Financial Report and Audited Financial Statements
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A/63/5/Add.1 United Nations United Nations Development Programme Financial report and audited financial statements for the biennium ended 31 December 2007 and Report of the Board of Auditors General Assembly Official Records Sixty-third Session Supplement No. 5A General Assembly Official Records Sixty-third Session Supplement No. 5A United Nations Development Programme Financial report and audited financial statements for the biennium ended 31 December 2007 and Report of the Board of Auditors United Nations • New York, 2008 A/63/5/Add.1 Note Symbols of United Nations documents are composed of capital letters combined with figures. Mention of such a symbol indicates a reference to a United Nations document. ISSN 0251-8198 [23 July 2008] Contents Chapter Page Letters of transmittal and certification.............................................. vii I. Financial report for the biennium ended 31 December 2007 ............................ 1 A. Changes in accounting practices and policies in the biennium ...................... 2 B. Regular resources .......................................................... 5 C. Other resources activities .................................................... 7 D. Programme expenditure monitoring ........................................... 9 E. Trust funds established by the United Nations Development Programme ............. 10 F. Management service agreements .............................................. 14 G. United Nations Volunteers ................................................... 15 H. Junior Professional Officers programme........................................ 16 I. Reserve for field accommodation ............................................. 16 J. Funds established by the General Assembly and administered by the United Nations Development Programme .................................................... 17 II. Report of the Board of Auditors ................................................... 19 Summary ..................................................................... 19 A. Introduction ............................................................... 26 1. Mandate, scope and methodology ......................................... 26 2. Coordination with internal audit .......................................... 27 3. Main recommendations ................................................. 27 B. Detailed findings and recommendations ........................................ 30 1. Follow-up of previous recommendations ................................... 30 2. Overall financial overview............................................... 31 3. Statement of income and expenditure ...................................... 32 4. Statement of assets, liabilities, and reserves and fund balances ................. 35 5. Statement of cash flows ................................................. 45 6. Capital assets and construction work in progress............................. 46 7. General and related trust funds ........................................... 46 8. Inter-fund balances ..................................................... 47 iii 9. End-of-service liabilities, including after-service health insurance .............. 56 10. Financial statement disclosures ........................................... 57 11. Progress towards the implementation of the International Public Sector Accounting Standards ............................................................. 58 12. Results-based management/budgeting ..................................... 60 13. Treasury management, including bank accounts and cash ..................... 61 14. Procurement and contract management .................................... 66 15. Asset management ..................................................... 70 16. Human resources management ........................................... 73 17. Consultants, experts and temporary assistance............................... 76 18. Information technology ................................................. 77 19. Enterprise risk management.............................................. 77 20. Enterprise resource planning ............................................. 78 21. Cost recovery ......................................................... 79 22. Programme and project management ...................................... 80 23. Programme expenditure, including nationally executed expenditure ............. 83 24. Multi-Donor Trust Fund Office ........................................... 92 25. Global Environment Facility ............................................. 95 26. Harmonized approach to cash transfer ..................................... 95 27. Common services ...................................................... 96 28. Safety and security ..................................................... 98 29. United Nations Capital Development Fund ................................. 100 30. United Nations Development Fund for Women .............................. 100 31. Special audit of United Nations activities in the Democratic People’s Republic of Korea ................................................................ 101 32. Inter-Agency Procurement Services Office ................................. 101 33. Internal audit function .................................................. 102 34. Internal audit findings .................................................. 106 35. Write-offs and disposals................................................. 110 36. Ex gratia payments ..................................................... 111 37. Cases of fraud and presumptive fraud...................................... 111 C. Acknowledgement.......................................................... 113 Annex Status of implementation of the Board’s recommendations for the biennium ended 31 December 2005.............................................................. 114 iv III. Audit opinion .................................................................. 119 IV. Financial statements for the biennium ended 31 December 2007 ........................ 121 Abbreviations used in the financial statements ....................................... 122 Overview ..................................................................... 126 Income, expenditure and fund balances for the biennium ended 31 December 2007 .... 126 Assets, liabilities, reserves and fund balances as at 31 December 2007............... 127 Movement in resources balances for the biennium ended 31 December 2007.......... 129 Statement of cash flows for the biennium ended 31 December 2007 ................. 130 Statement I. Income, expenditures and fund balances for the biennium ended 31 December 2007.............................................................. 132 I.1 Regular resources activities .............................................. 132 I.2 Other resources activities................................................ 134 Statement II. Assets, liabilities, reserves and fund balances as at 31 December 2007........ 136 II.1 Regular resources activities .............................................. 136 II.2 Other resources activities................................................ 140 Statement III. Statement of cash flows for the biennium ended 31 December 2007 ......... 144 III.1 Regular resources activities .............................................. 144 III.2 Other resources activities................................................ 146 Statement IV. Movements in resources balances for the biennium ended 31 December 2007 . 148 IV.1 Regular resources activities .............................................. 148 IV.2 Other resources activities................................................ 149 Schedule 1. Regular resources: other income and expenditure for the biennium ended 31 December 2007.............................................................. 150 Schedule 2. Programme expenditure by executing agents and sources of funds for the biennium ended 31 December 2007................................................ 151 2.1 Programme expenditure by implementing agents and source of funds for the biennium ended 31 December 2007 ........................................... 153 Schedule 3. Biennial support budget for the biennium ended 31 December 2007: programme support activities; management and administration costs; support to operational activities of the United Nations system ....................................................... 155 Schedule 4. Regular resources: biennial support budget (gross) and expenditure against biennial support budget (gross by major category of expenditure) for the biennium ended 31 December 2007.............................................................. 156 Schedule 5. Trust funds established by UNDP: schedule of income, expenditure and fund balances for the biennium ended 31 December 2007 .................................. 157 5.1 Selected trust funds established by UNDP: statement of accounts for the biennium ended 31 December 2007 .................................................... 226 v Schedule 6. Reimbursable support services and miscellaneous activities: income, expenditure and fund balances for the biennium ended 31 December 2007 and assets, liabilities and reserves and fund balances as at 31 December 2007 .................................. 235 6.1 Junior Professional Officers programme: status of funds for the biennium ended 31 December 2007 ......................................................... 239 6.2 Reserve for field accommodation: income, expenditure and fund balances for the biennium ended 31 December