Office of the Inspector General Presentation on the Status of implementation of Recommendations June 29, 2017. Presented by Garry LaGuerre, Acting Inspector General

Assessing Risks Category of Risks 1. Strategic and Development/Governance 2. Operational 3. Reporting 4. Compliance

Assessing Risks (Cont.) Risk Measurement/Ranking The risk ranking scale that we have established is defined in terms of what is called the vulnerability scale (i.e., Very High, High, Medium, Low and Very Low). “Vulnerability refers to the susceptibility of the entity to a risk event in terms of criteria related to the entity’s preparedness, agility, and adaptability. Vulnerability is related to impact and likelihood. The more vulnerable the entity is to the risk, the higher the impact will be should the event occur”.   Some organizations use numerical values (i.e., 1, 2, 3, 4 and 5) and averages to rank their risks. It also bears noting that an organization’s approach to risk assessment and the model used depend on its business processes and audit universe. For instance, a banking or lending institution would have a different approach and use a different risk assessment model than a manufacturing or an insurance company. In our approach to risk measurement and the selection of the top 20 risk areas from the universe of 104 responses obtained from the 2016 the annual risk assessment survey, we use a combination of both quantitative input (e.g., magnitude/materiality) and qualitative judgement (e.g., familiarity with the process, complexity). The heat map on the next page displays a two-dimensional representation of the high-risk data and a visual summary of the ranking of the risks (Very High, High, Medium, Uncertain/Low and Very Low) in terms of their probability and impact on the achievement of the Organization’s objectives.

Heat Map

Illustration of Probability/Impact High Probability vs. Low Impact High Impact vs. Low Probability Examples: 1. Petty Cash Fund 2. Earthquake in the DC Area

AUDIT RECOMMENDATIONS ISSUED IN 2016 27 recommendations were issued as a result of the completed audits in 2016. Recommendations by Audit Name and Level of Risk: Project Code Audit Name Status Total High Medium 2015-03 Disbursement Process for Specific Funds 2 2016-06 GS/OAS Office in Bolivia 5 7 2016-05 GS/OAS Office in Peru 6 1 2016-07 Management and Use of GS/OAS Travel Mileage 3 2016-04 OASES Reporting and Data Integrity Assessment 4 2016-02 Transition Costs 15 12 27 15 High risks 12 Medium risks

OIG OPEN/PENDING RECOMMENDATIONS (2009-2016) Currently, OIG has a database of 109 open/pending recommendations from 2009-2016. Table A shows actual “OPEN” recommendations by level of risk and status Table B shows OPEN/ PENDING recommendations by year and level of risk from 2009 - 2016 TABLE A TABLE B Open/Pending Recommendations as of December 2016, by Level of Risk and Status Level of Risk Status Total Pending Open High 41 36 77 Medium 15 30 Low 2 58 51 109 Year High Low Medium Total Issued 2009 1 - 2010 2011 2012 2013 9 4 13 2014 26 2 7 35 2015 28 8 36 2016 22 77 30 109 Per the Board’s recommendation, OIG will reevaluate the status of the older recommendations (2009-2014) in terms their level of risks and relevance.

. IMPORTANT NOTES Total of 109 does not include nine recommendations issued in OIG’s 2016 investigative reports. Pending: 58 (some information received, additional follow-up needed) Open: 51 (no information received from management or information provided does not address the issue) Follow-up on outstanding recommendations is performed within the TeamCentral© module of TeamMate© (the audit and investigation management software that we implemented in 2015) TeamMate Basic Manual and the Principles and Guidelines include the procedures for following-up on open recommendations In Teammate: State or Status of the recommendations includes the following options: - Open, Pending, Implemented, Closed – Verified, Closed – Not-Verified, Closed – No Longer Applicable The OIG appreciates the efforts of the Chair of the CAAP, Mr. Sebastien Siguion, to improve the dialogue between the OIG and the Member States with respect to the implementation process of OIG recommendations

Thank You QUESTIONS ?