Udenrigsudvalget 2013-14, Klima-, Energi- og Bygningsudvalget 2013-14
URU Alm.del Bilag 13, KEB Alm.del Bilag 31
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Measures and Plans Concerning theBoard of Audit and Inspection’s AuditFindings on the GGGIGGGI’s Implementation Status Update by Finance, HR, Legal,GGP&I and OIA (as of May 24, 2013)Information in this report is each unit’s representation and may be subject to audit by Office ofInternal Audit (OIA) in the future.
2012. 12. 00(0)
Global Green Growth Institute
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Table of contents
I. Reinforcement of the GGGI Compensation RegulationII. Reinforcement of Various Allowance Payment StandardsIII. Formulation of the Corporate Vehicle Management Regulation and Reinforcement ofControlIV. Formulation of the Corporate Credit Card Regulation and Reinforcement of ControlV. Reinforcement of the GGGI Procurement Regulation and Its More Rigorous ApplicationVI. Reinforcement of Business Management Method and Establishment of Quality ControlSystemVII. Reinforcement of Internal Control System
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I. Reinforcement of the GGGI Compensation Regulation
1. Tightening of Rules on Payment of Housing Allowance
Housing Allowance Payment RegulationAmong the existing GGGI Compensation Regulations, housing allowance payment rules for employees shouldbe adjusted to match the situation by considering the area of residence, position and the employment agreements.
Pursuant to the existing regulations, the present housing allowance support only applies to the internationalrecruitment and to the foreigners with residence in Korea above the manager level with exception to the year2011, the early stage of the organization. After confirming the new staff regulation followed by the IO-conversion, the employment agreements of K-GGGI will be re-examined and will be applied during the renewalof employment agreements based on IO-GGGI. [Annex 01-Staff Regulations (HR-DRAFT)-To be approved at17 Jan 2013 Council]Tightening of the audit requirements regarding various allowances in every employment agreements.[Chart] Housing allowance by position
GradeDirector-GeneralDDG / ADGCFODirectorSenior Program
Korea / London (USD)7,5005,0004,0003,0002,000
Denmark (DKK)N/AN/AN/A12,00010,000
UAE (USD)N/AN/AN/A5,0004,000
Manager (SPM)Program Manager1,000(PM)8,0003,000
The above chart is made by reference to ICSC housing allowance standards chart by country which regulates theworking and employment conditions of the organizations within the UN
Update by GGGI HR Unit:Status of Action: Completed.Action Completion Date: Q1, 2013Process Owner: Kristen Son, HR Sr. Program Manager3
Corrective Action Taken: GGGI Staff Regulations approved at the 2ndCouncil in AbuDhabi and the Provisional Staff Rules promulgated by the director General. HousingAllowances is applicable subject to expatriate staff who are not serving in their homecountry and country of their nationality. All personnel contracts under the IO-GGGIare in compliance under the new Staff Regulations and Provisional Staff Rules.Please see the Regulation 4.2 and the Rule 4.3 attached for detailed information.Accordingly, above chart has been amended based on current GGGI grade system,which has been approved at the Transitional Sub-Committee of the Council. Pleasesee below for the updated chart on Housing Allowances.
Exception: None
Amended Housing Allowances Chart
Grade
Director-General
DDG / ADG
CFO
C4 / C5
C3
C2
Korea/London
(USD)
7,500C4 / C5
5,0004,000C3
3,0002,000C2
1,000DKK 8,0003,000DKK 10,0004,000DKK 12,0005,000Grade
Denmark
UAE (USD)
2. Tightening of Rules on Payment of Child Education Expenses
Rules on Payment of Employees’ Child Education ExpensesAmong the existing GGGI Compensation Regulations, child education expense payment rules for employeesshould be adjusted to match the situation by considering the area of residence, position and the employmentagreements.
