GAO 

United States Government Accountability Office

Report to the Permanent Subcommittee 

on Investigations, Committee on 

Homeland Security and Governmental 

Affairs, U.S. Senate 

UN OFFICE FOR 

PROJECT SERVICES 

Management Reforms 

Proceeding but 

Effectiveness Not 

Assessed, and 

USAID’s Oversight of 

Grants Has 

Weaknesses 

November 2009 

GAO-10-168 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

November 2009

UN OFFICE FOR PROJECT SERVICES

Management Reforms Proceeding but Effectiveness

Not Assessed, and USAID’s Oversight of Grants Has

Highlights of GAO-10-168, a report to the Weaknesses

Permanent Subcommittee on 

Investigations, Committee on Homeland 

Security and Governmental Affairs, U.S. 

Senate 

While UNOPS management continues to implement reforms that address key 

concerns raised by audits and investigations, the effectiveness of some 

implemented reforms has not been assessed. Management efforts to improve 

UNOPS include (1) development of UNOPS’s project tracking system, Atlas; 

(2) establishment of an internal oversight office; and (3) establishment of an 

ethics office. While changes to Atlas have improved UNOPS’s financial 

documentation, UNOPS does not systematically assess data reliability in 

Atlas. Although UNOPS’s internal oversight has been strengthened by the 

creation of an oversight office, two phases of an investigation of activities in 

Afghanistan have not begun. UNOPS had no investigative capacity of its own 

and had to seek out external investigators for which it is still negotiating the 

scope and cost. In addition, while UNOPS’s ethics office complies with most 

UN requirements, no one has assessed the effectiveness of the office’s 

activities. Finally, UNOPS’s Executive Board lacks full access to internal 

audit reports that could provide greater insights into UNOPS’s operations. 

USAID has not consistently implemented its oversight policies when making 

grant awards with UNOPS and has been vulnerable to program fraud and 

abuse. While USAID has policies that require it to perform pre-award 

assessments of Public International Organizations (PIO), such as UNOPS, 

USAID could not provide official documentation of these assessments for 7 of 

its 11 awards made to UNOPS from 2004 through 2008. In the 4 assessments 

USAID provided, there were no statements acknowledging findings of weak 

internal controls from UN audits and investigations. In addition, USAID did 

not negotiate to include audit authority for 9 of these awards that would have 

allowed USAID access to UNOPS project financial records. We found that an 

absence of clear guidance, training, and monitoring contributed to these 

failures. USAID’s noncompliance with its policies resulted in limited access to 

data on UNOPS grants that were associated with findings of possible criminal 

actions. 

UNDP Office of 

Audit and 

Performance 

Review, May 2007:

2004 2005 2006 2007 2008 2009

UN oversight reports with critical findings on UNOPS

Dates when USAID was required to assess UNOPS’s eligibility as a grantee

Length of the USAID-funded project

New grant award: USAID performed no official pre-award assessment

New grant award: USAID performed official pre-award assessment

USAID increased grant's budget but performed no official assessment 

USAID increased grant's budget and performed an official assessment

UN Board of Auditors Report, July 2004:

OIOS

Procurement 

Task Force 

Kenya, August 

2007:

OIOS Procurement 

Task Force, 

Afghanistan, 

December 2008:

UN Board of 

Auditors

Report, 

June 2008:

UNDP Office of 

Audit and 

Performance 

Review, May 2006:

UN Board of Auditors Report, June 2007:

Source: GAO analysis of UNOPS data.

The United Nations (UN) Office for 

Project Services (UNOPS) provides 

numerous services for its clients, 

including procurement and project 

management. Recent audits and 

investigations of UNOPS have 

revealed alleged violations of law, 

weak internal controls, and 

financial mismanagement. UNOPS 

officials misused some of the more 

than $400 million awarded to 

UNOPS by the U.S. Agency for 

International Development 

(USAID) from 2004 through 2008. 

GAO was asked to (1) assess the 

extent to which UNOPS has 

addressed key concerns about its 

internal controls, and (2) evaluate 

USAID’s oversight of UNOPSimplemented projects. To address 

these objectives, GAO reviewed 

UNOPS and USAID policies and 

grant documentation. 

What GAO Recommends

GAO recommends that the 

Secretary of State work with other 

member states to encourage 

UNOPS’s continued reform in areas 

of vulnerability identified by UN 

auditors and assessment of the 

effectiveness of the reform effort. 

We also recommend that the 

USAID Administrator ensure that 

USAID document its approach for 

assessing PIOs’ eligibility for 

USAID funding and improve its 

guidance, training, and monitoring 

relating to the use of PIO audit 

provisions. State and USAID agreed 

with our recommendations. 

UNOPS acknowledged the need for 

an assessment of reforms, but 

stated that improvements have 

already been demonstrated. 

View GAO-10-168 or key components.

For more information, contact Thomas Melito 

at (202) 512-9601 or melitot@gao.gov. 
Page i GAO-10-168 

Contents 

Letter 1

Results in Brief 3 

Background 5 

UNOPS Reforms Are Proceeding, but the Effectiveness of Some 

Implemented Reforms Has Not Been Assessed 12 

USAID Has Not Consistently Implemented Its Oversight Policies 

When Making Grant Awards with UNOPS and Has Been 

Vulnerable to Program Fraud and Abuse 23 

Conclusions 35 

Recommendations for Executive Action 36 

Agency Comments and Our Evaluation 36 

Appendix I Scope and Methodology 38 

Appendix II UNOPS’s Locations Worldwide 42 

Appendix III Types of Services Provided by UNOPS 44 

Appendix IV Designated International Organizations by the 

Department of State 46 

Appendix V Results of GAO’s Survey of UNOPS Field Office 

Managers 51 

Appendix VI USAID Oversight Policies for Grants with Public 

International Organizations 53 

Appendix VII USAID’s Documented Pre-Award Assessments of 

UNOPS 55 

 UN Office for Project Services 
Appendix VIII Comments from the Department of State 57 

Appendix IX Comments from the U.S. Agency for International 

Development 59 

Appendix X Comments from the UN Office for Project Services 62 

Appendix XI GAO Contact and Staff Acknowledgments 65 

Related GAO Products 66

Tables 

Table 1: UNOPS Expenditures on Service Delivery Per Year, from 

2004 through 2008 7 

Table 2: Summary of Critical Findings from Selected UN Audits 

and Investigations of UNOPS, 2002 through 2008 8 

Table 3: UNOPS’s Efforts to Comply With Key International 

Internal Audit Standards 17 

Table 4: UNOPS’s Efforts to Comply with Key UN Ethics 

Requirements, as of October 2009 20 

Table 5: Audit Provisions USAID Used in Its Awards with UNOPS, 

2004 through 2008 30 

Table 6: Types of Services Provided by UNOPS 44 

Table 7: Department of State Designated International 

Organizations 46 

Table 8: UNOPS Field Office Responses to GAO Survey Question 

about Atlas Data Reliability 51 

Table 9: UNOPS Field Office Responses to GAO Survey Question 

about Conditions Making Atlas Use Difficult 52 

Table 10: USAID’s ADS Policies and Provisions for Grants with 

PIOs 53 

Page ii GAO-10-168 UN Office for Project Services
Figures 

Figure 1: Timing of USAID Grant Awards and Issuance Dates of UN 

Oversight Reports, 2004 through 2008 28 

Figure 2: Locations of UNOPS Offices, as of 2009 43 

Figure 3: USAID’s Documented Assessments of UNOPS, 2004 

through 2008 56 

Abbreviations 

ADS Automated Directives System 

BOA Board of Auditors 

FASS Field Administrative Support Service 

IIA Institute of Internal Auditors 

MCC Management Coordination Committee 

NGO nongovernmental organization 

OIOS United Nations Office of Internal Oversight Services 

OAA USAID Office of Acquisition and Assistance 

PIO Public International Organization 

PTF Procurement Task Force 

State Department of State 

UN United Nations 

UNDP United Nations Development Program 

UNOPS United Nations Office for Project Services 

USAID U.S. Agency for International Development 

This is a work of the U.S. government and is not subject to copyright protection in the 

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Page iii GAO-10-168 UN Office for Project Services
Page 1 GAO-10-168 

 

United States Government Accountability Office

Washington, DC 20548 

 

November 19, 2009 

The Honorable Carl Levin 

Chairman 

The Honorable Tom Coburn 

Ranking Member 

Permanent Subcommittee on Investigations 

Committee on Homeland Security 

 and Governmental Affairs 

United States Senate 

The United Nations (UN) Office for Project Services (UNOPS) provides 

about $1 billion a year in services including procurement and project 

management to UN and other international clients. Since 2002, audits and 

investigations of UNOPS have revealed alleged violations of law, weak 

internal controls, financial mismanagement, and breaches in accounting 

and procurement policies. Several projects that UNOPS implemented with 

U.S. funds were associated with these adverse findings. 

In 2006, UNOPS was near insolvency and the UN Controller placed 

restrictions—which lasted for about 2 years—on UN agencies’ use of 

UNOPS services. However, UN entities and U.S. agencies continued to use 

UNOPS to perform projects in post-conflict nations and other difficult 

environments because, according to some clients, UNOPS had the 

capacity to move quickly and maintain a presence in difficult operating 

environments. The UN Secretary-General appointed new management1

 in 

2006 to help restore the financial stability of UNOPS and to make changes 

that responded to weaknesses identified by UN auditors. The new 

management team stated that strengthening UNOPS’s internal controls 

was a major focus. To accomplish this goal, the management team took a 

number of steps within its first 3 years at UNOPS, including establishing 

an ethics office in 2006 and an internal oversight office in 2007.2

1

Unless we specify otherwise, the term “management” refers only to UNOPS’s senior 

management officials. 

2

Internal oversight and ethics are among the key areas identified in UNOPS’s accountability 

framework. 

 UN Office for Project Services 
 

From 2004 to 2008, UNOPS spent approximately $430 million 

implementing U.S. government grants awarded directly to UNOPS.3

 The 

majority of expenditures from these direct awards—about 92 percent—

were from the U.S. Agency for International Development (USAID).4

 Of the 

USAID grants awarded to UNOPS from 2004 through 2008, 84 percent 

were awarded to projects in Afghanistan, where most of the misconduct 

identified by audits and investigations occurred. As a member of the 

Executive Board, the United States has expressed concern over 

weaknesses at UNOPS identified in the UN audit reports. For example, in 

2004 a Department of State (State) official at the U.S. Mission to the UN 

called for UNOPS management to report on steps it was taking to ensure 

sound financial controls, and encouraged member states to do whatever 

was necessary to ensure that UN managers implemented the UN audit 

recommendations. In addition, in 2008, State officials made public 

statements about UNOPS’s internal oversight arrangements and inaccurate 

inventory reports. 

Given the concerns that have arisen regarding UNOPS’s management and 

relationship with UN and U.S. organizations, you asked us to examine 

oversight and accountability within UNOPS operations. Specifically, this 

report (1) assesses the extent to which UNOPS has addressed key 

concerns about its internal controls and (2) evaluates USAID’s oversight of 

UNOPS-implemented projects. 

To address these objectives, we examined audits and investigations of 

UNOPS’s activities, interviewed UNOPS officials, and analyzed documents 

relating to initiatives designed to strengthen UNOPS’s internal controls. 

We also interviewed UNOPS clients in New York, New York; Washington, 

D.C.; and Geneva, Switzerland. We reviewed applicable professional 

standards and guidelines for performing audits and investigations, 

including the Institute of Internal Auditors’ International Standards for the 

Professional Practice of Internal Auditing5

 and the UN Uniform Guidelines 

 

3

UNOPS also spent an additional $97.8 million of U.S. funds indirectly as a subcontractor 

on U.S. government projects. 

4

In addition to USAID, the Departments of Defense, State, and Agriculture have funded 

small grants to UNOPS in Afghanistan, Iraq, and the Occupied Palestinian Territories. 

USAID categorizes UNOPS as a Public International Organization (PIO), which means that 

it is an organization established by international agreement and whose governing body is 

composed principally of foreign governments or other PIOs. 

5

UNOPS adopted the IIA’s International Professional Practices Framework, which also 

includes a Code of Ethics. 

Page 2 GAO-10-168 UN Office for Project Services
 

for Investigations. For the purposes of our study, we selected key audit 

and investigation standards to examine the extent to which UNOPS has 

implemented them. In addition, we prepared and administered a survey to 

help us assess the extent to which UNOPS’s implementation of an 

electronic project database, Atlas, has strengthened its internal controls.6

Finally, we reviewed USAID’s acquisitions policies, collected and reviewed 

documentation from the USAID missions that awarded grants to UNOPS 

from 2004 through 2008, examined agreements between U.S. agencies and 

UNOPS during this time, and interviewed USAID officials in Washington, 

D.C. and at USAID missions in Afghanistan, Haiti, Liberia, and Sudan. 

Appendix I provides a detailed discussion of our scope and methodology. 

We conducted this performance audit from July 2008 to November 2009 in 

accordance with generally accepted government auditing standards. Those 

standards require that we plan and perform the audit to obtain sufficient, 

appropriate evidence to provide a reasonable basis for our findings and 

conclusions based on our audit objectives. We believe that the evidence 

obtained provides a reasonable basis for our findings and conclusions 

based on our audit objectives. 

UNOPS management is taking action to implement reforms that address 

concerns about the organization’s internal controls, as identified by audits 

and investigations, but the effectiveness of some of the implemented 

reforms has not been assessed. Examples of management’s efforts include 

(1) the development of UNOPS’s centralized project tracking system, 

Atlas, which is designed to provide project financial data more quickly to 

management; (2) the establishment of an internal oversight office in 2007; 

and (3) the establishment of an ethics office in 2006 to provide a 

mechanism for identifying ethical concerns. While changes to Atlas have 

improved UNOPS’s documentation of financial data, the extent of the 

improvement is uncertain, because, for example, UNOPS management 

does not systematically assess the reliability of data in Atlas. Although 

UNOPS’s internal oversight has been strengthened by the creation of an 

oversight office, 2 phases of an investigation of UNOPS’s activities in 

Afghanistan have yet to begin. UNOPS had no investigative capacity of its 

own and had to seek out external investigation services for which it is still 

Results in Brief 

 

6

Atlas is a corporate Web-based Enterprise Resource Planning system, that includes 

functions other than project management, such as human resources management. Atlas is 

used by UNOPS, UNDP, and the UN Population Fund. We refer throughout this report to 

specific functions of the Atlas system. 

Page 3 GAO-10-168 UN Office for Project Services
 

negotiating the scope and cost. In addition, while UNOPS’s ethics office 

meets most of the UN Secretary-General’s requirements, the extent to 

which the office is performing its mandated duties is uncertain because 

the effectiveness of the office’s activities has not been assessed. Finally, 

UNOPS’s Executive Board lacks full access to internal audit reports that 

could provide greater insights into UNOPS’s operations. 

