OAS Management Modernization
Overview for CAAP: 15 July 2014
[email protected]
Overall approach

Nine work areas

Four time phases

Several items sequenced after
Strategic Vision, and after new SG
appointed in 2015
Presentation today in 4 sections

Specific Funds and Leadership

2015 current budget items

2015 capital expenditure items

Looking ahead to 2016 and beyond
Specific Funds management (1)

Reduction in small specific fund
projects with high management load
PROJECTO
COMPLETION
No.
%
$
o
until 50,000
until 100,000
until 200,000
until 500,000
until 1,000,000
More then 1,000,000
375
154
69
56
35
23
10
52%
21%
10%
8%
5%
3%
1%
0.0
2,107,765
5,107,227
8,020,964
10,549,994
15,401,080
20,989,031
TOTAL
722
100%
62,176,061 100.0%
COST
AVERAGE
%
0.0%
3.4%
8.2%
12.9%
17.0%
24.8%
33.8%
Specific Funds management (2)
1
6
Evaluation and
Audit
Final narrative
(evaluation) and
financial report
(compliance)
Sample of OAS
Project Business Cycle
Project Proposal Design
Project proposal presented
by Primary Dependency to
DPE and then PEC
2
5
Negotiation
Project proposal
presented by
Primary
Dependency to
donors
Implementation
Project execution,
monitoring and
narrative/financial
progress reports
4
OASES Grant Setup
Setup of grant/project
account in OASES in
accordance with signed
donor agreement
3
Legal and Financial
Validation
Draft donor agreement
reviewed by DFAMS
and DLS
Specific Funds management (3)




Creation of Specific Fund “baskets”:
where the OAS designs a programme
and several donors contribute
Take the MAPP model, apply it to the
IACHR, and then to the Election
Observer Missions
Benefits of streamlined administration,
more efficiency, better results
Some degree of earmarking still
possible in a hybrid model
Leadership Training



Should be a priority for a restored
training budget
There is a middle-management gap in
the organization that creates a longterm risk
P1-P4 level employees with less than 10
years at the OAS are the least engaged,
according to the staff survey. But they
represent the future
Current vs Capital expenditure
Current expenditure is
“Spending on items that are consumed or only last a
limited period of time”
- Maintenance, salaries, travel, CPRs, training, evaluations, audits
Capital expenditure is
“An amount spent to acquire or upgrade productive
assets such as buildings, equipment and software, in
order to increase capacity or efficiency for more than
one accounting period”
-
Building renovations, videoconference and computer equipment,
software upgrades, converting to new HR or accounting systems
Independence of the Inspector-General



Strengthen the IG office
Oversight by an External Audit
Committee, in accordance with
global standards
Expand the role of the Board of
External Auditors to include the
External Audit Committee functions
Evaluation




Evaluation is a core accountability
and performance function
Currently only financed by some
Specific Fund donors
More efficient to contract out rather
than conduct with in-house staff
Evaluation emphasis should be on
learning and improvement rather
than control
Restore the training budget




OAS needs a training budget
The single most important priority
identified in the staff survey
Necessary to implement all the
business process improvements
Includes items like ethics training
recommended by the BEA, and
basic orientation for new staff
Balancing revenues and expenditures

Three sets of measures recommended
will need significant new spending:




Stronger Inspector-General Office
Evaluation function
Restored training budget
Propose to provide additional funds
through three main measures



Removal of early payment discount
Closer application of Direct Costs
ICR increase from 2016
Early payment discount





Clearly met a need at a time of
critical cash-flow problems
But has “cost” the OAS about $5.5m
since 2000
$533,000 discounted in 2013
Recommended by the BEA
Needs approval at the Special GA
Direct Costs



Direct costs are currently being
undercharged
Definition of Direct Costs is broad
and application subjective
Both programme staff and Specific
Fund donors want to keep Direct
Costs down, but this is concealing
the real costs and significantly
taxing the Regular Fund
Indirect Cost Recovery




Current rates of 11% and 12% do not
reflect actual costs
Need to finance Inspector-General
and Evaluation costs that are
currently unfunded
Propose increase to UN standard 13%
for all new agreements effective 2016
Also propose to introduce a minimum
ICR for small projects
Possible expenditure reductions






Limit the number of staff attending
international meetings
Reduce the frequency of some international
meetings, and hold more of them virtually
Require rent-share from host states for all
national offices, and/or
Co-locate national offices with other
InterAmerican organizations
Postpone new mandates until they have full
costing and an identified source of funds
Rethink the number and size of reports to
Member States, so they get what they need
OAS Capital Plan 2015-2018

A capital plan will encompass



Long-term capital measures such as
building renovations and overdue
maintenance
Once-in-a-decade exceptional
measures such as SG transition costs
and replenishing the reserve fund, and
Modernization measures including IT
systems, accrual accounting,
procurement reform and modernization
of human resources management
Modernization capital measures

IT upgrade is the basis for
modernization and streamlining in
three other areas




Conversion to accrual accounting
Streamlined procurement
Modern Human Resource Management
Together will need about $8 million
of which $4 million for IT and
$1.5 million for accrual accounting
(not full IPSAS)
Buying business cards: $15
Human Resources

Successive cuts have left critical gaps
and left the OAS exposed






Start with Strategic Vision
Then Organizational Design
Then skills and gap analysis
Classification review
Fitting the people to the tasks
3-4 year process, including updated
Human Resources regulatory framework
Looking ahead to the other 2015 items
New quota system

4 options




Change nothing
Fix the US contribution at about $49m and
49% and increase the rest to 100m
Leave the total budget at $83m, reduce US
to 49% and increase the rest to $83m
Leave the non-US budget at $34m, reduce
the US to 49% and reduce the whole budget
to $66m
Change Management


Change is always uncomfortable
Change should be actively managed






Have a plan (based on a clear vision)
Communicate to engage
Implement (through empowerment)
Monitor progress and adjust
Implementation Team
Management Modernization Ombudsman
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