Deliberazione n. 15/2016 ICAO-Regional Office EUR/NAT

LA SEZIONE DI CONTROLLO

PER GLI AFFARI COMUNITARI ED INTERNAZIONALI

Composta dai Magistrati:

Dott. Ermanno GRANELLI Presidente

Dott.ssa Maria Teresa POLITO Consigliere

Dott.ssa Maria Annunziata RUCIRETA Consigliere

Dott. Giacinto DAMMICCO Consigliere

Nell’Adunanza del 25 luglio 2016

Visto il mandato di external auditor dell’International Civil Aviation

Organization (ICAO) conferito alla Corte dei conti dal Council dell’ICAO e ratificato

dall’ Assembly dell’Organizzazione nella sua 38^ Sessione tenutasi il 4 ottobre 2013;

Visti i principi INTOSAI;

Visti i principi internazionali di audit applicabili all’attività delle Istituzioni

superiori di controllo (International Standards of Supreme Audit Institutions –

ISSAI);

Udito il relatore Consigliere Maria Teresa Polito ed esaminato e discusso su sua

proposta lo Special Report “Summary of the audit on ICAO Regional Office in Paris

EUR/NAT”;

DELIBERA

di approvare lo Special Report “Summary of the audit on ICAO Regional Office in

Paris EUR/NAT”

DISPONE

di trasmettere copia dello Special Report “Summary of the audit on ICAO Regional

Office in Paris EUR/NAT” al Segretario Generale dell’International Civil Aviation

Organization (ICAO).

IL RELATORE IL PRESIDENTE

F.to Maria Teresa Polito F.to Ermanno Granelli

Depositata in Segreteria il 1 agosto 2016

Il Dirigente

F.to Maria Teresa Macchione

ltalian Court of Auditors

Audit Chamber for Community and lnternationa/ Affairs

SUMMARY OF THE AUDIT

ON ICAO REGIONAL OFFICE IN PARIS

EUR/NAT

~ ICAO UNI INGAVIATON NO COUNTRY LEFT BEHINO

2016

Table of Contents

PRELIMINARY INFORMATION •••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• l

AUDIT OBJECTIVES •••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 1

GENERAL REGULATIONS •••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 2

EUR/NAT ACTIVITIES ••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 2

ACCOUNTING MANAGEMENT ••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 3

a. Bank accounts .................................................................................................................... 5

b. Payments with credit cards ................................................................................................ 5

c. Petty cash ........................................................................................................................... 6

CONTRACTS FOR SERVICES ANO SUPPLIES ••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 6

STAFF •••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 7

Consultancy .......................................................................................................................... 10

MISSIONS ••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 10

ASSET SITUATION •••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 11

a) Building ............................................................................................................................ 11

b) Assets ............................................................................................................................... 11

ECAC (European Civil Aviation Conference) ................................................................. 12

AN NEX •••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• 13

PRELIMINARY INFORMATION

1. This audit regards the Europea n and North Atlantic Office (EURINAT Office ), the

ICAO Ragionai Office based in Paris (Neuilly-sur-Seine). lt was performed, on-the-spot, by

Counsellor Maria Teresa Polito and Mr. Stefano Penati from 26 to 30 October 2015 and

from 14 to 18 December 2015.

2. EURINAT, established in 1946, is the largest ICAO Ragionai Office, in respect of both

its budget and the number of Member States under its competence. lt covers two regions -

Europa and North Atlantic - and provides assistance to 56 States, which include not only

those in the European area, but also Algeria, Tunisia, and Morocco, in the Mediterranean

regio n, and other countries of the formar Soviet Union (such as Kazakhstan, Turkmenistan,

Uzbekistan, Tajikistan, Azerbaijan, Belarus, Armenia, Georgia, and Kyrgyzstan), and, on the

Atlantic front, lceland1•

3. During the visits, the local staff were very helpful and actively cooperated in the audit

activities; we therefore wish to thank them for their fruitful collaboration.