While USAID’s policies for making grants with Public International 

Organizations (PIO)—such as UNOPS—require it to assess grantees and in 

some cases to include a provision under which the grantee agrees to give 

USAID access to oversight information, USAID has not consistently 

applied these policies when making grant awards with UNOPS. USAID 

could not provide documentary evidence of required assessments for 7 of 

the 11 awards to UNOPS issued from 2004 through 2008. USAID did 

provide evidence of 4 assessments; however, it did not acknowledge the 

adverse findings from multiple UN audits and investigations, including 

weaknesses in UNOPS’s internal controls and financial management. In 

addition, for 5 of its 11 awards USAID, as the sole contributor, did not 

include the required audit provision that would have allowed USAID 

access to financial records substantiating how UNOPS spent U.S. grant 

funds. Furthermore, for 4 additional awards, USAID had the discretion, as 

the largest contributor, to negotiate for the same provision but did not 

exercise such discretion, even though in 3 cases the only other 

contributions to the awards were small contributions from UNOPS. The 

omission of the required audit authority was due to an absence of clear 

guidance, and no training or monitoring of this provision. USAID’s failure 

to adhere to its policies severely limited its audit access to UNOPS grants 

that were associated with alleged findings of criminal actions and 

mismanaged funds. For example, in Afghanistan USAID investigators were 

unable to acquire information needed to substantiate UNOPS use of 

USAID grant funds for several projects of concern. 

We make recommendations in this report to the Secretary of State to work 

with member states to (1) support UNOPS’s continued reform in areas of 

vulnerability identified by UN auditors and (2) encourage UNOPS 

management to assess the effectiveness of the reform effort. We also 

recommend that the USAID Administrator ensure that USAID (1) develop 

and document its approach for assessing eligibility of PIOs for USAID 

funding, (2) define the terms and definitions in its existing guidance on 

PIO audit provisions permitting USAID access to financial records and 

documents, (3) ensure that cognizant contracting staff are sufficiently 

trained on the use of the PIO audit provisions, and (4) establish an 

Page 4 GAO-10-168 UN Office for Project Services
 

approach to monitor whether the PIO audit provisions are implemented as 

required. 

We requested and received written comments on a draft of this report 

from State, USAID, and UNOPS. We have reprinted these comments, with 

our responses, in appendixes VIII through X. State endorsed the main 

findings and conclusions of the draft report and concurred with the 

recommendation that it encourage assessment of the impact of UNOPS’s 

reform efforts. USAID concurred with our recommendations and proposed 

an agency plan to implement each recommendation including target 

completion dates. Specifically, USAID agreed that it needs to adopt 

improved procedures, stronger guidance, training, and monitoring related 

to the use of Public International Organizations (PIO) audit provisions. 

UNOPS acknowledged the need for assessment of long-term impact of its 

reforms, but stated that the most recent external audit and improved 

financial position are indicators that demonstrate improvement. We 

incorporated technical comments from UNOPS in our report where 

appropriate. 

Background 

UNOPS is an Autonomous, 

Self-Financing UN Entity 

UNOPS originated in 1974 as part of the UN Development Program 

(UNDP), but has since become an autonomous, self-financing UN entity. 

UNDP, which is the UN’s global development agency, established the 

office to provide flexible procurement services for multidisciplinary 

projects.7

 Effective January 1995, the UN General Assembly established 

UNOPS as a “separate and identifiable UN entity” to provide services to 

UN organizations and to governmental, intergovernmental, and 

nongovernmental entities.8

 At the time UNOPS did not report directly to its 

 

7

UNDP originally named UNOPS the Office for Projects Execution in 1974 but renamed it 

the Office for Project Services in 1988. 

8

The Secretary-General had proposed to separate the Office for Project Services from 

UNDP largely because of the perception of a potential conflict of interest at UNDP. The UN 

Advisory Committee on Administrative and Budgetary Questions also expressed concerns 

about the compatibility of the global service provision and project implementation function 

of OPS with UNDP’s primary role as a central coordinating and funding agency. 

Page 5 GAO-10-168 UN Office for Project Services
 

governing body, the Executive Board,9 but instead reported to it through a 

Management Coordination Committee (MCC) chaired by the UNDP 

Administrator to provide additional oversight over UNOPS. In September 

2008, based on an MCC recommendation, the Executive Board moved to 

make UNOPS completely autonomous by removing all ties to UNDP. The 

MCC was renamed the Policy Advisory Committee to reflect its change 

from being a part of UNOPS’s governance structure to now serving in an 

advisory capacity. As a result, UNOPS’s Executive Director now has 

independent authority and accountability for the conduct of UNOPS’s 

business. See appendix II for a description of UNOPS’s locations. 

UNOPS was created to be a self-financing entity and does not receive any 

of its annual budget from assessed or voluntary contributions from 

member states. All of its resources come as fees-for-service. However, 

UNOPS does benefit from UN exemptions and immunities.10 For example, 

UNOPS is exempt from some taxes and custom duties on imports and 

exports. According to UNOPS officials, UNOPS and most of its officials 

can import and purchase goods duty-free. 

UNOPS Provides Services 

to a Range of Clients 

UNOPS provides services to a range of UN and other clients. These 

services include project management, procurement, human resources 

management, financial management, and UN common services.11 See 

appendix III for a detailed list of UNOPS services by type. Its clients 

include governments, UN agencies, international financial institutions, 

intergovernmental organizations, and nongovernmental organizations 

 

9

UNOPS, UNDP, and United Nations Population Fund share an Executive Board. The 

Board comprises representatives from 36 countries who serve on a rotating basis. The 

members for 2009 are Angola, Antigua and Barbuda, Austria, Azerbaijan, Bhutan, Central 

African Republic, China, Columbia, Cuba, Denmark, Finland, France, Germany, Haiti, India, 

Islamic Republic of Iran, Lao People’s Democratic Republic, Malawi, Mauritania, Mexico, 

Netherlands, New Zealand, Norway, Republic of Korea, Russian Federation, Senegal, 

Serbia, Sierra Leone, Slovakia, Somalia, Sweden, Turkey, United Kingdom, United Republic 

of Tanzania, the United States, and Yemen. 

10UNOPS officials said that while the UN Convention on the Immunities and Privileges of 

the United Nations specifies the privileges and immunities that are common to UN 

activities, personnel, assets, and property, the application of these privileges and 

immunities vary by country. For example, financial exemptions depend on the exemptions 

each government extends to the UN agency. 

11UN common services include negotiating and administering contracts for shared UN 

services and designing, contracting, and supervising construction of shared UN buildings 

and facilities. 

Page 6 GAO-10-168 UN Office for Project Services
 

(NGO). In addition, UNOPS is responsible for administration of the UN 

Global Marketplace Web site, which helps connect UN organizations and 

potential vendors and prepares the annual statistical report on the 

procurement activities of the UN system. 

UNOPS provides many of these services in difficult work environments, 

such as post-disaster and peace-building settings, developing countries, 

and economies in transition. Some UNOPS clients said they use UNOPS to 

implement programs because UNOPS can move quickly and maintain a 

presence in difficult environments, such as after natural disasters and in 

post-conflict and politically unstable countries.12 For example, the UN 

Children’s Fund used UNOPS as an implementing partner to perform 

rehabilitation, refurbishment, and other tsunami-related construction 

projects in Indonesia, Maldives, and Sri Lanka when there were no local 

contractors on the ground to perform the work. The UN Mine Action 

Service also uses UNOPS as its implementer of global demining services 

because UNOPS is one of the few organizations with expertise in mine 

detection and removal that has a presence in post-conflict and politically 

unstable countries. 

From 2004 to 2008 UNOPS 

Funding Levels Have 

Increased 

In the last 5 years, UNOPS spent about $4 billion delivering services to its 

clients, and its annual service delivery expenditures increased from less 

than $500 million in 2004 to more than $1 billion in 2008. (See table 1 for 

the amount spent on implementation of projects.) During the same time 

period, UNOPS’s operational reserve fund fell to as low as $4.4 million in 

2005, but was restored to more than $30 million in 2008. UNOPS has also 

increased its annual acquisition of new business from $728 million in 2004 

to $1.5 billion in 2008. 

Table 1: UNOPS Expenditures on Service Delivery Per Year, from 2004 through 2008 

U.S. dollars in millions 

Year 2004 2005 2006 2007 2008

Amount $495.27 $888.24 $706.00 $850.00 $1,060

Source: GAO analysis of data from UNOPS annual reports. 

 

12According to UNOPS’s management and some of UNOPS’s clients, many other UN service 

providers do not or will not work in some of the difficult environments where UNOPS 

does. 

Page 7 GAO-10-168 UN Office for Project Services
 

As shown in table 2, UN audits and investigations from 2002 through 2008 

have found significant financial mismanagement at UNOPS and a lack of 

financial transaction documentation.13

Table 2: Summary of Critical Findings from Selected UN Audits and Investigations 

of UNOPS, 2002 through 2008 

Multiple UN Audits Found 

Widespread Financial 

Mismanagement and 

Insufficient 

Documentation of 

UNOPS’s Financial 

Transactions 

UN Board of Auditors Report, July 2002 

• Insufficient revenue to cover costs. 

• Lack of contingency plan if deficits exceed the organization’s operational reserve. 

• Lack of system that can accurately compute and monitor actual project costs. 

UN Board of Auditors Report, July 2004 

• Lack of valid information for some costs and financial statements. 

• Lack of independently validated internal control framework. 

• Lack of information and communications technology strategy. 

• Lack of a proper system to estimate the cost of the services provided. 

UNDP Office of Audit and Performance Review,a May 2006 

• Lack of compliance with rules, regulations and procedures. 

• Absence of written procedures to guide staff. 

• Recurring expenditures in excess of approved budget. 

• Inadequate or lack of supervision by supervisors. 

UNDP Office of Audit and Performance Review,a May 2007 

• Deficiencies in managing project budgets and expenditures in the field. 

• Inaccurate expenditure reporting due to limited use of Atlas in the field. 

• Recurring expenditures in excess of approved budget. 

• Inadequate or lack of supervision by supervisors. 

 

13The Board of Auditors (BOA) produces reports on a two-year cycle that cover the 

preceding two years. For example, the BOA issued its report in 2002 for the biennium 2000 

to 2001, and its report in 2003 for the biennium 2001 to 2002. The BOA issued a report in 

2007 for the biennium 2004 to 2005 because UNOPS did not provide certified financial 

statements for the biennium in accordance with Financial Regulations and Rules and the 

audit was temporarily suspended. The BOA 2008 report covered the biennium 2006 to 2007. 

Page 8 GAO-10-168 UN Office for Project Services
 

UN Board of Auditors Report, June 2007 

• Operational reserves below desired level. 

• Balances not corroborated by supporting documents or in accordance with 

accounting records. 

• Breakdown in internal controls and financial reporting. 

• Lack of transparency and consistency in funding and fee-setting process. 

Procurement Task Force,b Kenya, August 2007 

• Lack of integrity and transparency in the UNOPS procurement process. 

• Alleged criminal activities to obtain UN contracts and money for personal use. 

UN Board of Auditors Report, July 2008 

• Unresolved interfund balances with UNDP, UN Population Fund, and other UN 

entities. 

• Shortcomings in assets management. 

• Inadequate Atlas project controls. 

• Inability to verify financial transactions. 

Procurement Task Force, Afghanistan, December 2008 

• Alleged embezzlement. 

• Misuse of project and UNOPS funds. 

• Fraudulent and wasteful procurement. 

Source: GAO analysis of data from UN audit and investigation reports. 

a

The Office of Audit and Performance Review is UNDP’s internal audit office. 

b

The Procurement Task Force was created on January 12, 2006, to address all procurement matters 

referred to the Office of Internal Oversight Services. 

The UN Board of Auditors (BOA) is the only external auditor authorized to 

audit UNOPS’s financial statements and reports to member states through 

the UN General Assembly. 

UNOPS Management Has 

Identified Areas for 

Reform based on Key 

Concerns about Internal 

Controls 

The UNOPS management team has identified areas for reform to address 

previously identified concerns about internal controls. These areas—

which include financial documentation, internal oversight, and ethics—are 

critical to developing a robust internal controls environment and reducing 

vulnerability to waste, fraud, and abuse. 

Audits of UNOPS found deficiencies in financial documentation and 

reporting, including a lack of required information on UNOPS’s costs and 

financial statements and a lack of documentation corroborating project 

balances. International internal control standards emphasize that a strong 

financial documentation system is essential to effective management. 

Without a system in place that can document timely, accurate, and 

Page 9 GAO-10-168 UN Office for Project Services
 

complete information, management’s capacity to ensure effective internal 

audits is limited. 

Internal oversight, which includes audits and investigations, provides 

management with information about the effectiveness of internal controls, 

compliance with rules and regulations, and proposed corrective measures. 

Internal audits can be used to track recommendations to ensure that 

management addresses these areas. UNOPS has adopted Institute for 

Internal Auditors standards, which are internationally recognized best 

practices for internal audits. Findings from investigations can be used to 

hold an organization or individuals accountable for wrongdoing. UN 

Uniform Guidelines for Investigations require, among other things, that 

management ensure sufficient resources to perform investigations. 

Previous audit reports have highlighted a lack of compliance with rules 

and a lack of documentation to support financial transactions at UNOPS, 

suggesting that some of the organization’s practices were at risk of ethics 

violations. Ethics policies could strengthen the organization’s internal 

controls environment by helping to ensure accountability and 

transparency within the organization. 

USAID Has Distinct 

Policies for Awarding 

Grants with PIOs, 

including UNOPS 

USAID, which provides the large majority of U.S. funding to UNOPS, has 

policies for making awards with PIOs that are distinct from its policies for 

making contracts, grants, or cooperative agreements with for-profit, 

nonprofit, international partners, and other organizations.14 For grants with 

PIOs, USAID primarily relies on policies in its Automated Directives 

System (ADS) 308, which outlines a different set of procedures for making 

 

14According to USAID policy, a cooperative agreement is used when the principal purpose 

of the relationship is the transfer of money, property, services, or anything of value to the 

recipient in order to accomplish a public purpose of support or stimulation authorized by 

federal statute; and substantial involvement is anticipated between USAID and the 

recipient during the performance of the proposed activity. Grants are also used when the 

principal purpose of the relationship is the transfer of money, property, services, or 

anything of value to the recipient in order to accomplish a public purpose of support or 

stimulation authorized by federal statute; however, the recipient is to have substantial 

freedom to pursue its stated program, and substantial involvement is not anticipated 

between USAID and the recipient during the performance of the proposed activity. 

According to USAID, PIOs normally receive grants from USAID, not cooperative 

agreements. USAID’s policy uses “grants” to refer to both grants and cooperative 

agreements. Accordingly, we use the term “grant” in this report when referring to USAID 

policy. 

Page 10 GAO-10-168 UN Office for Project Services
 

grant awards with PIOs.15 For example, competition is not required for 

grants with PIOs. USAID also follows a simplified grant format, uses a 

separate set of pre-award assessment criteria, and generally relies on the 

PIO’s own management for oversight— including internal audit and 

procurement policies—except when USAID is the sole contributor to the 

grant award. According to its PIO policy, USAID uses a list of international 

organizations compiled by State and maintained by the Office of Personnel 

Management to designate those PIOs that may receive USAID grant funds 

(see appendix IV for this list). The 124 international organizations on the 

list are separated into six categories: 

• UN organizations. 

• Specialized agencies of the UN and related organizations. 

• International financial institutions. 

• Inter-American organizations. 

• Other regional organizations. 

• Other international organizations. 

According to USAID data, from January 2004 to July 2009, USAID issued 

approximately $8.1 billion in grants or cooperative agreements to 50 

different PIOs. USAID’s data showed that the majority—60 percent—of 

USAID’s grants to PIOs had been awarded to UN organizations and 

specialized UN agencies. 

