UNICEF: Financial report and audited financial statements for 2015 and the report of the Board of Auditors

Joint statement by Australia, Canada, Denmark, Finland, Germany, Iceland, Ireland, Norway, Sweden, and Switzerland given by Deputy Permanent Representative of Norway Ms. May-Elin Stener Ambassador, 08 February 2017.

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I deliver this statement on behalf of Australia, Canada, Finland, France, Germany, Ireland, the Netherlands, Sweden, the United Kingdom, and my own country Norway.

Let me start by thanking for the presentation of UNICEFs financial report and audited statements for the year ended 31 December 2015 and the Report of the Board of Auditors.

We would like to commend UNICEF for once again having received a clean audit.

In line with the recommendations given by the Board of Auditors, we encourage the introduction of a composite annual budget for the organization, which includes all types of expenditure. We ask UNICEF to clarify as to whether this will be realized in the Integrated Budget 2018-2021.

We support the recommendation that UNICEF identify the operational costs that should be met by the program budget in accordance with UNICEF Financial Regulations and Rules. We note UNICEF’s progress to date in implementing this, but request confirmation that a preliminary report was submitted by end of 2016. We also urge UNICEF to address the recommendations around supply chain and inventory management noting the impacts such issues have on delivery of programmes and value for money.


The Board of Auditors point to lacking implementation of the guidelines for a harmonised approach to cash transfers, so-called HACT. Cash appropriation to implementing partners must be based on an effective, efficient and reliable risk-based approach that identifies strengths and weaknesses of financial systems as well as implementing partners in particular. We therefore appreciate UNICEF’s adoption and implementation of the guidelines.

However, we urge UNICEF to assure that all envisaged macro assessments and micro assessments are carried out by all country offices and for all implementing partners. These assessments are an essential component of HACT and thus necessary for ensuring appropriate use of UNICEF funds. The guidelines have been in place for several years, and we encourage UNICEF to take active steps towards their full implementation.

We also request that planned assurance activities are consistently implemented in line with country office assurance plans to ensure that funds provided to implementing partners have been used for the intended purpose and are delivering the results intended.

We support the Board of Auditors recommendations regarding the delays in the implementation of integrated monitoring and evaluation plans and the completion rates for annual work and management plans by regional and country offices, as well as delays in donor reporting. Since UNICEF relies on voluntary contributions from the public and private sector, UNICEF should take efforts to ensure effective monitoring, evaluation and reporting in a timely manner.

Another issue the Board of Auditors flag is risk management. Whilst the Board of Auditors report found considerable progress in preparing risk registers at country level, the report also highlighted scope to improve the quality and consistency of the risk registers being used, ensure better documentation and more frequent reviews.

It also flagged the need for additional guidance on risk escalation and to prepare an enterprise-wide annual risk mitigation plan. Effective risk management is essential to the sound functioning of the organization and we would request UNICEF therefore to prioritize efforts to address these points.

The Board of Auditors also have several other important recommendations, some of which have been reiterated several times. We are concerned that the completion rate of all recommendations has fallen to 39% in 2016, compared to 76% in 2013.

We kindly ask UNICEF to provide information explaining the further decrease of the completion rate. We encourage an improved follow up, and ask UNICEF to describe how recommendations - especially those repeated by the Board of Auditors - will be effectuated.

Thank you.