5.1 Board of Trustees
5.2 Leadership and Organizational Culture
5.3 Managing the Matrix
5.4 Financial Status of the Centre
5.5 Resource Mobilization
5.6 Financial Management
5.7 Human Resources Management
5.8 Information Technology
5.9 Operations
5.10 Internal Audit
ICRAF's Board is currently comprised of 14 members, including four women and five persons from developing countries. One seat is reserved for a representative of the Kenyan Government, while the Director General and the Chair of the CIFOR Board serve ex officio. Members, elected for three-year terms, once renewable, come from a spread of geographic regions and represent a variety of scientific fields relevant to ICRAF's mandate, including persons experienced in finance and administration. (See Table 5.1) The Panel observed that the nomination process was systematic and based on criteria identified in advance.
The Board is nominally structured in the usual way, with an Executive and Finance Committee of seven persons, a Nominations Committee of ten and an Audit Committee of four. The latter two normally meet at the same time and between them absorb the entire Board membership. The Board made a deliberate decision, however, to make the Programme Committee a committee of the whole, albeit with a chair separate from the Board Chair. In point of fact, the Programme Committee's work is totally integrated within the Board's agenda of the second meeting of the year (usually in December), at which time it completes its work for the year and does not reconvene during the April meeting. At present, there is also an ad hoc Resource Mobilization Committee that will assist the staff and engage Board members in seeking new sources of funding. A small ad hoc committee also met separately at the meeting attended by the Panel to review in depth and report to the Board on several proposed personnel policy changes. There was some discussion of establishing an additional ad hoc committee to consider Board procedures, although no action was taken. In view of the fact that the current Board manual is somewhat out of sync with the procedures that have evolved, the Panel suggests that the Board review its procedures and revise the manual accordingly.
Immediately preceding the April 1998 meeting, the Board spent two days in a retreat with senior management. The objectives were: a) to launch a process to develop a common vision for the future of ICRAF and its alliances, and b) to begin to develop an agenda for action to meet the Centre's objectives in 2003. The retreat resulted in an action plan for Board and management that will involve the preparation of reports on nine significant issues for review at the next and subsequent Board meetings. Board members and management indicated that they especially valued this extended period for brainstorming on strategic issues and expressed the need to repeat such opportunities. The Panel shares their view on the importance of such a structured activity.
Board members appear to have a good working relationship with each other and to exhibit a strong commitment to ICRAF. Participation at the meeting observed was active and all-inclusive, with differing opinions stated candidly. Relations with management are also cordial, although in the past the Board has not hesitated to exercise strong control when circumstances warranted.
Table 5.1 - International Centre for Research in Agroforestry (ICRAF) Board Composition (1993-1998)
The Board itself feels members should interact more with the staff, despite the fact that its agenda regularly includes meetings with both staff associations. In addition, all staff are free to attend open Board meetings and to approach members informally during morning coffee breaks. For this reason, the Panel is puzzled that there is so little understanding of the Board's role and responsibility to ICRAF on the part of many staff members. The Panel suggests that management communicate more clearly to staff the legal, fiduciary and other significant responsibilities held by the Board.
The Board takes seriously its evaluation responsibilities. At the April 1998 meeting, considerable time was spent reviewing the performance of the Director General, who then met with members in closed session to discuss achievements of the past and plans for the forthcoming year. This procedure has been undertaken annually since the time of the last EPMR. During two prior periods of strain, the Board found it necessary to intervene forcefully to assist on two critical management issues.
In April 1997 and again in April 1998, the Board formally evaluated the quality of its own leadership, concurring with the Panel's judgement that the chair is in competent hands, and completed a lengthy questionnaire on its own performance, using the format suggested by the CGIAR Secretariat. On both occasions, members commented in writing on the need for more organized orientation for new trustees and, importantly, on their wish to structure meetings so as to reduce the number of presentations in favor of increased time for discussion of strategic, longer-term issues. Concern was expressed over the fact that the Board had been seriously distracted from its programmatic oversight responsibilities on two past occasions by the need to focus on urgent administrative matters. The results of the 1998 evaluations were reported but neither analyzed nor followed by discussion as to appropriate remedial action. The Panel suggests that the Board study the self-evaluations carried out to date and come to consensus on appropriate follow-up action.
Board and committee minutes record clearly, if briefly, the discussion and decisions taken during open sessions but fail to indicate what takes place when sessions are closed. Because this, too, is important Board business, there should be an official record of any decisions taken.