AUDIT OBJECTIVES

4. The visit was aimed to do the following:

• Evaluate the organization of the Office, and the activities carried out;

• ldentify the objectives assigned to the Office, and the strategies undertaken to

achieve them; analyse the specific objectives set directly by EURINAT;

• Evaluate the relationship with Headquarters, and implementation of their directives;

• Examine supporting documents for the accounts entries recorded at Headquarters

related to revenues and expenditure, and any relationship with banks;

• Evaluate the assets, their management and their recording in ad-hoc registers and

in the accounts;

• Analyse expenditure related to personnel;

1 Other Countries under the jurisdiction of the Office, beyond the ones mentioned above, are the following: Albania, Greece, Republic of Moldova, Hungary, Romania, Andorra, Russian Federation, lreland, San Marino, Austria,

lsrael, Serbia, ltaly, Slovakia, Slovenia, Belgium, Spain, Bosnia and Herzegovina, Latvia, Sweden, Bulgaria, Lithuania, Switzerland, Croatia, Luxembourg, Cyprus, Malta, Yugoslav Republic, Czech Republic, Monaco, former Yugoslav Republic of Macedonia, Denmark, Montenegro, Estonia, Turkey, Finland, The Netherlands, France, Norway, Ukraine, Poland, United Kingdom, Germany, Portugal.

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• Fallaw up the previaus recammendatians issued by EA and lA and the status af

their implementatian.

GENERAL REGULATIONS

5. During aur audit, we examined the fallawing dacuments, pravided by Headquarters:

• Regional Office Manual (ROM), V Edition 31 March 2010;

• Regional office financial procedures and policies Manuaf2;

• Policy and procedures for the Use of ICAO lssued Credit Cards, October 2015;

• ICAO procurement code, November 2010;

• ICAO Financial Regulations, Doc 7515 fifteenth Edition 2013;

• Budget of the Organization 2014-2015-2016, Doc 10030, October 2013.

EURINAT ACTIVITIES

6. One af the mai n objectives af Ragionai Offices is ta harmonize the implementation af

internatianal civil aviation Standards and Recommended Practices (SARPs) in the Member

States.

An initiative, named No Country Left Behind, has been recently launched with the aim of

enhancing ICAO's suppart far the Member States' implementation af the SARPs.

During the audit, ragionai management infarmed us that each Member State averseen by

EURINAT presented specific risks; hawever, since resources were limited, priarities had

been established and specific pragrammes were implemented with a view ta mitigating

specific risks.

7. There are five strategie abjectives far the 2014-2016 three-year period3:

• Safety: in relation ta this abjective, the auditars were pravided with a Global Aviation

Safety Pian (GASP)4.

• Air Navigation Capacity and Efficiency: the auditors were provided with a Global Air

Navigation Capacity and Efficiency Pian (Giobal Plan)5; this dacument aims ta enhance

the harmanization of Country programmes canceming air traffic rules;

2 Received by mail. 3 The five strategie objectives were established by Council at its 196th session on 2012, 20 June; see Budget of the

Organization 2014-2015-2016, p. 1. 4 Doc 10004; the first edition of the GASP was approved on 30 July 2013 by the Council (PRES RK/2197); the latest

edition was approved in 2013 for the period 2013-2016. slt was published in 2013, Doc. 9750-AN/963, related to the period 2013-2028, and represents the fourth and latest

Edition ofthe Global Air Navigation Pian (GANP). 2

• Security & Facilitation;

• Economie Deve/opment of Air Transport;

• Environmental Protection.

T o ensure the implementation of those strategie objectives, a number of activity groups

were created:

• North Atlantic Systems Planning Group (NAT SPG);

• European Air Navigation Planning Group (EANPG);

• Regional Aviation Safety Group (RASG EUR)6;

• EURINAT Aviation Facilitation and Security Group (ENAVSECG). This group was was

established in 20127, with a view to strengthening aviation security at the European

level, as well as cooperation among the parties concerned.

8. During the audit, EURINAT Management reported to us that the activities were planned

independently by each Member State through yearly programmes, which are designed

to mitigate the risk detected at the ragionai level.

"Measuring the performance of the Ragionai Offices" was the specific ai m of the audit report

that we published early this yearB. lt analysed the activities performed by the Management

in arder to link the ICAO objectives to appropriate key performance indicators.

ACCOUNTING MANAGEMENT

9. The following resources were allotted to EURINAT Office: 3.880 million Canadian dollars

(CAD) in 2014; 4.038 million Canadian dollars in 2015, and 4.242 million Canadian

dollars for the year 20169, of which aver 2/3 are for salari es and emoluments.

1 O. Accounting is managed through the AGRESSO software, in connection with

Headquarters.

