UNHCR winterisation kits arrive on Lesvos - Oct 2020

© UNHCR Marios Andriotis Konstantos

 The Enterprise Risk Management Service (ERM) has
developed a tool which aims to assist field operations in
managing risks when undertaking procurement directly or
entrusting procurement to partners. The tool is designed to
help ensure that key risks have been adequately identified
and analysed, and relevant treatments – proactive and
reactive – thoroughly considered and agreed upon within
the operation.
The tool is purely an advisory resource; the authority to
issue mandatory instructions and guidance regarding
procurement rests with DESS (Division of Emergency,
Security and Supply).
The tool comprises of several key risks, with examples of
their causes, consequences and treatments that may apply
in your operation. These risks and treatments are the result
of an analysis of the operational risk register, relevant
sectoral policies and guidelines, and field colleagues’
contributions.
While we attempted to be as exhaustive as possible, there
may still be elements of risks and treatments that have not
been captured. Operations are welcome to contribute by
sending additional proposals and comments to
hqerm@unhcr.org, with subject: Tool - Procurement Risks.
.
2
Procurement is a crucial function in UNHCR, taking a
significant proportion of the annual budget. It is therefore vital
that it is effectively managed in order to maximize its positive
impact for persons of concern. However, it is an area that
features prominently in audit reports with a range of issues
being consistently stressed; and an area where fraud and
corruption can be perpetrated. It is therefore a function
requiring careful management, whether conducted directly by
UNHCR personnel or indirectly through partners.
The risks featured in this tool are identified based upon the
country risk assessments, feedback from personnel engaged
in managing procurement and upon a review of audit and
monitoring reports. The suggested risk treatments are
founded upon the current policies, administrative instructions,
procedures and guidance materials which can be found on
the DESS intranet site.
The procurement intranet page is where the key policies and
guidance are published.
Operations can select one or more risk event(s) that apply to
their operation, as well as the applicable causes,
consequences and treatments*. Please note that none of
the Proactive or Reactive treatment “menu” is
compartmentalised; treatments can be applicable to one or
several causes or consequences. All statements (cause,
event, consequence and treatments) can be edited and
adjusted to your operational context; some may not be
relevant or possible in each context. Key risks should also
be reflected in the operation’s overall online risk register. If
multiple risks from the tool are relevant to your operation,
we would suggest capturing them in one or two higher level
risks to keep the overall risk register as a streamlined,
prioritised management tool for the Representative and
senior management team. Please ensure to select the tag
“Fraud” if applicable.
A risk statement as reflected in the online Risk Management Tool
consists of four parts, namely, a risk event, its causes,
consequences and a name. A risk may have multiple causes and
consequences but has only one risk event. The risk name should
be succinct and clearly identify the risk. Risk treatments are
actions to reduce the likelihood and impact of the risk. Proactive
risk treatment actions are implemented before a risk event occurs,
based on identified causes of the risk event. Reactive risk
treatments are executed after a risk event occurs, thus addressing
the consequences of the risk event occurring.
 Procurement planning not prioritised
Lack of knowledge and experience in supply
on developing and maintaining a procurement
plan
UNHCR fails to anticipate the procurement
needs of potential emergencies
Planning teamwork between requesting and
supply personnel is inadequate or non-existent
Inadequate planning for maintaining stock
levels by UNHCR or partners
Inadequate planning for the necessary frame
agreements
Overburdened, limited workforce with
competing priorities
Failure to anticipate rainy season impacts on
transportation options
Workload time pressures impact ability to plan
and conduct effective procurement,
particularly towards year end or during
emergency
Unreliable or insufficient funding impacts
planning
3 Risk management tool: Procurement risks
Keep procurement plan updated and monitor
local sourcing options
Train supply personnel on planning
Include procurement plan in Country
Operations Plan with supply participation
Ensure ongoing joint procurement planning
between supply and requesting personnel to
anticipate evolving needs of PoCs
Ensure supply personnel are trained on
emergency procurement steps
Monitor stock levels and ensure adequacy
Plan procurement with partners
Plan with suppliers on required lead times
and expected surges in order requirements
Maintain frame agreements to ensure needs
can be met
Pre-position contingency stock for remote
locations / anticipate rainy season impacts
