At UNFPA, Audit Failures Are Put In Charge of Audits, Olivier Brasseur, While Milk Is Bought and Money Is Missing

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

UNITED NATIONS, January 23 -- On Friday, responding to the breaking scandal around the UN Development Program, Secretary-General Ban Ki-moon called for an "urgent, system wide and external inquiry into all activities done around the globe by the UN funds and programs." This would include the UN Population Fund, which alongside some laudable programs also reportedly pays its national staffers' salaries, as well as rent and utilities, in North Korea with hard currency Euros.

            Inner City Press asked UNFPA's spokespeople some simple questions, and was told by Abubaker Dunga that information would be provided on Monday ("I will put together the information and send it to you as soon as possible today"). However, despite multiple email and telephone reminders, UNFPA did not end up answering the questions or providing any information by 11 p.m. on Monday.

            UNDP had refused for months to provide Inner City Press with copies of internal audits it has requested. Among the reasons given by Administrator Kemal Dervis is that these documents are "management tools," which are acted on to improve agencies' functioning.

            Inner City Press has obtained copies of UNFPA internal or "management" audits. A sample May 2006 audit recites that

"The Division for Oversight Services conducted a management audit of the UNFPA country office in Nigeria from 23 January to 10 February 2006.... The management of the Office was Deficient... Until the completion of the audit, the post of Representative was occupied by Mr. Niangoran Essan... The Office did not properly monitor the advances and the expenditures of the 64 implementing agencies under the 19 respective projects. Some Certificate of Expenditures were misplaced or lost in the Office, and were not subsequently recorded in ATLAS, therefore overstating the outstanding advances. In January 2005, a Memorandum of Understanding was signed between UNDP and UNFPA covering sub-contacted activities under the National population census project. The MoU did not include a provision for the Administrative Overhead Support (AOS) Cost application in respect of the activities for which an amount of US $2,066,311 was budgeted... Information on vendors in ATLAS was incomplete and duplicate records were identified... The registry function within the Office was very weak; a list of files was not maintained. Several files and documentation were destroyed in 2005 without following the guidelines of the UNDP Manual of Operations Management. There was considerable risk to the staff... the general administration of the Office was Deficient."

            So after so damning an internal audit, what happened to the head administrator of the Office, Mr. Niangoran Essan? He was promoted, to head a regional Country Technical Services Team based in Zimbabwe, a so-called L-7 post.

            The head of UNFPA's Division for Oversight Services, which conducted the above-quoted audit, is Olivier Brasseur, who when he was the head of UNFPA's office in Pakistan received a bad audit himself, which stated that "the management of the Office was Deficient. control weaknesses identified were widespread and were significant enough to have a negative impact on performance. They include the lack of reliance that can be associated with the data produced by the Atlas system at this time... the Representative during the period under review was Dr. Olivier Brasseur." Then Mr. Brasseur was put in charge of auditing other country offices, being quoted in April 2006 as the head of Oversight Services praising a census in Nigeria that was fraught with "logistical problems." This is the revolving-door system that Ban Ki-moon is being told can fix itself.

            This Atlas system was described as one of Mark Malloch Brown's crowning achievements at UNDP and its satellites like UNFPA. But repeatedly the audits show the system not working or not being used. A major UNDP country office, Brazil, refused to use it, saying that because it raised enough of its own money, no one could make it do anything. This is the fragmentation and world of UN fiefdoms to which Ban Ki-moon cast fear on Jan. 19, and then offered a reprieve on Jan. 22 by limiting the scope of the inquiry and leaving it up to the agencies, in some sense, to consent to and design the audits by already-used insiders.

UNFPA: This is the picture, now read the until-now-secret audits

            The UNFPA audits are damning, were never sufficiently disclosed, and were rarely if ever acted on. Another sample audit, of UNFPA's country office in the Republic of Congo - Brazzaville, states that

"As of June 2005, the Office had not sought the agreement of the Government to extend the conditions applicable to UNDP under the standard basic assistance agreement to UNFPA... the projects under the Interim Program had not been financially closed because of difficulties with the recovery of unspent advances totaling US $ 43,671... The internal controls over the processing of payments was inadequate. 426 disbursement vouchers totaling US $ 708,264 were missing and the could therefore not be included in the sample of transactions to be included."