Between meetings, Board members receive copies of the weekly staff newsletter, the quarterly journal, trip reports from staff of the Director General's office and e-mails from management as warranted. A quarterly financial report, is currently sent only to the Board Chair and the Chair of the Audit Committee. In the Panel's view, this does not permit the Board to fulfill its fiduciary responsibilities adequately, and the Panel suggests that a comprehensive financial report be sent quarterly to all members of the Board.
The advance papers reviewed by the Panel for the April meeting were comprehensive but principally concerned with management issues. As indicated, the Board convenes as a Programme Committee only in the course of the second meeting of the year. Thus, in preparation for the December 1997 meeting, members received a draft copy of the Programme of Work and Budget for 1998. Oral presentations of achievements and plans were made during the meeting itself, following which the Board approved the 1998 work plan and budget.
Although the Panel understands that the December 1998 Programme Committee meeting will be structured in such a way as to minimize formal presentations and increase time for Board members to discuss issues with staff, the Panel remains concerned that the Board is not presented with sufficient information to fulfill its programme oversight function. For example, EPMR members were given some twenty-two Centre- or donor-commissioned external reports on various aspects of ICRAF's programme and management. Only one of these had been reviewed by the Board or its Programme Committee, and none were Board commissioned. The CGIAR review procedures presume that a full set of Centre-Commissioned External Reviews (CCERs) will be carried out in advance of the quinquennial EPMR. Ideally, these are scheduled and commissioned by Centre Boards as a means of keeping abreast of scientific and management quality within the institution. It is also surprising that too few programmatic matters have been referred to the Board to warrant a formal second meeting during the year of the Programme Committee. It is clear to the Panel that a greater involvement by the Board in programme matters would improve the effectiveness of the Board and would be welcomed by the staff as well as its own members.
Therefore, the Panel recommends that:
a) the Board strengthen its programme oversight by increasing the frequency of Programme Committee meetings, becoming more proactive in setting its agenda and seeking appropriate documentation from management; andb) the Board institute a formal procedure to schedule and commission Centre-Commissioned External Reviews and to discuss these, other external review reports and management's responses.
Since 1991, ICRAF has transformed itself from a Council to a well-regarded global research institution. This implies that it has benefited from strong and positive leadership, provided by a dynamic and committed Director General.
The Director General guides ICRAF with the assistance of a Management Committee, comprised of himself, the Deputy Director General (who is also presently Acting Director of Finance and Administration - known as FINAD) and the Directors' of Research and Development. The Committee meets twice monthly to review and approve guidelines, keep abreast of finances, review progress on funding initiatives, approve new staff positions and appointments, agree on plans and discuss other management issues as they arise. The majority of decisions have been made by the Committee as a whole since it defined its decision-making rules in 1996 to ensure ownership; they proceed through consensus, vote, DG and DDG and, if all of these fail, decision by the Director General. Minutes are prepared by the Assistant to the DG and communicated to staff via the internal network that is an important source of centre information. Four times a year, members of the two staff associations (the GSSA, representing support staff, and IPSA, representing professional staff at both the national and international levels) meet with the Management Committee to convey and discuss staff concerns. The associations also meet with the Head of Human Resources with greater frequency and with the Board at each of its semi-annual meetings. A weekly staff newsletter conveys general Centre news to staff.
Staff at headquarters gather in the main courtyard for coffee every Friday morning, at which time the Director General introduces new staff and makes other announcements of general interest. The Panel observed his special effort at these events to acknowledge notable staff achievements. The Board also uses these gatherings to communicate with staff during its meeting weeks. In addition, seminars are organized every Friday to promote discussion on both scientific and management issues.
In recent years, the Management Committee has had five members, but on occasion this team did not function harmoniously. The lack of unity among senior managers over the last two to three years was, in significant part, responsible for an ebb and flow in staff morale throughout the Centre. With the formation of a new team in January 1998, the Board and staff are hopeful that a more cooperative spirit will emerge.
Several events contributed to the volatility reported to the Panel, notably management's response to a financial crisis in 1995 and the sudden departure of a senior manager in late 1997. In both instances, the Board found it necessary to intervene to calm staff fears and take steps to review and provide counsel on the specific conflict management procedures applied in each case.
