UNFPA's Dubious Tales On UN's N. Korea Audit's 2nd
Day, Red Faces at UNDP
Byline: Matthew Russell Lee of Inner City Press at
the UN
UNITED NATIONS, March 20 -- With the
delayed
"urgent audit" of North Korea programs
called for by Ban Ki-moon on January 19
now in its second day, inconsistencies are cropping up.
The
90-day deadline for the audit is now described as merely being a goal. The
government of the Democratic People's Republic of Korea has yet to signal that
any auditors will even be allowed to enter the country.
While
the delay in starting the audit is attributed to "unforeseen staff travel
arrangements of one of the auditors," UN insiders tell Inner City Press that it
was the Pyongyang to New York travel of Resident Coordinator Timo Pakkala that
was delayed for one week, so that certain surgical modifications to the records
could be made. A point at issue now is not only how much money was expended, but
where in fact it went.
On Tuesday, the audit's second day,
officials from the UN Population Fund put in an appearance at the UN Board of
Auditors' office on the 26th floor of the UNDP building, where they claimed that
UNFPA's programs in Pyongyang did not have the problems which forced UNDP to
suspend its operations earlier this month.
This is belied by a draft internal audit
report obtained by Inner City Press, and presumably available to the Board of
Auditors. If it is not, since in the face of this audit documents have a way of
disappearing or being modified, extensive quotes from the UNFPA internal audit
are below.
But first, after receiving no-comment from the
Board of Auditors, Inner City Press' previous questions about the audit
have been responded to by UN Controller Warren Sach:
Subj: Question
on audit, from today's noon briefing: why was audit pushed back a week, etc,
thanks
From: Warren
Sach
To: Inner City
Press
CC: goolsarrans
[at] un.org
Date: 3/19/2007
2:14:37 PM Eastern Standard Time
1. Why
was the audit pushed back a week? As per a 7 March 2007memorandum from the
Board of Auditors, the planned start date of the audit will be delayed by one
week due to unforeseen staff travel arrangements of one of the auditors.
2. What
impact might it have on complying with the 90 day time frame?
Please see
below answer on the proposed time frame.
3. When
does the 90 day time frame expire? The Secretary General has requested
through the Advisory Committee on Administrative and Budgetary Questions (ACABQ)
that the Board of Auditors conduct the required activities within a time frame
of 90 days. The Board of Auditors has agreed to take up the work as a matter of
priority which we hope can be achieved within the timeframe requested by the
Secretary General.
4. Has
any request been made for auditors to enter DPRK? The Secretary General has
sent a letter to the Permanent Representative of the Democratic People’s
Republic of North Korea informing them of the audit and requesting assistance to
facilitate travel arrangements and visas.
5. Has
there been any response? The letter to the DPRK was sent on the 12th of
March 2007. We have not received any follow up communication in the past few
days.
6. Has
there been any response to Ban Ki-moon's February 28 letter on this issue?
The letter from the Secretary General dated 28 February 2007 was a response to a
correspondence received from the Permanent Representative of DPRK. We have not
received any follow up communication from the DPRK.
While appreciating this reply
from Warren Sach, who has also taken back on but has yet to respond about the
post of Ban Ki-moon's representative to the UN Pension Fund, it is still unclear
when the audit's 90 day "clock," previously referred to by Ban Ki-moon's staff,
expires. Additionally, there is among insiders a counter-explanation of the
audit's one-week delay in starting, that involves the Pyongyang to New York
travel of Resident Coordinator Timo Pakkala being delayed for one week, so that
targeted chances to documentation could be made. More on this to follow. Within
UNDP, there is growing paranoia. The Administrator's discomfort is, insiders
say, incarnated in a skin condition used to deny press access. No questions!
And no answers, either, for example as to why the head of UNDP's Bureau of
Management Akiko Yuge
has left New York
for precisely the two weeks of the audit's first (and some say only) phase.
For now, the members of the Board of
Auditors are making phone calls and holding meetings. On Tuesday, they went to
UNFPA, where they were told a number of stories, including that UNFPA's programs
in Pyongyang did not have the problems which triggered the audit and forced UNDP
to suspend its operations in North Korea.
