UNDP Backslides on Audits and N. Koreans' Travel, Scope Expands to UNICEF, WFP, and UNFPA, FAO and UPEACE

Byline: Matthew Russell Lee of Inner City Press at the UN: News Analysis

UNITED NATIONS, January 26 -- The day after the UN Development Program acknowledges it was told by its Executive Board to more narrowly focus its North Korea programs away from building the capacity of the Kim Jong Il government, and to become more transparent, Friday there was already backsliding, on audits and on DPRK travel.

            During the last day of the Executive Board meetings, UNDP's Ad Melkert said that while he now hopes to finalize some additional availability of audits by the Board's next session, this will not include management audits, which are the kind that would have earlier revealed the issues in North Korea, including accepting government staff and not auditing "nationally-executed," but UNDP-funded, programs.

            After a press conference by UN Controller Warren Sach about how the audits announced and then scaled-back by Ban Ki-moon will be conducted, the head of UNDP's Communications Office, David Morrison, spoke to reporters in the hall. Inner City Press asked Mr. Morrison to answer a question previously posed in writing, regarding UNDP's involvement in the August 2006 trip by 10 members of the North Korean government to Lund University. Mr. Morrison responded that "University of Peace, part of the UN system, did." Click here for University for Peace's self-description, complete with photograph of Council member Ban Ki-moon. Inner City Press' source name these 10 as the travelers:

            Mr. Morrison added that UNDP "may have facilitated travel arrangements" through its Beijing office. Mr. Morrison stated, rhetorically, "Have we funded travel? That's what UNDP does." He continued, "Can I say there is not going to be any more travel? Absolutely not."  So then what, one wonders, is being limited about UNDP's North Korea program pending the audit?  Melkert in Belarus

            UNDP's Mr. Morrison also provided a closely argued distinction between hard and soft won, stating that even paying in hard won, as apparently the World Food Program does for half of its national staff in the DPRK, is just the same as paying in Euros, except the UN gets less for its money because the DPRK is able to set the exchange rate. Inner City Press asked how the salaries of those seconded by the DPRK government are set. "There is a negotiated salary," Mr. Morrison replied. Negotiated how? Since UNDP allowed the North Korean government to order whom to hire, how could UNDP have leverage on how much they'd be paid?

            Warren Sach was asked when the Secretariat knew of the issues in North Korea. "Only very recently," Mr. Sach replied, emphasizing that there is an "absolute and total delegation to the Administrator of UNDP" on financial matters. So who's holding the bag, one reporter wondered.

            Inner City Press asked Mr. Sach to explain how the North Korea issues, identified in withheld UNDP internal audits of 1999, 2001 and 2004, were not even included in the 374-page most recently public audit of UNDP. Video here, from Minute 24:13. Mr. Sach directed Inner City Press to the UN Board of Auditors, "only they can answer." We'll see.

            Inner City Press has received a response from UNICEF in writing that

"Of the 30 UNICEF staff in the Pyongyang office, 10 are international professionals recruited through New York headquarters and stationed in Pyongyang for up to five years.  They have the bulk of their salaries paid to personal overseas bank accounts. Twenty are local staff.  For local staff, UNICEF transfers their salaries to the host government, which in turn is responsible for paying each of the 20 national staff members.  The salary rate per month is 358 Euros for National Program and Operation staff, and ranges from 243 to 315 Euros for drivers and maintenance staff. DSA for overnight travel by international or national staff is paid directly to the staff, by check in Euros."

            Inner City Press asked Mr. Sach whether UNICEF would be included in the audit, along with WFP, which has orally represented paying half of its national staff in DPRK in Euros, and UNFPA, which while refusing to answer is known to pay in Euros, and to have 80% of its programs in North Korea executed by the DPRK government. Video here, from Minute 25:12.

            Mr. Sach indicated that all four agencies will be included in the audit. He decided to name more agencies, other than mentioning UNHCR. Inner City Press earlier this week asked the Food and Agriculture Organization, in writing, to explain its North Korea programs. FAO's spokesman's response was to inquire into Inner City Press' right to ask the question, and then to archly state "we are considering how we can respond to your request for this very large amount of information, and I will revert in due course."  We'll be waiting.