 

15USAID’s policy documents are in ADS. ADS 302 is the policy document for issuing 

contracts, and ADS 303 is the policy document for issuing grants and cooperative 

agreements to NGOs. In addition, for contracts, USAID applies policies and preaward 

procedures outlined in the Federal Acquisition Regulations and in the USAID Acquisition 

Regulations. For grants with NGOs, USAID uses policies outlined in the Office of 

Management and Budget Circular A-110 and in the Code of Federal Regulations 22 CFR 

226. 

Page 11 GAO-10-168 UN Office for Project Services
 

UNOPS Reforms Are 

Proceeding, but the 

Effectiveness of Some 

Implemented Reforms 

Has Not Been 

Assessed 

UNOPS Reforms to Its 

Documentation System, 

Internal Oversight, and 

Ethics Are Proceeding 

UNOPS has taken actions to implement reforms in areas including its 

documentation system; internal oversight, including internal audits and 

investigations; and ethics. 

The current UNOPS management team has continued to develop Atlas, its 

centralized project management system, to address previously identified 

deficiencies in UNOPS’s documentation. In 2007, UNOPS established an 

internal oversight office, including an internal audit program modeled 

after Institute for Internal Auditors standards. As part of its effort to 

address previously identified deficiencies through internal oversight, 

UNOPS management proposed investigations into allegations of 

wrongdoing by UNOPS employees. In addition, the management team 

established an ethics office in 2006 according to UN guidance on the roles 

of UN ethics offices. 

The current UNOPS management team has continued to develop Atlas, its 

centralized electronic project management system, to address previously 

identified deficiencies and thereby ensure that its design reduces the risk 

of fraud, waste, and abuse and strengthens internal and financial controls. 

Atlas has been in use at UNOPS since 2004 and is designed to 

systematically consolidate and track project data worldwide, including 

financial transactions. 

Documentation System 

Prior to Atlas, UNOPS field offices used the Field Administrative Support 

Service (FASS). FASS, which is not a common platform, required UNOPS 

offices to each maintain their own database for tracking projects. 

Headquarters management did not have real-time capability for tracking 

project or field office expenditures and, therefore, had limited capacity to 

identify either poor performance or other problems with grants or 

contracts. According to a UNOPS official, most countries’ data systems 

before Atlas were unsatisfactory and were not integrated for centralized 

use or oversight. In addition, FASS provided no systematic way to include 

electronic documentation for every disbursement made by officials in the 

Page 12 GAO-10-168 UN Office for Project Services
 

field. Under the new system, project managers enter financial transaction 

data and Atlas creates and documents vouchers used to make payments. 

Information is now more readily accessible to management in 

headquarters and in the field offices. 

In July 2007 UNOPS management established the Internal Audit Office. 

Before UNOPS established this office, it had only minimal internal audit 

capacity. UNDP provided internal audit coverage to UNOPS until the 

office was established, but its capacity to audit UNOPS was limited. In 

2007, for example, the three staff members performing internal audits for 

UNOPS were only able to complete one of the nine planned audits and 

management reviews of UNOPS core units and activities before the 

establishment of UNOPS’s office in July. 

Internal Oversight 

To address previously identified deficiencies, UNOPS management agreed 

to fund investigations into allegations of wrongdoing by UNOPS 

employees. In 2006 and 2007 UNOPS management agreed to pay for the 

UN Office of Internal Oversight Services (OIOS) to investigate UNOPS 

activities in Afghanistan, Argentina, and Kenya. In 2007 UNOPS 

management requested further investigation of misconduct in 

Afghanistan.16 One investigation in Kenya and the first phase of the 

Afghanistan investigation found evidence of alleged criminal activity. In 

2009 UNOPS management approved the hiring of its first investigator and, 

in September, changed the name of the office from the Internal Audit 

Office to the Internal Audit and Investigations Group to reflect its 

expanded capacity. 

In July 2006 the current UNOPS management team established an ethics 

office modeled upon the UN Secretariat Ethics Office and UN guidance. 

The UN Secretary-General had made ethics reform a priority in 2005 and 

established a Secretariat Ethics Office in January 2006.17 UNOPS appointed 

its Ethics Officer “to advance United Nations reform and as part of its 

commitment to the highest standards of ethics, integrity, accountability 

and transparency.” Prior to 2006 UNOPS had neither an ethics office nor 

Ethics 

 

16UNOPS requested the investigation from OIOS, which referred the case to the 

Procurement Task Force. The first phase investigated the activities of the Country 

Coordinator for UNOPS’s operations in Afghanistan and Dubai, while the second and third 

phases were to investigate a UNOPS vendor and other lapses relating to management of 

funds in Afghanistan. 

17The UN General Assembly document establishing the UN Secretariat Ethics Office, 

ST/SGB/2005/22, was issued in December 2005, but entered into effect on January 1, 2006. 

Page 13 GAO-10-168 UN Office for Project Services
 

an ethics officer, thus no one had responsibility to identify and address 

ethics concerns. 

Reforms Have 

Strengthened Internal 

Controls, but the Extent of 

Their Effectiveness Has 

Not Been Assessed 

While changes to UNOPS’s project tracking system, Atlas, have improved 

documentation of projects at UNOPS, the effectiveness of these 

improvements is limited by the lack of systematic data reliability 

assessments and other system implementation inadequacies. Atlas has 

improved the internal controls environment at UNOPS in three primary 

ways: 

Project Tracking System Has 

Improved Documentation of 

Projects, but Weaknesses 

Remain 

• Atlas allows UNOPS management real-time global access to system data.18

According to UNOPS officials, this improves management’s capacity to 

oversee worldwide operations and track progress toward project 

completion by country office or region. As a result, managers have the 

opportunity to identify and correct problems, such as poor performance or 

fraud, much more quickly than they could under FASS. 

• Atlas requires some data to be entered for each project, allowing managers 

the ability to more systematically measure, track, and compare 

performance by project or office. For example, financial data and 

procurements for each project must be systematically entered into Atlas. 

In addition, the system requires documentation of every purchase order 

and allows each one to be checked, either in the field or from 

headquarters, against the project’s budget and cash balance. UNOPS 

officials said that these additional requirements have made Atlas more 

effective at tracking UNOPS’s assets than FASS. 

• Atlas incorporates some functions that may reduce the risk of fraud. For 

example, within months after he was appointed, the Executive Director 

 

18For example, a “financial dashboard”—a tool on Atlas that summarizes organization and 

project finances—makes Atlas more accessible to UNOPS managers by allowing them a 

quick view of budget, project expenditure, project income, and administrative expenditure 

data. Staff do not have unlimited access to global project data and other data in Atlas. 

UNOPS management assign each staff member a level of access on a case-by-base basis. 

Page 14 GAO-10-168 UN Office for Project Services
 

stated plans to require UNOPS field offices to document imprest19 account 

transactions in Atlas, because such transactions present a particularly high 

risk of fraud. Until they implemented this requirement, headquarters gave 

offices cash advances in imprest accounts and replenished the accounts 

monthly with only limited documentation of how offices spent the 

money.20 In September 2009, the officials reported that all offices were 

tracking imprest transactions in Atlas. Atlas also reduces vulnerability to 

fraud by using an electronic signature to verify that more than one person 

has been involved in every transaction as a management oversight 

measure. 

We found that three major weaknesses may limit Atlas’s potential to 

address some of UNOPS’s previously identified internal and financial 

control problems. 

• The timeliness, accuracy, and completeness of data in Atlas are 

limited, and UNOPS does not systematically assess the reliability 

of data in Atlas. Based on our survey of UNOPS’s field offices, more than 

a third of the offices reported that the timeliness, accuracy, and 

completeness of data in Atlas were limited (see appendix V for more 

complete results of our survey). The UNOPS Director of internal oversight 

also told us in December 2008 that the accuracy and completeness of data 

entry remain a concern. However, UNOPS management does not know the 

extent to which data reliability is a problem because UNOPS has not 

sought any systematic check on data accuracy. While UNOPS officials 

periodically run reports to see if information is consistent, these reports 

are run on an ad-hoc basis, particularly when issues arise on a particular 

project or office. UNOPS officials said there have not been any UNOPS 

management reports on frequency or types of errors discovered in 

reviewing data entered into Atlas. 

 

19“Imprest” refers to a use of cash for business transactions. Generally, the purpose of an 

imprest fund is to make small payments when the ordering of checks is not practical and 

where the interests of the U.S. government are best served by making payments in cash. 

Business in Afghanistan required large imprest accounts, because Afghanistan lacked the 

established banking system that is necessary for making noncash payments. 

20Although it took about 3 years to implement the requirement in all field offices because of 

the extensive effort required to reconcile the accounts, the Executive Director said he 

required the documentation of all imprest transactions in Atlas in Afghanistan first, 

because of the extensive use of an imprest account there and because of his concerns 

about financial mismanagement and fraud. 

Page 15 GAO-10-168 UN Office for Project Services
 

• The Atlas system can be difficult to use and frequent turnover 

presents a training challenge. Managers from all of the UNOPS field 

offices we surveyed identified some conditions that made Atlas difficult to 

use (see appendix V). For example, according to 15 of the 17 field 

managers who responded to our survey, Atlas produced reports that did 

not meet the needs of their offices, which made the system at least 

“somewhat difficult” to use. In addition, more than half of the respondents 

indicated that the system was slow, data entry took too long, system 

connectivity or access was poor, and the system contained technical 

glitches.21 A UNOPS official we interviewed told us that one of Atlas’s 

technical glitches was its failure to release funds when expenses are reevaluated. Another UNOPS official also said that UNOPS faces continued 

financial risk because it had not integrated all the necessary management 

controls. For example, UN WebBuy—the online procurement tool used by 

UNOPS—is not linked to Atlas, so there is no function for electronic 

approval of contract award ceilings, which leaves the organization 

vulnerable to possible price manipulation. Furthermore, while UNOPS’s 

Chief Information Officer told us UNOPS has offered nine training 

sessions on using Atlas in 2009 as of October, UNOPS officials said 

frequent turnover of staff at UNOPS presents a continuing training 

challenge. One official said there was a need to make the training more 

tailor-made for shorter-term employees and offer introduction training at 

more frequent intervals. 

• Several recommendations relating to Atlas from UNOPS internal 

oversight office have not been fully implemented. Several of the 

unresolved high priority audit recommendations from UNOPS’s 2007 and 

2008 internal audits relate to deficiencies in the Atlas system. For example, 

the Director of internal oversight at UNOPS reported to the UNOPS 

Executive Board in 2009 that there is a need to (1) reconcile Atlas records 

and bank statements for all ongoing projects, (2) issue a guideline on 

budget overrides and a control mechanism to mitigate the risk of 

nonauthorized expenditures, and (3) expedite the review and application 

of the new version of Atlas where all operational technical concerns are 

solved. 

 

21Between 9 and 11 of the offices we surveyed responded that each of these conditions 

made Atlas at least “somewhat difficult” to use. 

Page 16 GAO-10-168 UN Office for Project Services
 

Internal Audits at UNOPS UNOPS Has Established More Systematic Internal Audits 

Generally Comply with 

International Standards, but 

Phases of a Remaining 

Investigation of Alleged 

Wrongdoing Have Not Begun 

As of August 2009, we found that UNOPS’s internal audit function 

generally complies with key Institute of Internal Auditors (IIA) standards, 

as discussed in table 3.22

Table 3: UNOPS’s Efforts to Comply With Key International Internal Audit Standards 

Risk-based planning (IIA standards 2010 and 2110) 

Annual risk-based work plans informed by entity’s risk-management framework 

• In 2007, UNOPS hired a Director of internal oversight—then called the Head of the Internal Audit Office—who has developed a 

risk-based audit plan. UNOPS complied with the IIA standards for risk-based planning by completing a risk-based audit plan for 

2009 and 2010. 

Resource management—Audit (IIA standard 2030) 

Sufficient resources to achieve audit work plans 

• UNOPS’s Director of internal oversight and UNOPS management maintain that the organization has sufficient resources to 

achieve its audit work plans, which is consistent with the IIA standard for resource management. UNOPS internal oversight staff

allocations rose from 3 employees when UNDP performed UNOPS’s internal audits in 2007 to 10 in the fall of 2009, according to 

UNOPS’s Director of internal oversight, and UNOPS has almost tripled the office’s budget from about $620 thousand in 2006 to 

nearly $1.6 million in 2009. He also said, that based on the size of UNOPS, the staffing levels of its oversight office fall within the 

average range, according to an annual benchmark conducted for the international network of auditors within international 

organizations. The UNOPS Executive Board’s decision at its June 2009 session welcomed “the progress made to increase the 

internal audit capacity of the organization” and “the increased internal audit coverage in 2008.” 

Quality assurance (IIA standard 1312) 

External assessment (every 5 years) 

• In accordance with an IIA standard on quality assurance, UNOPS’s oversight office successfully underwent an external review in 

August 2009 by the former Director of Internal Oversight Services at UNESCO and Inspector General of the European 

Investment Bank, who is accredited with the IIA. 

Recommendation tracking (IIA standards 2500 and 2500.A1) 

System in place to monitor recommendations 

Process for following up on implementation status 

• UNOPS has complied with the IIA standards on recommendation tracking. UNOPS’s Director of internal oversight submitted a list 

of high priority audit recommendations from the oversight office and a list of audit recommendations unresolved for 18 months or 

more to the Executive Board, along with UNOPS’s 2009 annual report on the internal oversight office’s activities. 

Source: GAO analysis of UNOPS data. 

 

22Generally compliant means that there is evidence of a series of actions that indicate the 

organization has generally complied with the standard. 

Page 17 GAO-10-168 UN Office for Project Services
 

Sufficiency of Resources for UNOPS Investigations Is Unclear 

Because Remaining Phases of an Investigation Have Not Begun 

While UNOPS management has committed resources to investigations, the 

sufficiency of UNOPS’s resources for investigations is unclear because 

two phases of the investigation of its operations in Afghanistan have not 

yet begun. Although UN Uniform Guidelines for Investigations require 

management to ensure sufficient resources for investigations, the 

remaining phases of the investigation have not begun because negotiations 

between UNOPS and the OIOS over the investigation’s cost and scope 

have been slow.23 In 2007, when UNOPS management proposed the first 

phase of the investigation, UNOPS had no investigative capacity of its own 

and, thus, had to request and pay other investigators for their services.24

UNOPS management told us they selected OIOS because it is commonly 

viewed as the principal investigative authority for UN organizations. 

UNOPS management officials also said that selecting OIOS over other 

alternatives would be less likely to be seen as inappropriately influencing 

the investigations. However, as we reported previously, OIOS is not fully 

independent in investigating matters for UN funds and programs (and 

other UN entities), such as UNOPS. OIOS must negotiate the terms of 

work and payment for any investigations it conducts for UN funds, 

programs, and other UN entities.25 OIOS sent UNOPS a proposal for the 

second phase of the investigation about 5 months after the case was 

transferred to the OIOS Investigations Division from the Procurement 

Task Force (PTF),26 and UNOPS and OIOS management said negotiations 

were still ongoing because of disagreements over the proposed scope and 

cost of work. UNOPS management officials told us they found OIOS’s 

proposed cost too high and the proposed scope too narrow. State officials 

and a former PTF investigator said they are concerned that OIOS is not 

 

23According to UNOPS officials, many of the investigators that OIOS had hired from the 

Procurement Task Force (PTF) for phase one of the investigation have left OIOS, resulting 

in a loss of institutional memory regarding the work performed by the PTF. 

