Inner City Press -- Investigative Reporting From the Inner City to Wall Street to the United Nations

Despite Scathing Audit of PWC Wrongly Selected, UN Claims All Fine With Umoja

UNITED NATIONS, March 5 -- Even in those instances when the UN is forced to catch itself in irregularities, in overpaying for services, hiring friends and cronies, rather than answer questions or take action, it makes accusations of error and clings to the status quo.

  A year ago, Inner City Press wrote and asked Secretary General Ban Ki-moon's spokesman Martin Nesirky about a pattern of hiring fraud, including the doctoring of resumes to omit previous supervisory relationships, documented in resumes leaked to Inner City Press by a whistleblower.

  While there was not definitive answer at the time, an audit by the UN's Office of Internal Oversight Services verified all of these irregularities, resume doctoring and more, including overpaying PriceWaterhouseCoopers for a contract for the UN's Enterprise Resource Management, called UMOJA.

Inner City Press asked Nesirky for a response, but received more. Finally last week Inner City Press exclusively published the complete OIOS audit -- click here to view -- and on the morning of March 1 asked Nesirky in writing:

Paragraph 73 of the OIOS audit states that Angela Kane accepted responsibility for identifying who should be held accountable for procurement irregularities relating to her department's award of a contract to PriceWaterhouseCoopers. The same paragraph states that her office agreed to issue a report within 30 days, the deadline of which would have been September 24th, 2010. So the question is, did Angela Kane identify who was responsible for these irregularities by September 24, 2010, and who, if anyone, was held accountable? Does Angela Kane still believe that Paul van Essche is the right man for the job, and did she know Mr van Essche prior to his appointment as Umoja chief?

  Nesirky didn't respond to the question, or even acknowledge receipt of the e-mail. So at the noon briefing, Inner City Press in person asked him:

Inner City Press: on OIOS, I had wanted to ask this; it has been a long time brewing. Almost a year ago there was this, issues arose about the hiring within the Umoja project, about Paul van Essche hiring friends and colleagues in violation of rules. And now the OIOS report itself has become public, and in it, it says, it’s pretty damning, it talks about PricewaterhouseCoopers not being a low bidder; talks about all the hiring, and it says, Angela Kane said that she would respond to this report and take action in some way on accountability by 24 September last year, 2010. So, I am wondering, I know you didn’t; I am not sure if you have issued some kind of a statement about this yet, what action has been taken on this OIOS report about systematic problems within the $300 million Umoja project?

Spokesperson Nesirky: Two things: One is that we’ve answered at length and on more than one occasion on this topic, and I don’t really have anything to add except, for a second point, which is that some aspects of the audit report are being still closely studied, to look at what action may be needed. And that is all I have to say on it.

Inner City Press: But I mean, if it paints a picture of hiring irregularities, and is PricewaterhouseCoopers, given this report, do they still have the contract? What, I just want, I know that you have issued something, but I am not sure as to the two main components, the head of Umoja and PWC; what’s happening?

Spokesperson Nesirky: We’ve issued quite a lot of detailed responses to questions on this from you and from others, and I don’t have anything further to add.

Inner City Press: But I haven’t really seen the response.

Spokesperson Nesikry: I don’t have anything further to add at this point, Matthew.

Later on March 1, Inner City Press e-mailed Nesirky asking to see these supposed previous answers:

“What answers have you previously provided to the media inquiring about the OIOS audit of Umoja, and what's the basis of your statement today at noon that you have provided extensive answers to such questions. Please provide the answers you referred to.”

  The next day, Nesirky sent this:

From: UN Spokesperson - Do Not Reply [at] un.org
Date: Wed, Mar 2, 2011 at 10:56 AM
Subject: Your questions on Umoja
To: Matthew.Lee [at] innercitypress.com
Cc: Martin Nesirky [at] un.org

Hi -- you had received the following answers on Umoja on 14 February; we have nothing to add at this time.

[Q] Last week you said you were still developing a response to the WSJ story about OIOS having found serious irregularities concerning Paul van Essche's management of the Umoja project. In March of last year, you confirmed in response to my question that OIOS was undertaking a separate investigation of van Escche's role in concealing his prior relationship with a subordinate he hired for the project.

Now it is reported that “Van Essche... hired one official, who had been turned down for a lower post, to a more senior position when he took over the project, the report said. This official was hired after he changed his CV to remove Van Essche’s name as his supervisor in three previous jobs, the report says.”

Question 1 Please this morning provide an update about these two investigations -- what were the results of them, and what action is the SG taking, if any? And does the SG still believe that Mr Van Escche is the right man for implementing the Umoja project?

The questions raised relate to issues that were reported in August 2010 in an internal audit conducted by OIOS. As part of that audit process, management responded to the findings and recommendations. In some cases the recommendations were accepted and implemented and in other management undertook to conduct further examinations in order to close the recommendation. This examination by management is still in progress and we have no further comment to make at this stage.

