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* OAS Indirect Cost Recovery (ICR) Policy and Procedures (Ver. 1)
 

* OAS Indirect Cost Recovery (ICR) Policy and Procedures (Ver. 1)

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  • Future availability of resources; past, current and future commitments against those resources will remain largely un-quantified and under-reported under OAS’ unique method of accounting/reporting for resources.

* OAS Indirect Cost Recovery (ICR) Policy and Procedures (Ver. 1) * OAS Indirect Cost Recovery (ICR) Policy and Procedures (Ver. 1) Presentation Transcript

  • 05/05/10 OAS Indirect Cost Recovery (ICR) Policy and Procedures (Ver. 1) SECRETARIAT FOR ADMINISTRATION AND FINANCE NOV. 2007 Ver.7 SECRETARIAT FOR ADMINISTRATION AND FINANCE NOV. 2007 SAF TRANSFORMATION AND MODERNIZATION PROJECT (STAMP) Secretariat for Administration and Finance (SAF) Presentation to the Committee on Administrative and Budgetary Affairs (CAAP) November 15, 2007
  • What is covered in this presentation?
    • I. Is Modernization Necessary?
    • The Transformation Path
    • Managing the Transformation Successfully
    • IV. Next Steps
    05/05/10
  • 05/05/10 I Is Modernization Necessary?
  • An Evolving OAS
    • The General Secretariat translates mandates from Member States into programs and projects, initiatives, services. Well-executed programs and the trust of Member States and the international community are essential elements to sustain and increase support for OAS’ mission.
    • OAS needs to evolve into an integrating agency and strategic alliance builder that must maintain its competitive advantage as it seeks scarce donor resources to implement programs.
    • Good internal governance is fundamental to successful program execution and increased member state/international community support.
    05/05/10
  • An Evolving OAS / A Static Resource Management Structure
    • OAS and all other multi-laterals have not kept pace with industry standards and trends.
    • OAS’ General Standards, Budgetary and Financial Rules, Administrative Memoranda, Procurement and Personnel guidelines adopted decades ago were consistent with the industry standards at the time. International accounting standards were in their infancy.
    • Changes to the standards since then have been minimal and/or piecemeal with a focus on solving crises or specific issues, not the overall management of resources. The results are often OAS-specific and limit management and partners from being able to benchmark and compare OAS’ results to other institutions.
      • e.g., Employee/Contractor hiring mechanisms have become unwieldy and unintelligible over time in order to deal with hiring for specific fund programs. One or two mechanisms have grown to eleven.
    • Business processes are rigid and rules-driven. Each transaction is treated as though it poses the same level of risk. As a result, transaction costs are high.
    05/05/10
  • An Evolving OAS / A Static Resource Management Structure
    • Management and Donor Reporting was mainly financial, focused on inflows and outflows, lacked analysis and a meaningful link between the use of resources and intended outcomes.
    • Despite a significant investment in a modern enterprise resource management system, Oracle’s E-Business Suite (internally named “OASES”) was being configured to fit an outdated resource management model. The full strategic capability of OASES was underutilized.
    • External systems were being developed independently by program areas and not as part of an well-defined organizational approach to managing resources. The Organization’s IT resources were not aligned with the core business of the OAS.
    05/05/10
  • What Do Our Donors/Strategic Partners Expect?
    • A meaningful way to measure performance based on common standards.
      • Good quality, credible standards enhance the reliability, consistency and transparency of resource management information. Standards are more credible when the standard-setting process is independent of any particular body.
    • Proper accountability
      • Timely, understandable reports that link the use of resources to the accomplishment of strategic goals and objectives; not just transaction reporting.
    • Resources to be used effectively and efficiently to accomplish objectives
      • Minimize transaction costs, simplify and streamline rules and business processes, less bureaucracy.
    • Quality service and results
      • Modern, responsive and flexible administrative infrastructure focused on delivering value.
    05/05/10
  • How Are Other International Organizations Adjusting?
    • All other international organizations, public-sector entities and NGOs are adapting their resource management standards and systems to meet member state and partner expectations and evolving priorities.
    • The United Nations, World Health Organization, Pan American Health Organization, International Monetary Fund, Inter-American Development Bank, The World Bank, The Commonwealth Secretariat have all undertaken transformation initiatives.
    • Standardization and simplification and a focus on value is driving change in the way that all resources are managed: human, financial, real property and information.
    • They are adopting new resource management standards such as International Public Sector Accounting Standards (IPSAS), human resource and procurement standards.
    05/05/10
  • How Are All Other International Organizations Adjusting?
    • The IPSAS Board currently includes representatives of Member states and Observer countries such as: Argentina, Canada, Mexico, the United States, Australia, France, Japan, the Netherlands, Norway, and the United Kingdom.
