1 Contracts for the purchase of services, supplies, equipment or other requirements shall be entered into for and on behalf of the Organization only by duly authorized officials
110.7.2 All purchases and contracts of over £30,000 (or its equivalent in US Dollars for
Field Technical Co-operation Projects) shall be made by tender, and subject to provisions of the Procurement Manual
Contracts are generally awarded to the lowest tender, but if conditions make accepting the lowest bid undesirable, the Secretary-General has the authority to approve a different tender Additionally, when necessary for the Organization's best interests, the Secretary-General may authorize the rejection of all tenders.
The Director of the Administrative Division reports directly to the Secretary-General and is responsible for establishing and maintaining effective internal controls over the Organization's financial transactions and other designated operations Ensuring robust internal control systems is essential for safeguarding assets and promoting transparency within the Organization This role is vital in supporting the Organization's commitment to sound financial management and operational integrity.
TO THE FINANCIAL REGULATIONS
The External Auditor is responsible for conducting a comprehensive audit of the Organization's accounts, including all trust funds and special accounts, to ensure accuracy and compliance This process allows the auditor to thoroughly assess the financial integrity of the Organization and verify that all financial records are properly maintained and reported.
(a) that the financial statements are in accord with the books and records of the Organization;
(b) that the financial transactions reflected in the statements have been in accordance with the rules and regulations, the budgetary provisions and other applicable directives;
(c) that the securities and monies on deposit and on hand have been verified by certificate received direct from the Organization's depositaries or by actual count;
(d) that the internal controls, including the internal audit, are adequate in the light of the extent of reliance placed thereon; and
(e) that procedures satisfactory to the External Auditor have been applied to the recording of all assets, liabilities, surpluses and deficits
The External Auditor has the exclusive authority to determine the validity of certifications and representations made by the Secretary General, either fully or partially They are entitled to conduct a thorough examination and verification of all financial records, including those related to supplies and equipment, ensuring transparency and accountability in the organization’s financial management.
The External Auditor and their staff shall have unrestricted access to all necessary books, records, and documentation at convenient times to perform the audit effectively Privileged and confidential information required for the audit will be made available upon application and must be handled with strict confidentiality, respecting their classified nature The External Auditor is responsible for notifying the Council if access to any privileged information is denied when needed for audit purposes, ensuring transparency and accountability.
The External Auditor does not have the authority to disallow items in the accounts but must alert the Secretary General to any transactions raising doubts about their legality or propriety Any audit objections identified during the examination of accounts should be promptly communicated to the Secretary General for appropriate action, ensuring transparency and accountability in financial management.
The External Auditor is required to provide a clear, signed opinion stating that they have examined the financial statements and schedules of the International Maritime Organization for the specified year Their examination includes a general review of accounting procedures and necessary tests of records and supporting evidence Based on this review, the auditor's opinion will confirm the accuracy and fairness of the financial statements, clearly indicating whether they present a true and fair view of the Organization’s financial position This process ensures transparency and compliance with relevant auditing standards.
(a) the financial statements present fairly the financial position as at the end of the period and the results of its operations for the year then ended;
(b) the financial statements were prepared in accordance with the stated accounting principles;
(c) the accounting principles were applied on a basis consistent with that of the preceding financial year;
(d) transactions were in accordance with the Financial Regulations and legislative authority
6 The report of the External Auditor to the IMO Assembly on the financial operations of the year should mention:
(a) the type and scope of his or her examination;
(b) matters affecting the completeness or accuracy of the accounts, including where appropriate:
(i) information necessary to the correct interpretation of the accounts;
(ii) any amounts which ought to have been received but which have not been brought to account;
(iii) any amounts for which a legal or contingent obligation exists and which have not been recorded or reflected in the financial statements;
(iv) expenditures not properly substantiated;
Ensuring that proper books of accounts are maintained is essential for accurate financial reporting Any material deviations from generally accepted accounting principles in the presentation of statements must be disclosed clearly, especially when such deviations are applied consistently Additionally, other relevant matters that require the attention of the Assembly should be highlighted to promote transparency and informed decision-making.
(i) cases of fraud or presumptive fraud;
(ii) wasteful or improper expenditure of the Organization’s money or other assets (notwithstanding that the accounting for the transaction may be correct);
Identifying potential expenditure is crucial, especially when it may commit the Organization to significant future outlays Additionally, any flaws in the overall system or detailed regulations governing the control of receipts, disbursements, supplies, and equipment can pose substantial risks to operational efficiency and financial integrity Ensuring robust controls and regulatory compliance is essential for maintaining organizational stability and accountability.
(v) expenditure not in accordance with the intention of the Assembly after making allowance for duly authorized transfers within the budget;
(vi) expenditure in excess of appropriations as amended by duly authorized transfers within the budget;
(vii) expenditure not in conformity with the authority which governs it;
(d) the accuracy or otherwise of the supplies and equipment records as determined by stocktaking and examination of the records
In addition, the reports may contain reference to:
Transactions from previous years, for which additional information has now been obtained, should be reviewed, and any new transactions in subsequent years that warrant early knowledge by the Assembly must also be reported This ensures transparency and timely oversight of relevant economic activities.
