Oas management modernization overview for caap 15 july 2014
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OAS Management Modernization Overview for CAAP: 15 July 2014. [email protected] Overall approach. Nine work areas Four time phases Several items sequenced after Strategic Vision, and after new SG appointed in 2015. Presentation today in 4 sections.

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OAS Management Modernization Overview for CAAP: 15 July 2014

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Oas management modernization overview for caap 15 july 2014

OAS Management ModernizationOverview for CAAP: 15 July 2014

[email protected]


Overall approach

Overall approach

  • Nine work areas

  • Four time phases

  • Several items sequenced after Strategic Vision, and after new SG appointed in 2015


Presentation today in 4 sections

Presentation today in 4 sections

  • Specific Funds and Leadership

  • 2015 current budget items

  • 2015 capital expenditure items

  • Looking ahead to 2016 and beyond


Specific funds management 1

PROJECTO

COMPLETION

COST AVERAGE

No.

%

$

%

o

375

52%

0.0

0.0%

until 50,000

154

21%

2,107,765

3.4%

until 100,000

69

10%

5,107,227

8.2%

until 200,000

56

8%

8,020,964

12.9%

until 500,000

35

5%

10,549,994

17.0%

until 1,000,000

23

3%

15,401,080

24.8%

More then 1,000,000

10

1%

20,989,031

33.8%

TOTAL

722

100%

62,176,061

100.0%

Specific Funds management (1)

  • Reduction in small specific fund projects with high management load


Specific funds management 2

Specific Funds management (2)

  • Creation of Specific Fund “baskets”: where the OAS designs a programme and several donors contribute

  • Take the MAPP model, apply it to the IACHR, and then to the Election Observer Missions

  • Benefits of streamlined administration, more efficiency, better results

  • Some degree of earmarking still possible in a hybrid model


Leadership training

Leadership Training

  • Should be a priority for a restored training budget

  • There is a middle-management gap in the organization that creates a long-term risk

  • P1-P4 level employees with less than 10 years at the OAS are the least engaged, according to the staff survey. But they represent the future


Current vs capital expenditure

Current vs Capital expenditure

Current expenditure is

“Spending on items that are consumed or only last a limited period of time”- Maintenance, salaries, travel, CPRs, training, evaluations, audits

Capital expenditure is“An amount spent to acquire or upgrade productive assets such as buildings, equipment and software, in order to increase capacity or efficiency for more than one accounting period”- Building renovations, videoconference and computer equipment, software upgrades, converting to new HR or accounting systems


Independence of the inspector general

Independence of the Inspector-General

  • Strengthen the IG office

  • Oversight by an External Audit Committee, in accordance with global standards

  • Expand the role of the Board of External Auditors to include the External Audit Committee functions


Evaluation

Evaluation

  • Evaluation is a core accountability and performance function

  • Currently only financed by some Specific Fund donors

  • More efficient to contract out rather than conduct with in-house staff

  • Evaluation emphasis should be on learning and improvement rather than control


Restore the training budget

Restore the training budget

  • OAS needs a training budget

  • The single most important priority identified in the staff survey

  • Necessary to implement all the business process improvements

  • Includes items like ethics training recommended by the BEA, and basic orientation for new staff


Balancing revenues and expenditures

Balancing revenues and expenditures

  • Three sets of measures recommended will need significant new spending:

    • Stronger Inspector-General Office

    • Evaluation function

    • Restored training budget

  • Propose to provide additional funds through three main measures

    • Removal of early payment discount

    • Closer application of Direct Costs

    • ICR increase from 2016


Early payment discount

Early payment discount

  • Clearly met a need at a time of critical cash-flow problems

  • But has “cost” the OAS about $5.5m since 2000

  • $533,000 discounted in 2013

  • Recommended by the BEA

  • Needs approval at the Special GA


Direct costs

Direct Costs

  • Direct costs are currently being undercharged

  • Definition of Direct Costs is broad and application subjective

  • Both programme staff and Specific Fund donors want to keep Direct Costs down, but this is concealing the real costs and significantly taxing the Regular Fund


Indirect cost recovery

Indirect Cost Recovery

  • Current rates of 11% and 12% do not reflect actual costs

  • Need to finance Inspector-General and Evaluation costs that are currently unfunded

  • Propose increase to UN standard 13% for all new agreements effective 2016

  • Also propose to introduce a minimum ICR for small projects


Possible expenditure reductions

Possible expenditure reductions

  • Limit the number of staff attending international meetings

  • Reduce the frequency of some international meetings, and hold more of them virtually

  • Require rent-share from host states for all national offices, and/or

  • Co-locate national offices with other InterAmerican organizations

  • Postpone new mandates until they have full costing and an identified source of funds

  • Rethink the number and size of reports to Member States, so they get what they need


Oas capital plan 2015 2018

OAS Capital Plan 2015-2018

  • A capital plan will encompass

    • Long-term capital measures such as building renovations and overdue maintenance

    • Once-in-a-decade exceptional measures such as SG transition costs and replenishing the reserve fund, and

    • Modernization measures including IT systems, accrual accounting, procurement reform and modernization of human resources management


Modernization capital measures

Modernization capital measures

  • IT upgrade is the basis for modernization and streamlining in three other areas

    • Conversion to accrual accounting

    • Streamlined procurement

    • Modern Human Resource Management

  • Together will need about $8 million of which $4 million for IT and $1.5 million for accrual accounting (not full IPSAS)


Buying business cards 15

Buying business cards: $15


Human resources

Human Resources

  • Successive cuts have left critical gaps and left the OAS exposed

    • Start with Strategic Vision

    • Then Organizational Design

    • Then skills and gap analysis

    • Classification review

    • Fitting the people to the tasks

  • 3-4 year process, including updated Human Resources regulatory framework


Looking ahead to the other 2015 items

Looking ahead to the other 2015 items


New quota system

New quota system

  • 4 options

    • Change nothing

    • Fix the US contribution at about $49m and 49% and increase the rest to 100m

    • Leave the total budget at $83m, reduce US to 49% and increase the rest to $83m

    • Leave the non-US budget at $34m, reduce the US to 49% and reduce the whole budget to $66m


Change management

Change Management

  • Change is always uncomfortable

  • Change should be actively managed

    • Have a plan (based on a clear vision)

    • Communicate to engage

    • Implement (through empowerment)

    • Monitor progress and adjust

  • Implementation Team

  • Management Modernization Ombudsman


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