6 The ICAO Council at the fourth meeting ofits 190th Session held on 25 May 2010 approved several RASGs: RASG­PA for the Caribbean, South American, and North American regions (including Centrai America); RASG-EUR for the European region; RASG-APAC for the Asia Pacific regions; RASG-AFI for the African region and RASG-MID for the Middle East region. See RASG-EUR Procedura/ handbook, fourth Edition, December 2015, pg. 1.

The RASG-EUR group was established in January 2012. 7 Group defined after the joint declaration of the Regional Conference on Aviation Security in Europe on the 22

November 2011. s See ,.fs it possible to measure the performance of a Regional Office?", approved by the Audit Chamber for Community

and lntemational Affairs with resolution No. 4/2016. One of the recommendations of the report aimed to establish an internai procedure envisaging specific objectives also for Regional Offices. Those objectives should be monitored yearly against performance indicators.

9 See Budget ofthe Organization 2014-2015-2016, page 70. 3

11. Expenses at the Ragionai Office related to the following items: Consu/tancy, Rental &

Maintenance of Premises, /T Hardware and Software, Telecommunications, Operational

Expenditure, Meetings, Travels, Hospitality and Retreats, while the other expenses are

berne by Headquarters.

12. The resources allotted in 2014 were 640,967 Canadian dollars, of which 543,143 were

spent (that is 85% of the allotment). Expenses are detailed in the following Table10.

CAD

ltems Allocated spent o/o

(a) (b) (b/a)

Consultancy 65,33 62,64 95.88 Rental and Maintenance of Premises 212,09 176,95 83.43 Hardware and Software 4,62 1,63 35.21 Telecommunications 42,88 36,18 84.37 Operational Expenditure 80,21 54,42 67.84 Meetings 71,00 67,12 94.53 Travels 157,43 140,75 89.40 Hospitality and retreats 7,39 5,96 80.54

Totals 640,96 545,64 85.13 Source: data prov1ded by EURINAT

13.1n 2015, 736,326 Canadian dollars were allocated, of which 593,377 were spent (i.e.

80.59°/o of the allocation). Expenditure is detailed in the following Table11 .

10 Those amounts were provided by email on 2015, 15th June by the Financial Services Section at Headquarters and are related to the final budget report.

11 Additional items of expenditure, only for 2015, were Discretionary Staff related costs and Outsourcing, for which there was no allotment and an amount of 153 and 2,534 Canadian dollars was spent respectively.

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CAD

ltems allocated spent % (a) (b) (b/a)

Consultancy 117,02 106,31 90.84 Rental and Maintenance of Premises 228,67 162,26 70.96 Hardware and Software 0,77 0,72 92.74 T elecommunications 49,44 40,73 82.38 Operational Expenditure 83,46 40,77 48.84 Meetings 67,23 60,23 89.59 Travels 169,37 166,97 98.58 Hospitality and retreats 8,14 3,28 40.29

Totals 724,10 581,25 80.27 Source: data provided by EURINAT

14. W e found that payments are usually made through bank orders approved through

Agresso and signed by the Administrative Specialist and the person who has the

authorization to make the transaction. They are preceded by a payment approvai by a

"supervisor" responsible for the project or activity.

a. Bank accounts

15. Two bank accounts are in use at the Ragionai Office: o ne in euros, and o ne in US dollars

(See paragraph below for bank accounts used by ECAC).

b. Payments with credit cards

16. For sundry expenses, the Ragionai Director may use a credit card. Headquarters

informed us that a procedure ("Policy and procedures for the Use of ICAO lssued Credit

Cards'J exists, which contains directives on the use of credit cards by holders. Additional

relevant provisions are contained in the "Regional Office Financial Procedures and

Policies Manual" (Articles 1.2 and 2.1 ).

17. However, Management at Headquarters clarified that, at the ti me of our audit in Paris,

the document named "Policy and procedures for the Use of /CA O /ssued Credit Cards"

had not been shared with Paris Office, but had only been distributed to the Offices in

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Montréal. They assured that the document will be extended also to EURINAT and other

Ragionai Offices, in arder to harmonize the procedures12•

18. We will follow up the correct implementation of such procedures at the other Regional

Offices.

c. Petty cash

19.At paragraph 2.3.313, the Regional Offices Manual on accounting procedures provides

for the possibility of keeping a small amount of cash (not exceeding 1,000 Canadian

dollars) to be used for small expenses (e.g. taxi reimbursements, tickets for public

transport, visa fees, light refreshments in the presence of guests, and so on). Since 2013,

no more gifts have been distributed to workers and mailmen on the occasion offestivities,

thus overcoming the irregularities pinpointed by the external auditors in their audit of

2008.

20. No major issues were detected during our audit and we will monitor the issue in future

audits.

CONTRACTS FOR SERVICES ANO SUPPLIES

21. With regard to contracts and supplies, Management follows the procedures provided for

in the regulations for tenders 14.

22. For contracts and supplies under 5,000 Canadian dollars, the Head of the Office can

decide on the item of expenditure on the basis of a single estimate. Expenses exceeding

5,000 Canadian dollars up to 99,000 may be made by the Ragionai Director, but must

be authorized by the Secretary Generai. Tenders exceeding 10,000 Canadian dollars

are advertised o n the ICAO website (Article 6 paragraph 3 of the regulations o n tenders ).

Beyond this amount, 3 estimates are always needed. Ordinary tenders involve cleaning

services, supplies of consumar products, supplies of computer material, and other

purchases of consumables. For instance, during 2015, the works for the renovation of

the building facade were carried out, and the procedure was supervised directly by the

Headquarters.

23. EURINAT management told us that many small enterprises in Paris may have difficulties

with English language fora) checking the ICAO website fortenders, b) understanding ali

the elements set out in the tender and c) preparing the documents for participating in the

12 See as a reference e-mail dated 27 November 2015. 13 lt is the above mentioned document Regional office financial procedures and policies Manual. 14 See ICAO procurement code.

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tender. In addition, Management also reported to us that these elements may cause

delays in the approvai process, a Iso because this is directly supervised by Headquarters.

This is why, for some routine maintenance contracts (e.g. cleaning services), we were

informed that the Regional office prefers a system two-year or three-year contracts.

24. W e will check whether these issues a Iso occur in other regional offices.

STAFF

25. The provision for staff remained unvaried at 27 units (please see the organigram

attached below at page 9). This is consistent with the number from the previous audit

carried out by the extemal auditor in 2008.

26. Along with the Regional Director and his Deputy, the technical team is composed of 15

units. Therefore, the technical staff, responsible for carrying out the complex activities of

assistance to Member States, is prevalent (17 people, including one acting as Deputy

Regional Director). The French external auditor had suggested that the technical chain

should be increased from 41°/o to 48°/o. As mentioned in our Performance audit (see

a bo ve), we are not ab le to assess what could be a hypothetical"target" (Key performance

indicator) in relation to the number of technical staff to be deployed at the EURINAT

office in order to accomplish the 5 strategie objectives. W e would therefore refer back

to the conclusion of our Performance Audit (see Annex) and we will follow up the

implementation of our recommendation in the course of our future audits 15.

27. The other 1 O people in the administrative team are distributed as follows (at the ti me of

our audit):

• 3 units dea l with the accounting, management of the missions, and generai

administration,

• 4 deal with generai services, including 1 for procurement, amongst other duties,

• 1 staff member works at the reception desk (there is another one assigned to

the technical team for 50 o/o and the administrative team for another 50 o/o),

• Other 2 people dealt with IT services.

28. The administrative team is coordinated by the Administrative Specialist.

29. Of the 27 people units on duty16, 16 are Generai Services (including 1 G2, 1 G3, 3 G4,

2 G5, 5 G6, and 2 G7), with a distinction between permanent contracts (4 of them) and

1s See Performance audit .. ,s it possible to measure the performance of a Regional Office?", approved by the Control Section of Communitarian and lntemational Affairs with resolution No. 4/2016. 16 The document depicted a need for: 5 P-4 positions (1 USOAP CIVIA Regional Officer for Regional air safety; 1 AVSEC Regional Officer, actually redundant; 1 AGAIAOP Regional Officer; 1 AM Regional Officer); 1 P3 position (1 Technical

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temporary (three-year) contracts. The difference depends on the time of recruitment,

sin ce a different regime was introduced at a later stage. Of the 27 people o n duty, 1 O are

Professional staff17•

30. The Ragionai Director pointed out that resources were inadequate resources as

compared with the needs to be met. The report accompanying the 2017-2019 multi-year

pian highlighted a big staff shortage in the face of increased and complex needs, and

recommended additional positions, including the stabilization of two supernumerary

units. In the absence of additional staff, the Ragionai staff (especially the technical team)

works overtime in the event of unforeseen situations ( e.g. sickness, leaves) or when they

need to work on new projects, the Ragionai staff (especially the technical team) work

overtime, and are compensated with extra leave; however, given the amount of work,

su eh extra leave cannot be enjoyed.