The External Auditor is authorized to provide observations and comments based on their audit findings, which they may communicate to the Council, the Assembly, or the Secretary-General These insights offer valuable oversight of the Secretary-General’s financial report, ensuring transparency and accountability.
When the External Auditor’s scope of audit is restricted or insufficient evidence cannot be obtained, the auditor must include this in their opinion and report, clearly explaining the reasons for their comments and the impact on the financial position and transactions recorded.
The External Auditor must ensure to provide the Secretary-General with a fair opportunity to explain any observations before including any criticisms in their report This process safeguards transparency and ensures that audit comments are based on a comprehensive understanding of the issues Adhering to this protocol upholds professional standards and maintains the integrity of the audit process.
10 The External Auditor is not required to mention any matter referred to in the foregoing which, in his or her opinion, is insignificant in all respects
TO THE FINANCIAL REGULATIONS
The Internal Oversight Services (IOS) was established to unify internal audit, evaluation, and investigation functions under one oversight mechanism, supporting the Secretary-General in implementing Financial Regulation 10.1 IOS provides independent, objective assurance, reviews, and advice aimed at enhancing the effectiveness of risk management, internal controls, and results-based management processes Its role is to add value and improve the organization’s ability to achieve its objectives through comprehensive oversight and continuous improvement.
The Head of IOS is appointed and can only be terminated by the Secretary-General, ensuring high-level oversight and accountability Reporting directly to the Secretary-General, the Head of IOS maintains the independence essential for the organization's oversight functions IOS operates independently from other parts of the Organization to preserve objectivity and impartiality Staff members of IOS are prohibited from holding managerial roles or performing operational tasks to prevent conflicts of interest, with exceptions only in rare cases approved by the Secretary-General To support its effective functioning, the Secretary-General is responsible for providing necessary resources, including appropriate staffing, sufficient funds, and specialized training, thereby safeguarding IOS's independence and operational integrity.
The primary objectives of internal audit are to verify that management has established clear policies and procedures, and to ensure the presence of an adequate and effective internal control system This provides assurance regarding the organization's compliance, operational efficiency, and risk management Internal audits help assess whether controls are functioning properly to safeguard assets and ensure reliable financial reporting Ultimately, internal audit supports management in achieving organizational goals through systematic evaluation and improvement of internal controls.
(a) integrity of financial information; compliance with established regulations, rules, policies and procedures in all operations; and the safeguarding of the assets of the Organization;
(b) the economic, efficient and effective use of resources in operations and identifying opportunities for improvements; and
(c) effectiveness of programme management for achieving stated objectives consistent with policies, plans and budgets
The primary objectives of evaluation are to assess the efficiency, effectiveness, relevance, impact, and sustainability of the Organization's programs, projects, and activities in relation to their stated goals Evaluation also aims to provide actionable recommendations for corrective measures to enhance program delivery and overall effectiveness Additionally, it ensures that evaluation findings are integrated into programming and operational adjustments to foster continuous improvement.
The primary objective of the investigation is to examine allegations of misconduct that violate the organization's rules, regulations, and relevant administrative policies It aims to identify acts of mismanagement, abuse of authority, waste, and abuse by staff members to ensure organizational integrity and accountability.
6 In undertaking their activities and responsibilities, staff members of IOS shall have the following authority:
The organization must provide complete, prompt, and unrestricted access to all records, documents, assets, and premises deemed relevant by the Head of IOS This ensures thorough review and transparency in the review process, facilitating effective assessment of the subject matter under consideration.
(b) the right to communicate directly with all levels of staff and management, pursuant to the discharge of their own responsibilities; and
Staff members are required to provide all necessary information and explanations upon the request of the Head of IOS, ensuring full cooperation to effectively fulfill their responsibilities.
7 IOS staff shall be responsible for maintaining the confidentiality of all information obtained in the course of their work
IOS has no direct authority or responsibility for the organization's operations beyond the responsibilities outlined in these Terms of Reference IOS's role does not substitute or relieve staff members of their assigned responsibilities, emphasizing their accountability.
The Head of IOS is responsible for preparing an annual work plan aligned with recognized internal auditing standards and available resources This comprehensive plan must then be approved by the Secretary-General to ensure it aligns with organizational goals and priorities.
Under the annual plan, the Secretary-General or the Head of IOS may authorize special audits, evaluations, or investigations when required by specific management requests or in response to particular circumstances These targeted assessments ensure thorough oversight beyond routine procedures, addressing urgent or unique issues as they arise This flexibility enhances the organization’s ability to maintain transparency and accountability in critical areas.
SCOPE AND STANDARDS OF WORK
11 The scope of work of IOS shall encompass all activities undertaken by the Organization for which the Secretary-General has responsibility
IOS 12 shall conduct its audit functions in accordance with the Standards for Professional Practices of Internal Auditing established by the Institute of Internal Auditors, ensuring adherence to international best practices Additionally, IOS 12 is committed to upholding the Code of Ethics adopted by the Institute of Internal Auditors, as endorsed during the 33rd Meeting of the Representatives of Internal Audit Services of the United Nations and Multilateral Financial Institutions on June 6, 2002, promoting integrity and professionalism across its auditing activities.