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GA Endorses Terms of Reference for the IAAC and the Strengthening of the OIOS

8 June 2007

Fifth Committee delegates finally closed discussions today on the draft resolution for the strengthening of the OIOS. The draft resolution also contains the terms of reference (TOR) for the Independent Audit Advisory Committee (IAAC).

The TOR approved for the IAAC represent a compromise between all parties. Disagreements amongst Member States concerned the extent of independence of the Committee, and the criteria of membership and modus of election of its candidates.

With respect to the modus for the election of the members of the Committee, the idea of instituting a nominating committee was abandoned. Member States will instead propose 10 candidates, based on regional and geographical representation for the General Assembly’s approval. It is envisaged that regional groups will propose their candidates for the IAAC. The draft resolution recommends that the candidates be evaluated and attested through consultations with an external relevant institution, such as the International Organization of Supreme Audit Institutions (INTOSAI). The evaluation of the candidates would be made available to all Member States. Even though the draft resolution does not contain strong language in this regard, western countries would have wished for such referral to be obligatory, it is highly likely that candidates who have been attested and evaluated, by INTOSAI or other analogous organizations, will have a better chance to be voted on the Committee.

In regards to the possibility of re-election of members, which the western countries had opposed during consultations, it was decided that members will be appointed on the Committee for a term of three years with the possibility to have their membership renewed once. Members will thus be able to serve a maximum of 6 years each, with the exception of the first members elected, 2 of which will be appointed for 4 years with the possibility to renew their membership.

TOR for the IAAC will be reviewed in 3 years time and adjustments made when necessary.

  1. IAAC TIMELINE

As far as the strengthening of the Office of Internal Oversight Services, Fifth delegates agreed to the revised estimates as suggested by ACABQ. Thus, a few more posts have been approved for the audit and investigation section of the OIOS.

The discussion on the revision of the funding arrangements of the OIOS, which greatly contribute to the inefficiency of the office in carrying out its audit tasks, was deferred to the 62nd session of the GA.

Problems with OIOS funding arrangements:
During the general discussion at the Fifth Committee, the Under Secretary-General of the OIOS, Ms. Inga-Britt Ahlenius underlined how the main obstacle to OIOS independence is problems surrounding its funding arrangement for operations. According to the report on funding arrangements (A/61/810), two main issues need to be tackled in order to guarantee OIOS operational independence:

  1. The OIOS budget is subject to the review of the Department of Management which OIOS has oversight responsibility for;
  2. The OIOS negotiates funding for a third of its activities with the entities it is chartered to audit.

Such a funding mechanism has a negative impact on the independence of the internal audit activity since the funding condition allows the auditee to influence, if not control, the audit process. For further details, please see: Fifth Committee Report: Week of 7-11 May 2007.

For more information about the negotiations on the reform of governance and oversight at the Fifth Committee please see:

  1. Fifth Committee Report: 1-8 June 2007
  2. Fifth Committee Report: 14-29 May 2007
  3. Fifth Committee Report: 7-11 May 2007

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