Anticipate year end requirements and build
into plan
Plan with UN Procurement Working Group
Understand other sourcing options such as
redeployment, in-kind donations, host
government, etc.
Plan with HQ for replenishment from global
stocks or inter-agency arrangements
Ease workload time pressures by using
standard specifications and bid templates for
commonly procured items
Flag funding shortfalls, re-prioritise
procurement plan
Break in pipeline of good / services Respond rapidly to stock-outs or pipeline
breaks
Personnel overwhelmed by emergency
and unable to procure what is required Request SMS for rapid replenishment
of stock from global stockpiles or
Procurement is ad hoc and is not focused
through inter-agency partnership
on the necessary strategic activities
Escalate to regional bureau and SMS
PoCs not properly supported and may
to seek support
resort to negative coping mechanisms
Improve planning in partnership
Failure to implement mandate may lead to
between supply and requestors
reputational damage for UNHCR
Boost personnel capacity through
Negative impacts on assistance from high
missions, fast-track appointments etc.
cost / low quality / insufficient quantity /
delayed delivery / unfavourable terms and Review option to provide cash
conditions assistance in situations and contexts
where the procurement of goods and
Excessive budget expenditure and best
services for PoCs is considered costly,
value for money not achieved
unsustainable, unnecessary or unduly
Increase in waivers for competitive bidding, restrictive
undermining competition
Increased risks for fraud, poor audit trail,
non-adherence to procurement thresholds
Increased risk of post facto notifications
Dry season transport window is missed,
leading to delay and increased cost
Concentration of procurement in the last
quarter leading to overburdened personnel
and sub-optimal procurement decisions
 Lack of knowledge and experience in supply
and requesting personnel on procurement
process
Target market and potential suppliers are not
well understood by supply
Without a technical requestor engaged, poorly
drafted specifications that are either too specific
or too vague
Clearance of specifications by mandated HQ
department not done, e.g. medicines, building
construction, motor vehicles
Sustainability considerations not factored into
specifications
Tender request poorly framed
Procurement action is poorly advertised
Tender timelines set too tightly, reducing
response and competition
Guiding principles of procurement are not built
into the procurement process and followed; i.e.:
• best value for money
• accountability, integrity and transparency
• fairness and effective competition
• best interests of UNHCR are paramount
Procurement action does not follow UNHCR
rules and procedures; e.g..
• wrong solicitation method selected
• clear pass/fail or scoring criteria not
established up-front and followed
• waiver of competitive bidding pursued
without proper justification
• bid information leaked or not properly
shared with all potential suppliers
• bid opening poorly managed
• technical and/or financial evaluation unfair
• contract awarded without due process
4 Risk management tool: Procurement risks
Train relevant personnel on procurement
process
Supply to conduct effective market research
prior to finalising procurement action
Be aware of existing frame agreements and
piggy-back opportunities – local, regional
and global. Ensure close engagement with
local UN Procurement Working Group
Keep vendor list properly vetted, updated
and relevant
Ensure support from technical requestor to
supply in developing procurement
requirements and evaluation criteria
Ensure regional or HQ expertise is sought
where necessary for complex requirements,
or approval where required
Fully engage requestor in conducting a
timely technical evaluation
Use open solicitation methods to maximise
fair competition. Allow enough time for
suppliers to respond
Advertise tenders widely on UNHCR
procurement website, UNGM website, local
newspapers and other outlets as appropriate
Establish and apply clear pass/fail criteria for
Invitations to bid, or scoring criteria for
requests for proposal
Conduct and sign-off technical evaluation
before financial evaluation is started
Conduct financial evaluation only for
qualifying suppliers and only following
technical evaluation
Mismatch between what is requested and Investigate and document why a procurement
what is available in the targeted market action failed or delivered poor outcomes
Market cannot meet needs of UNHCR; e.g.: Conduct a fresh procurement action if
• available suppliers are limited necessary but avoid the mistakes of the first
• limited product options available
• costs too high or other key needs such as Engage pro-actively with supplier to raise and
lead time cannot be met resolve performance issues
Potential suppliers are missed, low level of Report any decisions which divert from the
response or insufficient competition in the established delegation of authority
responses received
Recover financial losses where possible and
No supplier can be chosen and the appropriate