UNFPA's
Thoraya Obaid: UN interview, not (yet) audit
UNFPA's story is contradicted by a
document obtained by Inner City Press, an internal audit report of
UNFPA's County Office in DPR Korea, dated May 2006.
This
internal audit was carried out by KPMG in-country from May 23 to May 29 and is
68 pages in length. Even while sidestepping UNFPA's provision of hard currency
to the Kim Jong Il government -- perhaps because all of UNFPA's payments were
and are through UNDP, as more recently acknowledged by UNDP's spokesman -- the
audit paints a disturbing picture of UNFPA.
At UNFPA
in North Korea there is sloppy bookkeeping, at least, for payments of $96,000
and $93,000 and $77,000. KPMG diplomatically notes an "absence
of documentation for independent verification." There was a murky "transfer of
assets" worth $420,000 to the North Korean government. A consultant was hired to
slap together some praise of UNFPA's and the DPRK's "partnership," but was paid
before the work was done, and the work was never evaluated. In a project from
the European Commission, KPMG notes "unauthorized use of project resources,"
without saying by whom. But this is what the Board of Auditors should find out
and make public.
Back
in January, Inner City Press asked UNFPA for comment on
these issues.
Spokesman Abubakar Dungus on January 22 said he would respond that day. He did
not, and has not. On January 26, Mr. Dungus' boss Safiye Cagar told Inner City
Press that Mr. Dungus was on retreat. Minutes later, UNFPA security chief Janie
McCusker attempted to have Inner City Press' correspondent barred from the UNFPA
Executive Board meeting. When this failed, Ms. McCusker was seen whispering with
Ms. Cagar, Kwabena Osei-Danquah and UNFPA Executive Director Thoraya Obaid.
Missing from this scene was UNFPA's Alaadin Morsy, who has been
threatened by Ms. Obaid with a document, contested by Mr. Morsy, concerning
"the vehicle that you imported when you
were first place on the ATR Project in Egypt... the vehicle was imported for
your personal use without paying customs duties to the Government of Egypt. If
you were employed for less than three years on the project, you were obligated
to either re-export the vehicle or pay the customs duty that would have been
owed when you imported the car in 2002. Your employment with the project was
terminated after one year and you should have taken one of these two action. To
the best of our knowledge and that of the Ministry of Foreign Trade and Industry
and the Egyptian Customs Authority, you have not done so. Mr. Tim S. Buehrer of
the Secretary-General's office has stated that he has contacted you on numerous
occasions concerning this matter but that you have not responded."
Some have predicted the ejection from the
UN System of either Mr. Morsy or Ms. Obaid. These are other issues, beyond but
not unrelated to hard currency and mis-management, into which the Board of
Auditors should delve, along with these additional findings from UNFPA's May
2006 internal audit, for example on the key question of accepting personnel from
the DPRK government:
"National staff
were seconded from the Ministry of Foreign Affairs for National Program Officer,
Finance and Administration Associate and Secretary positions and the driver was
seconded from the General Bureau for Affairs with Diplomatic Missions... There
was no documentation on the health status and evidence of educational background
in addition to the Curriculum Vitae for seconded staff maintained in the staff
personal file... Competencies of personnel not verified prior to secondment
acceptance."
These are precisely the issues on which Ban
Ki-moon called for the audit. UNFPA now tells the Board of Auditors that
everything's fine. How? There is also this, in the internal audit of UNFPA:
"World Health
Organization (WHO) was the implementing UN agency for DRK3R203. An Annual Work
Plan was developed and signed on 1 February 2005. The following issues were note
in the execution arrangement with WHO:
The budget
allocated for WHO execution was US$193,500 for 2005. However, in the AWP, an
amount of US$47,000 was manually recorded as balance carried forward from 2004
in addition to the allocation in 2005. The amount was inconsistent with WHO
financial report claiming that the amount carried forward from UNFPA from 2004
was US$62,452; Our review of the financial report submitted by WHO revealed that
an amount of US$156,388 out of total budget of US$255,952 was still in 'unliquidated/earmarking'
column indicating that the plan activities (mainly fellowships) for the year
have not taken place. As at our audit date, the Office was not able to confirm
whether WHO has successfully completed the outstanding activities as at 31
December 2005. The information on the utilization of the unliquidated amount was
only provided to the Office after being requested the audit team. Ineffective
monitoring of resources. Error in financial reporting."