24UNOPS management proposed in 2006 that UNDP investigate UNOPS’s activities in 

Afghanistan, but decided to use OIOS’s services in 2007 after UNDP’s investigation was 

challenged by the subject of the investigation. 

25OIOS’s lack of financial independence means that high-risk areas could be excluded from 

adequate examination. See GAO, United Nations: Funding Arrangements Impede 

Independence of Internal Auditors, GAO-06-575 (Washington, D.C.: April 2006). 

26The PTF disbanded in December 2008. OIOS officials told us that their decisions on 

whether and how to investigate the PTF cases took several months after they were 

transferred to OIOS’s Investigations Division. 

Page 18 GAO-10-168 UN Office for Project Services
 

committed to pursuing the UNOPS investigations. However, OIOS officials 

said they were concerned about UNOPS’s willingness to pay, because 

UNOPS contested the cost of the first investigation of Afghanistan after it 

was completed by the PTF. Therefore, OIOS officials said they would not 

agree to the investigation until UNOPS had confirmed a payment schedule. 

As a result, the remaining phases of the investigation have not begun about 

3 years after the activities in Afghanistan that are the proposed subject of 

the investigation occurred.27 According to investigators who worked on the 

first phase of the Afghanistan investigation, lengthy delays increase the 

chance that documentation of the activities to be investigated may be lost 

or destroyed, thus hindering any eventual investigation and ultimately, 

accountability. Because arrangements for the investigation of UNOPS are 

not finalized, it is unclear whether UNOPS has met the UN Investigative 

Guideline requiring the organization to provide sufficient resources to 

perform investigations. 

In an effort to develop its own internal investigative capacity, UNOPS 

announced the opening of a position to hire a full-time investigator in 

August 2009, which has not been filled as of October 2009. UNOPS 

management officials told us they would consider contracting with 

additional investigators as needed. 

While we found that UNOPS’s Ethics Office generally complies with most 

of the key requirements for UN ethics offices of organizations outside the 

UN Secretariat as outlined in a 2007 UN Secretary-General’s bulletin, it has 

not met the requirement of annual reporting and has not fully met its own 

requirement for ethics training (see table 4). Furthermore, assessments of 

the effectiveness of UNOPS’s Ethics Office have not been conducted. 

UNOPS Ethics Office Has Met 

Most UN Requirements but Its 

Effectiveness Has Not Been 

Assessed 

 

27The PTF proposed the remaining phases of the Afghanistan investigation in its report on 

the first phase of the investigation in December 2008. 

Page 19 GAO-10-168 UN Office for Project Services
 

Table 4: UNOPS’s Efforts to Comply with Key UN Ethics Requirements, as of October 2009 

UN ethics requirement Efforts to comply with requirement Compliance status 

Develops ethics standards UNOPS has adopted ethics standards consistent with 

those of the UN Secretariat Ethics Office and conforms to 

the positions of that office. In addition, UNOPS employees 

are subject to the basic rights and duties of UN staff 

outlined in the 2002 UN Secretary-General’s bulletin.a

 

Generally compliantb

 

Holds annual training on 

ethics issues 

In January 2009 UNOPS management stated that UNOPS 

had redesigned and modernized its online course on 

ethics—developed by the United Nations Office on Drugs 

and Crime and used by the UN Secretariat—and required 

all UNOPS personnel to complete it by the end of March 

2009. 

According to the UNOPS Ethics Officer, 

UNOPS’s ethics training is one-time training, 

not annual as required. Although the training 

is required for all UNOPS personnel, 

UNOPS officials told us they have targeted 

between 800 and 1,000 of their 

approximately 2,000 personnel to complete 

the online training. They said that several 

hundred personnel cannot be expected to 

complete the training, because, for example, 

many personnel in the field are illiterate and 

many UNOPS contractors are only subject 

to the rules of the agencies for whom they 

are performing UNOPS contract work. As of 

October 2009 only 600 of the 800 to 1,000 

personnel expected to complete the training 

had saved a copy of the completion 

certificate online. Technical issues 

prevented the Ethics Officer from seeing 

directly who had taken the course, and thus 

the Ethics Officer cannot know if more than 

600 UNOPS staff have completed the 

training. According to UNOPS management, 

UNOPS’s policy requiring all personnel to 

complete ethics training exceeds the 

minimum UN-wide requirement. 

Provides confidential 

advice and guidance to 

staff on ethical issues 

The UNOPS Ethics Officer said he has provided 

confidential guidance on ethical issues to “a few” UNOPS 

employees, but that UNOPS does not have a record of the 

number of staff who have sought counsel on ethical issues. 

Generally compliant 

Plays a role in the 

protection of staff against 

retaliation (whistleblower 

protection policy) 

The UNOPS Ethics Office has mechanisms in place for 

staff to report fraud or seek protection from retaliation. 

UNOPS has established an anonymous hotline to report 

possible fraudulent or corrupt activity. In addition, 

submissions can be sent to fraudhotline@unops.org. 

UNOPS has adopted a whistleblower protection policy that 

formalizes protective measures for UN staff members, 

interns, and volunteers who have experienced retaliation 

for reporting misconduct in their working environment or for 

cooperating with a duly authorized audit or investigation, in 

accordance with a UN Secretary-General’s bulletin from 

2005. 

Generally compliant 

Page 20 GAO-10-168 UN Office for Project Services
 

UN ethics requirement Efforts to comply with requirement Compliance status 

Administers the 

organization’s financial 

disclosure program 

UNOPS has implemented a process for submission and 

review of financial disclosures and has taken steps to 

ensure compliance with its requirement. According to 

UNOPS’s 2008 policy on financial disclosure, many 

UNOPS personnel have an obligation to file either an 

annual financial declaration or a financial disclosure 

statement, including senior level personnel, all UNOPS 

personnel who are procurement specialists or whose 

principal duties are the procurement of goods and services, 

all operations center directors and managers, all project 

managers, UNOPS internal auditors, and the UNOPS 

Focal Point for Financial Disclosure. 

Management has taken appropriate actions to address 

incidents of noncompliance with the financial disclosure 

policy. For example, according to UNOPS management, 

when six staff did not meet the requirement by the May 31, 

2008 deadline, they were sent notices that they would be 

terminated if they did not comply. As a result, four of them 

eventually complied and two chose to leave UNOPS. As of 

September 2009, UNOPS management was unaware of 

any outstanding cases. An official said management was 

waiting for an independent contractor to complete required 

random checks of 2009 financial disclosures. 

Generally compliant 

Prepares an annual report 

of ethics-related activities 

UNOPS’s Executive Director included a brief summary of 

ethics-related activities in UNOPS’s 2008 annual report to 

the Executive Board. 

The UNOPS Ethics Officer did not prepare 

an annual report of the office’s activities in 

2007 or 2008. The Ethics Officer told us that 

because the Ethics Office became 

independent in January 2009, he will 

complete the office’s first formal annual 

report of ethics-related activities for activities 

in 2009. 

Participates as a member 

of the UN Ethics 

Committee, which is 

chaired by the head of the 

UN Secretariat’s Ethics 

Office 

The head of the UN Secretariat’s Ethics Office, who chairs 

the UN Ethics Committee, told us that UNOPS’s Ethics 

Officer participates regularly in committee meetings and 

that he is one of the major contributors. The committee 

reviews annual ethics reports of the committee members’ 

organizations and has drafted a UN-wide Code of Ethics, 

which was approved by the UN Secretary-General and is 

awaiting approval by member states in the UN General 

Assembly. 

Generally compliant 

Source: GAO analysis of UNOPS data. 

a

The purpose of the bulletin is to ensure that all UN staff are aware of the “standards of conduct for 

the international civil service” adopted in 2001. The bulletin is also based on the Charter of the United 

Nations, which establishes the universal standard for all staff members employed by the UN as the 

“highest standards of efficiency, competence and integrity.” 

b

Evidence of a series of actions that indicate the organization has generally complied with the 

guideline. 

Page 21 GAO-10-168 UN Office for Project Services
 

The effectiveness of the UNOPS Ethics Office remains unclear because the 

office’s activities have not been assessed. The UNOPS Director of internal 

oversight and the Ethics Officer told us that there have been no audits or 

assessments of UNOPS’s Ethics Office. Although the Ethics Office was 

established in 2006, they said it is too early to assess its effectiveness 

because the office has only been independent since February 2009.28 By 

contrast, the UN Secretariat Ethics Office, which was also established in 

2006, has been audited or assessed by three entities in the last year.29

UNOPS’s Executive Board 

Lacks Full Access to 

Internal Audit Reports that 

Could Provide Greater 

Insights into UNOPS’s 

Operations 

While UNOPS’s Executive Board receives information from various 

sources about the effectiveness of UNOPS’s financial and programmatic 

operations, the board members—including the United States—do not have 

full access to internal audit reports, which could increase transparency 

and provide further insight into UNOPS’s operations.30 As a member of the 

Executive Board, the United States works with other member states 

represented on the Board to ensure oversight and accountability of 

UNOPS’s resources. Currently, the Executive Board receives information 

on UNOPS’s operations from the BOA’s external audit reports on the 

organization’s financial statements and the UNOPS internal oversight 

office’s annual report summarizing the office’s findings and activities. For 

example, in 2009, UNOPS’s internal oversight office provided the 

Executive Board with the annual report for its first full year of operation. 

While these existing information sources help the Executive Board 

exercise its oversight responsibilities, access to UNOPS’s internal audit 

reports is limited. In September 2008, at its annual meetings, UNOPS’s 

Executive Board approved a policy that granted member states limited 

access to internal audit reports completed after their decision entered into 

effect. Member states are not given copies of the reports, but are able to 

read them at the UNOPS internal oversight office after officially requesting 

access. However, the United States and other member states may still be 

denied access to any UNOPS internal audit reports that were completed 

before September 2008, covering the time frame when the negative 

 

28The current UNOPS Ethics Officer formerly served simultaneously as the UNOPS Ethics 

Officer and the UNOPS General Counsel. 

29The UN Secretariat Ethics Officer said audits or assessments of the UN Secretariat Ethics 

Office have been conducted by the Independent Audit Advisory Committee, the UN Joint 

Inspection Unit, and the BOA. 

30The Executive Board is UNOPS’s governing body and, among other duties, approves 

UNOPS’s budget and recommends improvements. 

Page 22 GAO-10-168 UN Office for Project Services
 

findings were identified. By contrast, since December 2004, OIOS has 

provided members with full access to internal audit reports upon request. 

While USAID’s general policies for making grants with PIOs require USAID 

to evaluate grantees and to include provisions in some cases under which 

the grantee agrees to give USAID access to oversight information, USAID 

has not consistently implemented these policies when making grant 

awards with UNOPS. From 2004 through 2008, USAID did not meet its 

criteria for assessing UNOPS’s eligibility as a grantee before awarding 

each grant. Furthermore, in those assessments it did perform, USAID did 

not acknowledge adverse findings from a series of UN investigations and 

public UN audit reports. In addition, in the majority of these awards 

USAID did not negotiate to include a provision where UNOPS would agree 

to allow USAID access to UNOPS’s expenditure records and documents. 

We found that some of these omissions can be attributed to USAID’s lack 

of clear guidance, training, and monitoring of its required audit provisions. 

USAID’s failure to adhere to its policies limited its oversight of grants that 

were subsequently associated with alleged findings of criminal actions and 

mismanaged funds. 

USAID Has Not 

Consistently 

Implemented Its 

Oversight Policies 

When Making Grant 

Awards with UNOPS 

and Has Been 

Vulnerable to 

Program Fraud and 

Abuse 

USAID’s Policies Require 

USAID to Evaluate 

Grantees Before Making an 

Award and to Include 

Provisions Allowing 

Access to Oversight 

Information When 

Applicable 

USAID has policies that require it to evaluate PIOs before making an 

award and to include provisions to obtain access to information needed to 

oversee grant expenditures when USAID is the sole contributor to the 

award. According to the Domestic Working Group on Grant 

Accountability—a collection of federal, state, and local audit organizations 

tasked by the U.S. Comptroller General to suggest ways to improve grant 

accountability—pre-award assessments can provide the government with 

confidence that the grantee has the required financial systems to allow 

sufficient oversight. These assessments should ensure that an applicant 

has adequate financial systems and they should enable government 

agencies to decide whether to award the grant and if oversight conditions 

should be added.31 For grants with NGOs, USAID uses criteria for 

assessing grantees outlined by the Office of Management and Budget’s 

(OMB) Circular A-110. According to the Circular, these criteria can also 

apply to PIOs. In addition, USAID requires that the missions perform preaward assessments, as well as additional assessments whenever a 

 

31Domestic Working Group Grant Accountability Project, Guide to Opportunities for 

Improving Grant Accountability (Washington, D.C, October 2005). 

Page 23 GAO-10-168 UN Office for Project Services
 

modification significantly increases the amount of the original grant. The 

assessments are to ensure that (1) the grantee’s program is an effective 

and efficient way to achieve a USAID objective, (2) the grantee’s program 

and objectives are compatible with USAID, (3) there are no reasons to 

consider the grantee not responsible, and (4) the grant is made for a 

specific program of interest to USAID. 

In addition, under USAID policies, the application of certain audit 

provisions with PIOs depends on its contribution to the award relative to 

other donors—whether USAID is the sole or largest contributor. 

According to a 1988 USAID policy, when USAID is the sole contributor in a 

grant to a PIO, USAID shall include a provision in the grant requiring that 

the grantee provide all records and documents that support program 

expenditures to USAID or to the U.S. Comptroller General.32 USAID policy 

further states that if USAID is the largest contributor to a project it can, 

with the concurrence of State, seek to negotiate to apply increased audit 

authority to protect U.S. interests. Moreover, according to policy, when 

USAID is not the sole contributor to a UN award, USAID can apply the UN 

grant provision and the grant will be audited with established UN 

procedures.33 Appendix VI contains these USAID policies. 

USAID’s Process for 

Awarding Grants to 

UNOPS Did Not Include 

Required Steps for 

Evaluating the 

Responsibility of Grantees 

or Include Findings from 

Multiple UN Reports 

 

32USAID updated this policy in 2003 with minor wording changes that did not change the 

substance of the requirement. A USAID official said the revisions in the 2003 provisions 

were to update the provision with plain English, i.e., to delete the word “shall” and replace 

it with “is required to.” 

33While the grantee is not required to provide USAID access to its documents, under the UN 

grant provision, the grantee agrees to give the U.S. government a final report, including 

accounting for grant funds in sufficient detail to enable USAID to liquidate the grant. 

Page 24 GAO-10-168 UN Office for Project Services
 

During the years that the UN issued negative findings on UNOPS, USAID 

did not consistently perform pre-award assessments to justify selecting 

UNOPS as a responsible grantee. While USAID could apply the OMB 

Circular A-110 to perform eligibility assessments as it does for NGOs, it 

does not use this guidance to perform similar assessments for PIOs.34

According to USAID officials, USAID does not perform the same type of 

assessments that it performs for other grantees or contractors, although 

one USAID official said that addressing this lack of assessment is currently 

one of their top priorities.35 To the extent that USAID does perform 

assessments of PIOs, the assessments occur at the mission level before the 

grant is awarded and whenever a modification significantly increases the 

amount of the original grant. The assessments are to be recorded in 

memos and documented with the grant award. According to USAID Office 

of Acquisition and Assistance (OAA) officials, this requirement is the only 

policy that requires eligibility screening activities of PIOs. 