procurement action fails, or the wrong
Invoke warranty or guarantee claims, or
supplier is chosen; e.g..
withhold performance bond or other
• too inexperienced for what is requested
retentions
• lead-time too long
• specifications not in line with Consult with Legal Affairs Service if legal
requirements claims or retentions are being considered
• unwilling to meet UNHCR terms and
conditions Find alternate market sources to meet PoC
• lacks capacity (technical / financial / needs
administrative) to fulfil contract Follow up with host government on tax, duty,
Tender responses cannot be compared importation or customs issues
without additional follow up causing delay
and waste of resources Work to repair reputational damage with
suppliers or host government
Environmentally, economically or socially
damaging procurement
Procurement principles are not met; e.g.
• best value for money is not obtained
(wasting resources)
• UNHCR’s best interests are not met and
UNHCR fails its mandate to protect
because PoCs do not receive what was
needed
PoCs resort to negative coping mechanisms
because procurement fails to meet their
basic needs
 Costs of basic items rise exponentially due to
economic crisis or market fluctuation
Host government insists on local procurement
or on specific supplier or sub-set of suppliers
Host government delays / does not grant VAT
or duty exemptions / import permits / custom
clearance
5 Risk management tool: Procurement risks
Establish back-up supplier contracts where Procurement is ruled in-valid and must be
there is a perceived risk with one supplier cancelled, wasting resources (time and
money)
Alternatively, make a joint award to more
than one qualifying supplier if the tender Reputational damage with respondent
allows for this and it is in the best interests of suppliers who become unwilling to engage
UNHCR due to supplier capacity issues, etc. with UNHCR in future procurement
Closely monitor supplier performance Perception of mismanaged procurement
negatively impacts reputation and funding of
Document contract award decisions, UNHCR. Reinforced by negative audit
recording basis for decision; and ensuring findings
decision-making thresholds are not
breached Inability to source or high prices impact
program implementation
Perform due diligence checks before
selection of a new supplier Relationship with host government is
negatively impacted
Prepare suppliers, holding seminars on
"How to do business with UNHCR" Possible conflict of interest between host
government officials and suppliers
Promote local market development
opportunities or broaden scope of Increased demurrage / storage charges are
procurement to a wider geography incurred due to delayed customs clearance
Safeguard against steep cost increases by
including standard clauses in the contract
and staying engaged with suppliers
Inform host government concerning UN and
UNHCR procurement rules when necessary
Collaborate with UNCT to address host
government multilaterally to insist on
uniform SOPs for customs clearance, tax
exemptions etc. as ‘One UN’
Plan for possible delays in custom clearance
UNHCR remains familiar with host
government rules and regulations regarding
procurement and importation matters
 Unclear responsibilities regarding who
should manage the contract. (The manager
should be the requestor who is able to judge
performance, rather than supply)
Tender documents do not reflect required
deliverables of UNHCR
Relevant technical experts (e.g. WASH) not
involved in setting requirements during
specification phase
Cost overruns are accepted without
justification
Payments approved without verification
against contract deliverables, terms and
conditions
Unjustifiable supplier change requests are
accepted by UNHCR after contract
established
UNHCR personnel unclear about
requirements/responsibilities for
engagement with suppliers
Contract management problems are not
raised with supplier
Contract is unclear, allowing supplier to
unjustifiably vary price, specifications, lead
time, etc.
Supply does not help contract managers
with administration of their contracts or does
not perform their administration tasks in due
time
6 Risk management tool: Procurement risks
Supply to raise awareness of contract
managers about their roles and
responsibilities and the support role supply
plays in administering contracts
Ensure a contract manager is identified in
the requesting team for every contract
Train requesting personnel on the contract
information i.e. measurable deliverables, to
be contained in a tender; and consult with
technical experts on specifications
If justified, require performance bond or
payment retention to ensure deliverables
Ensure segregation of duties, giving
responsibility to requesting personnel for
accepting delivery
Monitor receipt of goods / services to
ensure reconciliation with purchase order,
invoice and contract before payment
Monitor spending per supplier to ensure
compliance with award decision & contract
Orientate requesting personnel and
suppliers on the contract change process
Contract manager to manage, with support
from supply:
• supplier relationship
