Office of the Inspector General 2009 Annual and Activity Reports Summary Presented by Oscar Chavera, Acting Inspector General

2 OIG Overview The internal audit function is established by Article 117 of the General Standards. Executive Order declares the responsibility, purpose and authority of the Office of the Inspector General with respect to internal audits. Internal auditing is a management control that operates by measuring and evaluating the effectiveness of other management controls. The internal audit function undertakes the following audit types: Compliance and Performance Operational and Financial Investigative Information Technology

3 OIG Overview The OIG during 2009 had 7 staff members to perform the audit functions, including those that are administrative. 6 Positions financed by the Regular Fund 1 Position financed by ICR OIG Staff The OIG reports directly to the Secretary General on the results of the audits. OIG Annual and Activity Reports are transmitted to the Permanent Council and CAAP. OIG is responsible for reporting to the Board of External Auditors on the issuance of all reports submitted to the SG. While performing its functions the OIG have no direct authority over or responsibility for any of the operations or activities reviewed.

Internal Audit Activities

Audit Activities The OIG activities that were completed or initiated during 2009 issued 9 audits and 1 investigation. All OIG submitted reports were approved by the Secretary General. Our work was focused with particular emphasis on the proposals made by the Board of External Auditors and operations with the highest potential for increased effectiveness, economy and efficiency. Additionally, our activities also consider the GS/OAS annual operating plan and include: Investigations requested by the SG and Member States Audits of specific operations, processes, areas or departments at Headquarters Audits of the Offices and Units of the General Secretariat in the Member States and specific fund projects Audits or Evaluations not contemplated in the Work Plan Most of the audits are performed in-house; however when a different level of expertise is required, outsource services with in-house management is used.

6 Audits and Investigations during 2009 AUDITSTATUS OF RECOMMENDATIONS TOTAL % of Total AUDIT #NameType ●●● 01/09OASES Data IntegrityOperational /09GS/OAS El SalvadorCompliance /09GS/OAS Costa RicaCompliance /09GS/OAS DominicaCompliance /09GS/OAS St. LuciaCompliance /09GS/OAS JamaicaCompliance /09GS/OAS PeruCompliance /09ScholarshipOperational /09Portal of the AmericasOperational INVESTIGATIONSSTATUS OF RECOMMENDATIONS TOTAL% INV. #NameType ●●● 01/09GS/OAS BoliviaCompliance TOTAL In accordance with Article 119 of the General standards, OIG reports are available to the Permanent Council upon request. ● IMPLEMENTED ● IN PROGRESS ● OUTSTANDING

7 Summary of Recommendations The number of recommendations issued during 2009 represents a significant reduction of at least of 50% in comparison to previous years. This reduction is a good indicator of the efforts made by the GS/OAS for continuous improvements in internal control and policy implementation. YEAR No. of Recommendations Total ●●● % to previous year HighMediumLow % % % TOTAL ●IMPLEMENTED●IN PROGRESS●OUTSTANDING During the auditing process, many findings identified were corrected prior to finalizing the report and therefore were not considered as recommendations.

8 To the GS/OAS Offices in the Member States: (a) effective supervision and training and (b) improve financial and administrative processes. Improvements in the administration and monitoring of FEMCIDI projects. Improve Fellowship Management System (FMS) online application mechanism. Comply with OAS directives regarding the Scholarships Capital Fund. Educational Portal of the Americas improvements to: (a) technical infrastructure, (b) website, (c) search engine and (d) financial management of virtual courses. Develop and implement vendor policy based on industry best business practices. Develop, test and implement OASES alerts Sample of Recommendations

9 Follow-Up The OIG monitors all recommendations issued. To be effective and facilitate achievements of programs and objectives, audit recommendations must be implemented. Outstanding recommendations from prior years – 2006: four (4) are still in progress. YEAR 2009No. of Recommendations Status ●●● High12642 Medium1284 Low211 Total ● Implemented ● In Progress ● Awaiting Management Response

10 Effect on GS/OAS activities as a result of OIG recommendations The OIG relies on actions taken by management to implement the recommendations. Results of recommendations implemented or in progress include the following: Segregation of duties - Vendors administration moved from DFAMS to OPS New OASES alerts were implemented New appointments in GS/OAS Bolivia Improvements of internal control in the following offices: GS/OAS Jamaica GS/OAS Peru GS/OAS Costa Rica Virtual Courses - New platform being implemented for EPA Updates to FMS functionality

Work Plan Annex 3 of CP/doc. 4536/ Audit activities were based on the OIG Work Plan and focused on areas of Significant Risk and recommendations from the Board of External Auditors and include: AuditTechnical Area/Subject Last Audit Current StatusAudit Number 1Credit Cards-CompletedSG/OIG/AUDIT-01/10 2Office of Procurement-Draft sent for commentsSG/OIG/AUDIT-05/10 3Travel2004DraftedSG/OIG/AUDIT-04/10 4Payroll Processes-80% ProgressSG/OIG/AUDIT-06/10 5Taxes200180% ProgressSG/OIG/AUDIT-07/10 6CPR Processes2006Not Performed 7GS/OAS Guyana2007CompletedSG/OIG/AUDIT-03/10 8GS/OAS St. Vincent and Grenadines2002CompletedSG/OIG/AUDIT-02/10 9Selected Chile FEMCIDI Projects1994Not Performed 10Colombia FEMCIDI and Specific Projects1994DraftedSG/OIG/AUDIT-08/10 11GS/OAS Mexico and Selected Projects2002DraftedSG/OIG/AUDIT-09/10 12Dominica Republic2003DraftedSG/OIG/AUDIT-10/10 13Honduras2006Not Performed 14OASES2009Not Performed

12 Thank You To the Member States, the Secretary General and the General Secretariat for their continued support to the Office of the Inspector General. To the OIG team for their dedication, hard work and commitment. OIG contact informationHotline (202) (fax) The OIG is responsible for maintaining a Hotline which allows allegations to be reported to the Inspector General in person, by telephone, by , by facsimile, by regular mail or anonymously.