USAID Did Not Consistently 

Assess UNOPS’s Responsibility 

as a Grantee 

However, USAID missions did not have official documentation of preaward assessments for more than half of its grants with UNOPS in the last 

5 years or for the majority of modifications that increased grant budgets. 

USAID could not provide official documentation of assessments for 7 of 

the 11 grants it made to UNOPS from 2004 through 2008 (see app. VII).36

USAID also lacked assessment documentation for the majority of 

modifications to UNOPS grant programs that increased the budget of the 

grant award. According to USAID OAA officials, procurement staff should 

document assessment criteria in a memo whenever a modification 

increases the budget or introduces new work to the program. However, 

USAID did not have records of assessments for 11 out of 14 modifications 

 

34For example, USAID uses criteria listed in the OMB Circular A-110 for special award 

conditions, including performance history, financial stability, and management systems. In 

addition to the criteria listed in the Circular A-110 for grants with NGOs, USAID also 

conducts pre-award surveys to ensure compliance with federal financial, procurement, 

personnel, and management system standards. 

35For example, in October 2009 USAID sent a team of professionals to UNOPS headquarters 

at the invitation of UNOPS management. USAID officials told us they planned to assess 

how USAID could develop a standard operating procedure to apply assessment criteria to 

PIOs. 

36Two of the memos USAID provided were unofficial documents. The pre-award memos for 

both the Afghanistan Rehabilitation of Secondary Roads grant and the Women’s Dormitory 

grant were unsigned, undated documents that restated the award criteria without providing 

an assessment. 

Page 25 GAO-10-168 UN Office for Project Services
 

that increased UNOPS’s grant budgets from 2004 through 2008. We 

previously reported that documentation is necessary to ensure that third 

parties can fully understand and review the actions that have occurred 

during the project period.37 For example, until 2006, the Afghanistan 

Mission had no documented assessments for modifications to the largest 

USAID-funded UNOPS project in Afghanistan—Rehabilitation of 

Secondary Roads—even though these modifications increased the scope 

and budget of the program by more than ten times its original amount. In 

2006 the Afghanistan Deputy Mission Director reported in an official 

memo that there was no information in the grant files justifying these 

modifications and thus he had to rely on limited information, including 

anecdotal inputs, to justify additional increases to the program. 

USAID OAA officials acknowledged that some of the memos documenting 

pre-award assessments from 2004 through 2008 could be missing. USAID 

officials told us that finding these memos from field offices was a difficult 

task, because the memos may be stored in the field and are not available 

from a centralized location. In addition, one USAID official said that 

institutional knowledge of grants is difficult to maintain at hardship posts 

where staff generally have only 1-year rotations. 

None of USAID’s four official pre-award assessments of UNOPS from 2004 

through 2008 acknowledged adverse findings from publicly available UN 

audits and investigations. 38 As we noted earlier in this report, from 2002 

through 2008, OIOS, the BOA, the UNDP Office of Audit and Performance 

Review, and the UNOPS Internal Audit Office all issued negative findings 

on UNOPS’s internal controls, financial monitoring, and lack of 

transparency. Furthermore, in 2004 and 2007, the BOA was unable to make 

a judgment about UNOPS’s financial statements due to UNOPS’s lack of 

sound financial controls and its unreliable financial accounting data. In 

2008, the BOA expressed an unqualified audit opinion of UNOPS’s 

financial statements, although the report also expressed the need for 

improvements in financial controls, asset management, and project 

USAID Did Not Acknowledge 

Information from UN Audits 

and Investigations of UNOPS 

while Continuing to Award 

Grants to UNOPS 

 

37GAO, Grants Management: EPA Has Made Progress in Grant Reforms but Needs to 

Address Weaknesses in Implementation and Accountability. GAO-06-625 (Washington, 

D.C.: May 12, 2006). 

38The four BOA reports issued from 2002 through 2008 are publicly available on the BOA 

Web site: http://www.un.org/auditors/board/reports.shtml. The two UNDP Office of Audit 

and Performance Review reports issued during this time are publicly available on the 

UNDP Executive Board Web site: http://www.undp.org/execbrd/. The OIOS Procurement 

Task Force reports are available through the U.S. Mission to the United Nations. 

Page 26 GAO-10-168 UN Office for Project Services
 

monitoring. However, USAID headquarters officials said they did not have 

knowledge of UN findings from the 2004 BOA report and several Mission 

officials had no knowledge of any UN findings, despite criticisms of 

UNOPS management by State. From 2004 through 2008, USAID awarded 

11 grants with multiple modifications that increased the grant budgets, all 

of which were required instances for USAID to reassess UNOPS as a 

responsible grantee.39 During this time USAID obligated $478.3 million to 

UNOPS.40 Figure 1 juxtaposes the timing of USAID’s grant awards and 

modifications with the issuance dates of these UN reports. 

 

39In addition, USAID made more than 30 administrative modifications to UNOPS grants. At 

the time of each of these modifications, USAID could have assessed UNOPS but was not 

required to do so. 

40USAID reported their data according to funds obligated to UNOPS, not funds expended 

by UNOPS. 

Page 27 GAO-10-168 UN Office for Project Services
 

Figure 1: Timing of USAID Grant Awards and Issuance Dates of UN Oversight Reports, 2004 through 2008 

UNDP Office of 

Audit and 

Performance 

Review, May 2007:

• Inaccurate 

expenditure 

reporting

2004 2005 2006 2007 2008 2009

UN oversight 

reports with critical 

findings on UNOPS

Dates when USAID 

was required to 

assess UNOPS’s 

eligibility as a grantee

Rehabilitation of secondary roads

Emergency drought relief

Schools and clinics

Bridge construction

Rehabilitation of Afghanistan Geologic Survey and Ministry of Mines and Industry Complex

Hydro-electric plants

Length of the USAID-funded project

New grant award: USAID performed no official pre-award assessment

New grant award: USAID performed official pre-award assessment

USAID increased grant's budget but performed no official assessment 

USAID increased grant's budget and performed an official assessment

Building bridges/health posts

Design and construction of boys and girls high schools

Stabilization along the 

Rutshuru-Ishasa Axis

Election assistance to democratic parties

Women’s dorm

UN Board of 

Auditors Report, 

July 2004:

• Lack of 

financial 

information and 

internal control 

framework

OIOS Procurement 

Task Force Kenya, 

August 2007:

• Criminal 

activities to 

obtain UN 

contracts and 

money for 

personal use

OIOS Procurement Task 

Force, Afghanistan, 

December 2008:

• Embezzlement, 

misuse of project 

funds, fraudulent 

and wasteful 

procurement

UN Board of 

Auditors Report, 

June 2008:

• Inadequate 

Atlas project 

controls and 

unresolved 

balances with 

UN entities

UNDP Office of Audit 

and Performance 

Review, May 2006:

• Lack of 

compliance 

with rules, 

regulations and 

procedures

UN Board of 

Auditors Report, 

June 2007:

• Continued lack 

of internal 

control 

framework

Sources: GAO analysis of UNOPS data; Art Explosion (clip art).

Page 28 GAO-10-168 UN Office for Project Services
 

USAID Grants Have 

Lacked Certain Required 

Audit Provisions and Were 

Associated With Findings 

of Criminal Actions and 

Mismanaged Funds 

USAID did not consistently include the audit provision that would have 

allowed it access to documentation of how UNOPS spent funds from 

grants awarded to UNOPS during the last 5 years. Under USAID policy, for 

awards where USAID was the sole contributor, the audit provision was 

required. Where USAID was not the sole contributor, the inclusion of the 

audit provision was not required, but USAID could have negotiated for its 

inclusion. USAID only included the sole contributor audit provision in 2 of 

its 11 awards. (See table 5.) 

USAID Did Not Consistently 

Include Audit Provisions 

Allowing Direct Access to 

UNOPS Grant Expenditure 

Documentation 

For five of the awards, neither UNOPS nor USAID recorded additional 

contributors to the award—making USAID unequivocally the sole 

contributor—but USAID failed to include the sole contributor audit 

provision in those awards. USAID mission officials said there was no 

explanation in USAID’s documentation to indicate why contracting 

officials did not apply the sole contributor audit provision when USAID 

was the sole contributor. In addition, for four of the awards, USAID had 

the discretion to negotiate for the same provision and did not exercise 

such discretion. 

Page 29 GAO-10-168 UN Office for Project Services
 

Table 5: Audit Provisions USAID Used in Its Awards with UNOPS, 2004 through 2008 

Award date Location 

USAID contribution to 

grant award 

Other contributors 

documented in grant Audit provisiona

February 2004 Afghanistan Sole contributor None UN grants 

February 2004 Afghanistan Sole contributor None UN grants 

May 2004 Afghanistan Sole contributor None UN grants 

September 2004 Afghanistan Sole contributor None UN grants 

August 2006 Sudan Sole contributor NonebUN grants 

May 2005 Liberia Largest contributor UNOPS in-kind contribution UN grants 

August 2005 Haiti Largest contributor UNOPS in-kind contribution UN grants 

September 2005 Afghanistan Largest contributor UNOPS in-kind contribution UN grants 

September 2008 Democratic 

Republic of the 

Congo 

Largest contributor Nonfederal contributionc UN grants 

July 2006 Haiti Sole contributor None Sole contributor 

June 2007 Afghanistan Sole contributor None Sole contributor 

Source: GAO analysis of UNOPS and USAID data. 

a

When USAID uses the UN grants audit provision, it relinquishes its access to grantee expenditure 

documentation. When USAID uses the sole contributor audit provision, it can require access to 

grantee expenditure documentation. 

b

According to a USAID official at the Sudan Mission, there was an indication in the grant file that 

UNOPS provided cost sharing by supplying staff and other services, but the official could not find this 

documented in the grant budget. 

c

USAID did not have records describing the “nonfederal contribution” documented in the budget 

section of its grant award. UNOPS officials said that additional contributions could have been made 

as in-kind contributions by UNOPS, which would not be recorded as transactions in UNOPS records. 

According to UNOPS data, USAID has been the only outside contributor to 

all 11 of its grants with UNOPS during the last 5 years, but these data did 

not include any in-kind contributions made to the award.41 In at least three 

awards, UNOPS made small, in-kind contributions to the award—for 

example, they provided staff to perform landscaping services and 

administrative support. USAID also listed a nonfederal donor contributing 

to another award. UNOPS senior officials said they were unaware of the 

contributions UNOPS made to the three USAID grants. They said that 

these contributions were “strange” because UNOPS’s mandate is to 

 

41According to a senior UNOPS official, USAID was the sole contributor to these projects 

because there were no other donors listed in their general ledger for transactions made in 

each of the projects. 

Page 30 GAO-10-168 UN Office for Project Services
 

provide implementation services, not to be a donor. They told us that 

these in-kind contributions might have been made to avoid USAID’s 

regulations. 

Consistent with these statements, USAID gave us a 2005 e-mail exchange 

where a UNOPS official asked that the proposed grant use a UN provision 

as an alternative to the sole contributor provision.42 When asked, the 

USAID contracting officer in charge of the grant mentioned what actions 

could be taken in order for the sole contributor audit authority not to be 

required, such as contributions to the grants from another entity. As a 

result, UNOPS then contributed to the grant’s budget, and USAID did not 

include the sole contributor audit provision within the grant award. 

USAID policy does not define sole contributor for the purposes of grants 

to PIOs. As a result we were unable to determine whether the four 

remaining awards would be considered sole contributor awards requiring, 

unless waived, the inclusion of the sole contributor audit provision. 

Nevertheless, as the largest contributor, USAID could have elected to 

negotiate for the application of selected procurement and audit policies 

with UNOPS to protect U.S. interests. USAID applied the UN grants 

provision to these four awards. 

USAID has not provided clear guidance to ensure its audit provisions are 

correctly implemented. We found that contracting officers have not been 

consistent in their use of the sole contributor audit provision because 

there is no clear definition of what constitutes a sole contributor in USAID 

policy. USAID OAA officials said this lack of definitional clarity might 

weaken contracting officers’ abilities to include the provision when 

negotiating to include audit access with UN officials. For example, USAID 

has not defined the amount of contribution, the type of contribution, or 

the type of contributor necessary to establish USAID as the sole 

contributor. In addition, USAID provides no guidance to ensure that the 

contracting officers drafting the grant award know whether USAID is the 

sole contributor to the grant, because contracting officers do not 

participate in country donor meetings. USAID officials acknowledged that 

the absence of definitions and the absence of clear guidance for 

USAID Lacks Clear Guidance, 

Training, and Monitoring of Its 

Required Audit Provisions with 

UNOPS and Other PIOs 

 

42The UNOPS official asked that the UNOPS rules and regulations for procurement be 

applied to the grant. These rules and regulations apply when the UN grants audit provision 

is used. 

Page 31 GAO-10-168 UN Office for Project Services
 

implementing the sole contributor audit authority have been weaknesses 

in their PIO policies. 

USAID has also not provided contracting officers with specific training on 

how to apply the provisions in its grants with PIOs. For example, 

contracting officers at three missions that awarded grants to UNOPS said 

they received no training on awarding grants to PIOs, and the most recent 

assistance management workbook for contracting officers did not include 

any guidance on when to use the different PIO audit provisions.43

Finally, USAID does not monitor whether the PIO audit provisions are 

implemented as required, in part because it has not developed or 

documented an approach to such monitoring. According to internal 

control standards for the federal government, management should provide 

ongoing monitoring of grant implementation performance.44 However, 

USAID OAA officials were not aware that in five of the seven grants with 

UNOPS for which USAID was unequivocally the sole contributor, the 

contracting officers had used the incorrect audit provision, in part because 

they had not monitored the provisions in these awards. While USAID’s 

Mission Compliance Checklist includes monitoring criteria to confirm 

other provisions specific to PIOs, it does not include a requirement to 

monitor whether the mission used the appropriate audit provision.45

USAID officials acknowledged that monitoring appropriate oversight 

provisions may not be a standard part of their monitoring protocol. 

According to USAID officials, missions do not document how and when 

the sole contributor audit provision is used in grant awards. The missions 

never check to determine if the provisions are correctly implemented, and 

the contracting officer’s choice of audit provision in the original grant 

award is not reviewed unless there are major changes to the award’s 

financial contributors. Furthermore, while USAID’s policy indicates that 

the sole contributor audit provision can be waived, the policy does not 

 

43The 2007 USAID Program Project Management Training Workbook has one page of 

information on PIO Grants that does not include guidance on applying audit provisions to 

PIO grant awards. The workbook also does not include guidance on performing pre-award 

assessments of PIOs. 

44GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1

(Washington, D.C.: November 1999). 

45USAID’s Mission Compliance Checklist includes a requirement to confirm that a PIO 

award includes the appropriate provision implementing E.O. 13224 Executive Order on 

Terrorism Financing from ADS 308 (UN and non-UN organizations). 

