Shameful saga: UN Internal Audit report of the backlog in pension payments, 17 February 2017

The OIOS “Audit of management of delays in processing pension benefits in the United Nations Joint Staff Pension Fund”, leaked in draft last December, is now publicly available (Report 2017/002, dated 13 February 2017) (see link below).

Even after having read the leaked draft last December, the finalized OIOS audit of the backlog can only be described as shocking in what it discloses about the Fund Secretariat/CEO’s gross mischaracterization of the causes and extent of the unprecedented backlog in pension payments which has caused untold suffering to new retirees, and survivors, including widows and orphans. (Read for example about one 'long outstanding' case as detailed in paras. 55 and 56 of the audit report -- see below this note).

Debunking the CEO’s claims

According to the audit, the backlog was not, as the CEO has claimed all along, caused by glitches in integrating the Fund’s IT system (IPAS) with the overall UN system (Umoja); nor was the backlog caused by sharp increases in the number of retirees or beneficiaries; or a lack of documentation provided by member organizations.

What actually happened was that the CEO failed to assess and mitigate risk factors in implementing IPAS, including blackout periods, “missing or erroneous functionalities in IPAS” (para. 19) and the system’s "failure to match contributions from the member organizations to participant accounts" (para. 20).

he CEO also maintained some posts vacant for more than a year, claiming a lack of specialized knowledge among external candidates and a lack of seniority among existing staff (para. 23); failed to follow up on missing documentation, a task included in the responsibility of the UN Staff Pension Committee of which he’s the Secretary.

As the backlog accumulated, the CEO then tried to deflect responsibility away from his own management failures and grossly underreported on the backlog’s extent (omitting thousands of unprocessed cases); and misreported on the level of client servicing, among other failures.

In debunking the CEO’s claims, the report shows in stark detail that there was no significant increase in the numbers of retirees and beneficiaries during the period under audit (table 1, page 1); nor was there a significant increase in the time needed for collecting relevant documentation (table 2, page 5).

Collection of relevant documentation

And contrary to the claims of the CEO, that the Fund was not responsible for collecting relevant document, the report notes that “while the ultimate responsibility for timely submission of documents lies with the member organizations”, “it is imperative for the Fund to proactively inform them of missing documents to facilitate the process). (Para. 45).

OIOS notes that follow-up on missing documentation is included in the tasks for which the Fund received funds totaling $21 million in the 2014-2015 biennium; and that the CEO also failed to address a sharp decline in processing performance vis a vis the 15-day benchmark, and major deficiencies in client servicing. The report notes in this regard that “no metrics were defined in the Fund’s strategic framework to measure and monitor the performance of the Fund in its role as the secretariat of the United Nations SPC [Staff Pension Committee]” para. 43.

The report notes in the Executive Summary that IPAS "[has] the capacity to generate follow up letters in 30, 90 and 270 days to pursue these cases but the fund was yet to use this functionality effectively and systematically.”

Misreporting on the extent of the backlog

Regarding misreporting on the extent of the backlog, the report notes (para. 52) that the so-called “Q-Gates” [reporting on the status of the backlog) “[was limited] to only cases relating to a portion of initial separation benefits [giving] the appearance the outstanding cases of other benefit types were less important.”

In fact so apparently unimportant to the CEO were several categories of cases, amounting to several thousands in total, that they were entirely absent from his reporting and the Department of Management's updates on the UN Intranet -- iSeek.

From figures contained in the audit, there were almost 6,000 unreported cases of various types, including more than 4,000 “recalculation and revision” cases. These are above and beyond the 11,128 cases with incomplete documentation that the Fund did not include in its reporting of “actionable cases.”

Of the 11,128 cases that the Fund reported on 7 July 2016 as having incomplete documentation OIOS states that of the 2,889 cases related to former staff members, 61 per cent of these cases were ready for processing with a complete set of documentation; 39 per cent required follow-up of documentation by the Fund. Of the balance of cases, 87 per cent of open files were ready for processing and 13 per cent required follow-up by the Fund (para. 44).

Decline in processing performance

In addition, there has been a “sharp decline in the actual percentage of cases completed within 15 business days, from 70 per cent in 2014 to 39 per cent in 2015 and 24 per cent in 2016 (up to 17 June 2016)” (para. 39, page 12).

CEO’s response

In his response, almost as lengthy as the actual audit, the CEO continues to hold to his positions that “there are no delays, there is no backlog”, client servicing is working effectively, and the Fund has no responsibility to follow up on missing documentation. In respect to OIOS’ findings that thousands of cases were left out of the backlog reporting, the CEO contends that it’s OIOS’ calculations that are inaccurate. In other words, if there was ever a problem, there’s certainly no problem now.

OIOS notes in the Executive Summary: “The UNJSPF Secretariat accepted all 11 recommendations and requested the closure of three recommendations since those issues would be covered in the end-to-end review being conducted. The fund requested closure of five other recommendations (including the two critical recommendations) on the grounds that the recommendations were “overtaken by events”, the “risk has been eliminated”, “there are no delays”, or “there is no backlog”."

OIOS notes that the CEO is still doubling down on the grossly understated backlog: "The Fund stated that as of end of December 2016, there were only “367 presumed actionable cases (cases for which the Fund has received the three separation documents to process the case)”."

Department of Management response

With respect to the response from the Department of Management, OIOS notes (para. 51): “DM stated that it has no way of verifying accuracy of the data provided by the fund, and that the onus is on the Fund to ensure that what they provide to United Nations management is accurate and complete”.

That response can only be viewed as tragic in terms of the thousands of cases which the CEO blithely left out of the backlog statistics and which one can safely take it remain largely unprocessed to this day, the human suffering represented by those cases, and concerns raised on numerous occasions by the staff unions and others.

Back to the drawing board

In fact, according to the report (executive summary), the Department of Management has accepted to “(i) request the UNJSPF Secretariat to provide complete information on all types of outstanding cases; and (ii) establish new “Q-Gates” in consultation with the UNJSPF Secretariat for all outstanding cases, as well as standard templates for consistent monitoring and reporting.

OIOS conclusion

OIOS concludes: “OIOS is of the view that these recommendations cannot be closed because the fund’s definition of “backlog” did not include all types of outstanding cases" (and goes on to list the thousands of unreported cases of all types). OIOS also notes the Fund's responsibility to follow up on incomplete documentation and that it was yet to fully address deficiencies in client servicing and processing deadlines.

One of the most troubling aspects of the audit and the CEO's response is the obvious attempt by the latter to abdicate responsibility and to insist that either the audit is wrong, or the issues are resolved and nothing more needs to be done. It's troubling too to contemplate that this unacceptable situation has been allowed to fester and grow; and that the shameful saga is still continuing.

More to come.

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“Para. 55: OIOS selected the United Nations Organization Stabilization Mission in the December Republic of the Congo (MONUSCO) for further analysis of long outstanding cases:

Para. 56 (a). In one of the five death-in-service cases, a former staff member had died in 2006. The separation notification form was received in December 2007, followed by the separation personnel action form in September 2008 and the payment instruction in April 2013. Client Services contacted the surviving spouse through the MONUSCO human resources office in May 2016 to request the documents that were marked as “received” in IPAS. The former staff member had a surviving child who was 16 years old at the time of her death. The child was a designated beneficiary and was yet to receive benefits as of 31 August 2016.”

Access the report from the OIOS website here: (first report at top of page). If the link doesn't work go to the website of the United Nations Office of Internal Oversight Services, internal reports, and access report 2017/002 on page 2.

https://oios.un.org/page?slug=report