Progress Report on the Adoption of IPSAS at

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

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 2

The IPSAS Programme in UNDP • IPSAS is being introduced according to PRINCE 2, 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: Ø Financial Policy and Transition Ø Change Management Ø IT System Changes 3

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

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 5

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 6

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 7

UNFPA Briefing 8

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 9

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 10

UNFPA: IPSAS Funding and Resources • $800, 000 for 2006 -2008 • Estimated $ 6. 2 million for 20092012 11

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 12

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 13

UNOPS Briefing 14

The IPSAS Programme in UNOPS • IPSAS implementation support is one of the five pillars of UNOPS’s Change Programme • IPSAS project formally initiated under Prince 2 project methodology in January 2009 • IPSAS project board established • Quality assurance process flow established for all key activities • IPSAS adoption based on phased approach 15

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 16

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

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 18

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 19

Thank You! 20