In response to
a direct question from Inner City Press of whether the World Health Organization
received $10 million from South Korea while Ban Ki-moon was foreign minister,
WHO spokeswoman Christine McNab replied that, "Yes, last year South Korea
committed to providing the equivalent of US 10 million per year as support to
DPRK through WHO for health-related humanitarian assistance, for three years."
This has given rise to a question of how much money the South Korean government
transferred to North Korea, through UN agencies, while Ban Ki-moon was South
Korean Foreign Minister, click
here
for that story.
In the "Management comments" of the
audit, UNFPA claims that it "is doing good comparing with other UN agencies
resident in DPRK." The auditor KPMG -- also the auditor of UNDP in North Korea
-- does not reply. Then again, since UNFPA has refused to show these audits even
to the member states on its Executive Board, perhaps there's no reason for KPMG
to reply. Reply to whom? Only now, there is an answer -- to the Board of
Auditors, unless all of these documents and drafts disappear.
On UNDP and bank accounts, the UNFPA internal
audit says
"The monitoring
and oversight of UNFPA funds in UNDP’s bank account in the Korea Foreign Trade
Bank was performed by UNDP. The Office had no involvement in the management of
banking accounts and facilities in 2005. However, according to the UNFPA
Internal Control Framework, which came into effect on 22 March 2006, Country
Offices are to receive and check completed bank reconciliations from UNDP on a
monthly basis.... Lack of oversight on bank reconciliations."
After dodging the question
from the time it was
raised to Kemal Dervis on February 1,
UNDP's spokesman recently stated that upwards of $10 from "other UN funds and
programs," the "vast majority of it" from UNFPA, was paid through UNDP. UNDP has
not disclosed information which its spokesman, in the hallway outside the
briefing room, promised to provide, about safeguards in place to track this
UNFPA and "other" money. Rather, UNDP has said, "Wait for the audit."
But if from Day Two of the audit, UNFPA
does not tell the truth, and the auditors may never go to North Korea, how will
the truth be found? Developing.
Again, because a number of Inner City Press'
UN
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 the
UN agencies and many of their 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.
Feedback: Editorial
[at] innercitypress.com
UN Office: S-453A,
UN, NY 10017 USA Tel: 212-963-1439
Reporter's mobile
(and weekends): 718-716-3540
With Audit
Starting in NY, UNDP Manager
Akiko Yuge
Leaves Town,
Sale-of-Jobs Unanswered
Byline: Matthew Russell Lee of Inner City Press at
the UN: News Analysis
UNITED NATIONS, March 19 -- As the
delayed
"urgent audit" of North Korea programs
called for by Ban Ki-moon on January 19
today begins at the UN Development Program, the director of UNDP's Bureau of
Management Akiko Yuge has conveniently left town, internal UNDP e-mails obtained
by Inner City Press show.
Sources say that UNDP's legal chief James
Provenzano and finance director Darshak Shah may also have left. (Since UNDP no
longer answers even basic questions, this cannot be confirmed. As to Ms. Yuge,
see the intra-UNDP email below.)
Mr. Shah and Ms. Yuge were among the eight UNDP officials to whom the Executive
Secretary of the UN Board of Auditors, Swatantra Goolsarran, sent his
March 1 memo scoping out the audit
including requested interviews, their absence from headquarters during the audit
has raised questions about staff. So has the fact that the scope of audit memo
was not sent to UNDP's Asia chief, Hafiz Pasha, but only to his
ostensible deputy, David Lockwood. The credibility of the audit is increasingly
doubted by knowledgeable sources inside UNDP.
UNDP's large but recently
lethargic (at least on this issue) communications office has not helped dispel
the doubts. A series of questions about the audit and UNDP's North Korea program
have done unanswered. Even two non-North Korea questions asked on camera then in
writing last week, regarding UNDP's reported support of a gold mine in Romania
and the selling of jobs and promotions alleged by UNDP staffers, have been
entirely ignored. UNDP's David Morrison was asked these questions at the March
13 noon briefing filmed by UN TV, click
here
for video, from minute 40:30 to 42:39.
