Charter for the Evaluation and Internal Audit Office

I. Introduction

 

1. This Charter is established by the Council of the International Civil Aviation Organization (ICAO). It has been prepared in accordance with the standards promulgated by the Institute of Internal Auditors (IIA), and adopted by the Internal Audit Services of the United Nations System. It also takes into account the Norms and Standards for Evaluation approved by the United Nations Evaluation Group (UNEG) and the Uniform Guidelines for Investigations, 2nd edition, as endorsed by the 10th Conference of International Investigators. This Charter, approved by the ICAO Council at its 210th Session in 2017, will be periodically reviewed and updated, as required. The Council, while addressing changes to this Charter, shall consult the Secretary General and EAAC.

 

2. The main purpose of this Charter is to provide the general framework, mandate, authority, and responsibilities of the Evaluation and Internal Audit Office (EAO) of ICAO, as well as the related responsibility of the Council and the Secretary General.

 

3. EAO shall perform its mandate within the framework given herein under in this Charter.
 

II. General Framework

 

Mission of EAO

4. The mission of EAO is to assist the Secretary General to ensure that ICAO is managed effectively, efficiently and economically and in conformity with the applicable regulations and rules. This is done through systematic evaluation and internal audit of ICAO's programmes and activities, with a view to enhancing and protecting organizational value by providing risk-based and objective assurance, advice and insight. EAO assesses whether the Organization's stated objectives and impacts have been achieved, key corporate risks have been adequately managed, and resources have been expended, and that adequate financial controls are in place, in accordance with applicable rules and regulations and with regard to economy, efficiency and effectiveness. EAO provides a comprehensive and reliable base of evaluation evidence to support policy and programme improvement and to inform organizational learning. EAO also carries out investigations into cases of misconduct of a financial nature.
 

III. Mandate

 

5. EAO is responsible for undertaking internal audit activities, evaluations, and investigations. It may also provide additional advice to management where this does not compromise EAO’s independence and objectivity.
 

A. Internal Audit

 

6. Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes1.
 
7. EAO must assess and contribute to the improvement of governance, risk management, and control processes using a systematic and disciplined approach2.
 
7.1. Governance Processes
 
7.1.1. EAO’s activities must assess and make appropriate recommendations to improve the Organization's governance processes for the following objectives3:
 
​a)​promoting appropriate ethics and values within the Organization;
​b)​ensuring effective Organizational performance management and accountability;
​c)​communicating risk and control information to appropriate areas of the Organization;
​d)​coordinating the activities of, and communicating information among, the ICAO Council, external and internal auditors, and management; and
​e)​identifying weaknesses in operational management and financial controls.
   
7.2. Risk Management
 
7.2.1. EAO’s activities shall assess effectiveness and contribute to the improvement of risk management processes4.
 
7.2.2. EAO's activities shall assess risk exposures relating to the Organization's governance, operations, and information systems regarding the:
 
​a)​achievement of the Organization's strategic objectives;
​b)​reliability and integrity of financial and operational information;
​c)​effectiveness and efficiency of operations and programs;
​d)

​safeguarding of assets; and

​e)​compliance with laws, regulations, policies, procedures, and contracts.

 

7.3. Control

 

7.3.1. EAO’s activities shall assist the organization in maintaining effective operational management and financial controls by assessing their effectiveness and efficiency and by promoting continuous improvement5.
 

B. Evaluation

 

8. EAO shall assess the relevance, effectiveness, efficiency, impact and sustainability of an activity, project or programme. Evaluation is an important source of evidence of the achievement of results and institutional performance. It also contributes to building knowledge and to organizational learning; is an important agent of change; and plays a critical and credible role in supporting accountability. A separate ICAO Evaluation Policy has been established with the approval of the Council6, and it may be amended by it, as required, under the overarching framework of this Charter.
 

C. Investigation

 

9. In accordance with Annex I of the ICAO Service Code7, the Chief, EAO carries out investigations into allegations of misconduct of a financial nature.
 