• supplier performance issues, escalating
to Vendor Review Committee if needed
Supply to exercise oversight on contracts to
ensure timely renewal or tendering of all
expiring contracts
Supply to conduct effective contract record-
keeping as part of the procurement file and
to maintain clear audit trail
Seek support from the regional bureau / SMS
Contract does not reflect requirements of
UNHCR. For example: unsafe buildings are
constructed which violate construction
standards
Needs go unmet, so UNHCR fails in its
mandate to protect PoCs
PoCs may resort to negative coping
mechanisms
Waste of financial resources, cost over-
runs, delay, poor quality – resources
wasted and best value for money not
obtained
No ownership or responsibility for contract
management so contract issues go
unaddressed, deliverables are not
properly tracked, issues are not raised with
supplier and record-keeping is generally
poor
Contract monitoring is weak
Contract ceilings are breached
Contract cannot be enforced as UNHCR
intended
Negative audit opinion with reputational
risk to UNHCR, diminishing trust of donors
and negatively impacting funding
Contract is not re-tendered or extended in
time
Increase oversight by experienced
personnel
Analyse reasons for contract failure and
put mitigation steps in place. If
appropriate escalate issues to
Representative and / or IGO
Document reasons and actions taken for
material cost overruns or other
performance issues such as persistent
poor quality or late delivery
Document audit trail and properly
authorize any contract amendments
Escalate to regional bureau / SMS /IGO (as
appropriate) issues with contract
management
Ensure that contract cost over-runs are
approved by the respective authority
If contract costs breach the approved
contract ceiling immediately notify the
relevant authority post-facto
Implement supplier sanctions under the
guidance of the Vendor Review
Committee
Where provided by the contract, retain
performance bond or final payment until
terms of contract are fulfilled
Establish fresh contract
 Suppliers unaware of how they must do
business with UNHCR
Bribery or extortion by supplier to corrupt
UNHCR personnel to influence, secure or
extend a procurement contract
Suppliers collude or ‘rig bids’ to fraudulently
secure procurement contracts, e.g. via a
cartel
Supplier fraudulently misrepresents its
capacity to supply what is requested by
UNHCR
Supplier or another third party fraudulently
submits false or incorrect invoices
Supplier tables change order requests after
a contract is awarded that are unjustified.
This is a particular risk with construction
contracts
Weak control over establishment or change
in supplier bank details
Deterioration of local economy may increase
fraud prevalence in order to make ends
meet
There is an external environment of fraud
and corruption
UNHCR personnel not aware of proper
procurement procedures
Personnel does not disclose conflict of
interest with supplier and is engaged in a
procurement process affecting that supplier
Personnel accepts a bribe or gift or is
otherwise coerced by a supplier to influence
a procurement process
7 Risk management tool: Procurement risks
Hold supplier seminars on "How to do
business with UN / UNHCR"
Suppliers agree to UN Code of Conduct
for suppliers and include it in the contract
Ensure that all personnel are aware of
who, how and when they can contact
suppliers
Review for signs of collusion or bid rigging
in supplier responses and perform due
diligence checks on suppliers
Control supplier change requests
including bank details
Ensure Delegation of Authority Plan
(DOAP) is up to date and procurement
duties properly segregated I.e.
segregate::
• requesting and establishing
specifications from the procurement
action
• technical evaluation from financial
evaluation of tender responses
• managing the procurement action
from awarding the contract
• ordering from receipting from payment
Stress importance of compliant
procurement actions and enhance
awareness of procurement procedures
and the difference in emergencies
Train supply and requesting personnel
and procurement committee members on
required procurement practices and
ethics
Train relevant personnel on the SOP’s for:
• acceptance of goods / services
according to PO and contract
• payments
Principles of competition, fairness, integrity
and transparency are compromised
UNHCR or its partners may suffer
reputational damage and face critical audit
opinions
Donor confidence in UNHCR may be
negatively impacted and funding affected
Financial loss, best value for money not
achieved
Compromised / reduced quality goods,
services or works may be received
Goods, services or works which are not
required are procured and paid for
PoCs may not receive goods and services as
planned and resort to negative coping
mechanisms
Market may be negatively affected if other
suppliers suspect lack of transparency or
bias by UNHCR or its partners and lose trust,
impacting future procurement actions
Relations with host authorities may suffer
Compromised UNHCR or partner personnel
become more susceptible to repeat fraud or
corruption
Working environment becomes ‘toxic’ and
