Microsoft Word - I6685-Relatorio de Recomendações IAI.doc

This management letter, dated August 11, 2004, was issued by KPMG Auditores Independentes to the Inter-American Institute for Global Change Research (IAI). The document details internal control weaknesses identified during an interim audit, focusing on member contribution arrears, project reporting irregularities, approval flows, contract deficiencies, procurement manuals, and human resources practices.

• The IAI faces a risk to its continuity if member country contribution defaults persist. As of June 30, 2004, only 5 of 19 member countries had fully paid their annual contributions. Three countries—the United States, Brazil, and Canada—provide approximately 80% of the total contributions. Several countries have been in arrears for over three years, including Paraguay (7 years), Dominican Republic (6 years), Guatemala (5 years), Peru (5 years), Uruguay (5 years), and Venezuela (4 years).
• Audit testing of Collaborative Research Network (CRN) projects revealed that Grantee Institutions are not fully complying with financial and scientific reporting rules. Specific irregularities included: - Brian Luckman (CRN 3): Failed to account for US$ 72,621 of a US$ 149,422 contribution. - O. Sala (CRN 12): Failed to account for US$ 82,061 of a US$ 134,183 contribution, with US$ 30,000 transferred in November 2003 before a financial report was received. - P. Cornejo (CRN 38): Project canceled due to irregularities; US$ 51,712 remains to be recovered from the Grantee Institution (CATHALAC). - M. Mc Clain (CRN 47): Failed to account for US$ 3,688 of a US$ 136,500 contribution. - M. Nuñez (CRN 55): Failed to account for US$ 77,855 of a US$ 156,780 contribution, with US$ 15,000 transferred in September 2003 before a financial report was received. - Tim Baumgartner (CRN 62): Failed to account for US$ 18,478, yet the Institute transferred 100% of the US$ 149,240 annual contribution.
• The IAI lacks a formalized approval flow for scientific and financial reports. Scientific reports showed no evidence of review or approval by the scientific director. Financial reports were reviewed via separate memoranda rather than on the reports themselves, and the submission of supporting documentation for expenditures was not mandatory.
• Contracts with Grantee Institutions contain several weaknesses, including a lack of clear instructions on how to render accounts, missing deadlines for accounting for advances, and undefined penalties for delayed reports or unsubstantiated expenses. Additionally, there is no clear evidence that the IAI can stop transfers to grantees without risk of legal questioning if a member country suspends its contributions.
• The Institute's official purchasing manual, titled "Contracting and Procurement 1996", has never been fully implemented or applied. While the financial director has implemented a procedure, it is not properly formalized.
• The IAI utilizes an informal "hour bank" for overtime compensation that is not documented in employee contracts or collective bargaining agreements, creating a risk of legal labor claims. Furthermore, the hour bank spreadsheet was accessible and modifiable by unauthorized individuals, including the IT Manager, Financial Director, and Financial Assistant, rather than being restricted to the HR officer.

APA

Inter-American Institute for Global Change Research (n.d.). Microsoft Word - I6685-Relatorio de Recomendações IAI.doc. https://archive.iai.int/admin/site/sites/default/files/10_ManLetter.pdf

Chicago

Inter-American Institute for Global Change Research. Microsoft Word - I6685-Relatorio de Recomendações IAI.doc. n.d. https://archive.iai.int/admin/site/sites/default/files/10_ManLetter.pdf.

Wikipedia

{{cite report |author=Inter-American Institute for Global Change Research |title=Microsoft Word - I6685-Relatorio de Recomendações IAI.doc |url=https://archive.iai.int/admin/site/sites/default/files/10_ManLetter.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{interamericaninstituteforglobalchangeresearchndmicrosoft, author = {{Inter-American Institute for Global Change Research}}, title = {{Microsoft Word - I6685-Relatorio de Recomendações IAI.doc}}, institution = {Inter-American Institute for Global Change Research}, url = {https://archive.iai.int/admin/site/sites/default/files/10_ManLetter.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }