1. Office of the Inspector General
Status of OIG Recommendations & Plan to enhance their monitoring
OAS/OIG, November 2017

2. Review of OIG Recommendations with the CAAP
Agenda
Status of OIG Recommendations as of November 17, 2017
Plan to Enhance Monitoring of OIG Recommendations
November 2017
Review of OIG Recommendations with the CAAP

3. Overview of OIG Recommendations Activity
13 out of 66 closed recommendations in 2017 correspond to an OIG’s review of no longer applicable ones as recommended by the Board of External Auditors.
Corrections: 2015 and 2016 Investigations recommendations not accounted for in previous reports
November 2017
Review of OIG Recommendations with the CAAP

4. Overview of OIG Recommendations Activity by Secretariat
Responsible Area
Audit
Sub-Total
Investig.
Total
High
Medium
Low
Secretariat for Administration and Finance 36 9 - 45 23 68
Strategic Counsel for Organizational Development 7 2 1 10
Office of the Assistant Secretary General 3 4 8
Executive Secretariat for Integral Development
Secretariat for Access to Rights and Equity
Office of the Secretary General
Secretariat for Multidimensional Security
Secretariat for Legal Affairs
Secretariat for Strengthening Democracy
Secretariat for Hemispheric Affairs
Inter-American Defense Board
Total GS/OAS Open Recommendations 49 21 71 28 99
November 2017
Review of OIG Recommendations with the CAAP

5. High risk recommendations
49 recommendations rated as “high-risk” remained open as of November 15, 2017.
The Board of External Auditors (BEA) advised the OIG to review all open audit recommendations including a reevaluation of its rating. They noted that at the time of their review approximately 65% of all audit recommendations were ranked as “high”, which in their opinion can be not practical for management to immediately act on every recommendation.
The quarterly review process of OIG’s recommendations introduced by the CAAP has demonstrated to be a valuable support the Organization, to ensure the Secretariat moves ahead in implementing recommendations. Nonetheless , the review suggested by the BEA should be addressed by the OIG to ensure a prompt response from Management to the most important and relevant subjects.
Considering the existing OIG’s ongoing initiatives and priorities (details in Appendix 2 & Appendix 3), the OIG plans to address the BEA’s recommendation on Q1/2018. That activity should lead to a reduction of the number of recommendations rated as “high-risk” which are the ones the Organization should focus with priority and act upon.
Appendix 1 shows the list of all current open “high-risk” recommendations.
November 2017
Review of OIG Recommendations with the CAAP

6. Review of OIG Recommendations with the CAAP
Agenda
Status of OIG Recommendations as of November 17,2017
Plan to Enhance Monitoring of OIG Recommendations
November 2017
Review of OIG Recommendations with the CAAP

7. Review of OIG Recommendations with the CAAP
Open OIG recommendations have remain steady in around 100/year which suggests the monitoring process should be reviewed in order to pursue a higher level of effectiveness
Process Strengths
Quarterly review process of OIG’s recommendations introduced by the CAAP is enhancing management’s attention.
A best in class software (TeamMate) for audit management in place at the OIG.
Improvement Opportunities
Increase the frequency of OIG’s monitoring and reporting.
Ensure an appropriate prioritization of recommendations by introducing rating criteria.
Enhance clarity of specific actions required from management to close recommendations.
Ensure new audit recommendations are valid, feasible and understood by discussing them in audit exit meetings.
November 2017
Review of OIG Recommendations with the CAAP

8. Review of OIG Recommendations with the CAAP
Objectives in the OIG Mid-Term Plan addressing the improvement opportunities noted
Year
Action
Purpose
2017
Foster management’s engagement with audit recommendations
Enhance Secretariat’s attention to new OIG recommendations by ensuring those are valid, understood, risk-based, feasible and address the root cause of the issue
2018
Enhance monitoring process
Implement a comprehensive plan to:
Reduce the existing open recommendations to a manageable level
Implement an effective and systematic follow-up process to monitor and ensure that management actions are effectively implemented or that senior management has accepted the risk of not taking action
2019
Automate the follow-up process through TeamMate/TeamCentral
Enhance process efficiency
November 2017
Review of OIG Recommendations with the CAAP

9. 2017: Fostering management’s engagement with audit recommendations
As part of our quality assurance process, we are ensuring that our audit observations are risk-based.
In order to promote management’s engagement with audit observations, the OIG is now coordinating exit meetings after audit completions. Mutual understanding is pursued in those meetings and the following principles are promoted:
The audit process should be seen as a tool for continuous improvement.
Every finding only once! (i.e. focus on addressing the root cause of the issue).
November 2017
Review of OIG Recommendations with the CAAP