threatening, and in extreme cases
dangerous, leading to curtailment of
programmes or departure / withdrawal of
staff
Report any suspected fraud or corruption to
IGO and support investigation as required
Analyse poor tender responses to
understand and document the reasons
Enquire why a bidder withdraws or
deliberately ‘spoils’ a bid to understand and
document the reasons
Liaise with Vendor Ethics Committee (SMS
HQ) regarding investigating a supplier
suspected of fraud / corruption. (The
Vendor Ethics Committee liaises with the
IGO on cases of suspected fraud / corruption
by suppliers.)
Institute appropriate sanctions against
supplier following the decision of Vendor
Ethics Committee after IGO investigation
Collaborate and consult with Legal Affairs
Service (LAS) before raising any legal claims
Review options to terminate supplier
contract with Legal Affairs Service
Implement any personnel disciplinary
measures determined by Human Resources
Generally - support any formal investigations
and implement required sanction as
communicated by relevant authority without
delay
 Personnel unduly influences the award of a
procurement contract; e.g. by:
• disclosing confidential information to supplier
• adapting specifications to favour supplier
• setting deadlines which are too tight and
favour incumbent supplier
• abusing authority to suborn personnel into
favouring a supplier
• justifying an inappropriate contract award or
extension, including but not limited to
supporting unjustified sole sourcing
• engaging an external party who advises on
the scope of a procurement action and then
allowing that same party to submit an offer
for the procurement action
Personnel colludes with supplier to process
fraudulent or inappropriate payments; e.g. by:
• processing fraudulent orders and/or receipts
and/or invoices
• accepting sub-standard goods / services /
works
• processing procurement incorrectly as a
‘non-PO’ transaction to avoid three-way-
matching controls
• splitting procurement into smaller-value
transactions to avoid oversight
• processing supplier change requests or
otherwise modifying an awarded contract to
benefit the supplier without approval or good
reason
• conducting procurement off-line, either by-
passing the required solicitation and review
process, by-passing the order and receipt
process or paying off-line
• using emergency procurement procedures
incorrectly to simplify the procurement
process and by-pass controls
• delaying or falsifying accounting entries
8 Risk management tool: Procurement risks
Ensure suppliers know the channels for
complaints; and the office complies with
UNHCR requirements for reviewing them
Stress the obligation of UNHCR and partner
personnel to report suspected misconduct,
explain the whistle blower protection and
signpost reporting channels
Enforce compliance of mandatory training
against fraud and corruption
Provide fraud and corruption specific Code of
Conduct training, enhance awareness of Fraud
and Corruption Handbook, ensure relevant
personnel follow the online training: Prevention
of Fraud in Procurement’
Reiterate that personnel may not accept any
gifts or favours from suppliers
Disseminate to personnel the requirement for
declaring "conflicts of interest", and for
requesting permission for outside activities
Include personnel involved in procurement in
the financial disclosure programme
Conduct periodic procurement fraud risk
assessments and request pre-audit missions,
and audits on compliance to procurement
processes to identify and address fraud control
weaknesses
Follow up three-way matching errors (PO to
receipt to invoice) to identify reasons and
ensure purchase orders are raised before
receipts or invoices are recorded
Establish proper oversight in the management
chain and assign experienced personnel to
exercise due diligence
 Causes
Note: The suppliers and personnel of a
partner face the same procurement fraud /
corruption risks noted above for UNHCR
suppliers and personnel
9 Risk management tool: Procurement risks
Proactive treatments Consequences Reactive treatments
Monitor for:
• compliance against contract ceilings
• payment splitting
• duplicate payments
• procurement approval thresholds
Make sure that use of a back-up supplier
or joint award is justified and well
documented
Ensure tenders are fairly conducted and
evaluated and bid opening is well
managed
Encourage open market competition
Ensure vendor database is well managed,
and suppliers are only sanctioned via
established procedures
Rotate key supply personnel and contract
managers
Ensure during solicitation that ownership
details of each bidder are provided and
that bidders declare any legal association
with other bidders or UN personnel
Monitor partner's procurement using a
risk-based plan
Ensure partners have a code of conduct,
reporting mechanism in place and
promote high ethical behaviour
Raise awareness and build capacity of
partners to perform fraud review and
implement good principles to prevent /
identify and address fraud / corruption
 Members of procurement committees (i.e.
Bid Opening, Technical Evaluation,
Contracts and Vendor Review) are unclear