IV. Roles and Responsibilities

 

A. Internal Audit and Evaluation

 

10. Internal Audit: The scope of internal audit, encompasses, but is not limited to, the examination and assessment of the adequacy and effectiveness of the organization’s governance, risk management, and internal operational management and financial controls as well as the quality of performance in carrying out assigned responsibilities to achieve the Organization’s stated goals and objectives. This includes:
 
​i)​assessing risk exposure relating to achievement of the Organization’s strategic objectives;
​ii)​assessing the reliability and integrity of information and the means used to identify, measure, classify, and report such information;
​iii)​assessing the systems established to ensure compliance with those policies, plans, procedures, laws, and regulations which could have a significant impact on the Organization;
​iv)​assessing the means of safeguarding assets and, as appropriate, verifying the existence of such assets;
​v)​assessing the effectiveness and efficiency with which resources are employed;
​vi)​assessing operations or programs to ascertain whether results are consistent with established objectives and goals and whether the operations or programs are being carried out as planned;
​vii)​monitoring and assessing governance processes;
​viii)​monitoring and assessing the effectiveness of the Organization’s risk management processes, including those reflected in the corporate risk registers;
​ix)​coordinating with the external auditors;
​x)​reporting significant risk exposures, operational management and financial control issues, including fraud risks, governance issues, and other matters needed or requested by the Council; and
​xi)​identifying opportunities for cost reduction and performance improvement.
 
11. An evaluation is an assessment, conducted as systematically and impartially as possible, of an activity, project, programme, strategy, policy, topic, theme, sector, operational area or institutional performance. It analyses the level of achievement of both expected and unexpected results by examining the results chain, processes, contextual factors and causality using appropriate criteria such as relevance, effectiveness, efficiency, impact and sustainability8.
 
12. The process to be followed by EAO while carrying out internal audit and evaluation functions shall be as hereunder9:
 
​i)​each year, EAO shall prepare an annual work plan, as well as update the rolling triennial work plan, for evaluation and internal audit activities;
​ii)​the annual and triennial work plans shall be developed for (a) internal audit activities based on a prioritization of the audit universe using a risk-based methodology, and (b) evaluation based on an assessment of evaluability and strategic importance of topics;
​iii)​all the work plans shall be prepared in consultation with senior management, the Secretary General, President of the Council and members of the Council;
​iv)​the work plans shall include the indicative objectives and timing of planned internal audits and evaluations, including requirement of additional budget and resources;
​v)​the work plans shall be submitted to EAAC for its review before submission to the Council;
​vi)​the work plans shall be presented by the Secretary General and approved by the Council of ICAO during the last Session of the Council meetings in each calendar year;
vii)​EAO shall conduct its internal audit and evaluation function as per the approved annual work plans, as far as possible;
​iii)

any substantive changes to the approved annual work plans shall be reviewed by the EAAC and approved by the ICAO Council;

​ix)​EAO shall upload its finalized Audit and Evaluation Reports on the Council website, and inform the President of the Council, Council Members, EAAC and the External Auditors, through emails;
​x)​provide the external auditors and the EAAC with copies of internal audit and evaluation reports, including EAO’s periodic assessment of the extent of implementation of audit and evaluation recommendations;
​xi)​participate in meetings of the ICAO Council and its Committees, as required; and
​xii)​participate in meetings and working groups of Representatives of Internal Audit Services of the United Nations Organizations (UN-RIAS) and Multilateral Financial Institutions (Plenary RIAS); the United Nations Evaluation Group (UNEG); the Conference of International Investigators and United Nations Representatives of Investigative Services (UN-RIS), and any other similar entities that could be established in future.
 
13. In formulating its audit/ evaluation recommendations, EAO may identify opportunities for cost reduction, performance and process improvement. EAO will indicate the priority, or the degree of importance, of its recommendations, benefit(s) of its implementation, and in the specific case of internal audit, the risk of non-implementation of its recommendations.
 
14. In addition to the evaluation and internal audit functions, EAO shall also perform the following functions:
 
​i)​act as the focal point for the preparation and monitoring of Secretariat Action Plans relating to the implementation of the External Auditor’s recommendations; and
​ii)

​act as a liaison point between ICAO and the Joint Inspection Unit of the United Nations (JIU), and inform the Council of all reports received from the JIU, and highlight those which are directly relevant to ICAO and require the attention of Council.