Page 32 GAO-10-168 UN Office for Project Services
 

include criteria for requesting a waiver. USAID OAA officials said they 

have never seen a request to deviate from the sole contributor provision. 

USAID’s failure to adhere to its policies severely limited its ability to 

require expenditure documentation from grants that were associated with 

findings of alleged criminal actions and mismanaged funds. From 2004 

through 2008 USAID obligated $450 million in awards to UNOPS that did 

not include the sole contributor audit provision to provide access to 

UNOPS’s expenditure documents.46 In 2008, the PTF found instances of 

fraud, embezzlement, conversion of public funds, conflict of interest, and 

severe mismanagement of USAID-funded UNOPS projects in Afghanistan, 

including the $365.8 million Rehabilitation of Secondary Roads project. 

According to the allegations in the investigation, a UNOPS official diverted 

reconstruction funds for personal use, including hundreds of thousands of 

dollars in USAID funds for rent, a home renovation, and other luxury 

items. In addition, the investigation found that the UNOPS official 

repeatedly violated rules and regulations by severely misappropriating 

project funds and by engaging in fraudulent and unlawful acts.47 The 

USAID Office of Inspector General also reported in 2008 that UNOPS did 

not complete projects as claimed and that projects had defects and 

warranty issues, as well as numerous design errors, neglected repairs, and 

uninstalled equipment and materials—all of which were billed as 

complete. UNOPS was also missing key documentation for expenditures 

and bills of quantity. 

USAID’s Failure to Adhere to 

its Policies Severely Limited Its 

Access to Information about 

UNOPS Grants Associated with 

Findings of Alleged Criminal 

Actions and Mismanaged Funds 

USAID had limited access to expenditure records and documents during 

these grant awards and during subsequent investigations because it did 

not include the sole contributor provision in its awards with UNOPS.48 As a 

result, USAID officials have not been able to require UNOPS to provide 

information to substantiate how it spent U.S. grant funds. USAID officials 

said that certain UNOPS officials were unwilling to furnish requested 

documents during the grant, and UNOPS would not respond to requests 

 

46USAID provided obligation data, not expenditure data for its grants made with UNOPS. 

47As of September 2009 UNOPS officials reported that the New York District Attorney’s 

Office had requested the cooperation of the UN and wrote to the UN Office of Legal Affairs 

asking for all documents relating to the case. The officials said the office plans to transmit 

the files to the District Attorney so the case can be pursued. 

48USAID did include the sole contributor audit provision in its most recent grant award 

with UNOPS in Afghanistan, a 2007 award to design and construct boys and girls high 

schools. 

Page 33 GAO-10-168 UN Office for Project Services
 

for meetings and documentation after the grant. For example, a lead 

USAID investigator asked for bills of quantity for UNOPS projects that 

were underperforming to see if USAID had overpaid for those projects and 

to quantify how much money USAID had lost. Although the investigator 

sought meetings with the head of UNOPS in Afghanistan and the Acting 

Country Director of UNDP, the officials never responded to his requests 

for meetings and never provided the requested documentation. The 

investigator said that such problems will likely continue to occur with UN 

entities if USAID does not have a way to compel the UN to cooperate. 

However, some UNOPS officials have subsequently cooperated with 

requests for grant information made by the USAID Inspector General and 

other USAID OAA officials. 

While USAID took actions related to UNOPS projects in Afghanistan based 

on the severity of the findings in the investigation reports, it took more 

than a year to reconcile the accounts, and USAID is still working to 

substantiate some claims from UNOPS. In July 2008 the Afghanistan 

Mission decreased UNOPS’s scope of work, deobligated unexpended 

balances from expired awards, and issued bills for collection for 

outstanding amounts that had been advanced to UNOPS.49 According to 

the Afghanistan Mission, UNOPS has since refunded the amounts 

requested in the bills for collection—including accrued interest and 

additional funds—and has also provided documentation for funds that had 

been incorrectly entered as expenditures for another international donor 

in the payment management system instead of expenditures belonging to 

USAID. However, the Afghanistan Mission is still working with UNOPS to 

substantiate claims for reimbursement that are being made for the 

Secondary Roads project that was terminated in December 2007. The 

UNOPS letter of credit was suspended in January 2008, requiring UNOPS 

to provide supporting documentation for approval before any additional 

funds were released. UNOPS has since requested $16 million from USAID 

for costs incurred before USAID canceled the program, and while USAID 

Mission officials have already reimbursed UNOPS $1.2 million, they are 

 

49USAID issued a bill for collection for $40,053 and deobligated the unexpended balance of 

$50,000 from the 2004 Emergency Drought Relief grant; issued a bill for collection for 

$22,392 and deobligated the remaining balance of $500,000 from the 2005 Rehabilitation of 

Afghanistan Geologic Survey and Ministry of Mines and Industry Complex grant; moved to 

close out the award and de-obligate the remaining balance from the 2004 Schools and 

Clinics grant; and secured a different implementer for follow-on work for the 2004 

Rehabilitation of the Women’s Dormitory grant. 

Page 34 GAO-10-168 UN Office for Project Services
 

still reviewing and clarifying UNOPS’s documentation to determine 

additional amounts of repayment.50

The current UNOPS management team has made significant progress in 

improving UNOPS’s financial position and in making changes to its 

systems that are designed to address the deficiencies highlighted in 

numerous UN oversight organizations’ audits and investigations. However, 

problems with data reliability in UNOPS’s project management system, 

lengthy negotiations slowing its investigations, and limited ethics reporting 

are evidence that UNOPS management’s reform efforts have not yet fully 

addressed UNOPS’s internal control weaknesses. By fully implementing 

remaining reforms and assessing the overall effectiveness of the reform 

effort, UNOPS can provide the Executive Board assurance that the 

problems have been addressed. 

Conclusions 

USAID’s policies are designed to provide USAID assurance that its project 

implementers are capable of responsibly managing U.S. funds. However, 

USAID’s pre-award assessments of UNOPS did not include the numerous 

negative findings in UN audit reports that would have alerted USAID to the 

risks involved when using UNOPS as an implementing partner. If these 

assessments had shown UNOPS’s risks, including its deficiencies in 

internal controls and inaccurate expenditure reporting, USAID may have 

recognized the importance of applying its required oversight authority to 

its grant awards. Instead, USAID’s inconsistent implementation of its audit 

policies made its programs vulnerable to fraud, waste, and abuse. USAID 

forfeited access to information that may have revealed mismanagement of 

USAID funds years before costly post-project investigations did. 

 

50UNOPS officials told us that they have submitted all the appropriate paperwork to USAID, 

but that USAID Mission officials have been unwilling to meet with them or discuss the 

requested reimbursement. USAID officials said they have been discussing the matter for 

several months with UNOPS officials. 

Page 35 GAO-10-168 UN Office for Project Services
 

Recommendations for 

Executive Action 

We recommend that the Secretary of State work with other member states 

to take the following 2 actions: 

1. support UNOPS’s continued management reforms as it addresses the 

areas of vulnerability that UN auditors have identified and 

rt. 

documents, 

 staff are sufficiently trained on the 

use of the PIO audit provisions, and 

o monitor whether the PIO audit provisions are 

implemented as required. 

ort 

ted 

e 

d 

ed 

t it 

2. encourage UNOPS management to assess the effectiveness of the 

reform effo

For adequate accountability of grants made with Public International 

Organizations (PIO), we make 4 recommendations to the USAID 

Administrator to ensure that USAID 

1. develop and document its approach for assessing the eligibility of 

Public International Organizations deemed responsible for use by 

USAID, 

2. define the terms and definitions in its existing guidance on PIO audit 

provisions permitting USAID access to financial records and 

3. ensure that cognizant contracting

4. establish an approach t

We requested and received written comments on a draft of this rep

from State, USAID, and UNOPS. These comments are reprinted in 

appendixes VIII through X, along with our responses to specific points. 

UNOPS also submitted technical comments that we have incorpora

into this report, as appropriate. In commenting on the draft, Stat

endorsed the main findings and conclusions of the draft report. 

Specifically, State concurred with the recommendation that it support 

UNOPS in its continued efforts to improve management practices an

committed to continue to encourage and monitor assessment of the 

impact of the reform effort. State noted that our assessment of UNOPS’s 

progress is both accurate and balanced. State also noted that reforms in 

Executive Board access to internal audit reports is particularly important 

to fostering integrity, ethical conduct, and transparency. USAID concurr

with our recommendations and proposed an agency plan to implement 

each recommendation and a target completion date. USAID agreed tha

UN Office for Project Services

Agency Comments 

and Our Evaluation 

Page 36 GAO-10-168 
 

needs to adopt improved procedures, stronger guidance, training, and 

monitoring related to the use of Public International Organizations (PIO) 

audit provisions. For each recommendation, USAID set an implementation

target date of either May or June of 2010. UNOPS provided comments on 

some of our findings and acknowledged the need for assessment of longterm impact of its reforms, but stated that the most recent extern

and improved f

al audit 

inancial position are indicators that demonstrate 

improvement. 

 of 

e to 

ill be available at no charge on the GAO Web site at 

http://www.gao.gov. 

of this report. GAO staff who made major contributions to this report are 

listed in appendix XI. 

Thomas Melito 

tional Affairs and Trade 

As agreed with your offices, unless you publicly announce the contents o

this report earlier, we plan no further distribution until 30 days from the 

report date. At that time, we will send copies to the Executive Director

UNOPS, the Acting Administrator at the U.S. Agency for International 

Development, the Secretary of State, the U.S. Permanent Representativ

the United Nations, and other interested congressional committees. In 

addition, the report w

f 

If you or your staffs have any questions about this report, please contact 

me at (202) 512-9601 or melitot@gao.gov. Contact points for our Offices of

Congressional Relations and Public Affairs may be found on the last page 

Director, Interna

Page 37 GAO-10-168 UN Office for Project Services
Appendix I: Scope and Methodology Appendix I: Scope and Methodology 

To assess the extent to which United Nations (UN) Office of Project 

Services (UNOPS) has addressed key concerns about its internal controls, 

we reviewed key UN and UNOPS reports and documents outlining 

changes UNOPS management made to the organization and its operations 

from 2006 to 2009. We obtained and reviewed official reports from 

UNOPS’s Executive Board and the UN General Assembly, UN SecretaryGeneral bulletins, and UNOPS operational directives. We interviewed 

senior officials from UNOPS in New York, New York; Copenhagen, 

Denmark; and Geneva, Switzerland; and other UN officials in New York. 

Specifically, we met with officials from 

• the UN Children’s Fund, 

• the UN Development Program (UNDP), 

• the UN Population Fund, 

• the Advisory Committee on Administrative and Budgetary Questions, 

• the UN Mine Action Service, 

• UN Ethics Office, 

• the Office of Internal Oversight Services, and 

• the Board of Auditors (BOA). 

We also met with clients of UNOPS in Geneva—the Global Fund to Fight 

AIDS, Tuberculosis, and Malaria; and the Enhanced Integrated 

Framework—and Washington, D.C.—the U.S. Agency for International 

Development and the Departments of State, Defense, and Agriculture. We 

also discussed UNOPS reforms with Department of State (State) officials 

in Washington, D.C. and New York City. 

We selected reforms in the areas of documentation, internal oversight, and 

ethics to track in more detail. We determined that these were key areas of 

reform through our review of UNOPS’s annual reports to its Executive 

Board and UNOPS’s Accountability Framework and in our discussions 

with UNOPS officials. We focused on reform efforts undertaken by the 

current management team since it was appointed in 2006. To assess the 

extent to which the Atlas project tracking system has improved the 

organization’s financial documentation, we administered a survey—with a 

response rate of 100 percent—to the managers of UNOPS’s 5 regional 

Page 38 GAO-10-168 UN Office for Project Services 
Appendix I: Scope and Methodology 

offices and 12 operations centers. We sent a draft of the survey to UNOPS 

management, who required that we cut almost half of the proposed 

questions in the survey, including questions we felt were important in 

assessing Atlas’s capacity to capture data and document transactions that 

could strengthen internal and financial controls. To determine how many 

survey respondents reported data reliability limitations in Atlas, we 

counted all respondents who answered that data were to no extent, to a 

little extent, to some extent, or to a moderate extent timely, accurate, or 

complete. To evaluate UNOPS’s reforms in internal oversight, we 

compared UNOPS’s internal audit program to Institute for Internal 

Auditors’ International Standards for the Professional Practice of Internal 

Auditing and UNOPS’s investigative program to the UN Uniform 

Guidelines for Investigations. We evaluated UNOPS’s ethics program 

against the requirements for UN Ethics Offices established by UN 

Secretary-General’s Bulletins ST/SGB/2007/11 and ST/SGB/2005/22 and 

against its own ethics policies. 

To evaluate USAID’s oversight of UNOPS-implemented projects, we 

reviewed information from both headquarters and the USAID missions. At 

headquarters, we reviewed USAID’s policies for awarding, monitoring, and 

obtaining results from grants, including USAID’s policies in the Automated 

Directives System, USAID’s Acquisition Regulations, the Office of 

Management and Budget’s Circular A-110, and the Federal Acquisition 

Regulations. We also reviewed reports on USAID’s Office of Acquisition 

and Assistance, including prior reports from GAO1

 and USAID’s Inspector 

General.2

 We reviewed program information from USAID’s missions, 

including pre-award assessment memos, grant agreements, and 

modification memos. We compared USAID’s grant-related activities from 

2004 through 2008 with the criteria in GAO’s Standards for Internal 

Control in the Federal Government.

3

 These standards, issued pursuant to 

the requirements of the Federal Managers’ Financial Integrity Act of 1982, 

provide the overall framework for establishing and maintaining internal 

control in the federal government. We identified whether USAID was the 

 

1

See GAO, USAID Acquisition and Assistance: Actions Needed to Develop and Implement 

a Strategic Workforce Plan, GAO-08-1059 (Washington, D.C.: September 2008). 

2

USAID, Office of Inspector General, U.S. Agency for International Development’s 

(USAID) Most Serious Management and Performance Challenges (Washington, D.C., 

October 23, 2008). 

3

See GAO, Standards for Internal Control in the Federal Government, 

GAO/AIMD-00-21.3.1 (Washington, D.C.: November 1999). 

Page 39 GAO-10-168 UN Office for Project Services
Appendix I: Scope and Methodology 

sole, largest, or smallest contributor to its grants with UNOPS from 2004 

through 2008 by reviewing the grant awards for additional donors and 

comparing this data with information from UNOPS officials. We then 

reviewed the Audit and Records provisions that were used in the grants. 

We created a comprehensive spreadsheet to compare the levels of USAID 

contributions with the Audit and Records provisions used. To determine 

whether USAID had documented pre-award assessments of UNOPS, we 

requested pre-award memorandum in accordance with USAID’s policies 

for 11 awards and for any modifications to those awards made with 

UNOPS from 2004 through 2008. We reviewed all available memos that the 

USAID missions maintained, but for some grants the missions did not have 

documentation of these memos in their files. To determine if USAID had 

included findings from UN reports when completing the pre-award 

assessments, we reviewed audits and investigations from the BOA4

 and the 

UNDP Office of Audit and Performance Review,5

 which we compared to 

findings in USAID’s pre-award assessments of UNOPS. We also reviewed 

investigations from the Procurement Task Force on UNOPS programs in 

 

4

United Nations General Assembly Report of the Board of Auditors, United Nations Office 

for Project Services Financial Report and Audited Financial Statements for the 

Biennium ended 31 December 2001, A/57/5/Add.10, (New York, New York; July 2002); 

United Nations General Assembly Report of the Board of Auditors, United Nations Office 

for Project Services Financial Reports and Audited Financial Statements for the 

Biennium ended 31 December 2003, A/59/5/Add.10, (New York, New York; July 2004); 

United Nations General Assembly Report of the Board of Auditors, United Nations Office 

for Project Services Financial Reports and Audited Financial Statements for the 

Biennium ended 31 December 2005, A/61/5/Add.10, (New York, New York; June 2007); 

and United Nations General Assembly, Financial Reports and Audited Financial 

Statements and Reports of the Board of Auditors for the period ended 31 December 2007, 

A/63/474 (New York, New York; June 2008). 