            Inner City Press asked Mr. Sach to confirm something Inner City Press has asked UNDP orally and in writing without any response, that UNDP's chief auditor Jessie Rose Mabutas is now leaving in mid-February. Video here, from Minute 43:53. Mr. Sach responded, "I think it can be confirmed, what you indicated." There -- was that so hard? Beyond what has previously been reported about Ms. Mabutas, close observers note that the U.S.'s Ms. Bertini brought Ms. Mabutas into the UN system at a high level. And yet what is the U.S. now saying about the quality of UNDP's audits? Developing.

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Before UNDP Meeting, North Korea Reaches out to G-77 and Deal for Silence Reached, Unless a "Wrinkle"

Byline: Matthew Russell Lee of Inner City Press at the UN: News Analysis

UNITED NATIONS, January 15, 11:10 am, updated here -- The night before the expected showdown on North Korea and audits at the UN Development Program's Executive Board meeting, a deal was reached, Board diplomats say. Under the deal, according to one of its proponents, UNDP would suspend its programs in North Korea pending an audit. The diplomats predicted that unless any "wrinkles" emerge when the agenda item is called later this morning, the United States will not speak on the item. With a whimper, not a bang, one observer mused.

            A delegate from Lebanon provided a different perspective on the process. North Korea made a pitch to the Group of 77 organization of developing countries, rallying support to the idea that suspension and an audit would create a precedent for further "politicization" of development and of UNDP. This too appears to have had its effect.

            A diplomat seen as demanding reform pointed out that even if the audits are done by the same Board of Audit which previous concealed the North Korea - UNDP internal audits of 2004, 2001 and 1999, this time that Board is led by France, which has said it can and does use outside counsel and auditors. It is said that between Ban Ki-moon's Friday announcement of urgent worldwide inquiry into all activities of UN funds and programs and his Monday narrowing of scope, agencies and diplomats complained of the dangers of a full external audit. And so this deal, which as of 11 a.m. in the press gallery appears to be on track. We'll see -- it sounds as if the sides' understandings or spin of any deal are quite different.

UNDP & flags

            Also seen from the bleachers, to which the working press was confined, was a team from UNDP's Communications Office, including a blond woman accused by an Executive Board member's spokesperson of seeking to eavesdrop of what the spokesperson was saying. Notes were being taken, and spin was being prepared. It has twice been announced that UNDP's Ad Melkert -- who is said to have led the overnight negotiations, rather than Administrator Kemal Dervis -- will take media questions after the morning's session.

Update of 4:45 p.m. -- The fix in fact was in, or was finalized between 12 noon and 12:30. Ad Melkert read out a statement, and the chairman banged the gavel to approve it. Only then did the speechmaking start, following by two Q&As at the Security Council stakeout. And they will be reviewed, on this site, after UNDP makes available information it said it would, including on the specifics of the Nationally Executed programs it has allowed in North Korea, and after a few further inquiries. Watch this site -- new update at midnight, click here to view.

At UNOPS, Side Deals for Danish Relocation, Mattsson and Dalberg and the DSA Farming of Vitaly Vashelboim

Byline: Matthew Russell Lee of Inner City Press at the UN: News Analysis

UNITED NATIONS, January 23 -- The UN Office of Project Services is two years late in certifying its financial statements. As new UN Secretary General Ban Ki-moon calls for an "urgent, system wide and external inquiry into all activities done around the globe by the UN funds and programs," UNOPS stands out for not even having a certified audit in place.

            An investigation of UNOPS by Inner City Press has found a hotbed of favoritism, of supervisors distracting line employees from their logistical tasks in support of such efforts as mine removal, and of financial mismanagement hidden from the Executive Board.