            Forty thousand dollars here, 700 thousand dollars there -- pretty soon you're talking about real money. Inner City Press has reviewed payment records for UNFPA conference in Harrison, New York, invoiced on December 8, 2005 ($24, 303) and December 29, 2005 ($26,334) and then March 1, 2006 ($40,314). Inner City Press is informed of UNFPA purchases of baby milk in Egypt, unauthorized and outside of UNFPA's mandate, purchase done in order to facilitate the evasion of taxes.

            In the upcoming Executive Board meeting on UNFPA, one of the controversial items is UNFPA Regionalization. The UN's Advisory Committee on Administrative and Budgetary Questions, the ABACQ, has opined that "the level and number of posts in the areas of management, administration and support are relatively high. The Advisory Committee believes that the proposed organizational arrangements should be re-examined with a view to streamlining structures and reporting lines."

            Since UNFPA has not re-examined or re-drafted the proposal, it is trying to get the item removed from this week's agenda. We'll see.

            As this interim profile of UNFPA 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 UNDP's satellite UNFPA and at other funds, programs and specialized agencies to be examined in the near future, 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.

  Because a number of Inner City Press' UNFPA 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 what will be an ongoing series by saluting the stated goals of UNFPA and many of its staff and programs. 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.

Feedback: Editorial [at] innercitypress.com

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Ban Ki-moon Narrows Scope of UNDP Inquiry While Euro Focus Spreads to UNFPA and WFP, Feeding Koreans

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

UNITED NATIONS, January 22 -- What a difference a weekend makes. On Friday, UN Secretary General Ban Ki-moon reacted to the breaking scandal at the UN Development Program by calling for an "urgent, system wide and external inquiry into all activities done around the globe by the UN funds and programs."

            By Monday, "around the globe" had been scaled back to North Korea, and "all activities" had been limited to "hard currency transactions, independence of staff hiring and access to reviewing local projects." The "external inquiry" that now involves the same UN Board of Auditors which has chosen to exclude from the public documents it produces any mention of damning internal audits like KPMG's of UNDP-North Korea.

            Sources within UNDP and other funds and programs were left wondering: who got to Ban Ki-moon, to so dramatically cut back the scope of proposed clean-up? Some say the fight-back was by entrenched powers in UNDP, not only Messrs. Dervis and Melkert but even Asia Pacific assistant administrator Hafiz Pasha, finance director Darshak Shah, and Bruce Jenks of UNDP's "Bureau of Resources and Strategic Partnerships." Jenks knows were the bodies are buried in UNDP's system of 400-plus trust funds. Jenks is reported to communicate to the South Korean mission, including on what the ramifications of a comprehensive inquiry could be.

            Others, looking wider, say that certain member states chimed to demand a more limited review. That Mr. Ban's home country South Korea, which he served as Minister of Foreign Affairs, is a main funder of hard currency-paying UN programs in North Korea is deemed significant. Inner City Press has been told that South Korea's payments to UN agencies for North Korea passed through and were signed (off) on by not only the Ministry of Unification, but also the Ministry of Foreign Affairs.

            Some in the UN are already reaching conclusions on Ban. They point as examples to his lack of action to data on the Department of Economic and Social Affairs scandal, and to his decision announced Monday to speak at a DESA "global forum" conference in Vienna on June 26, along with, among others UNDP's Hafiz Pasha and Kathleen Cravero. They claim that DESA's Guido Bertucci's reach-out to Mr. Ban is through DESA advisor Elia Yi Armstrong. They question whether for example Italy's dictating that its funding be used exclusively to hire Italians is different from secondment, and must now be subject to even the scaled-down inquiry offered as a substitute on Monday, with its reference to independence of hiring. Others argue that while the Old Guard was able to reign Ban in on Monday, this will not go on forever. Time will tell.