10. 2018: Plan to enhance OIG’s recommendations monitoring
Action
Purpose
1. Review audit approach
Introduction of agreed SMART actions in the audit reports.
Introduce criteria for audit observation’s rating.
Apply IIA’s recommendations for small internal audit activities in compliance with Standard 2500 – Monitoring Progress
Enhance clarity of OIG recommendations
Ensure a risk-based criteria to establish priorities.
Use OIG’s scarce resources optimally.
2. Re-assess existing open recommendations
Re-assess the rating using new criteria
Apply IIA’s recommendations for small internal audit activities in compliance with Standard 2500 – Monitoring Progress
Conduct follow - up audits
Reduce the existing open recommendations to a manageable level and ensure the focus of attention is given to the most relevant issues.
3. Report recommendation status every 2 months to the Secretariats and quarterly to the CAAP.
Time for monitoring will be allocated in the OIG’s resource planning process.
Enhance management attention by means of a systematic reporting.
LIST OF ACRONYMS USED: IIA = The Institute of Internal Auditors; SMART = Specific, Measurable, Achievable, Responsible person, Time; CAAP=Committee on Administrative and Budgetary Affairs

11. Introduction of agreed SMART actions in the audit reports
SMART acronyms stands for:
Specific, Measurable, Achievable, Responsible person, Time.
Current audit reports have:
OIG recommendation
Management response
New audit reports will include:
OIG recommendation
Management comments (if any).
Specific agreed management action, including due date and person responsible for its implementation.
November 2017
Review of OIG Recommendations with the CAAP

12. Introduction of criteria for observation’s ratings
Type of Observation
Low
Medium
High
Financial impact
Potential financial impact below USD 80,000 a year
Potential financial impact below USD 800,000 a year
Potential financial impact equal to or above USD 800,000 a year
Policies compliance
Few occurrences with limited potential damage
Some occurrences with potential damage
Significant control weakness that might prevent OAS from pursuing its objectives
DRAFT FOR ILLUSTRATION PURPOSES
November 2017
Review of OIG Recommendations with the CAAP

13. IIA’s recommendations for small internal audit activities -
IIA’s recommendations for small internal audit activities - * In Compliance with Standard 2500 – Monitoring Progress
Existing open recommendations:
Once re-assessed, hand over to management those rated Medium or Low Priority
New recommendations:
OIG commits to follow - up only on those rated High or Medium Priority
*The Institute of Internal Auditors (IIA) defines a small audit activity as one which typically will have one or more of these characteristics: One to five auditors; Productive internal audit hours below 7,500 a year; Limited level of co-sourcing or out-sourcing.

14. Review of OIG Recommendations with the CAAP
Appendixes
November 2017
Review of OIG Recommendations with the CAAP

15. Review of OIG Recommendations with the CAAP
Appendix 1 – List of all Open High-Risk Recommendations as of November
November 2017
Review of OIG Recommendations with the CAAP

16. Appendix 2: OIG – Operational Road Map 2017 - 2019
2018
2019
Long Term Ambition
- Define and establish performance indicators
- Promote an AC
- OIG’s Online Portal
- Update Executive Order 95-05
- Explore Data Analytics
Optimized processes led by a learning organization.
Continuous Improvement
- Conclude audits 2017
- Enhance monitoring process
- Update risk-based plan
- Audit Charter
- Quality Assessment
- Update manual
- Implement Quality Assessment recommendations
- Develop Standard Audit Programs
- Automated follow - up (Team Central)
- Self-assessment
- Foster management’s engagement with audit recommendations
- Complete or substantially finalize the audit plan
Certified audit activity that provides value added recommendations, monitors agreed actions and ultimately helps OAS achieve its objectives through world-class audit services.
Audit Activities
Investigation
Activities
- Update manual
- Review Harassment Policy
Diligent and expeditious investigations that strengthen OAS transparency & accountability.
- Conduct a Peer Review
- Reduce backlog
People
- CPE fulfillment
- Preparation for Quality Assessment
- Initiate recruitment process
- CPE fulfillment
- Conclude recruitment process
- Introduce IDPs
- CPE fulfillment
- IDP monitoring
- Increase CIA/CFE team members
A team that attracts and develops talent.
LIST OF ACRONYMS USED: OIG= Office of the Inspector General, AC= Audit Committee, QAIP=Quality Assurance and Improvement Program, CPE=Continuing Professional Education, IDP=Individual Development Plan, CIA = Certified Internal Auditor, CFE= Certified Fraud Examiner
Objectives in red are those related to the plan to improve the monitoring of OIG Recommendations

17. Appendix 3: Overview of OIG’s activity 2017
October 2017
OIG Mid Term Plan