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OAS Management Modernization Overview for CAAP: 15 July 2014

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Presentation on theme: "OAS Management Modernization Overview for CAAP: 15 July 2014"— Presentation transcript:

1 OAS Management Modernization Overview for CAAP: 15 July 2014

2 Overall approach Nine work areas Four time phases Several items sequenced after Strategic Vision, and after new SG appointed in 2015

3 Presentation today in 4 sections Specific Funds and Leadership 2015 current budget items 2015 capital expenditure items Looking ahead to 2016 and beyond

4 Specific Funds management (1) Reduction in small specific fund projects with high management load No.%$% o37552%0.00.0% until 50,00015421%2,107,7653.4% until 100,0006910%5,107,2278.2% until 200,000568%8,020,96412.9% until 500,000355%10,549,99417.0% until 1,000,000233%15,401,08024.8% More then 1,000,000101%20,989,03133.8% TOTAL722100%62,176,061100.0% PROJECTOCOMPLETION COST AVERAGE

5 Specific Funds management (2) Creation of Specific Fund “baskets”: where the OAS designs a programme and several donors contribute Take the MAPP model, apply it to the IACHR, and then to the Election Observer Missions Benefits of streamlined administration, more efficiency, better results Some degree of earmarking still possible in a hybrid model

6 Leadership Training Should be a priority for a restored training budget There is a middle-management gap in the organization that creates a long- term risk P1-P4 level employees with less than 10 years at the OAS are the least engaged, according to the staff survey. But they represent the future

7 Current vs Capital expenditure Current expenditure is “Spending on items that are consumed or only last a limited period of time” - Maintenance, salaries, travel, CPRs, training, evaluations, audits Capital expenditure is “An amount spent to acquire or upgrade productive assets such as buildings, equipment and software, in order to increase capacity or efficiency for more than one accounting period” - Building renovations, videoconference and computer equipment, software upgrades, converting to new HR or accounting systems

8 Independence of the Inspector-General Strengthen the IG office Oversight by an External Audit Committee, in accordance with global standards Expand the role of the Board of External Auditors to include the External Audit Committee functions

9 Evaluation Evaluation is a core accountability and performance function Currently only financed by some Specific Fund donors More efficient to contract out rather than conduct with in-house staff Evaluation emphasis should be on learning and improvement rather than control

10 Restore the training budget OAS needs a training budget The single most important priority identified in the staff survey Necessary to implement all the business process improvements Includes items like ethics training recommended by the BEA, and basic orientation for new staff

11 Balancing revenues and expenditures Three sets of measures recommended will need significant new spending: Stronger Inspector-General Office Evaluation function Restored training budget Propose to provide additional funds through three main measures Removal of early payment discount Closer application of Direct Costs ICR increase from 2016

12 Early payment discount Clearly met a need at a time of critical cash-flow problems But has “cost” the OAS about $5.5m since 2000 $533,000 discounted in 2013 Recommended by the BEA Needs approval at the Special GA

13 Direct Costs Direct costs are currently being undercharged Definition of Direct Costs is broad and application subjective Both programme staff and Specific Fund donors want to keep Direct Costs down, but this is concealing the real costs and significantly taxing the Regular Fund

14 Indirect Cost Recovery Current rates of 11% and 12% do not reflect actual costs Need to finance Inspector-General and Evaluation costs that are currently unfunded Propose increase to UN standard 13% for all new agreements effective 2016 Also propose to introduce a minimum ICR for small projects

15 Possible expenditure reductions Limit the number of staff attending international meetings Reduce the frequency of some international meetings, and hold more of them virtually Require rent-share from host states for all national offices, and/or Co-locate national offices with other InterAmerican organizations Postpone new mandates until they have full costing and an identified source of funds Rethink the number and size of reports to Member States, so they get what they need

16 OAS Capital Plan 2015-2018 A capital plan will encompass Long-term capital measures such as building renovations and overdue maintenance Once-in-a-decade exceptional measures such as SG transition costs and replenishing the reserve fund, and Modernization measures including IT systems, accrual accounting, procurement reform and modernization of human resources management

17 Modernization capital measures IT upgrade is the basis for modernization and streamlining in three other areas Conversion to accrual accounting Streamlined procurement Modern Human Resource Management Together will need about $8 million of which $4 million for IT and $1.5 million for accrual accounting (not full IPSAS)

18 Buying business cards: $15

19 Human Resources Successive cuts have left critical gaps and left the OAS exposed Start with Strategic Vision Then Organizational Design Then skills and gap analysis Classification review Fitting the people to the tasks 3-4 year process, including updated Human Resources regulatory framework

20 Looking ahead to the other 2015 items

21 New quota system 4 options Change nothing Fix the US contribution at about $49m and 49% and increase the rest to 100m Leave the total budget at $83m, reduce US to 49% and increase the rest to $83m Leave the non-US budget at $34m, reduce the US to 49% and reduce the whole budget to $66m

22 Change Management Change is always uncomfortable Change should be actively managed Have a plan (based on a clear vision) Communicate to engage Implement (through empowerment) Monitor progress and adjust Implementation Team Management Modernization Ombudsman

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