After confirming the new staff regulation followed by the IO- conversion, the employment agreements of K-GGGI will be re-examined and will be applied during the renewal of employment agreements based on IO-GGGI.4
New regulations to be applied upon IO-conversion:- Payment of 75% of total child education expenses and maximum amount payable per child will be decidedwith reference to UN ICSC. In case of UN, child education expense is paid to the employee who worksoverseas and amounts 75% of total child education expense. The maximum amount payable per child will bedecided by nation. Tightening of the audit requirements regarding various allowances in every employmentagreements
Update by GGGI HR Unit:Status of Action: Completed.Action Completion Date: Q1, 2013Process Owner: Kristen Son, HR Sr. Program ManagerCorrective Action Taken: GGGI Staff Regulations approved at the 2ndCouncil in AbuDhabi and the Provisional Staff Rules promulgated by the director General.Education Allowances is applicable subject to expatriate staff who are not serving intheir home country and country of their nationality. All personnel contracts under theIO-GGGI are in compliance under the new Staff Regulations and Provisional StaffRules. Please see the Regulation 4.2 and the Rule 4.4 attached for detailedinformation.Exception: Those individuals who still are under the K-GGGI based contracts may fallinto the exception of this rule per their contractual terms. Once their K-GGGI basedcontract expires, the exception will be resolved.
II. Reinforcement of Various Allowance Payment Standards
1. Tightening of Rules on Allowances for the participation of Meeting- To fill the insufficient manpower during the initial period of establishment, GGGI paid allowances to thetemporarily hired employees (temporary staff) for their meeting expenses and etc. However, currently, GGGIdoes not make any payment unless it is based on GGGI Rules and Regulations.
Update by GGGI HR Unit:Status of Action: CompletedAction Completion Date: Q1, 2013Process Owner: Kristen Son, HR Sr. Program ManagerCorrective Action Taken: No allowances for participating of meetings. If there is aneed for any change in the current practice, it will be discussed with the Director-General.Exception: None.5
2. Tightening of Rules on Secondee Allowances-Pursuant to Article 3 and 14 of the GGGI Compensation Rules/Regulations, GGGI pays allowance within theamount of 1.5 million won to the secondees who work at least one month or more at GGGI.-Currently, no secondment is made without a secondee agreement and GGGI plans to comply with theregulation on secondment allowance in the future. The secondee allowance is made by reference to ICSCsecondee allowance standards chart by country which regulates the working and employment conditions of theorganizations within the UN
Update by GGGI HR Unit:Status of Action: In-ProgressExpected Action Completion Date: September 2013Process Owner: Kristen Son, HR Sr. Program ManagerCorrective Action Taken: HR is planning to develop the Secondment Policy.Exception: Currently, GGGI has one secondee who is receiving KRW1,000,000/month based on the Secondee Agreement made between GGGI andDanida under the K-GGGI’s Rules on Compensation. Once the new policy isdeveloped and approved, the exception will be managed accordingly.Update on May 23, 2013: The Secondee from Danida voluntary asked HR to stopmaking such allowance to him after he learned that there is no secondee allowancerule under the IO-GGGI Staff Regulations and Provisional Staff Rules (SRPSR). Heinformed OIA that he will also pay back the allowance he received for the period ofApril 2013. The IO-GGGI SRPSR was effective on April 1, 2013.3. The comparison between the existing personnel policy and the new personnel policy pursuant to IO-conversion
CategoryHousing
K-GGGIBased on individual contract terms
International Organization GGGIExpense Reimbursement within Budget Limits
Education
Difference by individual contract
Support 75% of Net Education Costs- Cycle: Once a year- Coverage: Round trip flight for staff member