5

United Nations Executive Board of the United Nations Development Programme and of 

the United Nations Population Fund, UNOPS: Report of the UNDP Office of Audit and 

Performance Review to the UNOPS Executive Director on Internal Audit Services in 

2005, DP/2006/32 (New York, New York; May 2006); and United Nations Executive Board 

of the United Nations Development Programme and of the United Nations Population 

Fund, Report of the UNDP Office of Audit and Performance Review to the UNOPS 

Executive Director on Internal Audit Services in 2006, DP/2007/38 (New York, New York; 

May 2007). 

Page 40 GAO-10-168 UN Office for Project Services
Appendix I: Scope and Methodology 

Kenya and Afghanistan,6 and from the USAID Inspector General on UNOPS 

programs in Afghanistan.7

We used data provided by USAID from its database sources to determine 

the amount of funding USAID obligated to Public International 

Organizations (PIO), including UNOPS, from 2004 to July 2009. However, 

USAID was unable to provide accurate counts of its obligation 

information. For example, USAID provided us a list of its PIO grants from 

its Electronic Procurement Information Collection System, New 

Management System, and Global Acquisition and Assistance System 

databases, but this information contained numerous inconsistencies. We 

made numerous attempts to resolve inconsistencies in the information 

USAID provided over the course of our review, which caused us to 

question its accuracy. As a result, we used UNOPS expenditure data from 

its U.S. grant awards to identify the total amount of USAID funding 

UNOPS has spent in the last 5 years. We used this data to supplement the 

obligation information provided by USAID. 

In addition to our review of documents and grant files described above, we 

interviewed key staff at USAID headquarters in Washington, D.C., and 

USAID missions in Afghanistan, Haiti, Liberia, and Sudan and about how 

they conducted and documented grant-related activities since 2004. 

We conducted this performance audit from July 2008 to November 2009 in 

accordance with generally accepted government auditing standards. Those 

standards require that we plan and perform the audit to obtain sufficient, 

appropriate evidence to provide a reasonable basis for our findings and 

conclusions based on our audit objectives. We believe that the evidence 

obtained provides a reasonable basis for our findings and conclusions 

based on our audit objectives. 

 

6

United Nations Office of Internal Oversight Services Procurement Task Force, Final 

Report on a Concerned United Nations Staff Member and UNOPS Procurement, PTFR012/07 (New York, New York; August 2007); and United Nations Office of Internal 

Oversight Services Procurement Task Force, Report on UNOPS Afghanistan and Former 

United Nations Staff Member, PTF-R010-08 (New York, New York; December 2008). 

7

Office of Inspector General, U.S. Agency for International Development, Report of 

Investigation, United Nations Development Program (UNDP), (Manila, Philippines; 

2008). 

Page 41 GAO-10-168 UN Office for Project Services
Appendix II: UNOPS’s Locations Worldwide Appendix II: UNOPS’s Locations Worldwide 

United Nations Office of Project Services (UNOPS) operates from offices 

located worldwide, including headquarters, regional offices, operations 

centers, and project centers.1

 UNOPS’s five regional offices are located in 

New York, New York; Bangkok, Thailand; Copenhagen, Denmark; 

Johannesburg, South Africa; and Panama City, Panama. In 2006, UNOPS 

moved its headquarters from New York to Copenhagen.2

 UNOPS also has 

12 operations centers and 10 project centers throughout the world. Figure 

2 shows UNOPS’s primary office locations worldwide. From these 

locations UNOPS oversees activities in more than 50 countries. 

 

1

For the purposes of our report, we use the term “field offices” to refer to all offices other 

than headquarters. 

2

According to UNOPS management, reasons for moving UNOPS headquarters from New 

York to Copenhagen included rent in UNOPS’s offices in the Chrysler Building being too 

high and the offer of rent-free space in Copenhagen by the Danish government. 

Page 42 GAO-10-168 UN Office for Project Services 
Appendix II: UNOPS’s Locations Worldwide 

Figure 2: Locations of UNOPS Offices, as of 2009 

Uruguay

Montevideo

United States New York City

Tunisia

Tunis

Thailand

Bangkok

Switzerland

Geneva

Sudan

Juba

Sri Lanka

Colombo

South Africa

Johannesburg

Senegal

Dakar

Peru

Lima

Panama

Panama City

Nicaragua Managua

Kenya

Nairobi

Jordan

Amman

Israel

Jerusalem

Indonesia

Banda Aceh

India

New Delhi

Haiti

Port-au-Prince

Guatemala

Guatemala City

El Salvador

San Salavdor

Denmark

Copenhagen

Côte

d'Ivoire

Abidjan

Dem. Republic

of the Congo Kinshasa

Burma

Rangoon

Argentina

Buenos Aires

Afghanistan

Kabul

Kosovo

Pristina

Sources: GAO analysis of UNOPS data and Map Resources (map).

Page 43 GAO-10-168 UN Office for Project Services
Appendix III: Types of Services Provided by 

UNOPS 

Page 44 GAO-10-168 

As shown in table 6, United Nations Office for Project Services (UNOPS) 

services may be grouped according to the types of services it provides, 

although project management may encompass many different types of 

UNOPS services. 

Table 6: Types of Services Provided by UNOPS 

Service type Explanation of service type 

Project management • Designing projects and preparing annual action plans. 

• Identifying, recruiting, and managing human resources. 

• Procuring goods and services. 

• Capacity-building for institutions and training key personnel to ensure long-term 

sustainability. 

• Financial management, including provision of accounting services and customized reporting 

per client requirements. 

• Fund management, where resources are disbursed through pooled funding mechanisms. 

• Establishing and conducting monitoring and evaluation systems, and reporting on project 

implementation. 

Procurement • Implementation of information technology procurement systems. 

• One-time stand-alone procurement services. 

• Complete management of procurement process. 

• Advisory services relating to, for example, sustainable procurement. 

Human resources management • Recruitment and selection. 

• Human resources advice. 

• Managing contracts and entitlements. 

Financial management • Trust-fund management, financial services and reporting. 

• Review and approval (or recommendation for approval) of applications. 

• Assessment of national capacity, including government institutions and nongovernmental 

organizations (NGO), to implement loan or grant activities. 

• Assessment of capacities and mandates of international organizations and NGOs to 

implement activities. 

• Capacity development of national institutions, including NGOs, in financial management and 

accounting, reporting, project management, procurement, human resource management, 

knowledge management, and monitoring and evaluation. 

• Advice to applicants on interpreting and responding to loan or grant requirements through all 

phases from pre-project to final reporting. 

• Project monitoring and reporting. 

• Certification of use of funds. 

• Recommendation of additional disbursements. 

• Independent audit of financial records. 

• Audit of compliance with applicable agreements and procedures. 

Appendix III: Types of Services Provided by 

UNOPS 

 UN Office for Project Services 
Appendix III: Types of Services Provided by 

UNOPS 

Service type Explanation of service type 

UN common services • Negotiating and administering contracts for shared services. 

• Designing, contracting, and supervising construction of shared buildings and facilities. 

Source: GAO analysis of UNOPS data. 

Page 45 GAO-10-168 UN Office for Project Services
Appendix IV: Designated International Appendix IV: Designated International Organizations by the Department of State 

Organizations by the Department of State 

The U.S. Agency for International Development (USAID) uses a list of 

international organizations approved for detail and transfer of federal 

employees to designate Public International Organizations (PIO) that may 

receive assistance agreements.1

 This list is composed of 124 organizations 

that the Department of State has designated as an international 

organization, as shown in table 7. 

According to USAID data, USAID awarded grants or cooperative 

agreements to 50 different PIOs from January 2004 to July 2009 at a total 

estimated cost of approximately $8.1 billion.2

 The majority of the awards 

were to United Nations (UN) entities. The largest amount of money was 

budgeted for World Food Program grants, at about $1.9 billion, and for UN 

Children’s Fund grants, at about $1 billion. 

Table 7: Department of State Designated International Organizations 

United Nations (UN Secretariat, organs, and their subsidiary bodies and special 

programs) 

• United Nations Secretariat (UN) 

• UN Capital Development Fund (UNCDF) 

• UN Center for Human Settlements (UNCHS) 

• UN Children’s Fund (UNICEF) 

• UN Development Fund for Women (UNIFEM) 

• UN Development Program (UNDP) 

• UN Environmental Program (UNEP) 

• UN High Commissioner for Refugees (UNHCR) 

• UN International Training and Research Center (UNITAR) 

• UN Office on Drugs and Crime (UNODC) 

• UN Population Fund (UNFPA) 

 

1

The list is maintained by the Office of Personnel Management under the Federal 

Employees International Organizations Service Act. The list includes any organization that 

the Department of State has designated as an international organization approved for detail 

and transfer of federal employees and can be accessed on Department of State (State) Web 

site: http://www.state.gov/p/io/empl/126305.htm. According to State, because the United 

Nations (UN) qualifies as an international organization in which the U.S. government 

participates, special programs of the UN usually qualify under the statute as well. The list 

of UN organizations, therefore, is meant to be illustrative, not exhaustive. 

2

USAID officials told us they filtered archived information from different UNOPS database 

sources, including the Electronic Procurement Information Collection System, the New 

Management System, and the Global Acquisition and Assistance System to generate a 

report listing PIOs that received USAID grants or cooperative agreements since January 

2004. However, the report contained several data reliability concerns. 

Page 46 GAO-10-168 UN Office for Project Services 
Appendix IV: Designated International 

Organizations by the Department of State 

United Nations (UN Secretariat, organs, and their subsidiary bodies and special 

programs)

• UN Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) 

• UN University (UNU) 

• UN Volunteers (UNV) 

• International Court of Justice (ICJ) 

• International Civil Service Commission (ICSC) 

• International Criminal Tribunal for the Former Yugoslavia (ICTY) 

• International Criminal Tribunal for Rwanda (ICTR) 

• International Research and Training Institute for the Advancement of Women 

(INSTRAW) 

• World Food Program (WFP) 

Specialized agencies of the UN and related organizations 

• Food and Agriculture Organization (FAO) 

• International Agency for Research on Cancer (IARC) 

• International Atomic Energy Agency (IAEA) 

• International Civil Aviation Organization (ICAO) 

• International Fund for Agricultural Development (IFAD) 

• International Labor Organization (ILO) 

• International Maritime Organization (IMO) 

• International Telecommunication Union (ITU) 

• UN Educational, Scientific and Cultural Organization (UNESCO) 

• Universal Postal Union (UPU) 

• World Health Organization (WHO) 

• World Intellectual Property Organization (WIPO) 

• World Meteorological Organization (WMO) 

International financial institutions 

• Bank for International Settlements (BIS) 

• International Monetary Fund (IMF) 

• North American Development Bank (NADB) 

• UN Regional Development Banks 

• African Development Bank 

• Asian Development Bank 

• European Bank for Reconstruction and Development (EBRD) 

• Inter-American Development Bank (IDB) 

• World Bank Group 

• International Bank for Reconstruction & Development (IBRD) 

• International Center for Settlement of Investment Disputes (ICSID) 

• International Finance Corporation (IFC) 

• Multilateral Investment Guarantee Agency (MIGA) 

Page 47 GAO-10-168 UN Office for Project Services
Appendix IV: Designated International 

Organizations by the Department of State 

Inter-American organizations 

• Border Environment Cooperation Commission (BECC) 

• Inter-American Center of Tax Administrators (CIAT) 

• Inter-American Indian Institute (IAII) 

• Inter-American Institute for Cooperation in Agriculture (IICA) 

• Inter-American Institute for Global Change Research (IAI) 

• Inter-American Tropical Tuna Commission (IATTC) 

• Organization of American States (OAS) 

• Pan American Health Organization (PAHO) 

• Pan American Institute of Geography and History (PAIGH) 

• Pan American Railway Congress Association (ACPF) (Argentina) 

• Postal Union of the Americas, Spain and Portugal (PUASP) 

Other regional organizations 

• Asia Pacific Energy Research Center (APERC) 

• Colombo Plan Council 

• Great Lakes Fisheries Commission (GLFC) 

• International Energy Agency (IEA) 

• North Atlantic Assembly (NAA) 

• North Atlantic Treaty Organization (NATO) 

• Nuclear Energy Agency (NEA) 

• Organization for Economic Cooperation and Development (OECD) 

• South Pacific Commission (SPC) 

Other international organizations 

• Center for International Forestry Research (CIFOR) 

• Commission for Environmental Cooperation (CEC) 

• Commission for Labor Cooperation 

• Commission for the Conservation of Antarctic Marine Living Resources (CCAMLR) 

• Comprehensive Nuclear-Test-Ban Treaty Organization (CTBTO) 

• Convention on International Trade in Endangered Species of Wild Fauna and Flora 

(CITES) 

• COPAS-SARSAT (Search and Rescue Satellite System) 

• Global Biodiversity Information Facility (GBIF) 

• The Global Fund (to Fight AIDS, Tuberculosis and Malaria) 

• The Hague Conference on Private International Law (HCOPIL) 

• International Agreement on the Maintenance of Certain Lights in the Red Sea 

• International Bureau for the Permanent Court of Arbitration (PCA) 

• International Bureau for the Protection of Industrial Property 

• International Bureau for the Publication of Customs Tariffs 

• International Bureau of Weights and Measures (BIPM) 

• International Center for Agricultural Research in the Dry Areas (ICARDA) 

Page 48 GAO-10-168 UN Office for Project Services
Appendix IV: Designated International 

Organizations by the Department of State 

Other international organizations 

• International Center for the Study of the Preservation and Restoration of Cultural 

Property 

• International Coffee Organization (ICO) 

• International Committee of the Red Cross (ICRC) 

• International Cotton Advisory Committee (ICAC) 

• International Council for the Exploration of the Sea (ICES) 

• International Criminal Police Organization (INTERPOL) 

• International Crops Research Institute for the Semi-Arid Tropics (ICRISAT) 

• International Development Law Institute (IDLI) 

• International Energy Forum Secretariat (IEFS) 

• International Fertilizer Development Center (IFDC) 

• International Grains Council (IGC) 

• International Human Frontier Science Program Organization (HFSP) 

• International Hydrographic Organization (IHO) 

• International Institute for Cotton 

• International Institute for the Unification of Private Law (UNIDROIT) 

• International Mobile Satellite Organization (IMSO) 

• International Organization for Legal Metrology (OIML) 

• International Organization for Migration (IOM) 

• International Organization of Supreme Audit Institutions (INTOSAI) 

• International Plant Genetics Resources Institute (IPGRI) 

• International Rubber Study Group (IRSG) 

• International Science and Technology Center (ISTC) 

• International Seed Testing Association (ISTA) 

• International Service for National Agriculture Research (ISNAR) 

• International Tropical Timber Organization (ITTO) 

• International Union of Credit and Investment Insurers (Berne Union) 

• International Whaling Commission (IWC) 

• Inter-Parliamentary Union (IPU) 

• Iran-United States Claims Tribunal 

• Korean Peninsula Energy Development Organization (KEDO) 

• Multinational Force and Observers (MFO) 

• North American Commission for Environmental Cooperation (CEC) 

• North Pacific Anadromous Fish Commission (NPAFC) 

• Organization for the Prohibition of Chemical Weapons (OPCW) 

• Organization for Security and Cooperation in Europe (OSCE) 

• Pacific Aviation Safety Office (PASO) 

• Permanent International Association of Navigation Congresses (PIANC) 

• Regional Environmental Center for Central and Eastern Europe (REC) 

• Science and Technology Center in Ukraine (STCU) 

Page 49 GAO-10-168 UN Office for Project Services
Appendix IV: Designated International 

Organizations by the Department of State 

Other international organizations

• Sierra Leone Special Court 

• World Customs Organization (WCO) 

• The World Heritage Fund 

• The World Organization for Animal Health (OIE) 

• World Trade Organization (WTO) 

Source: GAO presentation of Department of State data. 