            Last January, the Board was told that UNOPS wanted to move its "headquarters functions" from New York to Copenhagen. Bids had been selected, not only by Denmark, but also France, Germany, Italy and Spain. (Dubai later joined the bidding.) Denmark was selected, sources say, due to the inclusion in its package of a "transition fund," which UNOPS insiders call no more than a slush fund for management. The quid pro quo was a requirement that 120 jobs be moved to Copenhagen, a condition not disclosure to the Board one year ago, and resulting in disruption of such functions as mine removal now.

            Current UNOPS head Jan Mattsson previously served as the head of the UN Development Program's Bureau of Management, where as Inner City Press has reported, he handed out controversial contracts to Dalberg Global Development Advisors, whose founder Henrik Skovby worked for UNDP "both at their headquarters and in the field," and is still listed as a UNDP employee. (The lead person on Dalberg's advisory board, Sam Nyambi, lists his experience as having supervised 110 staff at UNDP and served as UNDP Resident Representative in Ethiopia.)

            Now it emerges that once Mattsson took over at UNOPS, he has also handed this agency's money to Dalberg. In an August 16, 2006 email to all UNOPS staff, Mattsson announced that Dalberg would be paid to "help us build a better UNOPS."

What could this Guatemalan kids do with Vitaly V.'s Daily Sustenance Allowance? See below.

            By most accounts, and as reflected by its inability to file certified financial statements, UNOPS has been in decline for years. It began as a unit of UNDP then spun off as independent, and proudly self-supporting. Then-chief Reinhart Helmke hung a banner at a staff retreat, "UNOPS, the One Billion Dollar Agency."

            Moving from the Daily News building to the Chrysler Building, money was overspent. Soon UNOPS was paying, it claimed, $20,000 per year for each computer terminal used, not including salary or benefits. An idea arose to relocate jobs out of New York. Proposals arrived from France and Germany, Italy and Denmark, talk of the Swiss and of Dubai. One year ago, the Board was informed that "headquarters functions" would be relocated, under a business case of cost-savings.

            Behind the scenes, interim Executive Director Gilberto Flores, who preceded Jan Mattsson, had cut a deal with Denmark: 120 jobs as a quid pro quo for, among other things, a transition fund with very few restrictions.  There was only one problem: the "headquarters function" remaining in New York did not add up to 120 jobs. And so a decision was made to relocate operating units as well, including those which service mine removers in the field.

            This being the UN, a veneer of participation was demanded. While behind closed doors Gilberto Flores declared he would never break his job commitment to the Danes, Ms. Roswitha Newels, who had made the misleading presentation to the Board, emerged to dialogue with staff. Facilitators arrived, ostensibly from UNDP's Management Change Team, run by one Tina Friis-Hansen. The facilitators' names were Georges Von Montfort and Lisa Rienarz.  (As it turns out, they are employees of Mattsson's favorite consultant Dalberg, and not UNDP staffers at all.) These facilitators nodded at angry staff talked, then mis-summarized the complaints to now-director Mattsson.  A proposal emerged to relocate personnel not only to Denmark but also Nairobi.

            With the staff more and more restive, Ms. Newels decided to commission a study to resolve the matter. Such studies require at least the veneer of objectivity. But Ms. Newels issued a sweetheart contract, which she only later entered in the system, to a close friend of hers, Ivo Pokorny.  For $700 a day, Mr. Pokorny produced a barely two and a half page memo, followed by a one page, hand-drawn chart. Requests to see Pokorny's final product have been rebuffed, as have question of when UNOPS will come clean to the Board, as well as file financial statements.

            UNOPS does appear, however, in the public audits of other UN agencies. The most recent public audit of UNICEF, for example, states that

"UNICEF is supporting construction projects for schools, health centers, and water and sanitation networks in Indonesia, Sri Lanka and the Maldives that represent an aggregate budget of $152.1 million. The three country offices have little experience, if any, overseeing major construction works. They entered into contracts with UNOPS (for permanent structures) and with IOM (for temporary schools in Indonesia) without clearing their clauses with the UNICEF senior advisor (Legal) resulting in the interesting of UNICEF not adequately safeguarded. For instance, the Indonesian school construction contract with UNOPS ($90 million) committed UNICEF to a set unit cost per building, over a three-year period, with no clause covering a rise in prices.... UNICEF failed to set up a consistent mechanism to follow up the implementation of the projects, monitor the work of the contractors and management the relationship with UNOPS." A/61/5/Add.2, page 42-43.