While acknowledging that such storms take time to dissipate, the Panel found a remarkably positive attitude on the part of staff when it began its work in April of 1998. Persistent questioning of staff at many levels led the Panel to conclude that the wind had calmed. Staff consistently described the ICRAF culture as one in which a team approach is paid more than lip service, where individuals are given scope to exercise initiative, where there is a strong esprit de corps and sense of purpose. Above all, they described a non-hierarchical Centre, where accessibility and transparency are encouraged. The support staff association called the Panel's attention to the commendable relations between the national and international staff and the frequency of staff interaction both in and outside of the work environment.
As is the case in many Centres, the scientists' main concern at present is with time pressures brought on by work demands that divert their attention from research. They refer to the reporting required by the CGIAR System and donors as well as the time spent on assembling and managing "complex mosaics" of funding packages. The assignment of new tasks to a Projects Office may ameliorate these concerns to some degree, but the Panel has no panacea to suggest to this common Systemwide problem.
The matrix structure of ICRAF is described in Chapter 2.
A broad range of middle managers and programme staff devoted considerable time and thought to the functioning of the matrix mechanism over the last year, leading to a decision to strengthen the regionalization of ICRAF and institute a number of changes as of 1 January 1998. Notably, primary responsibility for the supervision of staff posted to the regional offices and for both the management and raising of funds expended in the regions was transferred on that date to the Regional Coordinators with their strong support. This places the Programme Leaders in primarily a scientific advisory role, although they retain direct responsibility for some global research. Despite their loss of authority, they too support the change, believing their relief from managerial responsibilities will enable them to spend more time in quality control, in standardizing methods across regions and in ensuring a focus on international public goods.
Approximately 60% of ICRAF's scientists are based in the regions. Each now reports directly to, and is primarily evaluated by, a Regional Coordinator, who is the focal point for establishing priorities, developing and implementing work plans and maintaining constructive collaborative relations in the respective region. As is inevitable in a matrix, regional scientists are also associated with a global Programme from which they receive technical guidance and direction on research priorities. Nonetheless, all research initiated by a Programme Leader must have the concurrence of the Regional Coordinator concerned. The scientists at headquarters conduct activities relevant to a number of regions; they report directly to their respective Programme Leader, with whom they plan and agree on all their activities, again with the concurrence of the Regional Coordinators in whose regions they expect to conduct research.
In the Panel's view, this regionalized approach could promote greater coherence within a given region and perhaps more immediate local impact and more opportunity for cross-programme activity. On the other hand, the cost may be a partial loss of the strategic dimensions of research and an increased difficulty in raising funds for strategic, cross-regional activities. Regional Coordinators will have to develop a more global view than has been required of them in the past so as to avoid devolution of the Centre into six separate mini-ICRAFs, and they are duly aware of their need for better interaction among themselves and with the Programme Leaders. The Panel notes with approval the fact that both Board and management are watching these developments carefully.
While seeing the potential pitfalls clearly, management, the staff, the Board and the Panel agree that there is no perfect structure. Over time, roles in this revised matrix must be further clarified and adjustments made to achieve an appropriate balance between response to regional issues (that are often location-specific in natural resource management research), and the production of international, if not global, public goods.
The Regional Coordinators and their staff will also need to discharge their new administrative functions more effectively, especially financial management, for which they will need both specialized staff and training. The Panel's comments in this area and in resource mobilization are covered in a later Section of this Chapter.
ICRAF has experienced very rapid growth in the years since the last EPMR in 1993. Audited financial statements for 1997 recorded revenue of US$23.5 million, an increase over 1996 of 11% and as much as 84% over that recorded in 1992. Similarly, expenditures in 1997 amounted to US$23.2 million, a 14% increase over the amount in 1996, 92% above that in 1992. In 1998, however, ICRAF expects US$22.7 million in revenue, a 3.5% decrease over 1997, and has budgeted expenditures at US$21.8 million, a decrease of 7%. Management now predicts that both revenue and expenditures will be flat over the next several years.
As at 31 December 1997, assets totaled US$18.9 million, including US$5.6 million for the extension of ICRAF House recorded as a "capital work-in-progress" but now complete. Current liabilities amounted to US$8.9 million, including US$2.5 million set aside to cover staff accruals and provisions. However, management estimates the need for an additional US$200K in this account to fully cover the liability for international staff repatriation and has been charged by the Board to include this amount in the budget as soon as feasible.