Home LeaveAllowance
N/A
and his/her dependents (economy class)- Flight ticket or airfare reimbursement ispossible6
Cost of LivingCost of Living Allowance for each city will beAllowance(DISPATCH(Cost of Living survey)ONLY)- Secondees to GGGI who are assigned toDispatchAllowance(DISPATCHONLY)work at GGGI for more than one monthmay be paid up to KRW 1,500,000A lump-sum payment of 1 month- Employees dispatched to a foreigncountry may be paid up to KRW2,000,000 per monthHardshipAllowanceN/A(DISPATCH(Hardship survey)ONLY)determined with reference to ICSC reportHardship Allowance for each city will beN/Adetermined with reference to ICSC report
Update by GGGI HR Unit:Status of Action: Completed.Action Completion Date: Q1, 2013Process Owner: Kristen Son, HR Sr. Program ManagerCorrective Action Taken: GGGI Staff Regulations approved at the 2ndCouncil in AbuDhabi and the Provisional Staff Rules promulgated by the director General. TheAllowances listed above are applicable subject to expatriate staff who are not servingin their home country and country of their nationality. All personnel contracts underthe IO-GGGI are in compliance under the new Staff Regulations and Provisional StaffRules. Please see the Regulation 4.2 and the Rule Chapter 4 (Salaries and relatedallowances) for detailed information. See updated summary below.Exception: Those individuals who still are under the K-GGGI based contracts may fallinto the exception of this rule per their contractual terms. Once their K-GGGI basedcontract expires, the exception will be resolved.•••See amended housing allowance in the chart above(Tightening of Rules on Payment of Housing Allowance)Reimbursement of 75% of the net education costs for childunder 21.A lump sum payment of return Economy fare for staff memberand dependents once a year ( Staff rule 6.4)Each city will be determined with reference to ICSC report(Hardship survey)Each city will be determined with reference to ICSC report7
Housing
Education
Home Leave
Hardship
•Allowance
Cost of Living
•(Cost of Living survey)A lump-sum payment of 1 month of base salary (Net) forcovering pre-departure and setting expenses of at least 1 yearassignmentEach city will be determined with reference to ICSC report(Hardship survey)
III. Formulation of the Corporate Vehicle Management Regulation and Reinforcement of Control
Formulation of an internal regulation on corporate vehicle management underway currently for its submission tothe Management Committee for approval:- Corporate vehicles to be subject to public use only by GGGI employees including the executive director;- Vehicle manager to be designated for efficient vehicle management, operation, and maintenance;- Details of vehicle use to be managed transparently (to be reflected in the IT system).
Update by GGGI IT Unit:Status of Action: Completed.Action Completion Date: Q1, 2013Process Owner: Taebin Park, IT Program ManagerCorrective Action Taken: Currently, there are two vehicles in GGGI. One is forDirector-General only (Leased, model: YF sonata) and another is for the staff forofficial business only (Leased, model: KIA soul). Han Sangchel, Program Officer,M&A Unit, maintains a vehicle usage log. See attached.Exception: None. If there is a need for any change in the current practice, it will bediscussed with the Director-General.
IV. Formulation of the Corporate Credit Card Regulation and Reinforcement of Control
The GGGI Corporate Credit Card Regulation has been developed and formulated with the inclusion offollowing issues. It will be implemented after going through the internal procedures:- Only GGGI employees to become regular holders of GGGI corporate credit cards;- Payments to be made only for payment decisions to which evidentiary materials clearly specifying the use of acredit card are attached;- To insert an explicit provision that the responsible credit card user shall reimburse the GGGI for any amount of8
corporate credit card use that is in violation of the Regulation.-The draft has been presented to the Management Committee and they have endorsed it.