31.Again, in this respect, we recall the recommendations and suggestions raised in our

Performance audit18.

32. The technical team provides technical support for the projects under the 5 strategie

objectives. They a Iso carry out missions in the Member States. The members of the team

also perform translation activities, particularly o ne member, for the Russian language.

33.A yearly document from the Secretary Generai, provided for by the ROM19 (Paragraph

8.3.1, letter c)- the so called establishment book- determines the number and level of

the staff positions assigned to the Ragionai Office, but our understanding is that this

document was not available at EURINAT. However, it was pointed out that the staff

provision accompanies the multi-year budget (2014-2016). We observe that, in the

period underexamination, the staffnumbers remained nearly unvaried.ln 2014, afterthe

retirement of one person of the technical team, Headquarters canceled that position.

Assistance Regional Officer); 2 P2 positions (1 Avsec/Regional Officer; 1 Air TransporVRegional for the environment); 1 G4 position (1 Administrative Assistant-Technical Secretary of the team, actually redundant); 1 G7 position (1 Senior HR Assistant). 11 On the list of payments to Professionals we found some individuals that were not present in the Organisation Chart. lt has been clarified that they work at the Office in Bangkok. 1s See the performance audit report "ls it possible to measure the petforrnance of a Regional Office?': adopted by the Audit Chamber for Community and lntemational Affairs, with resolution No. 4/2016. 19 Regional Office Manual.

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Organization chart (source: ICAO website)

Luis FONSECA DE ALME! DA Regional Director

George FIRICAN Deputy Regional Director

Carolyne OTTIENO RD's Personal Assistant

,-· - · -·-·-·-·-·-·-·-·-·-· -·-·---~~-;~~~~~~ -~~~~---- ·- ·-·-·-·- ·- ·- ·-· -·- ·- ·-·-·l

Arkadii M ERKULOV SvenHALLE Christopher KEOHAN RO, safety RO, ANS lmpl. ATM RO, ANS lmpl. M ET

Sarantis POUUMENAKOS Elkhan NAHMADOV Celso FIGUEIREDO RO,ANSimpl. RO, ANS lmpl. CNS RO, ANS lmpl. ATM

** Cornelia LUDORF Rodolphe SALOMON

RO, Aviation Security RO, ANS lmpl.

lsabelle HOFSTETTER Prog ramme Associate (ANS)

Assistants l S e cretaries

Patricia CUFF Tech. Assist. CNS l ATM

Johanna LEVINA Secretary

! Patricia CAVISTON Leyla SULEYMANOVA Natalia SAWINA ! Secr etary Technical Associate Administrative Assistant l

L·-·-·-·-·-·-·-·-·-·-·-·- ·-·-·-·- ·-·-·-·- ·-·- ·- ·-·-·-·-·- ·- ·-·-·-·-·-·-·- ·-·-·­~·-·-·-·-·- ·- · - ·-· - ·- ·-·- · -·-·-·-·-·-· -·- ·- ·-· - · - · - ·- ·- ·-· - · -·-·- ·-· - · -·- ·- ·- · -i

! l

Accounting, Administration and

Tra ve l

Séverine FOURE Accounting Assistant

Rime SAlDI Administrative Assistant

vacant Administrative Clerk

Ac:;Jministration Unit i

Masha MINCIC·MEYER Administrative Specialist

qeneral Services

Frédérk BROSSEAU Generai Services Supervisor

Sebastian KACPRZAK Generai Services Clerk

* ; Catherine DALY

Re<:eptionist l Clerk & Secretary

:

Jurgen LUDORF Generai Services Assistant

lnformation & Communication Technologies

Jér émie MASSON ICT Seni or Associate

Benoi t BRUNETTE ICT Assistant

i

L·-·-·-·- ·- · - ·-·-·-·-·- · -·-·- ·-·-·-·-·-·-·

,.,.. : Secondments * : SO% with Tech t eam, so% w it h Generai Services t eam

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Consultancy

34.1n 2014, an IT consultancy service was used for two full days per month, over a period

of eleven months. At present, an IT consultancy service is also being used, only 3 or 4

times per month.