The Operating Fund, a stabilization mechanism that - in a not-for - profit context-indicates the financial capacity of an organization to adjust to unplanned changes in revenue, stood at US$1.5 million at the end of 1997, amounting to 24 revenue days (total 1998 revenue divided by 365 days). Current CGIAR guidelines call for a Fund of 90 revenue days or 25% of revenue, although the 1997 System average was only 49 days or 13%. The Board has set a target for the Operating Fund of US$4 million by the year 2000. Given the expectation that revenue will not increase and the fact that any contribution to the Fund must come from unrestricted resources, this will not be easy and may not be necessary.
ICRAF's liquidity, its ability to meet its short-term spending requirements in the face of delayed receipt of funds, can be measured in terms of its current ratio (current assets divided by current liabilities) and of available working capital (excess of current assets over current liabilities.) At the end of 1997, the Centre's current ratio was 1.27, somewhat below the CGIAR's normative range of 1.6 to 2.0 and a system-wide 1997 level of 1.72. The Centre has devised a plan, however, to reach a ratio of 2.08 by the year 2000. ICRAF's working capital stood at US$2.4 million as 1997 closed, an amount sufficient to cover 42 days of 1998 operating costs.
On the other hand, if one makes the conservative assumption that not more than one-third of the staff accrual liability account is likely to be drawn down within twelve months, thus transferring a portion of the staff accruals from current to long-term liabilities, the current ratio would be recalculated at 1.8 and the working capital at 102 days. The CGIAR recommends a very conservative 120 days of working capital; the System averaged 103 days in 1997. (The Panel understands that the CGIAR Secretariat is rethinking a number of these financial guidelines, with the possibility of adjusting them downward.) All in all, therefore, the Panel judges the Centre's financial status to be reasonably secure and commends the Board and management's attention to improving these measures. However, the Panel suggests that the Board revisit its policies regarding the accumulation of reserves in the light of ICRAF's current financial position.
ICRAF experiences two interrelated problems that are endemic within the CGIAR System: the proportion of unrestricted to restricted funding and the inability to recover legitimate overheads on restricted projects. Since 1994, ICRAF has eliminated "complementary" (special project or non-agenda funding from its operations). Funds are, therefore, in only two categories: unrestricted and restricted.
In 1998, the Centre expects unrestricted revenue of US$7.5 million, 35% of the total for the year, with 65% coming from restricted funding of US$14.6 million. This is a deteriorating situation; restricted funding was 56% of the total in 1992. In this respect, ICRAF is considerably more constrained than any other Centre in the CGIAR System where the average is 36% restricted funding. On the other hand, restricted funding normally carries the benefit of a longer time frame than unrestricted, which facilitates research planning and contributes to the financial security of an institution.
Coupled with the difficulty of negotiating the full cost of overhead on almost all restricted projects, this UR/R relationship leaves ICRAF with little room to maneuver. In the early days of the CGIAR System, unrestricted revenue was understood to enable a Centre to pursue research goals determined by its Board to be essential to its mandate and to do so whether or not they matched the particular interests of donors at a given point in time. It was meant to be a safeguard against deviation from the optimum research programme that can result when an institution is overly donor-driven. In ICRAF's current case, however, fully two-thirds of its unrestricted funds must be expended to support basic institutional overheads (Office of the DG, the Board, the Division of Finance and Administration) that should be allocated to the projects that these activities, in fact, support with essential services. The Panel shares the ICRAF Board's and management's concern at the low rate of overhead collection. The Panel suggests that the issue of overhead collection should be debated more openly at the System level.
ICRAF's accounting system appropriately enables the charging of most operating costs directly to projects. In addition, the Centre appropriately uses standardized costing to budget for staff. Based on an average salary plus benefit cost of the staff member's grade, standardized costs also subsume the costs for division direction and for information and biometric services. This system has reduced the overhead rate per se to a low 23% of project costs. Nonetheless, ICRAF's collection rate in 1997 stood at only 5% of direct project operating charges, a notably lower percentage than that experienced by other Centres. This suggests that staff meeting with donors may not be sufficiently attuned to the rationale for full overhead, nor appreciative of the services it covers, in order to negotiate firmly with even those donors who are prepared to entertain the concept.
It may also stem from the fact that overheads collected are considered to "belong" to the Programme or Region whose projects provide it. This may make it easier for scientists in negotiation with donors to budget whatever funds appear to be available to operating costs rather than to argue that projects must be supported by the services covered by overhead. The Panel suggests that collected overheads be allocated against the services it is designed to pay for, releasing unrestricted funds for allocation wherever they are needed to cover priority research.