 

B. Investigation

 

15. While carrying out investigations assigned to it, EAO shall rely on its internal resources. However, in cases where EAO staff do not have the required expertise to carry out an investigation and/or mission travel is necessary (Regional Offices, Technical Cooperation activities, etc.), EAO shall seek appropriate budgetary authority to contract the necessary expertise and finance the missions.
 
16. EAO shall submit its final investigation report in compliance with the Framework on Ethics10. The summarized results of these investigations shall be included in the Ethics Officer’s annual report to the Council.
 

C. Advisory role

 

17. In addition to its core responsibilities, EAO may be required to provide objective expert guidance and advice to improve the Organization’s operations and processes related to governance, risk management and control. In so doing, EAO shall act solely in an advisory capacity and shall not make management decisions or assume a management role. EAO shall also be mindful of the need to maintain independence and objectivity for any subsequent audits or evaluations which may be conducted in those areas where advice or assistance is requested.
 

D. Reporting

 

18. The Chief, EAO shall submit an annual report to the Secretary General who shall transmit it to the ICAO Council with his/her comments during the first Session of the Council meeting in each calendar year. This annual report shall summarize the activities and results of all work undertaken by EAO during the preceding year, as well as its performance relative to the annual work plan. This report shall also include the following:
 
​i)​significant risk exposures and control issues, fraud risks, governance issues, and other matters identified by the results of audits carried out; and
​ii)​information regarding the status of implementation of recommendations made by EAO in its audit and evaluation reports.
 
19. In addition, EAO shall submit the following reports to the Council of ICAO:
 
​i)​a summary of each evaluation report under a separate Working Paper;
​ii)​all reports of internal and external assessment of internal audit functions;
​iii)​annual status report on the implementation of JIU recommendations, as applicable to ICAO; and
​iv)​annual status report on the implementation of recommendations made by the External Auditor, unless the latter has already presented this information to the Council.

E. Monitoring

 

20. EAO shall establish and maintain a monitoring system to follow up on, and ascertain whether management has taken timely and effective action to implement recommendations made in its reports. A graphical and tabular presentation will be provided of the status of applicable recommendations issued by EAO, External Audit and the JIU. This information shall be made available on the Council website and kept updated.
 

V. Authority

 

21. EAO, whilst being responsible for maintaining confidentiality and the safeguarding of records and information, shall have complete access to all ICAO records, files, documents, accounts, physical property, and personnel, as required during the conduct of their audit/evaluation and investigation assignments. EAO shall also have free and unrestricted access to the ICAO Council.
 

VI. Independence and Competencies

 

22. Without prejudice to the other provisions of this Charter, EAO shall be free from managerial interference in determining its annual work plan; in establishing the scope of audits, evaluations and other reviews; in the performance of its work; and in reporting the results of its work.
 
23. EAO shall have no direct operational responsibility or authority over any of the activities audited/ evaluated. For example, in the case of internal audit, EAO shall not implement internal controls, develop procedures, install systems, prepare records, or engage in any other activity that may impair internal auditor’s judgment.
 
24. EAO shall exhibit the highest level of professional objectivity in gathering, assessing, and communicating information about the activity or process being examined. EAO shall make a balanced assessment of all the relevant circumstances and shall not be unduly influenced by others in forming judgments
 
25. All EAO staff at the professional level shall be appointed on the basis of appropriate qualifications and experience as described in relevant professional standards11. EAO staff must ensure that its competencies, professional conduct, and skills are continuously updated, and that its staff are trained and certified in the use of current best methods, processes, and practices in the audit, evaluation and investigation field.
 
26. EAO shall be provided with the necessary resources to implement its annual work plans in accordance with its mandate.
 
27. The Chief, EAO shall confirm to the ICAO Council, at least annually, the independence of the internal audit/evaluation activities.
 
28. Notwithstanding the foregoing, where allegations of misconduct of a financial nature concern the staff of EAO, the Chief, EAO shall seek the advice of the EAAC on how to proceed.
 
