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External Auditor's New Audits Executive Board 185 EX/32 Hundred and eighty-fifth session Part I PARIS, 23 September 2010 Original: French Item 32 of the provisional agenda EXTERNAL AUDITOR’s NEW AUDITS PART I REPORT ON THE INTERNATIONAL FUND FOR THE PROMOTION OF CULTURE (IFPC), INCLUDING AN AUDIT AND AN EVALUATION OF THE PERIOD 1999-2009 Summary Pursuant to 184 EX/Decision 21, the External Auditor submits the audit and evaluation report on the International Fund for the Promotion of Culture (IFPC). 185 EX/32 Part I Office of the External Auditor of the United Nations Educational, Scientific and Cultural Organization AUDIT AND EVALUATION REPORT ON THE INTERNATIONAL FUND FOR THE PROMOTION OF CULTURE (IFPC) 185 EX/32 Part I – page 3 TABLE OF CONTENTS Page 1. FRAMEWORK AND SCOPE OF THE AUDIT AND EVALUATION......................................... 5 2. A FUND “WITH VERY BROAD TERMS OF REFERENCE” ................................................... 5 2.1 THE IFPC’s MISSION WHEN IT WAS ESTABLISHED IN 1974 ...................................... 5 2.2. RECURRENT DEBATES ON THE IFPC’s PURPOSES AND STATUTES ...................... 6 3. IFPC ADMINISTRATION FROM 1999 TO 2009 ...................................................................... 8 3.1 GOVERNING BODIES...................................................................................................... 8 3.2 DIRECTOR OF THE IFPC ................................................................................................ 9 3.3 THE IFPC SECRETARIAT................................................................................................ 9 3.4 GOVERNANCE CRISES ................................................................................................ 10 3.4.1 Appointment of the Director in June 1999 ........................................................... 10 3.4.2 Suspension of the Fund’s activity in November 2006.......................................... 11 3.5 DRAFT AMENDMENT TO THE STATUTES IN 2010..................................................... 11 4. ACCOUNTS REVIEW AND FINANCIAL ANALYSIS ............................................................ 12 4.1 ACCOUNTS REVIEW ..................................................................................................... 12 4.1.1 Accounts Findings ............................................................................................... 12 4.1.2 Financial flows between the IFPC and the Aschberg Bursaries Programme...... 13 4.2 FUND RESOURCES: VOLATILITY AND CONTINUOUS DECLINE.............................. 14 4.2.1 Resources dry up................................................................................................ 14 4.2.2 The Fund’s short-term investment....................................................................... 15 4.3. FUND EXPENDITURE: THE BURDEN OF OVERHEADS............................................. 16 4.4 ACTIVITY REPORTS: REQUIREMENTS MET ONLY IN PART .................................... 17 5. PROJECTS SUPPORTED BY IFPC FROM 1999 TO 2009................................................... 18 5.1 PROJECT EXPENDITURE............................................................................................. 18 5.2 PROCEDURES............................................................................................................... 18 5.2.1 Criteria................................................................................................................. 18 5.2.2 Evaluations.......................................................................................................... 19 5.3 EXAMINATION OF A SAMPLE OF PROJECTS ............................................................ 20 5.4 PARTNERSHIPS ............................................................................................................ 20 5.4.1 The Harmony List ................................................................................................ 20 5.4.2 Other initiatives.................................................................................................... 22 6. LIKELY REFORMS................................................................................................................. 23 6.1 CONSIDERATIONS........................................................................................................ 23 6.2 PROSPECTS .................................................................................................................. 