The Board of Auditors has approved 28 reports at its seventy-second regular session at United Nations Headquarters in New York, held from 24 to 25 July. The United Nations peacekeeping operations report was approved in January and the Audit Operation Committee approved an additional three reports on the Board’s behalf, resulting in the issuance of a total of 32 reports. The Board audited the financial statement of 23 entities with a total of approximately $48.2 billion in revenue, $36.5 billion in expenses and $107.2 billion in assets.
All 23 entities received unqualified audit opinions. Of those, the International Tribunal for the Former Yugoslavia, which had ceased to be a going concern on 31 December 2017 on completion of its mandate, received an unqualified opinion with an emphasis of matter. The Tribunal completed amalgamation of the remaining activities with the United Nations International Residual Mechanism for Criminal Tribunals as at 1 January 2018.
The Board observed from the analysis of the financial statements of 18 audited entities (peacekeeping operations excluded), covered in its Concise Summary Report, that 13 entities closed the financial year with a surplus, while 5 entities recorded a deficit.
The United Nations Treasury maintains a cash pool to invest the pooled amount of participating entities. As at 31 December 2017, a total of nine entities were participating in the cash pool maintained by the United Nations Treasury, which manages total assets of $8.09 billion under its investment pool. Similarly, the United Nations Development Programme (UNDP) managed a total of $5.67 billion in investments for its own programme and for other United Nations entities under service agreements. Four entities are not participating in any cash/investment pool. In the Board’s opinion, cash and investment pooling is the most desirable model for ensuring effective cash and investment management. This decreases the cost of transactions and provides expert investment management services to the participating entities.
The United Nations entities have significant employee benefits liabilities. For 17 entities, such liabilities were more than one fourth (25 per cent) of total liabilities; for 11 entities, they were more than half of total liabilities. They were as high as 97.65 per cent of total liabilities for the United Nations Capital Development Fund and more than 75 per cent of total liabilities for the United Nations (Vol. I), United Nations Populations Fund (UNFPA), United Nations Institute for Training and Research (UNITAR), United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA), Office of the United Nations High Commissioner for Refugees (UNHCR) and the United Nations International Residual Mechanism for Criminal Tribunals. The Board noted that seven entities had no funding arrangements for employee benefit liabilities.
In United Nations (Vol. I), the Board had noted in its previous report (document A/70/5/Vol. I) that existing arrangements with many service providers for health insurance had not been reviewed for many years and that agreements with service providers were not up to date, with some agreements not updated since 2000. The Board also noted that the current binding documents between the United Nations and third-party administrators are not uniform/standardized. The Board had also noted that the United Nations does not have independent assurance over the accuracy of claims paid and whether the third-party administrators are meeting their contractual obligations, as the last “open‑book” examination of third-party administrators’ performance was done in 2009 and had recommended that arrangements be made to conduct an open book audit of the third-party administrators to provide assurance over the accuracy of reported costs and activities performed by the third-party administrators, and to confirm that they have complied with their contractual obligations.
Several issues were noted relating to delayed release of funds to implementing partners and the assurance activities of these expenditures. Given that this is a vital instrument for delivery of United Nations activities, the system needs to be strengthened.
The Board has recommended many improvements in strengthening the safety and security controls.
The Board of Auditors’ reports will be published by August/September and will be available on the Board’s website at www.un.org/en/auditors/board/, and the Official Document System of the United Nations at https://documents.un.org.
List of Members
The Board comprises Rajiv Mehrishi, Comptroller and Auditor General of India (Chair); Kay Scheller, President of the German Federal Court of Auditors; and Jorge Bermudez Soto, Comptroller General of Chile. Each member has a non‑consecutive tenure of six years.