ICRAF was funded by 20 donors in 1993; their number increased to 36 by 1998 as the Centre's budget almost doubled. Still, both Board and management are making plans for a revitalized effort to attract new donors to the Centre's research agenda, seeking those supportive of both "cutting edge" research and development activities. The Board's ad hoc Resource Mobilization Committee will work with staff toward three goals:
· to reach out to American philanthropic foundations that have not previously been donors to CGIAR centres;· to seek grants from the private sector, including private individuals;
· to establish an endowment of some US$100 million from which, in due course, to return US$5 million annually to unrestricted core.
Management will also look to donors from the South and to bilaterally-funded development projects. With respect to the private sector, consideration is being given to an approach to commercial firms with the request that they underwrite specific positions, with due care to preserve the focus on international public goods. Management realizes that substantial resources, including perhaps additional personnel, will be needed to bring this plan to fruition but has not yet determined an appropriate level of action. ICRAF may benefit from Ford Foundation support for an activity aimed at assisting the Centres to develop sustainable funding mechanisms.
An effort to bolster public awareness activities is also considered key to future fundraising, and additional resources will be devoted to materials and activities that will attempt to demonstrate to a broader public the direct path from ICRAF research to development.
The Panel is aware that individual scientists, including those posted to the regions, often devote considerable time to raising project funds. It is not clear how the new, explicit transfer of responsibility to the regions will differ significantly from current fundraising practice. There is also a question, as mentioned earlier, as to how inter-regional activities will be funded and whether the regions will be in competition with one another for funds. There may be a need to clarify the roles individual scientists, Programme Leaders, Regional Coordinators and Senior Management play in project proposal development and negotiation with donors. In any event, the headquarters Projects Office is an active as a point of coordination, assigned the task of tracking proposals and ensuring that contractual obligations for both substantive and financial reporting are met in a timely manner as well as for researching new sources of funding. The Panel supports management's efforts to maintain a focus on strategic goals as it pursues and utilizes both restricted and unrestricted funds.
ICRAF is reasonably comfortable with the anticipated funding for 1999; 120 proposals are in the pipeline, although some are not fully developed. This figure should be seen in the context of the fact that ICRAF received over 35 new grants in 1997. Management has indicated that a fairly flat level of resources is expected for the next several years.
5.6.1 The Accounting Function
5.6.2 The Treasury Function
5.6.3 The Programme of Work and Budget
5.6.4 Auditing
The Division of Finance and Administration (FINAD) is comprised of units that manage finance and budget (currently separate units but likely to be combined), human resources, information technology and operations. Led by a Director who is a member of the Management Committee, they are described and commented upon below. The Finance and Budget Units are currently staffed by one internationally recruited staff person, four national professional staff and approximately 15 support staff.
A Centre-commissioned external review of the Division was conducted in October 1996 that made a number of recommendations with respect to the Division's work, albeit principally regarding financial management. The reviewers generally focused on procedural details-most of which were subsequently attended to by Management-rather than taking a strategic overview, but their report did assist the EPMR to identify areas that required the Panel's attention.
An upgraded version of the Sun Systems computer accounting package became largely operative at ICRAF on January 1 of this year. It will shortly incorporate the human resources data base and will enable regional offices to enter the reports of expenditures against their imprest accounts directly as well as to access their financial reports at will. Hopefully, this new package will go a long way to solving the remaining concerns of both headquarters and regional staff with respect to the timing and accuracy of reports. It is also expected to improve cash flow as donor reports are produced on time and to offer better budgetary control.
A slight adjustment of the reporting format to include columns that display current month entries by region and by headquarters should also help to counteract misunderstanding of what the regions sometimes regard as errors, but the procedure to clarify the figures needs to be made explicit as well.
All regions except Southeast Asia will have professional financial staff in place, trained in ICRAF procedures, within a few months as the regions assume primary financial responsibility for their budgets. A new Financial Controller will join the Centre at mid-year and will consider headquarters' staffing levels, the allocation of tasks and incorporation of the budget unit. Current staff believe there is opportunity to reduce some duplication of effort as well as to increase efficiency by cross-training staff to substitute for one another. The new Controller can make an important contribution by fostering a strong service mentality among his staff.
In accordance with policy established by the Board, ICRAF has arranged that any balances in excess of US$50K in its principal US dollar current account will be "swept" into an interest-bearing account on a daily basis. Balances in that account in excess of expected disbursement over the next 30 days are invested in time deposits for from one to six months; amounts not needed for the foreseeable future are invested in bond funds or in bonds of AA-rating or better. Investment income from these sources amounted to US$162K in 1997. The policy document includes stipulations regarding the building of reserves that are commented upon above and should be reviewed.