            While for now the prospective inquiry appears to be cut back, Ban Ki-moon "has also requested the Administrator of UNDP to provide information in detail concerning the corrective actions taken in response to the internal audit findings of 1999, 2001 and 2004." In the case of Kemal Dervis, the question will be, seventeen months and what actions? And unlike in the past, will the answers be made public?

UNDP in North Korea, hard currency not shown

            Meanwhile, Inner City Press' inquiry into UNDP and other funds and programs continues, for this report on the World Food Program's activities in North Korea, including in comparison to what UNDP has admitted, the paying of the salary of all national staff in North Korea in hard currency, Euros, directly to the DPRK government.

            WFP pays half of its local staff in North Korea in won, the local currency, Inner City Press was told Monday by WFP spokesperson Bettina Luescher. These are 15 National Program Officers, nominated and seconded by DPRK's National Coordinating Committee, or NCC.  This money, however, is paid not paid directly to the staff, but rather to the NCC.

            The other 15 of WFP's local staff -- nine drivers and six support staff including cleaners -- are referred by DPRK's General Service Bureau, GSB, and are paid directly in hard currency, Euros.  WFP in North Korea also has 14 international staff members.

            WFP emphasizes through its spokesperson that North Korean staff are not permitted access to WFP's global accounting software. WFP does not pay rent to the North Korean government, but rather to the Bulgarian ministry of foreign affairs, for space in the former Bulgarian embassy. Utilities, though, are paid in Euros, by check for service provided, pursuant to WFP rules.

  Inner City Press has also asked these agencies about the substance of their programs, in North Korea as elsewhere. As it did with Congo-Kinshasa, WFP by Monday afternoon proffered a response:

Subject: Re: Hi, Qs re WFP in North Korea, Zimbabwe, etc., NEX, hard currency, thanks

From:Bettina Luescher, WFP Chief Spokesperson, North America
To: Inner City Press
Sent: Mon, 22 Jan 2007 5:46 PM

Dear Matthew, Here is some more information on our operation in DPRK:

 WFP has identified some 1.9 million people in North Korea who need food aid. These are among the most vulnerable people, including women and children, they live in both urban and rural areas. The two-year operation (2006 / 2007) aims to feed 1.9 million and would require 102 million US Dollars. Until now we have raised some 16 percent. With current limited funding, WFP feeds more than 700,000 people in 29 counties. Financial constraints are hampering expansion efforts to reach all 1.9 million in the 50 most insecure counties.

The statistics are sobering: A seven-year-old child in North Korea is likely to be 8 inches (some 20 centimeters) shorter, 9 kg lighter and lives some 10 years shorter that his South Korean peer. While malnutrition rates have fallen since the late 1990ies, they are still relatively high: 37 percent of young children are chronically malnourished , and one third of mothers are malnourished and anemic, based on a 2004 WFP/UNICEF survey.

 It is vitally important that the hard-won improvements in nutritional standards of recent years not be reversed in the counties where WFP distributions are concentrated . WFP's "no access, no food" policy continues to be strictly enforced. WFP will only provide food in areas where we can assess needs and monitor distributions. Accountability to our donors remains a top priority for WFP.

 I am checking on information for the other countries you mentioned.

 Mr. Morris is currently in Laos, then going to Hawaii, Australia, New Zealand, Indonesia, East Timor... meeting governments, donors, private sector partners and WFP operations. Ambassador Sheeran's schedule is being handled by the State Department. She will start with us in early April.

            Inner City Press asked if WFP has a Standard Basic Assistance Agreement with the DPRK government, and has been told that WFP operates under a "letter of understanding." Inner City Press has asked for a copy of this letter, and has asked for WFP's policy on providing internal audits. On both, answers have been promised for tomorrow.

            Less responsive, perhaps understandably, has by the UN Population Fund. Inner City Press asked UNFPA's spokespeople the same questions, and was told by Abubaker Dunga that information would be provided on Monday ("I will put together the information and send it to you as soon as possible today"). However, despite multiple email and telephone reminders, UNFPA did not end up answering the questions or providing any information by 9 p.m. on Monday. A profile of UNFPA is coming together. Developing.

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

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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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