Question 2 Also, please confirm that Ludovic van Essche, who worked for the UN, was Paul Van Escche's father, and that Paul Van Escche's mother knows and visited Angela Kane recently. Also, please state the status of Ms. Kane as head of the Department of Management, and when she will give the next of her promised briefings.

The UN Secretariat is not aware of any person by the name of Ludovic van Essche being a UN employee. Ms. Kane does not know Paul van Essche's mother and has never met her.

But back on February 15, Inner City Press had asked a follow up question, which Nesirky never answered or acknowledged:

In light of yesterday's van Essche family answers, please see

http://news.rootsweb.com/th/read/BELGIUM-ROOTS/1998-10/0909790152 and http://bit.ly/gXn2BG

Is this Paul van Essche's father? Does Ms. Kane not know him? Again, what is Ms. Kane's status as head of the Department of Management? When will she belatedly give a briefing?

Not only has Angela Kane not given a briefing, Nesirky has not even acknowledged the repeated request that she give one. In the interim, after Inner City Press' exclusive publication of the OIOS audit, in connection with a meeting of Kane's Department of Management, the following e-mail was widely sent out in the Department of Management by a whisteblower or reformer, including the OIOS audit as exclusively published by Inner City Press

From: [ ] @gmail.com

Today, Ms. Kane is conducting a Town Hall on Accountability in the UN. What a hypocrisy? Attached is an audit report of a division reporting directly to her. What has she done about it? Nothing!!! Any other person doing half of this would have been immediately suspended or fired. According to OIOS, there before has there been a single person who violates as many serious rules and in such a short time.

Ms. Kane, accountability is not lip service. It is through actions – direct and indirect. And also appearing to be accountable. Leaders set examples for everyone to follow; not set up different rules for themselves and their friends.

Many attendees forwarded this e-mail to Inner City Press, and reported on growing questions about Ms. Kane and more senior UN leadership. Finally, after refusing to answer or acknowledge questions or requests for a briefing by Ms. Kane, on Friday March 4 Nesirky's office sent the following, which despite substantial contradiction by the OIOS report itself, we publish in full:

From: UN Spokesperson - Do Not Reply [a] un.org
Date: Fri, Mar 4, 2011 at 10:56 AM
Subject: Response to your reporting on the Umoja project
To: Matthew.Lee [at] innercitypress.com
Cc: Martin Nesirky [at] un.org>

In response to your queries related to the Umoja project I would like to share some clarifications:

The article of the Inner City Press entitled "UN Corruption Scandal in ERP Extends from Hiring & PWC to Capital Master Plan", dated 28 February 2010, contains a number of errors.

There is no "corruption scandal" related to the Umoja project as the title of the article erroneously suggests.

No vendor was favoured over other bidders during the selection process. Bids were compared on a like-for-like basis rather than at face value to ensure a common factor for evaluation. The evaluation was conducted on an overall best value for money basis, and PwC received the highest combined score.

Prior to the awarding of the contract, the case was referred to the Headquarters Committee on Contracts for review to ensure adherence to the UN Financial Regulations governing procurement. The Committee examined the summarized technical and financial evaluations of the proposals received from vendors and concluded that no breach of UN financial rules occurred in the procurement process.

The allocated budget for project design services has not been and indeed cannot be exceeded, as the contract and the UN financial rules prevent any expenditure from going above the budgetary limit. So under any circumstances, the vendor cannot bill the Organization above the specified budgetary limit. Payment under the contract is contingent on the actual delivery of services.

The OIOS report that you refer to is an audit report that was prepared as part of regular programme of work of the Office of Internal Oversight Services. As per standard practice, accepted audit recommendations have been referred to the substantive areas and are at various stages of implementation.

Umoja maintains a "zero tolerance" policy, insisting on 100 per cent compliance with the UN's rules, regulations and ethical directives. It is an initiative that is fundamental to the Secretary-General's ability to provide an efficient, transparent and service-oriented Secretariat. Umoja will enhance accountability, transparency and internal controls for all types of resources.

While we publish this in full, it should be compared to the OIOS audit itself, and to the timeline above. Among many others, this question remains unanswered:

Paragraph 73 of the OIOS audit states that Angela Kane accepted responsibility for identifying who should be held accountable for procurement irregularities relating to her department's award of a contract to PriceWaterhouseCoopers. The same paragraph states that her office agreed to issue a report within 30 days, the deadline of which would have been September 24th, 2010. So the question is, did Angela Kane identify who was responsible for these irregularities by September 24, 2010, and who, if anyone, was held accountable? Does Angela Kane still believe that Paul van Essche is the right man for the job, and did she know Mr van Essche prior to his appointment as Umoja chief?

This UN does not appear to be accountable or well run, including to many of those who work within it and of the wider public. Watch this site.