Recent years have seen heightened concern and focus on risk management. The need for a robust
framework to effectively identify, assess and manage risk has become increasingly accepted in the United Nations. Risk management enables management to effectively address uncertainty and associated risk and opportunity, enhancing the capacity to build value. Recognising its importance, OCHA was quick to buy in on the process when it was first introduced in the UN some two years ago.
Working closely with the Office for Internal Oversight Services on a joint risk assessment, OCHA focused on defining its processes, identifying risks, controls and risk tolerance, and developing a risk profile and internal audit plan. Based on its mission statement, strategy and objectives, OCHA examined its leadership, advocacy, management/financial support, programme management and donor relations, administrative support in finance and budgeting, procurement and acquisitions, human resources management, logistics, operations and ICT.
In each of these areas, OCHA identified risks, controls on those risks and risk tolerance. Resources
allocated to each activity were examined and a risk profile developed that showed the potential probability of each risk by dollars invested, organisational unit and processes, as well as the impact of each risk, the existing risk management techniques and an assessment of their effectiveness. Assigning a probability rating for each risk, the exercise reviewed the impact of the risk or threat on OCHA’s programmes. The probability of the risk was mapped against its potential impact in a matrix
that became the basis of the audit plan.
Employing these risk management techniques, audits were conducted in the DRC, Sudan, Indonesia and Geneva, giving priority to those activities with the “most certain risks”. These audits have proved to be an effective means for early identification of potential risk areas and the formulation of responses, as well as to manage risk within acceptable levels.
The Indian Ocean tsunami and its aftermath triggered heightened public awareness around issues of humanitarian transparency and accountability. In response, OCHA engaged in a number of accountability initiatives throughout the year, in addition to subjecting itself to a series of early audits in some of the tsunami-affected countries.
The ERC advocated with agencies, donors and other partners for greater transparency, and OCHA also engaged with a number of fora that discussed accountability and transparency issues, such as the international conference in Jakarta in April on Promoting Financial Accountability in Managing Funds Related to the Tsunami, Conflict and Other Disasters, and a meeting of the International Group for Anti-Corruption Coordination.
Bringing in cutting-edge private sector expertise
Crucial in this regard was the expansion of a Financial Tracking Service (FTS) accessible publicly through OCHA’s website. This was facilitated by the donation by Pricewaterhouse Coopers (PwC)
of 8,000 staff-hours in pro bono professional services to help the UN system strengthen its financial accountability mechanisms, in particular around funding for the tsunami response.
This private sector partnership facilitated the development, for the first time, of a common UN platform to publicly account for the receipt and use of funds. This project earned PwC the International Visionaries Award from the United Nations Association of the USA and United Nations Association of the National Capital Area, and raised the standards in public reporting requirements.
Other areas of expertise provided through the PwC partnership included support to internal audit missions, forensic data analyses, developing fraud risk controls, and conducting enterprise-wide risk assessments. In addition, PwC conducted two cross-agency fraud and risk-control training workshops
in September 2005, at which agencies that did not form part of the PwC agreement were also invited to participate.
OCHA and its humanitarian partners within the UN system have since developed partnerships with other private sector firms such as First Logic and World Check, which provide risk-related services
such as enhanced forensic data analysis.
Managing risks through timely audits
Both internal and external auditors assessed OCHA’s response to the tsunami as well as providing timely audits of OCHA in Indonesia, Sri Lanka, the regional office in Bangkok and OCHA Geneva. Audits raised issues about staff deployment and turnover, training and pre-mission briefings, performance monitoring, inconsistencies between financial tracking systems, compliance with UN safety and security requirements, and the quality of data and information management services.
For each of these audits, OCHA has provided comprehensive management responses, and has fed the results into an overall strategy to improve performance and manage risks. Among other actions, management moved to increase administrative capacity by 26 posts to address human resource management and administration deficiencies identified, and to improve support to the field.
The OIOS reported in May 2005 on an October 2004 audit of OCHA’s Office in Geneva, which manages key trust funds in the area of humanitarian assistance. The audit affirmed its meaningful functions of support to OCHA’s coordination offices in the field, while making recommendations on aspects of the organisation’s restructuring in 2004, delineation of authority, and accountability of support for OCHA field offices, financial tracking, emergency services and staffing arrangements.
Promoting joint accountability and learning through internal and sector-wide initiatives
OCHA now implements a lesson learning review (LLR) within two months of a major emergency response. This was done one month after the tsunami hit. The review confirmed that the media strategy deployed by OCHA and others (such as WHO) managed to galvanise international support, as well as to draw attention to gaps and needs for additional assistance. Stand-by arrangements with external partners in donor countries and the private sector as well as agency-specific mechanisms (such as surge capacity, emergency revolving funds and UNDAC) all contributed to an effective immediate response.
OCHA’s early presence in most of the affected areas helped position OCHA in a key coordination leadership role. The appointment of the Deputy Emergency Relief Coordinator at a regional level was also seen as a positive new element for a response of such large dimensions. Key lessons that emerged from this review included the fact that UNDAC teams, deployed within 24 hours of the tsunami, need to integrate expertise on logistics, civil-military liaison and administration. Common services such as the HIC, JLC, communications/information technology and civil-military liaison are also key elements of response and need to be deployed much earlier.
At sector-wide level, OCHA was instrumental in setting up the Tsunami Evaluation Coalition (TEC) during the first half of 2005. The coalition, chaired by OCHA, now includes over 40 UN Agencies, NGOs, donors and non-profit organisations that have agreed to jointly evaluate sector-wide performance.
In the field, OCHA organised a series of tsunami lesson-learning workshops for national/local stakeholders in May, which were well received by all actors and contributed to a critical assessment of what worked well and what areas require improvement. At the time, shelter and transition issues were highlighted for urgent attention.
Based on its experience of the last two years, it is clear to OCHA that risk management is an important element of its operations. It provides OCHA with ownership of its future helping management achieve its performance targets and prevent loss of resources; helping ensure effective reporting and compliance with rules and regulations; and, ultimately, helping avoid damage to OCHA’s humanitarian operations.