on their role or have inadequate knowledge
on procurement procedures or fail to
conduct their role effectively in line with
UNHCR rules and regulations
Supply staff do not support the procurement
committees appropriately
Bid Opening Committee fails to properly
secure, register and handle incoming bids
Technical Evaluation Committee fails to
fairly assess tender responses in line with
advertised tender requirements and
established evaluation criteria
Committee on Contracts fails to focus on its
mandate to decide if the reviewed
procurement action and proposed decision
is in line with the procurement principles,
rules and regulations of UNHCR
Committee on Contracts fails its stewardship
role concerning:
• cases submitted post facto
• inadequate justification for contract
extensions
• inadequate justification for requests to
waive competitive bidding
• applicable threshold for their approval
Vendor Review Committee fails in its role to
review submissions concerning supplier
non-performance issues and escalate
proscribed practices to the Vendor Ethics
Committee where necessary
10
Ensure committee members are
knowledgeable, committed and trained to
perform their roles including ensuring that
they know the scope of their authority and
the purpose of their roles
Request focused training support for
committee members
Ensure supply staff are trained on their
support role to procurement committees
Representative to ensure authority of
delegation is formalized and up to date
Ensure committee members are recused
from participating in cases where there are
perceived or actual conflicts of interest
Ensure meetings are held timely and
decisions properly documented
Bid Opening Committee ensures secure
and confidential bid-handling and
recording
Technical Evaluation Committee ensures
supplier responses are fully and fairly
assessed in relation to advertised
requirements
Contract Committee ensures a tight focus
on its mandate and ensures that its
stewardship responsibilities are exercised
Representative to lower Contracts
Committee thresholds where prudent due
to personnel capacity or other limitations
of a specific office
Vendor Review Committee oversees
vendor non-performance issues and
engages with Vendor Ethics Committee as
required
Committees fail to perform the oversight task Increase oversight by experienced personnel
for which they are established and fail to
ensure correct and fair bid opening / Request focused training support, mission or
technical evaluation / process and review from regional bureau or SMS
procedural oversight / vendor sanctioning;
Report misconduct or irregularities that are
potentially leading to the following:
identified to senior management and / or
Poor audit opinion which has a reputational IGO, and support any follow up
risk and potentially negative impact on
Review and adjust SOPs if required
funding
Work with communication focal point to
Increased opportunity for fraud and
manage media and donor relations
corruption to occur
Increased non-compliance with procurement
rules, jeopardizing the underlying objectives
of procurement: i.e. best value for money;
accountability, integrity and transparency;
fairness and effective competition; ensuring
best interests of UNHCR
Sub-standard or unfair procurement
processes which may impact PoCs
Lack of control over late submissions,
contract extensions, waivers of competitive
bidding
Waste of financial and human resources
Poorly performing suppliers not properly
engaged or sanctioned where necessary
Risk management tool: Procurement risks
 Supply personnel in operations are limited in
number or experience
Supply personnel are too junior in relation to
the responsibilities of their job
UNHCR personnel engaged in procurement
activities are not well trained in procurement
No clear guidance / SOP relating to the
responsibility of supply exists in the operation
(e.g. regarding petty cash, non-PO
procurement, operational advances)
Supply personnel are not pro-active or are
side-lined in planning process
There is no time for joint planning in the
operation, so procurement becomes ad hoc
and time-pressured
Supply personnel are also required to be
involved in non-supply activities
Reporting lines of supply personnel are
unclear
Supply personnel report to requesting
department
Supply staffing not prioritized during
emergency or fast-track recruiting
11
Engage regional bureau if segregation of
duties is not possible in a small office
Clarify reporting lines of supply personnel
Ensure senior supply person reports to
Representative or Deputy, enhancing
segregation of duties with requesting units
Encourage functional reporting to supply in
regional bureau
Establish training for all personnel
engaged in procurement , to be able to
perform their roles in the procurement
process
Ensure recruitment of supply personnel
with the required skills and competence;
prioritizing in emergency operations
Budget enough supply personnel. Aim for
ratio of 1 admin-finance to 1 supply
personnel in an operation
Senior personnel to perform oversight and
perform due diligence where needed
Prioritise procurement planning
Establish frame agreements to reduce