      • Over 30 countries have adopted or plan to adopt IPSAS
      • The UN and all of its agencies will adopt IPSAS by 2010
      • NATO, OECD, EC, OAU have adopted IPSAS for financial reporting
    05/05/10
  • Consequences of Maintaining the Status Quo
    • OAS will be the only major international/multilateral organization trying to implement programs/projects in the 21 st century with 20 th century administrative mechanisms.
    • OAS will lose its competitive edge if it cannot demonstrate to partners that it can effectively manage resources in a modern way, demonstrate accountability for those resources, and meaningfully report results.
    • OAS will not be able to develop meaningful strategic plans and implement results-based management as managers/donors/partners will continue to have only a “moment-in-time” snapshot of Organizational resources.
    • No benchmarking will be possible with similar institutions to measure the effectiveness and efficiency of the OAS.
    • OAS will continue to have dual approaches to managing Regular and Specific fund resources.
    05/05/10
  • 05/05/10 II The Transformation Path
  • OAS’ RESOURCE MANAGEMENT FRAMEWORK 05/05/10
    • Performance Reporting
    • Cost Management
    • Investment Management
    • Internal Controls
    • System Security and Integrity
    • Training/Skill Sets
      • Roles and Responsibilities
      • Code of Ethics
      • Administrative Support Model
    RISK MANAGEMENT OAS’ GOVERNANCE STRUCTURE RESOURCE MANAGEMENT STANDARDS AND SYSTEMS
    • Accounting/Reporting Standards
    • Hiring Standards
    • Procurement Standards
    • Policies and Procedures
    • Business Processes
    • Enterprise Resource Planning System
    Communication Strategy Professional Development
  • OAS’ RESOURCE MANAGEMENT FRAMEWORK 05/05/10 RESOURCE MANAGEMENT STANDARDS AND SYSTEMS
    • Accounting/Reporting Standards
    • Hiring Standards
    • Procurement Standards
    • Policies and Procedures
    • Business Processes
    • Enterprise Resource Planning System
  • Resource Management Standards and Systems The Transformation Path
    • Adoption of International Public Sector Accounting Standards
      • This is not just an accounting issue – it defines the way we manage and report on all resources including fixed assets, human resources, buildings, equipment, etc. Reporting will be integrated and standardized across all funds of all types, allowing greater transparency and better decision-making.
      • Adoption will align OAS accounting practices with independent and internationally-recognized accounting standards and will improve the consistency and comparability of financial statements, internally and externally. Similar to the approach used by other IO’s/Multilaterals, we will gradually introduce changes to our resource management standards.
    05/05/10
  • Resource Management Standards and Systems The Transformation Path
    • Adoption of International Public Sector Accounting Standards
      • Follows from instructions to General Secretariat via General Assembly Budget Resolution AG/RES.2353 (XXXVII-O/07) and Board of External Auditors recommendations.
      • Accrual accounting means that the OAS for the first time will recognize past, present and future obligations against Organizational resources. There is nothing new here. These are not new obligations but under OAS-specific accounting rules they remain largely un-quantified; rendering them “invisible” and/or under-reported.
    05/05/10
    • OASES Becomes the Definitive Enterprise Resource Management System
      • OASES is the definitive source of all resource management and performance reporting
      • Eliminate external applications and build solutions within OASES; Maximize use of existing Oracle functionality
      • Integrate redefined, optimized business processes into OASES
      • Implement new modules where needed to reduce risk and enhance resource management capability:
        • Project Management
        • Public Sector Budgeting
        • Fixed Assets
        • Time and Labor
        • Self-Service Human Resources
      • Move set of books to an accrual basis
    05/05/10 Resource Management Standards and Systems The Transformation Path
    • Business Process Reengineering (BPR)
      • The objective is to move away from a rigid, transaction-oriented and “silo” approach to a more flexible, adaptable and horizontally-integrated way of managing resources.
      • Focus is on easing the administrative burden and reducing manual transaction processing by fully integrating solutions into OAS’ enterprise resource management system (OASES), and
      • Simplifying and standardizing policies, processes and terms.
        • What is a performance contract? When should it be used? Who is an employee?
        • How should we hire/contract short-term vs. long-term human resources?
        • How should we hire/contract individuals financed with project specific funds?
        • What are appropriate contracting mechanisms?
