Management Reform Advisory Commission Sub-Committee Amman 2 May 2012

1. Management Reform Advisory Commission Sub-Committee Amman 2 May 2012

2. OD Evaluation • OD Evaluation finalised in October 2011 • OD Evaluation included 10 recommendations to Agency • Create permanent internal communications function • Expand Executive Office to include additional DCG • Prioritise implementation of new model for Post Classification and Compensation System • Ensure comprehensive communications, training and development strategies in place for implementation of performance management system. • Caution about change management implications of new ERP system. • Strengthen strategic planning and development and elevate PCSU to a Planning and Policy Directorate. • Clear analysis on exactly how reforms are expected to have measurable results on efficiency/productivity as related to service levels. • Conduct cost-benefit survey of all business process improvements that may have resulted in efficiency and/or productivity gains under OD. • Consider what type of management and leadership approach is needed to achieve expected results. • Develop talent management system to develop and promote more area staff into senior management positions. Agency submitted Management Response to OD Evaluation and Action Plan for Management Reform in Feb 2012

3. Moving Forward • Taking into account lessons learnt from OD Evaluation, and according to Action Plan for Management Reform, Agency moving forward with reforms. • Management Reform Areas: • Human Resources(compensation, classification, performance management, staff development) • ERP • Financial Management(IPSAS, Activity Based Costing) • Management for Results(Donor Reporting, Accountability, RAC, Planning, RSS) • Internal Communication • Executive Management

4. Progress • Human ResourcesAgency on track to complete all deliverables by 2013. Costing of new classification and compensation systems key to ensure long-term sustainability. • ERPPartnership with WFP underway and intensive work with Cap Gemini on assessing how much of WFP system fits UNRWA business model being done. ERP management to move to Director of Finance. • Financial ManagementInternal financial system changes due to IPSAS continue; ABC consultants entering final phase – key issue will be analysis of results. • Management for ResultsHarmonized donor reporting; New RAC (ACRA) in place; Work continues on accountability and organisational design of RSS and PCSU. • Internal Communications Stock-taking of all internal communication activities Agency-wide undertaken. Next steps to be considered with new ERCD Director. • Executive Management Executive Management architecture completed and implemented.

5. Cost Implications • Human ResourcesAgency has delayed implementation of system to ensure cost sustainability – Agency foresees a cost implication in a new compensation and classification system, however, is working on ensuring that such costs can be reasonably managed. • ERPAgency foresees recurring costs of $4.9 million per year, as of 2014. This however is partially offset by savings of approx $ 2 million per year due to closing down of present system in 2014. • Financial ManagementNo additional long-term costs for IPSAS foreseen as Agency was able to obtain an International Staff member from the NY Regular Budget in 2012. Implications of the Activity Based Costing exercise remain to be analysed, however the Agency hopes to use this data to better gauge costs issues. • Management for ResultsNo additional long-term costs foreseen. • Internal Communications No additional long-term costs foreseen at this stage, however, should Agency proceed with engagement of a dedicated individual for internal communications, this may require an international post. • Executive Management No additional long-term costs foreseen.

6. executive office www.unrwa.org