Update by GGGI Finance Unit:Status of Action: In-ProgressExpected Action Completion Date: September 2013Process Owner: Munehiko Joya, CFOCorrective Action Taken: The corporate credit card guidelines which CFO developedwere reviewed and approved by Management Committee Meeting (MCM) inDecember 2012. In the meantime, the interim Financial Regulations say that theCFO should develop the policies, procedures and guidelines on corporate credit cardand have it endorsed by the AFSC. The guidelines will be shared with AFSC in duecourse to make it formal per the Financial Regulations. See attached documents.Once the Deputy Director-General for M&A is on board, CFO plans to issue individualcards in the name of executives (so that those cards can be used only by holderswho are accountable for the use of those cards as stated in the guidelines) and othercards to be used by those who are responsible for administrative matters of eachdepartment. See attached for corporate credit card usage status as of May 14, 2013.The corporate credit card payment is one type of payments so Finance checks all thesupporting documents (provided by the card holder/user) based on the relevantpolicies (if the card is used to purchase an air ticket, it requires a mission request,mission report, boarding passes etc. according to the travel policy) and beingreconciled against the budget. All the items need to be justified to process paymentrequests to clear the balance. Finance never clears the balance unless paymentrequests are raised properly and verified. The card holder/user is responsible forpaying any unjustifiable expense.
Exception: None
V. Reinforcement of the GGGI Procurement Regulation and Its More Rigorous Application
1. Tightening of the Procurement RegulationThe GGGI CFO has developed and formulated the draft and was endorsed by the Management Committee. To9
submit a proposed amendment to the Procurement Regulation and its future direction to a Council meetingslated for January 17, 2013; and to develop and consistently upgrade guidelines to meet the standards of aninternational organization.
Update by GGGI Finance Unit:Status of Action: In-ProgressExpected Action Completion Date: September 2013Process Owner: Munehiko Joya, CFOCorrective Action Taken: The draft procurement rules were developed andpresented to the Council in January 2013. Per the Council decision, CFO conducteda third-party`s independent benchmarking assessment (UNOPS has been engaged).The draft rules (please see the attachment), under final review, will be effectivepending the Council`s approval. To assure the implementation of the rules, Financewill develop more detailed guidelines and hire a procurement officer to monitor thecompliance of the procurement activities. Finance has engaged Allen York, a headhunting firm headquarted in Australia and specialized in CSR, environmentaland sustainability recruitments, to identify and hire the best person for this position byend of June 2013.Exception: None
Downward Adjustment of Optional Contract Limit- To expand open competitive bidding by ensuring that the revised Procurement Regulation lowers the allowablelimits for an optional agreement;- To prevent abuse of an optional agreement by requesting that a specific cause be provided even in the case ofconclusion of an optional agreement.
Update by GGGI Finance Unit:Status of Action: In-ProgressExpected Action Completion Date: Q3, 2013Process Owner: Munehiko Joya, CFOCorrective Action Taken: The procurement rule will be finalized upon the approval ofthe Council (expected to happen on June 8-9) and guidelines to implement the ruleswill follow thereafter (to be completed by end of Q2 or start of Q3 as a target). The10
procurement rule and its guidelines will set clear requirements for the competitivebidding and contract review process.Exception: None
More Rigorous Review of the Details of Agreement- To divide the existing Bidding Assessment Committee into the Contract Review Committee, TechnicalCommittee, and the Financial Committee; to maintain independence of the Technical Committee and FinancialCommittee to prevent meeting results of the Technical Committee from affecting decisions by the FinancialCommittee; and to cause the Contract Review Committee to monitor and supervise the overall bidding process;- To conduct flawless evaluation by tightening assessor selection rules.
Update by GGGI Finance Unit:Status of Action: In-ProgressExpected Action Completion Date: Q3, 2013Process Owner: Munehiko Joya, CFOCorrective Action Taken: The procurement rule will be finalized upon the approval ofthe Council (expected to happen on June 8-9) and guidelines to implement the ruleswill follow thereafter (to be completed by end of Q2 or start of Q3 as a target). Theprocurement rule and its guidelines will set clear requirements for the contract reviewprocess.Exception: None
Recruitment and Management of Staff in Charge of Procurement and Contracts- To employ a procurement and contract manager who will monitor and supervise the entire procurementprocess, from bidding, supplier selection, contract negotiation, to contract conclusion, in addition to tighteningapplicable rules;- Posted the GGGI’s announcement on recruitment of a procurement and contract manager from November 6,2012 to November 30, 2012 on its webpage as well as the home pages of major domestic and foreign job searchand employment service providers including Job Korea;- To employ a person with ample knowledge on procurement and contract laws and at least seven years’experience in related affairs as a procurement and contract manager who will be subordinate to the FinanceDepartment;- The second documentary screening underway as of December 17, 2012 for about ten applicants who passedthe first documentary screening, and about four applicants to be invited for a final interview.
