Progress Report on the Adoption of IPSAS at UNDP, UNFPA and UNOPS Briefing to the Executive Board

1. Progress Report on the Adoption of IPSAS atUNDP, UNFPA and UNOPS Briefing to the Executive Board June 1 2009

2. IPSAS Background • EB Decision 2009/2: UNDP/UNFPA/UNOPS to update EB on preparations, implementation and implications of IPSAS. • IPSAS is considered best practice in accounting for public sector and not-for-profit organizations • IPSAS was mandated by General Assembly Resolution 60/283 • 53 governments have adopted IPSAS or are in the process of doing so

3. The IPSAS Programme in UNDP • IPSAS is being introduced according to PRINCE2, an internationally recognized project management methodology • The IPSAS Programme is overseen by an IPSAS Board representing all key stakeholders, and is directed by a full-time Manager • Three fundamental pillars: • Financial Policy and Transition • Change Management • IT System Changes

4. Where We Are Now in UNDP Change Management IT Policy Testing & systems integration Transition plans Training Reports 30% of policies Change management communications Design of financial statement Data conversion tools Customization Learning strategy Business requirements Configuration Communications strategy Prototype for key business areas 70% of policies Learning framework Change management strategy Functional specs for key business areas Workload analysis

5. UNDP: IPSAS Funding and Resources • January 2007: EB approved IPSAS Programme budget of $9 million for 2008–2009 • One-time cost of IPSAS adoption estimated at $19.8 million. Additional funding of $10.8 million required to address: • Organizational impact analysis • Training, communication and in-country support • IT cost for developing reports • Above excludes recurring costs to address additional workload and complexity created by IPSAS

6. UNDP’s Timeline for IPSAS Adoption • Global financial crisis is constraining resources and impacting budget and staffing • Competing priorities force tough choices : • UN Contractual Reform mandate (with July 2009 deadline) • Change of Atlas hosting from IBM to UNICC • Administration of Justice System reform • Atlas personnel and resources have been drawn off from IPSAS • UNDP and its staff cannot absorb IPSAS on top of all this change • Without the necessary people and funding, a 2010 IPSAS adoption is no longer feasible

7. Next Steps for UNDP • Consultation with UNFPA and UNOPS on implementation plan • Continued collaboration with system-wide Task Force on Accounting Standards • Continued close engagement with Internal Audit and Audit Advisory Committee • Seek further in-depth input from UN Board of Auditors • Complete remaining Programme tasks • Communications with staff and member states • Consultations on contribution agreements • Re-examine approach to IPSAS adoption in the light of the rescheduling to 2012

8. UNFPA Briefing

9. The IPSAS Programme in UNFPA • Governance • CEB, Finance and Budget Network, Accounting Policy Task Force • Working groups, such as the New York Focus, provide comments and analysis • IPSAS Project Board provides guidance, advice and support • Trilateral Advisory Panel (TAP) and Executive Sponsors Group (ESG) provides linkages to UNDP and UNOPS

10. Where We Are Now in UNFPA • ‘Delivery Principle for Goods and Services’ implemented effective 1 January 2008 • IPSAS Risk Mitigation Strategy • Impact analysis on business operations • Began using the Atlas Contracts Module functionality • Identified revisions to UNFPA Financial Regulations and Rules • Engaged with IPSAS Training Advisory Board • Staff communications including IPSAS web site • Continuing consultations with DOS, BOA and AAC

11. UNFPA: IPSAS Funding and Resources • $800,000 for 2006-2008 • Estimated $ 6.2 million for 2009-2012

12. UNFPA’s Timeline for IPSAS Adoption • Following rescheduling of UNDP’s IPSAS adoption to 2012, UNFPA has had to rethink its own adoption strategy • UNFPA will aim to align itself with UNDP’s adoption schedule for certain IPSAS standards • UNFPA plans to adopt some standards on its own in 2010 - 2011

13. Next Steps for UNFPA • From 2010 UNFPA will adopt IPSAS in a phased approach: • Finalize revisions to Financial Regulations and Rules • Revenue Recognition, Fixed Assets, Intangible Assets, Inventory and Impairment of Non-Cash Generating Assets will be adopted in 2010/11 • Financial Statement Presentation, Employee Benefits, Leases, Segment Reports and Comparison of Budget vs Actual will be adopted in 2012 • Ongoing consultations with donors on • contribution agreements

14. UNOPS Briefing

15. The IPSAS Programme in UNOPS • IPSAS implementation support is one of the five pillars of UNOPS’s Change Programme • IPSAS project formally initiated under Prince2 project methodology in January 2009 • IPSAS project board established • Quality assurance process flow established for all key activities • IPSAS adoption based on phased approach

16. Where We Are Now in UNOPS • Policy • New FRR to take effect in February 2009 • IPSAS project management progress • External benchmarking • IPSAS initiation workshop • IPSAS communication plan • High-level approach to training

17. UNOPS: IPSAS Funding and Resources UNOPS is currently reviewing its future funding requirements for adopting IPSAS, including recurring costs.

18. UNOPS Timeline for IPSAS Adoption • Generally, UNOPS will follow an approach similar to that outlined by UNFPA • In preparing its new implementation schedule, UNOPS must heed requirement of the 2006-07 BOA report to implement certain IPSAS standards by 2009 with or without ERP support

19. Next Steps for UNOPS • UNOPS will adopt IPSAS in a phased manner • Priority areas are receipt accrual, expense recognition and revenue recognition: implementation by 31 December 2009 • Exploring possibility of classifying some IPSAS standards as “quick wins” • For remaining IPSAS standards, UNOPS is largely aligned with UNFPA’s approach

20. Thank You!