The annual Programme of Work and Budget (PWB) is the main internal management tool for planning activities, allocating resources, implementing work and monitoring progress. Late in 1996, the Centre established a staff "Total Quality Task Force" to review and revise the budgeting process and capture in both substantive and financial terms the plans for the subsequent year that are finalized at the Annual Programme Review in September. The resulting PWB for 1998, well integrated with the computerized accounting system, lists all the activities that are planned, the partners who will collaborate in the activity, the expected outputs and the ICRAF resources (staff and operating costs) required to undertake the work. The PWB also provides the basis for establishing the goals and work programme for each scientist at the Centre, which are then incorporated into their performance evaluation forms. Monitoring and assessment can therefore be carried out at two levels: for individuals, as part of their annual review, and at the programme and regional level, where expected outcomes can be directly measured against real achievements for a given year.
At the Programme level, work is expressed in terms of 19 projects; at the regional level, in 30 themes. The PWB document itself does not make clear the relationship between projects and themes, although the relationship is embodied in the listed codes (i.e., project codes are listed in a separate column for each activity). Within both themes and projects, work is expressed in terms of activities-with partners, concrete outputs expected, staff and operating costs.
This effort to identify outputs, in particular, and link them to staff assignments, is highly commendable, but the Panel finds that the breakdown of budgets into such small units - there are 320 in total - reduces budget flexibility and makes it difficult to comprehend the connections between relatively small, if important, outputs and larger objectives and goals. In part, this can be solved by a different formatting of the document, which would greatly facilitate Board review in the first instance. Nonetheless, budgetary breakdowns detailed to the extent they are in 1998 also reduce desirable flexibility and raise the transaction costs of budget adjustment. The precise nature of an output may also change as research and other work progresses, and some flexibility to adjust projected outputs within a larger grouping is desirable as well.
The process is currently being refined with consideration being given to consolidation of "tasks" into "key activities," with a "convenor" who will be in a position to exercise some budgetary discretion, albeit in consultation with the relevant task managers and in accordance with contractual obligations. The Panel suggests that the budget be made more flexible by reducing the number of units to which budgets and budgetary authority are assigned.
A budget manual is in draft and, presumably, will be revised when decisions have been made as to system adjustments. The Panel notes that the Budget Officer monitors expenditures throughout the year and sends out variance reports periodically. A formal process of budget revision is carried out in July.
The computer records actual non-staff operating costs against activities as expenditures are incurred, together with one twelfth of the budgeted staff time each month. The system can accommodate instructions from staff as to when the activity will take place and when to record the time spent, but almost none takes advantage of that procedure. This means that donor reports due in the course of the year must be prepared manually.
It also means that the measure of staff costs, on average 60% of the total, is based on budget estimates made largely in proposals, rather than on actual staff time devoted to a given activity. Over time, estimates are based on past year accounts that, in turn, were based on estimates. This is not a problem unique to ICRAF. (Very few of the CGIAR centres attempt to track staff costs in terms of time.) In the course of their performance evaluations, however, ICRAF staff are asked to distribute their time in percentages over the activities they have worked on during the year. The Panel suggests that management request staff annually to aggregate the information regarding distribution of staff time; FINAD can then consolidate the information to make comparisons with the budgeted and actual figures and feed the analysis into subsequent budgets. This exercise could also serve to improve cost consciousness and research efficiency.
The Nairobi affiliate of Coopers and Lybrand has audited the ICRAF accounts since 1989. A partner of the firm meets with the Audit Committee and, in the meeting observed by the Panel, presented an exceptionally helpful report that included useful suggestions and management's comments as well, as well as the declaration that 1997 accounts are in order. Nonetheless, it is usual practice to change auditing firms every three to five years so as to eliminate any possibility of collusion. The Panel suggests that the Board develop a policy regarding the appropriate duration of contracting with a single external audit firm.
In line with the transfer of financial responsibility to the regions, there is a plan to retain the documentation supporting expenditures in the Southeast Asian region and to conduct a sub-audit there by local representatives of the same firm at the close of 1998. If this proves satisfactory, the practice will be extended to other regions.