29. EAO shall maintain a quality assurance and improvement program that covers all aspects of the internal audit and evaluation activities. The program shall also assess the efficiency and effectiveness of the internal audit and evaluation activities and identify opportunities for improvement.
 
30. In accordance with International Standards for the Professional Practice of Internal Auditing12, EAO shall also carry out periodic internal assessments to include ongoing monitoring of the performance of the internal audit activity and Periodic reviews performed through self-assessment or by other persons within the Organization with sufficient knowledge of internal audit practices. Further, in accordance with these standards13, once every five years, EAO shall commission an external, independent quality assessment of all aspects of its internal audit operations to assess conformance with the Code of Ethics and the Standards. A copy of the report resulting from these assessments will be submitted to the Council.
 
31. In the case of evaluation, EAO shall assess conformance with the UNEG Norms and Standards for Evaluation by taking part in independent external assessments such as the UNEG peer review mechanism or the Joint Inspection Unit assessments.
 

VII. Organizational Structure

 

32. The Chief, EAO shall report to the Secretary General.
 
33. The Chief, EAO shall have unrestricted access to the President of the Council and the Council members through both formal and informal lines of communication.
 
34. The Council shall:
 
​a)​approve the Charter of EAO and amendments thereto;
​b)​approve the annual evaluation and internal audit plan and an indicative triennial plan on a rolling basis;
​c)​recommend to the Assembly to approve EAO’s budget and resource plan through established processes;
​d)​receive communications from the Secretary General and EAAC on EAO’s performance relative to its plan and other matters;
​e)​make appropriate inquiries of management and the Chief, EAO to determine whether there is inappropriate scope or resource limitations; and
​f)​approve the appointment and dismissal of the Chief, EAO14.
 
35. The Secretary General shall assume the following responsibilities:
 
​a)​present to the Council, the annual evaluation and internal audit plan and an indicative triennial plan on a rolling basis, for its approval;
​b)​use internal audit for efficient and effective management of ICAO’s assets and liabilities, as a third line of defence (LoD), in addition to Operational Management (1st LoD), and Risk management and compliance functions (2nd LoD);
​c)​make himself/ herself and the secretariat staff available, as required, for consultations, discussions, and meetings, in the formulation of evaluation and internal audit plans and programmes, development, and execution of risk assessment methodologies, and in responding to audit queries and drafts of evaluation and internal audit reports;
​d)​ensure that the resources are available and committed to the implementation of the agreed upon evaluation and internal audit plan and specific assignments in a timely manner;
​e)

​implement the evaluation and internal audit recommendations within the indicated and agreed timeframes, and bring to the notice of the ICAO Council, all disagreements with the evaluation and internal audit recommendations, with reasons thereof, through an Annual Report to be presented in the first Session of the Council in each calendar year.

 

 


[1] The Definition of Internal Auditing is one of the mandatory elements of the International Professional Practices Framework promulgated by the Institute of Internal Auditors (IIA).
 
[2] IIA Standard 2100
 
[3] IIA Standard 2110
 
[4] IIA Standard 2120
 
[5] IIA Standard 2130
 
[6] The current ICAO Evaluation Policy has been endorsed by the Council in 2014 (C-DEC 203/3)
 
[7] The ICAO Service Code Doc 7350, Annex I (ICAO Framework on Ethics)
 
[8] Definition based on extracts from the United National Evaluation Group (UNEG) Norms and Standards for Evaluation. (2016).
 
[9] Further elaborations of the process can be found in the Audit Manual and ICAO Evaluation Policy.
 
[10] The ICAO Service Code, Doc 7350, Annex I (ICAO Framework on Ethics)
 
[11] International Standards for the Professional Practice of internal Auditing issued by the Institute of Internal Auditors (IIA), or the Norms and Standards for Evaluation approved by the United Nations Evaluation Group (UNEG).
 
[12] IIA Standard 1311
 
[13] IIA Standard 1312
 
[14] The details of appointment and dismissal process can be found in ICAO Service Code (Doc 7350)
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