35. Moreover, Headquarters authorized the expertise of an aerospace engineer with an 11-

month fixed-term contract, renewed at the beginning of December, to deal with technical

issues, and this will continue during 2016.

36. W e analysed the procedure and it proved to be compliant with the specific authorization

by the Secretary Generai. We also examined the payment procedure, and verified the

validation of the amount of hours worked under the contract, as well as the relevant

signature for confirmation by the Officer supervising the work of the consultant. W e d id

not detect any major issue.

MISSIONS

37. The Regional Office pays the missions of its staff o n specific authorizations from

Headquarters. The Travel Unit at Headquarters issues air travel tickets, while trai n tickets

are purchased locally.

38. One employee of the administration team uses a debit card to withdraw cash for the

Petty Cash and advance allowances for ECAC consultants, when necessary.

39. W e analysed the missions that the Office staff carried out in 2014 and in 2015. In 2014,

funds allocated to this purpose amounted to 165,430 Canadian dollars, ofwhich 140,746

were spent. In 2015 (as at 14 December), the funds allocated amounted to 169,368

Canadian dollars (an in crea se of about 20°/o ), of which 166,968 were spent.

40. During both years, missions were almost exclusively carried out by the technical team,

the Regional Director and the Deputy.

41.1n 2014, 13 staff members were sent on missions to various places. Among them, there

was o ne member of staff who was reassigned to Montréal Office in 2015. An employee

of the Cairo Regional Office, an expert in AIM/ATM, carried out missions at the request

of EURINAT and his mission was reimbursed by that Office.

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42.1n 2015, missions were carried out by 15 members20 of the technical team, in addition to

the Ragionai Director and the Deputy. These included the expert in AIM/ATM on duty at

the Cairo Office.

43. W e have checked a mission file and have not detected any major issues.

ASSET SITUATION

a) Building

44. The building where the Ragionai Office is based is in Neuilly-sur-Seine.

45. On 8 May 1963, an lnternational Convention was signed by the French Government and

ICAO. Later, the covenant of 12 September/15 December 1986 better defined the terms

of the agreement and the reciproca! obligations. Under this covenant, ICAO accepted

the undivided co-ownership of 46°/o (463.554/1.000.000) of the ad hoc made 4-story

building, while the remaining 54°/o was attributed to the French government21 • This is, in

any case, a conditional right since, according to the above mentioned document (Art. 3),

it started on 1st Aprii 1985 and will cease after 99 years of possession, i. e. on 31 March

2084. Among the commitments undertaken, we highlight that ICAO cannot transfer the

contract in any way, must take charge of ali ordinary and extraordinary maintenance

expenses, and is bound to insure the building for damage, malfunctioning of water and

electric systems, fires, and for ali civil responsibility in generai (Art. 5).

46. Possession is also linked to a symbolic yearly rent of 1 O Francs (Art. 6). At the expiry

date, such possession may be renewed on a simple request by the Organisation, to be

formulated one year before the expiry date. Otherwise, the building will be returned to

the French government.

b) Assets

47.During the visit to EURINAT, also with reference to the observations raised in the past

by the French auditors and EAO, it was noted that some of the assets were not written

in the asset register. In the long-form report annexed to the ICAO certificate for the

financial year 2015, although acknowledging the initiatives recently undertaken in this

area by Management (particularly the release of new administrative instructions on

2o Additionally, o ne unit who retired in 2012 is not included in the Organisation Chart of the Regio n al Office. The situation has been reported to the Headquarters.

21 See ICAO financial statements for 2015, Note 2.5, par. 69. 11

December 2015), we made some recommendations. We will follow up these

recommendations in a future audit.

ECAC (European Civil Aviation Conference)

48. ECAC is an lnternational Conference to which 44 Countries are associated. lt receives

specific funding by its Member Countries.

49. The audit of ECAC is not in our scope, but in this report, we have exclusively analyzed

aspects of direct interest to ICAO.

50. The establishment of the Conference goes back to 1956. In disciplining its relationships

with ICAO, Article 12 of its Deed of lncorporation decides that, based on a financial aryd

administrative framework agreement, ICAO staff can be used for missions aAd, if

necessary, for specific tasks of the Conference.