The Human Resources Unit (HRU, within FINAD) includes one internationally recruited staff member, three national professionals and three support staff. The Unit carries out with great spirit and energy the full range of activities of a professional human resources office, including training and employee counseling. Its work is complex. ICRAF's 431 current staff members are comprised of 53 internationally recruited staff, 36 seconded staff from outside Kenya, 63 national professionals and 279 national support staff. Thirty-five nationalities are represented, posted at 20 duty stations in 15 legal environments. The HRS staff also supports about 50 staff members of sister CGIAR Centres and other institutions housed on the ICRAF campus and coordinates with the Centres that support ICRAF staff at their sites.
International staff represent 20 countries, with 40% coming from countries of the South that compares to the CGIAR figure of 40%. The Centre is concerned to maintain this diversity, especially as a number of staff from the South is near the ten year tenure limit now in effect.
IRS women comprise 21% of the total (the CGIAR average is 16%), while one woman is at the senior management level (25% vs. CGIAR 7%), and two are in middle management (11% vs. CGIAR 12%). Approximately 40% of the national professional staff are female. The Board and management have set a target of 30% internationally-recruited female staff by 2003, so that the staff will be representative of the recruitment pool.
The Panel was especially interested to note the substantial number of seconded staff, including 10 senior and 26 junior staff, recruited for the most part via European donor programmes. This adds valuable labor to the Centre's research agenda at minimal cost. The Panel suggests that the Centre seek more seconded staff from collaborating NARS as well, in order to ensure that staff diversity is maintained. This would also support ICRAF's capacity strengthening mandate. (See also the Panel recommendation regarding a visiting scientist scheme in Section 4.3 above.)
A related issue is the ratio of national professional or junior associate staff to internationally recruited senior staff. The Panel did not have sufficient time to consider this issue in depth but suggests that management consider whether a progressive change in the ratio of national professional to international staff would be a cost efficient measure without detriment to the quality of the research output.
The 1993 EPMR highlighted three HRU issues that have been largely resolved: a grievance procedure is in place, there has been a study of salaries and benefits (in fact, a survey is conducted jointly with ILRI and ICIPE every two years), and the performance evaluation system has been improved and staff trained, although there is more to accomplish in this area according to HRU staff. The 1996 CCER's recommendations have also resulted in a needed addition to professional staff, a policy on employee counseling and consolidation of a complex set of benefits into salary.
Staff reported to Panel members a notable improvement in HRU services since the recruitment of the incumbent international professional who joined the Centre in 1994. She and her staff have been responsible for a new personnel manual that, commendably in the Panel's view, covers all staff and encourages a unified perspective. There are also five country working manuals; staff at three other outreach sites use the policies of their host Centres. The recruitment procedures have been delineated to make the process transparent, and a useful interview form designed that takes into account not only the professional training but also the personal characteristics desirable in a given job. This is especially important, in the Panel's view, as staff are recruited to undertake policy work and to collaborate with diverse partners. Training in interview skills is planned.
As noted, the staff have revised the performance evaluation process so that the outputs committed to in the Programme of Work and Budget will be one basis for the assessment of individuals. Experimentation with a 360 degree evaluation scheme is under consideration, as is a way to evaluate individuals whose output is achieved through teamwork.
The evaluation process also yields information as to staff career development needs to which the Centre tries to respond with appropriate training programmes, formal and informal. Among others, Regional Coordinators were registered in what appears to have been a valued course in partnership management and teamwork early this year that should be repeated from time to time. Additional training in management and supervisory skills is also needed at all levels. Funds for these activities are in short supply, however, and the HRU staff is attempting to find a way to build training into funded proposals, arguing that ongoing training is a standard part of business today.
Two issues have come to the Panel's attention. The first is the policy that incoming IRS are given contracts for ten years at the outset. HRU staff argue that this reduces the causes of anxiety from two (Will funds be available? Will my contract be renewed?) to one. Concern for the availability of funds cannot be avoided. The Panel believes, however, that management should promote more staff flexibility. Research plans may change; the need for disciplinary skills may differ from time to time, and management should be in a position to respond promptly. With proper notice to staff, should the decision be made not to renew a contract, and with the kind of outplacement assistance recently provided to those nearing their (current) ten year deadline, transitions could be eased. The Panel believes initial contracts should be restricted to no more than three to five years, with the possibility of renewal.
The ten year tenure rule was determined by the Board in an effort to ensure that the staff is renewed periodically. The policy stipulates that IRS should remain at ICRAF no longer than ten years, although exceptions to the rule have been introduced recently. The Panel believes that this policy can sometimes work to the detriment of ICRAF as staff could be released even when their services remain valuable. If contracts are more limited, staff renewal should occur without the ten year ceiling.
