UN’s Independent Audit Advisory Committee pushes back UN Pension Board, 5 September 2019

The UN’s  Independent Audit Advisory Committee (IACC) isn’t playing along with the UN Pension Board’s attempt to discredit the UN internal auditors as a ploy to disregard and circumvent General Assembly directives.

UN Pension Board members and the UN retiree representative organization, FAFICS, were so incensed about the OIOS governance audit (A/73/341) called for by General Assembly resolution A/RES/73/274, that they not only roundly rejected its findings and recommendations in Rome in 2018, but also pushed to discredit the internal auditors (UN Office of Internal Oversight Services, OIOS) and report them to the UN’s Independent Audit Advisory Committee for alleged unprofessionalism -- “flawed and unprofessional” is the language contained in the Board’s report (page 72, para. 345).  

 https://www.passblue.com/2018/08/27/the-un-pension-fund-board-rejects-an-audit-of-its-work/

In a subsequent annex to the governance audit, OIOS roundly refuted the Board’s allegations. It's difficult to recall a UN document where the words "This statement is not true" appear once, let alone several times, as is the case with OIOS responses to the Board's comments on the governance audit. https://unpension.blogspot.com/2019/09/un-internal-auditors-oios-response-to.html

Now a letter (see below) dated 28 August 2019 from the IACC Chair to the Pension Board Chair calls foul on the Pension Board, stating categorically that it found no evidence of a flawed and unprofessional process in OIOS' conduct of the audit: 

“The IAAC weighed the information in the report, testimonial evidence, and other information such as the General Assembly’s guidance and internal audit guidelines. During the deliberations, the IAAC noted that both the Pension Board and OIOS believed that the audit would have benefited from a longer timeframe for discussion of key issues and findings. The IAAC however, did not find evidence that OIOS did not follow the accepted practice and standards for the Professional Practice of Internal auditing in conducting the audit.”

The IACC Chair “encourages the leadership of the Pension Board and OIOS to move past the disagreements associated with this audit and work together to develop and sustain open and constructive communications with regard to future audits of UNJSPF issues.”

In their 19 August 2019 report, the UN participant representatives reported on the Board’s annual meeting held in Nairobi in July where they were subjected to physical threats and intimidation by Board members still incensed by the audit (which is supported by the UN participant representatives) and determined to foot-drag on General Assembly directives and recommendations related to the audit.  http://unpension.blogspot.com/2019/08/un-pension-fund-staff-representatives.html

It’s useful to recall here the final paragraph of the UN participant representatives’ report: “In conclusion, the Fund remains in a delicate position. Huge pushback by many Board members (with the exception of those representing our Secretary-General) against the General Assembly-mandated governance review, coupled with continued disregard by the Board of its own regulations, disinterest in paying retirees on time, rising running costs and expectations of more information on the impact of our investments, means our work remains cut out. While we were subjected to belittling, humiliating and abusive behaviour, we will not be put off our common goal of ensuring a well-governed and sustainable pension fund. We would like to thank you for your continued support and will continue to keep you updated throughout the year.”

The following is but one example of the astonishing arrogance with which, according to the FAFICS report of the 2019 Pension Board meeting, the Board responded to one of the GA’s requests:

“UN SPC members have attempted for several years to raise the matter of “direct elections” for retiree representatives on the Pension Board.  This is a matter which the Board has considered to be outside its authority and rejected again this year, despite the Assembly having asked, within the specific context of the review of the composition and size of the Board, that the Working Group include the role of retiree representatives and the modalities for directly electing retiree representatives to the Board.”

Note: the FAFICS report was published on its website last week but now appears to have been removed. 

People are never as obstructive and even destructive as when their shortcomings are exposed. Recalcitrant Board members, egged on by former CEO Arvizu's coterie in the Fund Secretariat management, which seems to include the Acting CEO, appear to be steadfast in their determination to thwart or at least foot-drag as long as possible on implementing General Assembly directives and recommendations. 

While there's certainly optimism about the incoming Pension Benefits Administrator, Rosemarie McClean, currently Chief Operating Officer of the Ontario Teachers' Pension Plan, https://www.un.org/press/en/2019/sga1899.doc.htm,

she'll have a lot on her plate navigating entrenched tribalism and self-dealing in the Board and the Fund Secretariat's management.  There's no expectation that this pushback from the IACC will deter them from their misguided track, but at least it vindicates the OIOS auditors and sets the record straight.