            As this interim profile of UNOPS should make clear, issues to be inquired into in the wake of the UNDP scandals should not be limited just to North Korea, or to hard currency, secondment and auditors' access. The problems at UNOPS are systematic and require full public review and disclosure, and then substantive action. This is what Ban Ki-moon called for on January 19, then appeared to turn away from on Jan. 22. With the poor and needy be served by reform and accountability of these agencies in charge of money to serve them? We'll see.

            Other UNOPS issues involve Daily Sustenance Allowance abuse and overpaying of Mattsson's deputy Vitaly Vashelboim. Mattsson brought Vashelboim to New York, and has now sent him back to Copenhagen (where Mattsson's yet to move).  The totals paid to Mr. Vanshelboim for multiple relocations, travel and Daily Sustenance Allowance are the subject of outrage even within UNOPS staff, who says that the Board of Auditors inquiry recently announced by Ban Ki-moon should act on them. And what does Dalberg do for Mattsson? Inquiring minds want to know. But UNOPS.org does not list any media contact, and UNDP has still not responded to Inner City Press' January 16 questions about Dalberg and related policy issues.

            Documents, however, require no comment to report. Inner City Press has obtained a copy of a January 15, 2007 email from UNDP's Arne Christensen bragging that "UNDP / IAPSO has recently placed an order for several units of thermo vision equipment installed in mini-busses (surveillance equipment) for the State Border Guard Service of Ukraine... UNDP / IAPSO would be pleased to offer our expertise in procurement of material and equipment for border enhancement to other CO offices, as well as other UN offices involved in similar programs."

            Beyond the question, "what is UNDP doing buying surveillance equipment for Ukraine," we note that UNOPS in its search for survival is lobbying behind the scenes to acquire the "P" (procurement") from UNDP's IAPSO. But why would the UN system allow an agency which is so far delayed in filing its certified financials to acquire anything, or to continue to mislead its Board about a deeply flawed proposed move of core operating functions like mine removal to Denmark because of a secret slush fund deal? Developing.

  Because a number of Inner City Press' UNOPS sources go out of their way to express commitment to serving the poor, and while it should be unnecessary, Inner City Press is compelled to conclude this installment in a necessarily-ongoing series by saluting the stated goals of UNOPS and many of its staff. Keep those cards, letters and emails coming, and phone calls too, we apologize for any phone tag, but please continue trying, and keep the information flowing.

Other Inner City Press reports are available in the ProQuest service and some are archived on www.InnerCityPress.com --

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At the UN, Dow Chemical's Invited In, While Teaming Up With Microsoft is Defended

Kofi Annan Questioned about Congolese Colonel Who Kidnapped Seven UN Soldiers

UN Silent As Congolese Kidnapper of UN Peacekeepers Is Made An Army Colonel: News Analysis

UN's Guehenno Speaks of "Political Overstretch" Undermining Peacekeeping in Lower Profile Zones

In Gaza Power Station, the Role of Enron and the U.S. Government's OPIC Revealed by UN Sources

UN's Corporate Partnerships Will Be Reviewed, While New Teaming Up with Microsoft, and UNDP Continues

BTC Briefing, Like Pipeline, Skirts Troublespots, Azeri Revelations

Conflicts of Interest in UNHCR Program with SocGen and Pictet Reveal Reform Rifts

UN Grapples with Somalia, While UNDP Funds Mugabe's Human Rights Unit, Without Explanation

UN Gives Mugabe Time with His Friendly Mediator, Refugees Abandoned

At the UN, Friday Night's Alright for Fighting; Annan Meets Mugabe

UN Acknowledges Abuse in Uganda, But What Did Donors Know and When? Kazakh Questions

In Uganda, UNDP to Make Belated Announcement of Program Halt, But Questions Remain (and see The New Vision, offsite).