In view of the above, the Panel recommends that management restrict initial contracts to between three and five years, with the possibility of renewal and without the current ceiling often years.
A second issue was brought to the Panel's attention by national staff. They referred to a norm, rather than a written policy, that declares a national professional must resign from ICRAF if the person wishes to pursue a PhD degree. Staff are troubled by what they see as a limitation on their career development. The Panel views this more as a symbolic than a real concern. It is very unlikely that many would wish to pursue the degree even it the norm were revised. Certainly, it should only be revised with specific conditions in place: a) that the person can continue to perform his/her ICRAF work assignment successfully, b) that a senior scientist at ICRAF is prepared to supervise the dissertation research, c) that there is a clear understanding that the degree does not confer international status, rather that the staff member must await a position for which he/she is qualified and then compete in a worldwide recruitment effort-or seek a position elsewhere. The Panel suggests that management review the applications of highly qualified individuals who make a proposal to pursue a PhD degree with the full support of their supervisors.
The Information Technology Unit (within FINAD) is comprised of one internationally recruited staff member assisted by one national professional and six support staff. The Unit is responsible for computer hardware and software as well as the centre's communication system, including IVDN. The Unit Head provides highly skilled technical advice with respect to software selection to meet both administrative and scientific needs, configures software and manages the local area network and the intranet; his staff provides hardware adjustments/repairs, assistance with software problems, the Centre's audio-visual and telephone/fax services.
ICRAF has consolidated some of its software and communications equipment purchasing with ILRI. Most of the need for customized software and some hardware repairs are outsourced. ICRAF purchases off-the-shelf software centrally and is careful to protect the applications for which it holds licenses.
The Unit Head promotes a service mentality among his staff, encouraging them first to understand the needs of the research and other administrative staff and then to select and provide the technology that will be responsive. He is collaborating with other ICRAF staff in development of a proposal to introduce communications technology to selected NARS and participating in plans to set up a studio at headquarters that will facilitate distance learning programmes.
The Operations Unit (within FINAD) includes one internationally recruited staff member, assisted by four national professionals and some 36 support staff. Four sub-units report to the Head: Transport (the driving pool), Procurement, Production (with photocopying and some printing services) and the Travel Office. The Unit Head handles most insurances for ICRAF headquarters and regions and is responsible for a number of outsourced services, including security, building and grounds maintenance and food services. He also assisted in oversight of the construction of the new research building that has now been inaugurated and is all but complete.
A good deal of the headquarters purchasing is done on the Nairobi market as most goods are available at competitive prices. The Unit also purchases vehicles, computers and other major capital items for the regional offices. The Procurement office has recently improved notification to staff of the status of outstanding purchase requests.
ICRAF is a member of the United Nations Security system that has designed an area warden system to provide protection to international staff in their residences. The Centre pays for day and night guards for each staff residence and sends in specialists to advise on security for the premises.
The work of the Unit appears to be effective and appreciated, as no issues were brought to the Panel's attention.
The Internal Auditor has been at ICRAF for almost four years and appears to be reasonably well established. He prepares his annual work plan in consultation with the DG (to whom he reports directly) and members of the Management Committee and seeks the approval by the Audit Committee of the Board, to whom he also presents his findings at the end of the year. The Internal Auditor also checks that follow-up action is taken by the staff responsible for the operation in question. This will be tracked more systematically in the coming years. He also interacts with the external auditors during the course of their work and has free access to the managers, staff and information needed to carry out his internal audit function.
During the past few years - mainly as a function of his accounting and finance background and the manner in which his responsibilities have been defined by management and Board - the Internal Auditor has focused principally on issues of compliance with financial policies and procedures, particularly at ICRAF's regional offices. He has occasionally conducted an audit of other areas as well, such as the stores' inventory and travel expenses. The reports produced are clear, concise and forthright, for which he is to be commended.
The Panel notes that most of the areas audited deal with routine financial and administrative matters and focus almost entirely on ensuring compliance with established procedures. While this is important, the Panel suggests that the Internal Auditor also undertake, on a selective basis, an audit of the operational systems themselves-for example ICRAF's policies and procedures in such areas as cost control, management accounting and reporting, human resources and institutional/research management. This would increase the value added to ICRAF by the Internal Auditor and make the function more challenging and effective.