*According to the GGGI Recruitment Policy and Procedures, director and the senior program manager (SPM)11
of the relevant department and the HR SPM will be participating for the second interview
* T h e c omposition of interviewers [Annex 02 : Recruitment Policy and Procedures (May, 2012)] f o rthe recruitment and selection for SPM and Program Manager (PM) positions at the level of which theprocurement manager position was advertised is as follows:
Positions
Interviewers- Executive Director (Director-General)
SPM (Senior ProgramManager)
- Chief Administrative Officer (Chief Financial Officer)- HR Director- Director of the Department- Director of the Department
PM (Program Manager)
- Direct line Senior Program Manager- HR Senior Program Manager
Update by GGGI Finance Unit:Status of Action: In-ProgressExpected Action Completion Date: June 2013Process Owner: Munehiko Joya, CFOCorrective Action Taken: Finance is in process of recruiting a designatedprocurement officer.Exception: N/A
Job description of Staff in Charge of Procurement and Contracts and its staff requirements [Annex 03]
Under the direct supervision of Chief Finance Officer (CFO), the Procurement Manager will work functionallyacross the finance, Human resources, IT and legal teams to plan, develop, oversee and advise on complexprocurement and contractual aspects related to worldwide procurement of a variety of goods, works and servicesfor Global Green Growth Institute (GGGI) Seoul Headquarters and Satellite Offices (e.g. professional services,information technology products and services, electronic equipment and instruments, transportation services,vehicles, construction, building maintenance services and materials, furniture and office supplies).In particular he/she will:- Assist the CFO in planning, directing and coordinating the procurement program of the GGGI, establishingschedules and priorities;- Act as Principle Advisor for GGGI Seoul Headquarter and Satellite Offices on procurement issues and relatedactions;12
- Develop and coordinate implementation policies and improved procurement and contracting methods andprocedures for an efficient supply chain management, with particular view to long-term supply agreements forGGGI Seoul HQ and Satellite Offices, recommending changes when analysis indicates inefficiency;- Advise requisitioning units and recipient entities on the full range of procurement issues, providing, asnecessary, management support, intervention, advice and guidance at all stages of the procurement cycle, i.e.planning, soliciting, evaluating, negotiating, approving, executing and termination of contracts, with particularfocus on high-value, complex or otherwise strategic and important procurement cases, raising issues, asnecessary, with the CFO.- Assist the CFO in formulating strategies and designing innovative solutions to resolve issues/conflicts forcomplex procurement projects;- As required, negotiate with senior supplier representatives and intervene;- Direct market research and benchmark exercises. Analyze statistical data for GGGI procurement and marketreports on the world green growth project related goods and services situation, raising significant findings to theattention of higher management- Assume the responsibility for respect of the GGGI regulatory framework for procurement and contracting,adherence to contractual agreements, recommend amendments and advices concerned parties on contractualrights and obligation; contractual agreements, recommend amendments and advices concerned parties oncontractual rights and obligation;- Organize and contribute to periodic training and briefing sessions to Heads of offices/ requisitioners/administrative assistants to whom procurement authority has been delegated so that they keep abreast of latestdevelopments in procurement and have a solid understanding of processes to be followed and principles to beapplied.- Provides direction and guidance to more junior staff whoever applicable- Performs other duties as required.