Page 50 GAO-10-168 UN Office for Project Services
Appendix V: Results of GAO’s Survey of Appendix V: Results of GAO’s Survey of UNOPS Field Office Managers 

UNOPS Field Office Managers 

We sent a survey to the managers of 17 United Nations Office of Project 

Service (UNOPS) field offices—its 5 regional offices and 12 operations 

centers. All 17 managers responded to the survey. Questions focused on 

UNOPS’s project management system, Atlas. See tables 8 and 9 below for a 

compilation of all the responses to survey questions referred to in this 

report. 

Table 8: UNOPS Field Office Responses to GAO Survey Question about Atlas Data Reliability 

To what extent, if any, do you believe that the data in Atlas for the entire UNOPS system have each of the attributes listed 

below? 

To no 

extent

To a little 

extent

To some 

extent

To a moderate 

extent 

To a great 

extent

To a very 

great 

extent

Timeliness 0 0 4 3 9 1

Accuracy 0 0 4 2 8 3

Completeness 0 2 2 2 9 2

Source: GAO analysis of survey responses from UNOPS field office managers. 

Page 51 GAO-10-168 UN Office for Project Services 
Appendix V: Results of GAO’s Survey of 

UNOPS Field Office Managers 

Table 9: UNOPS Field Office Responses to GAO Survey Question about Conditions Making Atlas Use Difficult 

Listed below are some conditions that might make it difficult for an organization to use Atlas. For each condition that your 

office has encountered please indicate how difficult if at all that condition typically has made it for your office to use Atlas. 

Condition has been encountered and has made it...? 

Condition 

has not been 

encountered

Not at all or a 

little difficult

Somewhat 

difficult

Moderately 

difficult 

Very 

difficult

Extremely 

difficult

System is slow 3 3 8 2 1 0

Poor connectivity or inability to access 5 3 5 4 0 0

Unclear what information the system is 

requesting 7 7 2 1 0 0

Unclear what information the system is 

requiring 7 7 2 1 0 0

Entering data takes too long 3 4 3 6 1 0

System requires documentation that is too 

detaileda

6 7 2 1 0 0

System is not flexible enough to capture 

different types of projects 6 7 3 0 1 0

Technical glitches 2 5 4 5 1 0

System produces reports that do not meet the 

needs of the field offices 1 1 6 5 4 0

System does not permit complete project 

documentation 8 3 4 2 0 0

Source: GAO analysis of survey responses from UNOPS field office managers. 

a

One office did not respond to this question. 

Page 52 GAO-10-168 UN Office for Project Services
Appendix VI: USAID Oversight Policies for 

Grants with Public International 

Organizations 

According to U.S. Agency for International Development’s (USAID) 

policies outlined in its Automated Directive System (ADS) 308, USAID is 

required to apply specific pre-award assessment policies when making 

grants with Public International Organizations (PIO). In addition, the ADS 

308 Mandatory Standard Provisions outline standard provisions that 

USAID, when applicable, is required to use. According to this policy, when 

a standard provision is determined to be applicable in accordance with the 

applicability statement, the use of such standard provision is mandatory 

unless a deviation has been approved. 

Table 10: USAID’s ADS Policies and Provisions for Grants with PIOs 

ADS 308.3.2–Grant Agreements with PIOs 

Effective October 10, 2003 

Grant Agreements with PIOs are appropriate when the Agreement Officer makes a pre-award determination that all of the following

conditions are met: 

A Support for a PIO’s program or activity (either an expansion of its current program or the initiation of a new program or activity) is 

considered to be an effective and efficient way to achieve a particular development assistance or disaster relief objective; 

B The program and objectives of the PIO are compatible with those of USAID; 

C There is no reason to consider the PIO not responsible; and 

D Grants are made for specific programs of interest of USAID. Under the “augmentation” rule, a USAID grant may not fund the 

general operating budget of a PIO if that general operating budget is being funded by voluntary contributions from the 

Department of State under its “international organizations” budget or U.S. assessed contributions or dues. This does not prohibit 

funding of administrative fees applicable to the USAID activity. 

The requesting office must include a memo addressing the points in this section in any implementation request to the Agreement 

Officer to award a grant to a PIO. 

ADS 308.3.6.2–Application of USAID’s Procurement and Audit Policies to a PIO 

Effective October 10, 2003 

If USAID is the sole contributor, USAID procurement policies and procedures will apply to purchases of goods and services by the 

grantee to the same extent as in grants to non-U.S. nongovernmental organizations (ADS 303.5.15), unless they are specifically 

waived. 

If USAID is not the sole contributor but is still the largest contributor, USAID, with the concurrence of the Department of State, Office 

of International Organizations (IO), may elect to negotiate the application of selected procurement and audit policies with the PIO to 

protect U.S. interests. 

If USAID is a minor contributor to a program, USAID will rely on the international organization’s procurement policies and procedures. 

ADS 308 Required as Applicable Standard Provisions for Grants to PIOs 

Standard Audit and Records Provision–Non-UN Grantees (December 2003) 

Applicable when USAID is not the sole contributor to the grant 

The grantee is required to maintain books, records, documents, and other evidence in accordance with the grantee’s usual accounting 

procedures to sufficiently substantiate charges to the grant. The grantee confirms that this program will be subject to an independent 

audit in accordance with the Grantee’s usual auditing procedures, and agrees to furnish copies of these audit reports to USAID along 

with such other related information as may be reasonably requested by USAID with respect to questions arising from the audit report. 

Appendix VI: USAID Oversight Policies for 

Grants with Public International 

Organizations 

Page 53 GAO-10-168 UN Office for Project Services 
Appendix VI: USAID Oversight Policies for 

Grants with Public International 

Organizations 

USAID Sole Contributor Provision (December 2003) 

Applicable when USAID is the sole contributor to the grant 

The grantee is required to maintain books, records, documents, and other evidence in accordance with the grantee’s usual accounting 

procedures to sufficiently substantiate charges to the grant. The grantee agrees to make available to USAID or the Comptroller 

General of the United States all records and documents that support expenditures made under the program. 

Audit and Records – UN Grants (July 1988) 

Applicable to grants to the United Nations when USAID is not the sole contributor 

The grantee agrees to furnish the U.S. Government with a final report on activities carried out under this grant, including accounting 

for grant funds in sufficient detail to enable USAID to liquidate the grant. 

It is understood that financial records, including documentation to support entries on accounting records and to substantiate charges 

against the grant, will be maintained in accordance with the grantee’s usual accounting procedures, which must follow generally

accepted accounting practices. All such financial records must be maintained for at least three years after the final disbursement of 

funds under this grant. 

The grantee confirms that the grant account will be audited applying established procedures under appropriate provisions of the

financial regulations and rules of the United Nations. The report must be submitted to the U.S. Mission to the UN in New York for 

forwarding to the USAID program office. 

Source: USAID policies 

Page 54 GAO-10-168 UN Office for Project Services
Appendix VII: USAID’s Documented Pre- Appendix VII: USAID’s Documented Pre- Award Assessments of UNOPS 

Award Assessments of UNOPS 

According to policy directives, the U.S. Agency for International 

Development’s (USAID) agreement officers, who are responsible for 

signing grants to Public International Organizations (PIO), must complete 

pre-award assessments documented in a memo from the requesting office 

that justify using the PIO as a grantee for the program. In addition, USAID 

officials told us that this assessment should also be specifically completed 

before a modification that significantly increases the budget of the original 

award. We reviewed available information from USAID missions for all 11 

of USAID’s awards with UNOPS from 2004 through 2008 to determine 

which awards and modifications documented these assessments (see 

figure 3). 

Page 55 GAO-10-168 UN Office for Project Services 
Appendix VII: USAID’s Documented PreAward Assessments of UNOPS 

Figure 3: USAID’s Documented Assessments of UNOPS, 2004 through 2008 

USAID did not provide documentation of 

an assessment memo

USAID provided documentation of an assessment 

memo addressing the Automatic Directive System 

(ADS) 308.3.2 criteria

USAID provided documentation of an assessment 

memo, but the memo was an unsigned, unofficial 

document that did not address the ADS 308.3.2 criteria

Source: GAO analysis of USAID data.

Aug. 23, 2004

Apr. 17, 2006

Oct. 17, 2006

Dec. 16, 2006

$182,769,875

$93,290,125

$2,980,100

$51,902,538

$594,230

$100,000

$64,742

$8,000,000

$22,462,000

$824,890

$35,000,000

$8,150,000

$6,888,175

$50,000

$996,408

$3,000,000

$6,804,774

$4,100,000

$31,850,000

$23,400,000

$5,000,000

$2,974,898

$228,210

$236,450

$2,568

$128,475

Aug. 31, 2004

Jan. 8, 2005

May 31, 2006

Nov. 21, 2007

Nov. 17, 2008

Jan. 18, 2007

Sept. 20, 2004

July 19, 2006

Aug. 22, 2005

Sept. 25, 2005

Dec. 5, 2005

July 10, 2006

Aug. 23, 2006

June 7, 2007

Sept. 30, 2008

Dec. 27, 2006

Sept. 30, 2008

May 16, 2005

Sept. 1, 2004

May 2004

Feb. 24, 2004

Feb. 5, 2004 Afghanistan: Rehabilitation and Reconstruction 

of National Secondary Roads

Afghanistan: Rehabilitation Restoration of the Women’s

Dormitory Building of the University of Kabul

Afghanistan: Rehabilitation of Afghanistan Geologic 

Survey and Ministry of Mines and Industry Complex

Afghanistan: Design and Construction of Boys

and Girls High Schools

Democratic Republic of the Congo: 

Stabilization along the Rutshuru-Ishasa Axis

Haiti: Rehabilitation of Hydro-Electric Plants

Sudan: Building Bridges/ Health Posts

Afghanistan: Schools and Clinics Construction 

and Refurbishment Program

Afghanistan: Emergency Drought Relief

Liberia: Barclayville Rapid Bridge Construction

Haiti: Election Assistance to Democratic Parties

Modification 04

Modification 11

Modification 14

Modification 15

Modification 07

Modification 01

Modification 01

Modification 01

Modification 02

Modification 05

Modification 02

Modification 03

Modification 06

Modification 08

Modification 10

Date Award title Starting budget

Modification

increased

budget by

USAID provided documentation

 of pre-award

assessment

Page 56 GAO-10-168 UN Office for Project Services
Appendix VIII: Comments from the Appendix VIII: Comments from the Department of State 

Department of State 

Page 57 GAO-10-168 UN Office for Project Services 
Appendix VIII: Comments from the 

Department of State 

Page 58 GAO-10-168 UN Office for Project Services
Appendix IX: Comments from the U.S. Agency Appendix IX: Comments from the U.S. for International Development 

Agency for International Development 

Page 59 GAO-10-168 UN Office for Project Services 
Appendix IX: Comments from the U.S. Agency 

for International Development 

Page 60 GAO-10-168 UN Office for Project Services
Appendix IX: Comments from the U.S. Agency 

for International Development 

Page 61 GAO-10-168 UN Office for Project Services
Appendix X: Comments from the UN Office Appendix X: Comments from the UN Office for Project Services 

for Project Services 

Note: GAO comments 

supplementing those in 

the report text appear 

at the end of this 

appendix. 

See comment 1. 

Page 62 GAO-10-168 UN Office for Project Services 
Appendix X: Comments from the UN Office 

for Project Services 

See comment 2. 

See comment 3. 

See comment 4. 

Page 63 GAO-10-168 UN Office for Project Services
Appendix X: Comments from 

the UN Office for Project 

Services 

Page 64 GAO-10-168 

Following are GAO’s comments on the UNOPS letter dated November 9, 

2009. 

1. Regarding investigations, UNOPS noted that only one of six 

investigations performed by OIOS is incomplete. Because investigators 

recommended the remaining two phases of the Afghanistan 

investigation after they found alleged criminal activity and 

mismanagement of funds in the first phase of the investigation, we 

maintain that timely investigation of these activities is essential for 

UNOPS to demonstrate that it has provided sufficient resources for 

investigations. Furthermore, the remaining phases include plans to 

investigate broader management responsibility for the inappropriate 

activities identified in the first phase. 

GAO Comments 

2. UNOPS stated that systematic assessment of Atlas takes place on an 

ongoing basis. However, according to some UNOPS officials we spo

with, assessment of data reliability was not conducted in a systema

manner. Moreover, based on our survey findings, data reliability 

remains an ongoin

ke 

tic 

g problem. 

at 

 all 

g 

 the course. 

 GAO has 

d 

 this review. 

3. Regarding ethics training, UNOPS reported that it has complied with, 

or exceeded UN requirements. We modified our report to note th

UNOPS’s policy exceeds UN requirements, but maintain that UNOPS is 

not fully meeting its own requirement to provide ethics training for

its personnel. Additionally, we reported that a technical glitch in the 

system has kept UNOPS management and Ethics Officer from verifyin

who has completed

4. UNOPS said that our report does not explain the “single audit 

principle” as it relates to external audits of UN entities. The United 

States supports the “single audit principle” and we note that

successfully completed a body of work reviewing UN entities in which 

we successfully gained the voluntary cooperation of UN entities to 

perform our work. We had similar cooperation from UNOPS and ha

access to sufficient information to complete

 UN Office for Project Services 
Appendix XI: GAO Contact and Staff Appendix XI: GAO Contact and Staff Acknowledgments 

Acknowledgments 

Thomas Melito, (202) 512-9601 or melitot@gao.gov 

In addition to the person named above, Phillip Thomas (Assistant 

Director), Jeffrey Baldwin-Bott, Erin Carson, Debbie Chung, Leah DeWolf, 

Etana Finkler, and McKenzie Lawyer Davies made key contributions to 

this report. Joel Grossman, Jackson Hufnagle, Grace Lui, and Jena 

Sinkfield also provided technical assistance. 

GAO Contact 

Staff 

Acknowledgments 

Page 65 GAO-10-168 UN Office for Project Services
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(320622) Page 68 GAO-10-168 UN Office for Project Services
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