WIPO Audit/Evaluation Process Comes Of Age, With A Development Side

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Evaluation and auditing of the World Intellectual Property Organization gained increased interest a few years ago when rich member countries responsible for most of its revenues became alarmed about questions of financial and human resources management. But now the UN agency’s sometimes bumpy evaluation process is maturing, including a development aspect, and has a new external report on its global technical assistance programmes.

At the October annual WIPO General Assembly, members approved the appointment of a new WIPO External Auditor, the highly lauded current Comptroller and Auditor General of India, Vinod Rai. Rai, who has established respect for his key audit reports within India, will perform the WIPO office on 1 January 2012 until 2017. Rai, who is the first developing country official to hold the WIPO External Auditor post (beating out candidates from Norway, the United Kingdom and Spain, among others), was named a “person of the year” by Forbes magazine (US) in July.

The outgoing External Auditor, Kurt Grüter, a top official from Switzerland, gave generally good marks to WIPO financial situation at the October Assembly. He stressed the importance of WIPO securing a specialist responsible for monitoring the implementation and application of the recently adopted International Public Sector Accounting Standards (IPSAS), among other things.

Members at the October Assembly also approved a new director of the WIPO Internal Audit and Oversight Division, Thierry Rajaobelina, a national of Madagascar and France. The selection process, started in early 2011, saw more than 50 applications for the post. Rajaobelina has been deputy director, head of internal audit at the Organization for Security and Co-operation in Europe (OSCE) in Austria.

Rajaobelina will take over after the 14 January 2012 expiry of the appointment of the current director, Nicholas Treen. The post is for five years, non-renewable (and the person may not later take a job at WIPO). There is also a WIPO Ombudsman and an Ethics Officer.

The WIPO Internal Oversight Charter is the framework for the internal audit and other functions of WIPO. The mission of those functions is “to examine and evaluate, in an independent manner, WIPO’s control and business systems and processes, and to provide recommendations for improvement, thus providing assurance and assistance to management and staff in the effective discharge of their responsibilities and the achievement of WIPO’s mission, vision, objectives, outcomes and goals.”

Evaluation is defined in the charter as “a systematic, objective and impartial assessment focused on whether expected accomplishments and results have been achieved.”

At the 2005 General Assembly, WIPO member states approved the establishment of a WIPO Audit Committee, reporting to the Program and Budget Committee. At the 2010 General Assembly, the name was changed to Independent Advisory Oversight Committee (IAOC), and at the 2011 Assembly last month, revised terms of reference were approved, changing the makeup of the committee.

Under the rotation mechanism (Assembly document WO/GA/40/2), no committee member can serve more than 6 years, four members are serving 3 years from February 2011, and three members will serve for 3 years non-renewable. New members will be determined by drawing of lots, and after the first 3-year period, all committee members will be nominated for a 3-year term, renewable once (except the three non-renewable ones). Finally, each committee member will be replaced by a candidate from the same geographical region, unless there is already another member on the committee from that region, or there is no candidate from the region that meets the Selection Panel’s criteria.

The IAOC is an “independent, expert advisory and external oversight body,” which “aims to assist Member States in their role of oversight and for better exercise of their governance responsibilities.”

The committee reviews and monitors WIPO’s internal audit function, and can be asked to review or oversee particular projects, like the new construction project or the ongoing WIPO desk-to-desk assessment, in which each position in the organisation is being scrutinised.

Mixed Report from Internal Auditor

Outgoing WIPO Internal Auditor Nicholas Treen, in his summary annual report (Assembly document WO/GA/40/4), cited progress at WIPO, but said that “Internal Oversight still remains marginalized and lacking in status, staff and importance.” He also said that “risk acceptance by senior management of fewer high-risk audits than are considered necessary by IAOD, is not yet acceptable.” Available resources for timely investigations “are not yet at adequate levels,” and “much fewer than desirable evaluation reports have been provided due to lack of staff.”

Treen said at an October meeting on evaluation and development that the establishment of the WIPO IAOD has been “difficult.”

The main purpose of the independent evaluation function at WIPO is “to promote and to ensure substantive (rather than financial) accountability of the investments made, and as a basis for learning to improve the relevance and quality of future actions,” according to the IAOD revised WIPO Evaluation Policy of 4 May 2010. The policy lays out a range of ways the IAOD Evaluation Section maintains its independence, within WIPO, on a personal level, and from outside the organisation.

Treen said that over the past 4-5 years it has been “disappointing” that staffing has been inconsistent – sometimes with no staffing. But he added, “We are more hopeful that moving into 2012 [WIPO] will do more on staffing.”

In what he said is “my last report at the end of a challenging, stressful and shortened term of office,” Treen said he was grateful for the opportunity and had several strong recommendations for member states in the coming years.

The recommendations include:

– Rename the IAOD head as Inspector General, to improve status
– Make Inspector General part of the “senior staff,” (fulfilling the original 2005 Internal Audit Charter) and graded as an Assistant Director General
– Allow IAOD budget proposals to be submitted directly to the member states
– Allow the IAOD head to be the chair of recruitment and selection boards for IAOD staff, and be able to submit recruitment proposals directly to the director general for approval.

Internal Oversight in 2012-2013

In the proposed Program and Budget for 2012/2013, the WIPO director general said “the strengthening of the Internal Oversight services has continued” during the 2010/2011 biennium.