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QUALIFICATIONSKnowledge of internationally recognized procurement standards and of all phases of internationalprocurement techniques and operations used in contracting for highly complex and technologicallyadvanced goods and servicesKnowledge of contract law and expertise in handling complex procurement and contract issues.Knowledge of quantitative methods to measures supplier capacity systems and ability to identifysources of supply, market trends and pricing.Ability to develop procurement policies, procedures and new programs.Advanced university degree (mastericies, proceduruivalent) in business administration, publicadministration, commerce, engineering, law or a related field. A first-level university degree in combinationwith qualifying experience may be accepted in lieu of the advanced university degree.BackgroundA minimum of seven years of progressively responsible experiences in procurement, contractmanagement, administration or related area. Relevant IT skills, including familiarity with Microsoft Officeand web-based applications, required. Familiarity with ERP system will be a plus. Experience inprocurement systems required.2. Tightening the Details and Use of Standard Contract
Tightening of the Details of Standard Contract- Adopted more rigorous details of a standard contract to ensure that it specifically provides for the contractualperiod, scope of services, deliverables, obligation of contractual performance, compliance with contractualprocess, supervision including periodic reporting and monitoring of contract performance at each stage, detailsof contractual amount and costs, and expense settlement and submission of evidentiary documents;- Employed more rigorous requirements for submission of a plan on application of an advance payment beforesuch payment is made;- Use of a more rigorous standard contract presently being recommended and promoted; each team required tosubmit sufficient and reasonable rationale for a failure to use a standard contract to the Legal Team for itsreview and approval; and each team required to provide sufficient and reasonable rationale for any intent tomake a significant modification in the standard contract to the Legal Team for its discussion at the stage of legalreview and its approval;- To maintain the Time is of the Essence” provision which sets forth an obligation to meet the deadline anddefines a failure to meet the deadline as an irreparable violation as applicable under a traditional agreementbecause liquidated damages may be subject to frequent disputes with a counter-party to an agreement and tokeep a similar protective provision for the GGGI; and to insert a provision on liquidated damages whennecessary;- To reflect in the contractual procedures based on internal discussion of a provision on liquidated damages14
whether to add such provision to a standard contract or whether to insert such provision in each relevant contractas circumstances require.
Update by GGGI Legal Unit:Status of Action: Completed.Action Completion Date: Q1, 2013Process Owner: Ji Hwan Park, Legal Sr. Program ManagerCorrective Action Taken: All recommendations above are reflected in the GGGIStandard Contract template (see attached) except inclusion of a liquidated damagesprovision as explained below. When GGGI needs to take contract format other thanthe standard template, legal closely reviews the contract terms and ensures therecommendations above are incorporated appropriately.Exception: Currently, a liquidated damages provision is included on a case by casebasis. The research on inclusion of such provision in standard contracts of severalother international organizations turned out to be generally negative. However, Legalis open to further research and consideration on opinion/discussion to include suchprovision in the GGGI standard contract template, if it is required.
VI. Reinforcement of Business Management Method and Establishment of Quality Control System
To adopt a more stringent review of the GGGI’s application of the COP (Core Operating Process) and formulatea corresponding business management and supervision method; and to tighten transient examination of thescope of planned services for each project and the actual scope of contract regarding an outsourcing contract inparticular, assessment of the level of deliverables utilization, and review of the effectiveness of projectsthemselves.