Disarmament Abuse in Uganda Leads UN Agency to Suspend Its Work and Spending

Disarmament Abuse in Uganda Blamed on UNDP, Still Silent on Finance

Alleged Abuse in Disarmament in Uganda Known by UNDP, But Dollar Figures Still Not Given: What Did UN Know and When?

Strong Arm on Small Arms: Rift Within UN About Uganda's Involuntary Disarmament of Karamojong Villages

UN's Selective Vision on Somalia and Wishful Thinking on Uighurs

UN Habitat Predicts The World Is a Ghetto, But Will Finance Be Addressed at Vancouver World Urban Forum?

UN's Annan Concerned About Use of Terror's T-Word to Repress, Wants Freedom of Information

UN  Waffles on Human Rights in Central Asia and China; ICC on Kony and a Hero from Algiers

UN & US, Transparency for Finance But Not Foreign Affairs: Somalia, Sovereignty and Senator Tom Coburn

Human Rights Forgotten in UN's War of Words, Bolton versus Mark Malloch Brown: News Analysis

In Praise of Migration, UN Misses the Net and Bangalore While Going Soft on Financial Exclusion

UN Sees Somalia Through a Glass, Darkly, While Chomsky Speaks on Corporations and Everything But Congo

Corporate Spin on AIDS, Holbrooke's Kudos to Montenegro and its Independence

The Silence of the Congo and Naomi Watts; Between Bolivia and the World Bank

Human Rights Council Has Its Own Hanging Chads; Cocky U.S. State Department Spins from SUVs

Child Labor and Cargill and Nestle; Iran, Darfur and WHO's on First with Bird Flu

Press Freedom? Editor Arrested by Congo-Brazzaville, As It Presides Over Security Council

The Place of the Cost-Cut UN in Europe's Torn-Up Heart;
Deafness to Consumers, Even by the Greens

Background Checks at the UN, But Not the Global Compact; Teaching Statistics from Turkmenbashi's Single Book

Ripped Off Worse in the Big Apple, by Citigroup and Chase: High Cost Mortgages Spread in Outer Boroughs in 2005, Study Finds

Burundi: Chaos at Camp for Congolese Refugees, Silence from UNHCR, While Reform's Debated by Forty Until 4 AM

The Chadian Mirage: Beyond French Bombs, Is Exxon In the Cast? Asylum and the Uzbeks, Shadows of Stories to Come

Through the UN's One-Way Mirror, Sustainable Development To Be Discussed by Corporations, Even Nuclear Areva

Racial Disparities Grew Worse in 2005 at Citigroup, HSBC and Other Large Banks

Mine Your Own Business: Explosive Remnants of War and the Great Powers, Amid the Paparazzi

Human Rights Are Lost in the Mail: DR Congo Got the Letter, But the Process is Still Murky

Iraq's Oil to be Metered by Shell, While Basrah Project Remains Less than Clear

Kofi, Kony, Kagame and Coltan: This Moment in the Congo and Kampala

As Operation Swarmer Begins, UN's Qazi Denies It's Civil War and Has No Answers if Iraq's Oil is Being Metered

Cash Crop: In Nepal, Bhutanese Refugees Prohibited from Income Generation Even in their Camps

The Shorted and Shorting in Humanitarian Aid: From Davos to Darfur, the Numbers Don't Add Up

UN Reform: Transparency Later, Not Now -- At Least Not for AXA - WFP Insurance Contract

In the Sudanese Crisis, Oil Revenue Goes Missing, UN Says

Empty Words on Money Laundering and Narcotics, from the UN and Georgia

What is the Sound of Eleven Uzbeks Disappearing? A Lack of Seats in Tashkent, a Turf War at UN

Kosovo: Of Collective Punishment and Electricity; Lights Out on Privatization of Ferronikeli Mines

Abkhazia: Cleansing and (Money) Laundering, Says Georgia

Post-Tsunami Human Rights Abuses, including by UNDP in the Maldives

Citigroup Dissembles at United Nations Environmental Conference

Other Inner City Press reports are available in the ProQuest service and some are archived on www.InnerCityPress.com --

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