24 6.2.1 Disestablishment of the IFPC?............................................................................ 24 6.2.2 Revamp IFPC?.................................................................................................... 24 185 EX/32 Part I – page 5 1. FRAMEWORK AND SCOPE OF THE AUDIT AND EVALUATION 1. At its 184th session, the Executive Board decided to “request the External Auditor to undertake a comprehensive review including an audit and an evaluation of the International Fund for the Promotion of Culture covering the period from 1999 to 2009 and to report to it at its 185th session”.1 2. The requested review took place from late May to early July 2010 on the premises of the Culture Sector. Based on a summary of the Special Account’s performance drawn up by the Bureau of Financial Management (BFM), it included an analytical review of the 1999-2009 accounts, an examination of the functioning of the bodies responsible for the Fund’s steering and management bodies, a study of projects supported and an analysis of the successive projects envisaged to reform the International Fund for the Promotion of Culture (IFPC). 3. The audit team examined the Fund’s accounts, minutes of its governing bodies and archives held by the Bureau of Financial Management and the Culture Sector on accounting entries and operations, submitted questionnaires to and interviewed senior officials in the Division of Cultural Expressions and Creative Industries (CLT/CEI) and the Administrative Officer of the Culture Sector and examined files in the Bureau of Human Resources Management and the Office of International Standards and Legal Affairs. 4. The IFPC’s occasionally incomplete archives2 and the unequal orderliness of the files found constituted an objective constraint on the audit. 5. The audit team met the Assistant Director-General for Culture serving until May 2010, the Fund’s successive directors since 1999 and several former IFPC staff. It also contacted a company that had been an IFPC partner. Two former ambassadors to UNESCO and administrators of the Fund agreed to be interviewed (France and Romania). 6. The External Auditor sincerely thanks the ambassadors and deputy delegates who have kindly conveyed their views on the Fund’s past action and future prospects to the team (Benin, India, Iran (Islamic Republic of), Saint Lucia, Senegal, Venezuela (Bolivarian Republic of)). 2. A FUND “WITH VERY BROAD TERMS OF REFERENCE” 2.1 THE IFPC’s MISSION WHEN IT WAS ESTABLISHED IN 1974 7. The 11 years covered by the audit accounted for only one third of IFPC’s lifetime, as it was in November 1974 that the General Conference, at its 18th session, decided to establish an International Fund for the Promotion of Culture (IFPC) and adopted the Fund’s Statutes.3 Recalling the recommendations of the 1970 Venice and Kingston conferences4 and the proceedings of its 16th and 17th sessions,5 the General Conference was “convinced of the urgent necessity of giving greater prominence to culture in the development of individuals and societies and of strengthening international cultural cooperation” and “mindful of the importance in this regard of providing assistance for artistic creation and cultural activities”. 1 184 EX/Decision 21, recalling 182 EX/Decision 33 and 35 C/Resolution 48. 2 Former Fund Managers referred to the pulping in 2003, 2006 and 2007 of a part of IFPC’s documents. Officials currently CLT/CEI managers contested the reference to 2007, when the Organization’s archiving rules were respected. 3 18 C/Resolution 3.322 of November 1974 (18 C/87). 4 The Intergovernmental Conference on Cultural Policies (15 C/Resolution 3.331 of 1968) and Regional Caribbean Cultural Conference, respectively. 5 16 C/Resolution 3.324 and 17 C/Resolution 3.323 (and 93 EX/Decision 4.5.2 and 94 EX/Decision 4.4.2). 185 EX/32 Part I – page 6 8. The Statutes adopted in 1974 set out the aims, operations and resources. The Fund must promote: “(a) national cultures,6 the values that they embody and the forms of expression that ensure their authenticity and identity; (b) artistic creation in all its forms, while respecting its independence and free expression; (c) international and regional cultural cooperation”. To that end, Fund-supported operations should contribute to cultural development strategies; the establishment or reinforcement of institutions, structures and facilities whose purpose is cultural or artistic; the training of specialists in cultural development and cultural action; cultural production and cultural circulation; and research into cultural development. The Fund’s operations should take such forms as: “intellectual or technical assistance”; “financial aid in different forms, including investment, loans, grants, or any other kind of financial participation”; “in general, all other forms of activities that its Administrative Council may consider as being in conformity with the fundamental aims of the Fund and with its operational policy”. 9. In order to achieve these aims, the Fund's resources should consist of: “(a) voluntary contributions made by governments, organizations
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