Confirmation of Matters Requested by the Corresponding Government in Executing National Projects- To strengthen the procedures to receive a request for service or a memorandum of understanding from the(central or local) government of a corresponding country when migrating from Scoping’, the first stage in theCOP, to Management and Monitoring’, its second stage;- Receiving documents related to all national projects in the ‘Management and Monitoring’ stage as ofDecember 17, 2012.15
Update by GGGI GGP&I Unit:Status of Action: CompletedAction Completion Date: Q2, 2013Process Owner: Mattia Romani, GGP&I Deputy Director-GeneralCorrective Action Taken: As of December 2012, a much more stringent application ofthe Core Operating Processes (COP) was applied within the GGP&I department. Inparticular:--All project have now submitted COP documents relevant to the status of the projects.A new ‘Portfolio Management Unit’ (PMU) has been created to oversee themanagement of all the processes related to the project cycle, and to provide seniormanagement with a regular status update on the portfolio of GGP&I projects-The newly formed PMU has set up a system to ensure that all projects atimplementation stage have a formal request of collaboration from relevantgovernments, either in the form of an Memorandum of Understanding (MoU) or in theform of an official invitation letter-The Facilitative sub-committee of the Council has decided that they will directlyapprove the transition of projects from scoping to implementation phase, afterrecommendation by the Program sub-committee of the Council, hence providing afurther certification of due processThis newly established governance structure, as well as the required additionalcapacity in the Secretariat, implies that this is an ongoing process.Exception: None. GGP&I expect that by the end of Q2 2013 all projects will be inconformity with the standards described above.
Establishment of Procedures to Confirm the Details of Proposal and Contract- To review the reasonableness of the scope of services and of the contractual amount in concluding a contract,based on comparison with the details of an invitation for bidding and the details of a proposal (procurement andcontract officer);- To confirm whether said review was carried out through an ordinary audit.
Update by GGGI GGP&I Unit:Status of Action: CompletedAction Completion Date: Q2, 2013Process Owner: Mattia Romani, GGP&I Deputy Director-GeneralCorrective Action Taken:16
-
After an ordinary review of the current system of procurement and review ofcontract’s outputs, a Contract Review Committee (CRC) was formed in January2013 to oversee all stages of procurement and contracting of projects. The CRCreports to the Director General, and is formed by Secretariat officers who areindependent from the projects.Officer.It is currently chaired by the Chief Financial
-
The responsibility for the review of the outputs of contracted work will lay with theproject owners overseeing the work contracted as per GGGI’s financialregulations. The project owners will work closely with the PMU to ensure that theoutputs of contracted work are in line with expectations and this, together withany issues, will be reported to the DDG GGP&I in the context of the regularupdates on the portfolio of projects.
Exception: None.
Establishment of Quality Control System- To develop evaluation guidelines in order to assess performance of national projects; and to conduct suchassessment by formulating evaluation indices encompassing society, economy, environment, and other areas;- To establish a Monitoring and Evaluation system- It will be conducted under the leadership of new incoming deputy Director-General responsible for GGP&I.
Update by GGGI GGP&I Unit:Status of Action: CompletedAction Completion Date: Q2, 2013Process Owner: Mattia Romani, GGP&I Deputy Director-GeneralCorrective Action Taken:-The new DDG GGP&I was hired as of March 13, 2013. Under his leadership, anew ‘Portfolio Management Unit (PMU)’ has been created to oversee themanagement of all the processes related to the project cycle, and to providesenior management with a regular status update on the portfolio of GGP&Iprojects-Part of the scope of work of the newly established PMU is to create a state-of-the-art Monitoring and Evaluation (M&E) system. The expertise of the membersof the PMU (multi-decade experience with the World Bank and with bilateraldonors) puts them in an ideal position to set up a strong M&E system.-Work on the M&E system has commenced and it will be put in place over the nextcouple of months. GGP&I expects to have an M&E system in place during Q3201317
--
Additionally, an M&E expert from DANIDA has been seconded to GGGI toprovide a donor perspective on the M&E framework.A Joint Donor Review process has been set up to advice, among other things, onthe M&E framework.Exception: None.
VII. Reinforcement of Internal Control System
1. Organization and Operation of the Audit and Finance Sub-CommitteeIn a meeting of the Transition Committee convened on November 20, 2012 to pursue conversion of the GGGIinto an international organization as delegated by the Council, it was decided to propose, to the Council, a planto form the Audit and Finance Subcommittee as an entity subordinate to the Council. A resolution on the issuesincluding finance matters will be adopted in a Council meeting scheduled for January 2013.