51 . Following a Memorandum signed in 2006 between ICAO and ECAC, it was decided that

a reimbursement should be provided by ECAC in favour of the EURINAT Office for the

expenses incurred and the activities carried out by ICAO staff, the services provided and

the use of the establishment. In 2006, the reimbursement was set at 122,000 euros.

52. In 2014, taking into account the inflation rate, the reimbursement was set at 149,131

euros for the activities carried out by the staff and 38,840 US dollars for the use of the

establishment. calculated at a rate of 42%. The same situation occurred in 2015. At the

time of the audit, the establishment of the amount was stili underway. A specific

recommendation by the EAO office (still"open" at the date of our report) also mentioned

this issue.

53. 1n relation to ECAC bank accounts, please referto our recommendation n. 2 (see Annex

enclosed).

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AN NEX

Our Recommendations

From the Audit of the financia/ statements for 2015

Recommendation n. 2

In consideration of the above-mentioned issues, we recommend that Management seek an opinion from the Legai Affairs and External Relations Bureau on how to better regulate the ECAC/EUR-NAT operational banking activities. At the same time, it should start a thorough internai review of the current procedures, aiming at enhancing the internai contrai process with regard to the ECAC bank accounts and other similar situations, if any.

Comments by the Secretarv Generai to Ree. 2

The Recommendation is accepted. We will emphasize, again, to ECAC that bank accounts can only be opened under the authority of ICAO's Treasury Office. Second, we will request a review by our Legai Bureau of the current arrangements between ICAO and ECAC with a view to mitigate any risk that ICAO may be exposed to. We will explore if an Agreement between ECAC and ICAO where ECAC agrees to indemnify ICAO for any loss that ICAO may suffer as a result of an action by o ne of its staff members will resolve this matter. Finally, we confirm that we do not have similar arrangements with any other ragionai civil aviation conference.

Recommendation n. 5

Following the comments under points a), b) and c) above, we took note of the initiatives currently undertaken by Management and ofthe new Administrative lnstructions approved in December 2015, and we will look at the issue in a future audit. However, considering that some assets have not been recorded at EURINAT and also referring to the recommendations issued in specific reports by EAO and by our predecessors, who reported that this also happened in other ROs, we recommend that ali the assets, in particular the ones not previously entered, be recorded in the IMS, regardless of their value.

Comments by the Secretarv Generai to Rec.S

The Recommendation is accepted. Ali assets above CAD 300 should be incorporated in the IMS. EURINAT will take the necessary action to record ali missing assets. Under the approved Al for PPE, it is the responsibility of each ROto assess, record and enter the asset data for the RO into the IMS. As per the approved Al, ADB has provided ali ROs with the required scanning machines and training, to allow the RO to input asset data to the IMS.

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From the SPECIAL REPORT "ls it possible to measure the performance of a Regional Office?", PERFORMANCE AUDIT 2016

Reeommendation n.1

W e recommend that Management consider to define a specific internai procedure (i) where internai and external risks are gathered a Iso from ROs, and (ii) where achievable, time-bound and measurable specific objectives are agreed between HQ and RO, (iii) defining how and who should set objectives and who independently should monitor them through robust and credible KPis.

Comments by the Seeretarv Generai to Ree. 1

Agree. In an effort to strengthen the coordination with the ROs, the Secretary Generai has tasked an existing staff member with RO coordination duties.(i) SG will ask ROs to previde internai and external risks, (ii) abjectives have been identified far the ROs in the business Pian 2017-2019, (iii) OSG monitors the KPis.

Reeommendation n. 2

After having implemented an internai procedure an the basis of the previous recommendatian, considering that the Business Pian presented to Council has a_three-year reference period and aims to previde information on the achievement af the Strategie Objectives. we recommend that management inform periadically the Council on the on­going progress through an Activity Progress Report which might disclose (i) the actual expenditures versus the budgeted ones, (ii) the deployment of staff according to objectives and (iii) the manitoring of KPis.

Comments by the Seeretarv Generai to Ree. 2

Agree. Regular reporting including financial figures, staff counts and performance are shared with the Council.

Suggestion n. 1

When the framework is enhanced through the implementatian of our recommendations a bave, we then suggest to Management to timely evaluate if the performance of the HQ and ROs can be assessed and to consequently measure if objectives have been effectively achieved.

Comments by the Seeretarv Generai to Sugg. 1

Agree. Performance evaluation and measurement will take piace far ali Bureaus and ROs of the Organization.

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