For the next biennium, the secretariat said internal audit “will continue to focus on high-risk audits and provide advice for the improvements of internal controls, information security and risk management.” There will be regular monitoring and reporting, full implementation of new software applications by 2012, and a two-stage review process of audit reports is being instituted.

There will be further development of evaluation reports, wide dissemination and timely follow-up, the secretariat said. The internal oversight function will also continue to help management implement an “ethics and integrity” framework “within which all WIPO staff have clear duties, roles, responsibilities and rights.” This includes putting in place formalized whistle-blowing procedures and a “hot line”. It will also continue supporting the development of ethics and conduct codes, and a system of financial disclosures based on UN good practice.

Furthermore, a risk assessment framework will be developed, the secretariat said, “to mitigate against the occurrence of wrongdoing, misbehaviour and fraud.” A program to counter these will be developed along with other parties.

The internal audit team will also support the director general’s Strategic Realignment Program,
particularly internal control, risk management, ethics and information security, and will support the Development Agenda, the secretariat said. Coordination will continue with the External Auditor, Ombudsman and Ethics Office, as well as the UN more broadly, and more oversight tools such as manuals, policies and guidelines will be developed.

“The next couple of years are crunch time” for the WIPO evaluation process, an official told Intellectual Property Watch. There has been resistance at the start, but if momentum can be built, “then people will want to do better.”

Evaluation and Development

With the implementation of the 2007 Development Agenda, there is another side to the evaluation process, and efforts are being made to understand the interplay of evaluation and development.

“This is a new venture for this organisation,” WIPO Director General Francis Gurry said at a recent event entitled, “Learning from Existing Evaluation Practices on the Impacts and Effects of Intellectual Property on Development,” that grew from the Development Agenda.

“We are very serious about taking forward this idea of evaluation” to assess the outcome and impact of WIPO programmes, Julia Flores Marfetan, senior evaluation officer in the Evaluation Section of the WIPO Internal Audit and Oversight Division (IAOD), told the 6-7 October meeting.

“This is a very large part of this organisation,” accounting for more than 20 percent of its revenues, she said. “It’s important that we do this well.”

The Evaluation Section is headed by Claude Hilfiker.

One new area is an external, independent review of WIPO technical assistance, which has recently been released and is on the agenda for next week’s WIPO Committee on Development and Intellectual Property (CDIP).

Another review is of a pilot technical assistance support centre in Kenya. There is “almost overwhelming” demand for these centres, Flores said.

WIPO staff acknowledge that evaluation can be difficult. Criticism is not easy and self-criticism is even harder, Flores said. But it is useful in giving senior management information it needs to know how programmes are going.

On the Kenya “country portfolio evaluation,” the mission was being completed in October with results expected in December. Initial findings show that it has received successful support, a WIPO official said. Kenya is reaching “critical mass” in sustainability of its IP system and stakeholders have shown a “keen interest” in the evaluation. If the event is rated successful, WIPO will repeat it.

The independent country portfolio evaluations focus on the entire WIPO assistance in a country, providing an assessment of past and current activity so as to improve cooperation strategies, country programmes and “IP interventions,” according to a WIPO information sheet on the Kenya project.

Evaluation reports will be publicly available, with a “wide” dissemination policy, an official said, including being passed on to the WIPO Audit and Oversight Committee.

Report on WIPO Technical Assistance

How widely the independent external review of WIPO technical assistance will be disseminated is unclear. The report was submitted to WIPO in summer by authors Carolyn Deere (Oxford University Global Governance Project and Board Chair of Intellectual Property Watch) and Santiago Roca (Professor of Economics at the ESAN Graduate School of Business in Lima and former director of Peru’s Industrial Property Office). But to date it has not been promoted externally. The report appeared quietly on the WIPO website in September and is expected to be addressed by member states at the 14-18 November CDIP.

Developing country members of WIPO had long suspected that WIPO’s technical assistance is oriented toward promoting developed country interests, such as IP protection and enforcement. Developing countries, seeking to ensure assistance is tailored to their particular interests, called for the independent external review under the WIPO Development Agenda, adopted in 2007.

The report looked at three years, 2008-2010, with a focus on generating evidence-based findings, Deere told the evaluation meeting in October. It was directed to examine the “effectiveness, impact, efficiency and relevance” of WIPO technical cooperation activities, and comes in the context of overall organisational change under Director General Gurry’s ongoing Strategic Realignment Program (SRP).

The report involved months of analysis of WIPO reports, interviews, six country case studies, consultations with Geneva-based missions, and other ways to get feedback about WIPO activities in the field.

Deere said the scale of the analysis turned out to be “massive,” as the researchers were asked to look at the entire suite of WIPO activity – and development assistance accounts for some 20 percent of WIPO’s budget. This was the first document of its kind, so there was little to build on, she noted. The researchers had more difficulty getting information from member states than expected, she said, with about 30-40 responses in the end. And countries often lacked a clear contact point for the researchers to work with, she said.

Deere had a number of recommendations for members, such as to think through what is intended for follow-up, what decisions they will want to be able to make from the document, so that the review “has some life afterwards.”

Treen called the technical assistance report “extremely useful” and said its timing is “helpful to the change process” at WIPO.

William New may be reached at wnew@ip-watch.ch.

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