repetitive sourcing, or piggy-back
contracts of other UN agencies or UNHCR
Use standardised specifications, bid
documents and contracts where possible
Support supply personnel to manage work
boundaries and avoid being overwhelmed
Support missions from within region or HQ
SMS supports regional bureaux /
operations in aligning supply function
capacity with the expected responsibilities
Personnel are unable to perform effectively
and hinder the operation
Lack of planning and preparation (e.g. stock
management and frame agreements) leading
to poor operational response
Supply personnel make errors, take short
cuts, compromise procedures. E.g. tenders
not executed or evaluated correctly
Because supply personnel are too junior they
may be reluctant to speak up, or go ‘unheard’
or get over-ridden by the established office
hierarchy
Segregation of duties may be compromised
Supply pipeline is delayed or breaks
Waste of resources, delays
Problems spill over into increased demand for
support from operations to regional bureau or
HQ who in turn struggle to cope
Fraud / corruption becomes more likely
Reputational risk to UNHCR which negatively
impacts relations with PoCs, suppliers,
partners, donors. Poor audit outcomes.
Procurement conducted by partners is not
monitored and verified effectively
Increase oversight by experienced personnel
over supply function
Renew and repeat advocacy for supply
capacity increase
Communicate highly adverse audit findings
with donors prior to official release of audit
report and manage relations with support of
communications focal point
Inform and work with UNHCR crisis
communication focal point to prepare for
potential fallout with media or donors etc.
Support missions from regional bureau or
SMS, remote consultation to follow up on
problems detected through monitoring
Report misconduct to IGO, support
investigation and apply any resulting
sanctions
Increase monitoring / verification capacity for
procurement transactions by partners with
other relevant functions e.g. finance
Risk management tool: Procurement risks
 Clear advantage for UNHCR to delegate
procurement to partner is not demonstrated
by the assessment of partner’s capacity to
procure
Supply function is not part of partner's
procurement capacity assessment
Partner misrepresents its procurement
capacity
Prequalified partner (PQP) does not
implement the policies and procedures it
declared, and which formed the basis for its
pre-qualification
Non-prequalified partner is unaware of or
fails to follow the mandated UNHCR
procedures
Partner selects suppliers that do not meet
UN ethical standards
Multi-Functional Partner Management
Committee fails to monitor and verify
implementation of applicable procurement
policies and procedures
12
Build UNHCR personnel capacity to UNHCR fails to deliver on its mandate Internal and external audits on the
perform cost-benefit and other analysis of because partner procurement is poorly compliance to procurement processes by
partners to determine if procurement conducted partners to detect non-compliance
should be delegated
Partner incurs excessive cost on Report any detected irregularities as
Ensure supply function is competent to procurement (which can include paying tax appropriate to UNHCR management, IGO
participate in the analysis and decision which would be otherwise be avoided or and / or partner to take corrective action.
concerning delegation of procurement to a recovered if the procurement was conducted
partner. See e-learning course by UNHCR) Remove procurement component from
partner in Partnership Agreement or
Perform due diligence checks with other Inadequate quality of goods / services / terminate partnership after due process.
aid agencies for new partners works, or the procurement is late
Discuss, agree and monitor actions to be
Build capacity of partners on procurement Procurement principles are not respected taken by partner if they have engaged with
principles and processes of UNHCR unethical suppliers
Reputational risk due to adverse audit or
Build constructive relationship with partner negative publicity concerning the partner’s Inform and work with UNHCR crisis
to enhance capacity through training, procurement including its choice of suppliers communication focal point to prepare for
mentoring, coaching etc. potential fallout with media or donors etc.
High potential for fraud leading to loss of
Ensure partner provides and repeats Code stakeholder confidence and reputational
of Conduct training to personnel. damage
Inform partners of ethical conduct
requirement for suppliers and request they
implement declaration of ethical conduct
by their suppliers
Require that partners exercise due
diligence in selecting their suppliers
Raise awareness and train operation on
the requirements of the Multi-Functional
Partner Management Committee
Use a risk-based monitoring plan to ensure
oversight of procurement processes
implemented by partners
Review internal control assessments
completed by partners regarding
procurement processes
Follow up internal or external audit issues
Risk management tool: Procurement risks
 Opportunity |