    05/05/10 Resource Management Standards and Systems The Transformation Path
  • OAS’ RESOURCE MANAGEMENT FRAMEWORK 05/05/10
    • Performance Reporting
    • Cost Management
    • Investment Management
    • Internal Controls
    • System Security and Integrity
    • Training/Skill Sets
    RISK MANAGEMENT RESOURCE MANAGEMENT STANDARDS AND SYSTEMS
    • Accounting/Reporting Standards
    • Hiring Standards
    • Procurement Standards
    • Policies and Procedures
    • Business Processes
    • Enterprise Resource Planning System
    • Develop a Risk Management Framework
    • Performance Reporting
      • Reports link resource use to results and are relevant, understandable, comparable to established standards, timely, consistent and reliable
        • Quarterly Resource Management Reports
        • Board of External Auditors Reports
        • Develop a reporting strategy
    • Cost Management
      • Develop and deploy good costing models and budgets for projects, activities
    • Investment Management
      • Not just about money; manage the Organization’s investments in all resources: cash, buildings, people
    • Internal Controls
      • Achieve the proper balance between controls and risk; leverage technology and reduce manual controls, raise the level of consciousness to internal controls within resource management team; partner with OIG’s Office in proactive identification and mitigation of risk
    • System Security and Integrity
      • Enforce risk management policies
    05/05/10 Risk Management The Transformation Path
    • Develop a Risk Management Framework
    • Training
      • Training programs must be in place to prepare and equip staff with the skills and tools necessary to both navigate the transformation process and to operate within a modernized OAS
        • Role-based training programs:
          • First stage is training and AGA certification in governmental financial management for finance/budget/administrative personnel.
          • About 60 administrative and financial staff are participating in the Certified Government Financial Manager Training Program
          • Oracle business-analyst training for OASES module managers
          • IPSAS training
        • Career and succession planning
    05/05/10 Risk Management The Transformation Path
  • OAS’ RESOURCE MANAGEMENT FRAMEWORK 05/05/10
    • Performance Reporting
    • Cost Management
    • Investment Management
    • Internal Controls
    • System Security and Integrity
    • Training/Skill Sets
    • Roles and Responsibilities
    • Code of Ethics
    • Administrative Support Model
    RISK MANAGEMENT OAS’ GOVERNANCE STRUCTURE RESOURCE MANAGEMENT STANDARDS AND SYSTEMS
    • Accounting/Reporting Standards
    • Hiring Standards
    • Procurement Standards
    • Policies and Procedures
    • Business Processes
    • Enterprise Resource Planning System
    Communication Strategy Professional Development
    • Strengthen OAS’ Governance Framework
    • Includes clear definitions of roles and responsibilities and lines of accountability and the development of a corporate code of values and ethics .
    • CAAP and Political Bodies
    • Administrative Model
    • Program and Evaluation Committee (PEC)
    • Handbook on Specific Funds
    • Indirect Cost Recovery (ICR)
    • STAMP
    • Staff Committee
    • Building a corporate culture
    05/05/10 OAS Governance Structure The Transformation Path
  • 05/05/10 OAS Governance Structure The Transformation Path Governing Bodies Central Administration (SAF) OAS Country and Project Offices Program Area Financial and Administrative Staff Continuous Communication Continuous Communication Continuous Communication Shared Administrative Responsibility Continuous Communication
  • 05/05/10 III Managing the Transformation Successfully
  • Managing the Transformation Successfully
    • Commitment
      • Requires high-level vision and commitment to modernization effort
        • Secretary General’s Agenda
        • Board of External Auditors Recommendations
        • All of OAS Initiative
        • CAAP Member States, Key Stakeholders/Partners
      • Requires everyone involved in change effort to have a cohesive vision and strategy. All modernization initiatives should harmonize with the Organization’s strategic direction and the transformation plan .
    05/05/10
  • Managing the Transformation Successfully
    • Communication Strategy
        • Builds a shared vision of the need to modernize OAS’ resource management structure
        • Communicates modernization plan throughout the Organization
        • Keeps donors and stakeholders informed about plan progress
        • Provides a forum for stakeholders to provide feedback
    • Cross-Functional Team
        • SAF Transformation and Modernization Project (STAMP) team has been tasked to lead the change effort.
        • The STAMP team has representatives from all SAF Departments/Offices, Program Areas, Office of the Inspector General, and the Staff Association
    • Training Strategy
        • Ensures that those involved in and impacted by the change effort have the necessary skills and tools to successfully plan and implement changes.
    05/05/10
  • 05/05/10 IV Next Steps
  • Where are We and Where Do We Need to Go?
    • We have started on the journey towards new standards; e.g.:
    • Dramatically improved quarterly reporting
    • Specific Fund Handbook
    • Indirect Cost Recovery
    • Project Evaluation Committee
    • Results-Based Management
    • STAMP Implementation Team has been formed (BPR is underway)
    • Oracle being upgraded (Technical Upgrade is the first phase)
    • Updated Staff and Procurement Rules
    • OAS has joined the UN IPSAS Task Force in order to keep abreast of developments, share knowledge and develop solutions
    • Some professional development (AGA)
    • Information Management Plan
    05/05/10
  • Where are We and Where Do We Need to Go?
    • CAAP and the Governing Bodies’ role is now pivotal in moving this modernization agenda forward. In the not-too-distant future, we will be coming with an integrated proposal to modify and update the General Standards, particularly in the following areas:
          • Adoption of IPSAS
          • Staff Rules
          • Information Management Policies
          • Procurement Rules
          • Real Property Strategy
    05/05/10 CP19144E