Update by Secretariat:Status of Action: CompletedAction Completion Date: Q1, 2013Process Owner: N/ACorrective Action Taken: The Audit and Finance Sub-Committee of the Council wasformed and it is currently active.Exception: N/A
2. Development of Policies and ProceduresThe internal control system will be strengthened by proper documentation and implementation of financial, HRand other administrative policies and procedures. More focused budget planning, results-based managementmethodologies and tools, and systematic monitoring and evaluation practices will be rolled out to build fully-fledged internal control system. In this context, talents will be hired for key positions including a procurementmanager, an ERP expert and an internal auditor. In parallel, the business process and related delegation ofauthorities are currently reviewed and will be rationalized in line with international benchmarks and bestpractices. This prepares for the implementation of ERP to consolidate the administrative management of allfinancial, human and physical resources under a single integrated system for the entire organization.
Update by Secretariat:Status of Action: In-ProgressExpected Action Completion Date: December 2013Process Owner: Munehiko Joya, CFO (on behalf of Howard Bamsey, Director-18
General)Corrective Action Taken: Secretariat is simultaneously developing variousregulations and related policies and procedures in the areas of Finance, Budget, HR,Procurement, Travel and Delegation of Authorities. These regulations, policies andprocedures collectively enhance the accountability and transparency of GGGI`sfinancial, operational and administrative activities and management. Staff will betrained to fully onboard these written policies and procedures which will then befurther rationalized and automated by ERP with proper controls embedded (pleasesee the draft ERP presentation). In the conjunction with the development of theregulations, CFO made a proposal to hire an internal auditor in the originalmanagement response to BAI audit report and drafted a job description to assureindependence and objectivity. This was done by hiring a Chief Internal Auditor inApril 15, 2013 and budget appropriation for internal auditing function. CFO plans toprepare a separate paper on internal control system of GGGI which can be sharedwith the Council members for information later this year.Please note the internal control is a process with milestones of different stage.Developing policies is one milestone (currently being undertaken), followed byanother milestone of being put in place and then we have to assure and monitor thatpeople would be able to apply it to day to day operations. This enables GGGI to startautomating the policies and procedures by ERP and the process compliancemonitoring would be easier. This stage will happen progressively from Q1 2014 to Q12015 as one module after another is launched after test runs and goes live. Theprocess owner is CFO on behalf of DG for AFSC and ERP including policies andprocedures.Exception: N/A
3. Installation and Operation of a Dedicated Internal Audit SystemInternal Audit System, Report and Assessment- To set up a dedicated internal audit function comprising at least one internal audit professional and formulatean audit plan for its execution after review and approval by the Audit and Finance Sub-Committee;19
- To report the findings of ordinary/regular audits to the Council through the Audit and Finance Sub-Committeeafter notifying the GGGI management of related items and collecting related opinions and improvement plans;- To put the Audit and Finance Sub-Committee under the control of the Council to evaluate the effectivenessand reasonableness of internal audit affairs;- To commission outside experts to perform an audit in the case of an internal audit requiring expertiseaccording to the Audit and Finance Sub-Committee’s decision.
Update by GGGI OIA:Status of Action: OngoingAction Completion Date: OngoingProcess Owner: Youngmee Oh, Chief Internal AuditorCorrective Action Taken: GGGI established Office of Internal Audit (OIA) in April2013. The mission of OIA is to support the Council in fulfilling its internal oversightresponsibilities at GGGI. Based on the Annual Audit Plan approved by the Audit andFinance Sub-Committee of the Council, OIA performs independent and objectivemonitoring and evaluation of GGGI’s operations that includes, but not limited to, HR,Legal, IT and GGP&I. See attached Charter for Office of Internal Audit (approved on5/24/13) and the 2013 Internal Audit Plan for further information.Exception: N/A
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