Causes Proactive treatments Consequences Reactive treatments

The ‘’Delivering as One ’ initiative and the
Secretary General’s goal of establishing
common back office services set a context
for cooperation between UN entities on
procurement
The UN Procurement Network is a mature
network that has promulgated cooperation
between UN entities since it was formed
UN entities share a common approach to
procurement being guided by the same UN
procurement principles
Engage pro-actively with other UN entities in-
country to share procurement plans, and
resources
Seek opportunities to share the burden of
establishing procurement contracts of
common interest by either outsourcing, joining
or leading joint procurement actions
Seek opportunities to use the contracts of
other UN entities (so-called ‘piggy-backing’)
Secure price discounts where volumes can be
leveraged by aggregating those of several UN
entities
Improved outcomes for persons of concern Follow up on missed opportunities and seek to
broaden and deepen collaboration and
Better value for money cooperation
Limited resources stretch further because of
time saved through cooperation and volume
price discounts
Better market and supplier information
Coordinated and more effective interaction with
host government
Improved capability to respond in emergencies

Improve market leverage and knowledge

through cooperation

Ensure that non-confidential information about

suppliers including due diligence checks and
publicly available sanctions are shared with
other UN entities

Work with other UN entities to engage the

host government on issues concerning
customs clearance, demurrage or taxation
concerns

Leverage stock holdings of UN entities that

have an inter-agency agreement with UNHCR

13 Risk management tool: Procurement risks

 Opportunity |
Causes
The 2030 Agenda for Sustainable
Development, adopted by all United Nations
Member States in 2015, provides a blueprint
for peace and prosperity for people and the
planet, now and into the future
At its heart are the 17 Sustainable
Development Goals (SDGs), which
recognize that ending poverty and other
deprivations must go hand-in-hand with
strategies that improve health and
education, reduce inequality, and spur
economic growth – all while tackling climate
change and working to preserve our
oceans and forests
Goal 12.7 explicitly states the following
target: “Promote public procurement
practices that are sustainable, in
accordance with national policies and
priorities”
See UN website for a full list of the goals
See chapter in UN Practitioner’s handbook
for further information about sustainable
procurement
14
Proactive treatments
Review options for sustainable procurement to
address environmental, economic and social
goals and objectives
Establish and prioritize technical specifications
that take proper account of sustainability
issues in the procurement action, and factor
them into the procurement choice that is made
Prioritize local market sourcing and reduced
transportation costs
Perform due diligence of new suppliers to
review their sustainability practices
Conduct risk-based monitoring of existing
suppliers to review their sustainability practices
Encourage sustainable procurement practices
by partners
Consequences
More sustainable outcomes for the
environment, economy and society - both
where procurement is conducted and where
the programmes are delivered
Better value for money
Enhanced relations, through improvements to
local markets, better local employment
opportunities and stronger host community and
government relationships
A boost to innovative sustainable solutions
Enhanced brand and reputation of UNHCR and
better funding opportunities
Potential to tap into new private-sector funding
opportunities
Positive influence on suppliers and partners
Reactive treatments
Review existing procurement arrangements
and consider opportunities to enhance
sustainability through taking an alternate
approach
Follow up with suppliers who are operating
environmentally, economically or socially
unacceptable practices. Consider working
with suppliers on an improvement programme,
or in extreme cases discontinuing the contract
where there is a clear and unacceptable
breach
Assist partners in improving non-sustainable
procurement practices
Risk management tool: Procurement risks
Notes:

15 Risk management tool: Procurement risks

 Enterprise Risk
Management

15 Risk management toolkit: CBI risks