Inner City Press followed this up with an email:
Subj: Follow-up
to today's UN noon briefing, & some long-outstanding questions, thanks
Date: 3/13/2007
2:05:40 PM Eastern Standard Time
To:
david.morrison [at] undp.org, ad.melkert [at] undp.org, kemal.dervis [at]
undp.org
CC: [cc's
deleted in this format]
From: Inner
City Press
Hello -- This
follows up on questions asked at today's UN noon briefing. On deadline, need a
yes or no answer on whether the previous head of the Department of Management
ever imposed conditions appointments or promotion (or in cases of demotion /
re-classification downward). We are told that this was sometimes explained as
being akin to a "headhunter's fee."
Because we
are on deadline, we are also cc-ing some of the individuals, who we have been
told may on this question have knowledge. [Ed.'s note: cc's deleted in
this format.]
I am attaching
for your comment and explanation three documents concerning the controversy
regarding UNDP's position on, and involvement in, gold mining project in
Romania. Also, a breakdown of the $10.88 million you cited today, and your
response to Ben's question about the $151 million figure in OCHA's consolidated
appeal. I am pasting below yesterday's reminder email, and note that a long-ago
asked question -- how many people work for UNDP? -- message, which included
other still-unanswered questions, pasted below -- has yet to be answered. Ad
Melkert is cc-ed because he indicated such answers would become faster.
And again, we
believe that Mr. Dervis as Administrator should come and give a briefing in
226, given the issues that have been raised.
Still, no response whatsoever. Therefore, for now,
here is an edited version of one of the UNDP staff complaints that has been
directed to Inner City Press, despite David Morrison's counter-story that
procedures and whistle-blower protections exist in UNDP such that no one should
go to the press:
Subject: Re:
Attn: Mr. Matthew Russell Lee
Date: 3/2007 [Date and time omitted due to last line of 2d email, below]
From: [Name withheld, entitled to all whistle-blower protections]
To: Inner City Press
...on jobs for
favors first. I know some people to whom Brian Gleeson offered promotions or
appointments in exchange of the cash equivalent of the first salary. He
mentioned this option to me as well when my post was re-classified downwards. I
pretended it was a joke, but afterwards the relations became very strained. For
quite some time I was kind of sidelined...
Then --
Subject: Re:
Attn: Mr. Matthew Russell Lee - many thanks, some [follow-up] questions
Date: 3/2007 [Date and time omitted due to last line of this email]
From: [Name withheld, entitled to all whistle-blower protections]
To: Inner City Press
...Usually
$10,000 or first salary. Brian was quoted to say that as UNDP was becoming
corporate-like, it would be normal to charge as head hunter agency would charge.
...Our I.T.
manager said that the management could track what we do on the Internet at any
instant. So much for our rights, which could be another topic for you to
explore.
Yes, that will be another topic. And on the
Romania gold mine controversy, we have tried another route, which we hope will
soon bear fruit, at least a response of some sort. But why would UNDP made no
response at all for six days to questions about these sale of jobs and
promotions allegations, questions raised in a formal UN-televised press briefing
and then also in writing, with additional names provided?
This was sent out, Friday after close of business:
From:
Bernadette Jones
Sent: Mar 16,
2007 18:10
Subject: O-I-C
of BOM
Dear All,
This is to
advise that Ms. Akiko Yuge will be away from Headquarters from 18 to 31 March
2007, inclusive. During her absence Ms. Jocelline Bazile-Finley will be the
Officer-in-Charge of the Bureau of Management. Please also note that Ms. Bazile-Finley
is the Acting Chief Procurement Officer for this period.
Thank you
Bernadette
Jones , Executive Assistant to the Assistant Administrator and Director, Bureau
of Management
We will have more about UNDP's
procurement. But why would UNDP send its new director of Management, Brian
Gleeson's successor, away from headquarters precisely during the two week New
York period of the "urgent audit" of UNDP's management of its North Korea
program? Questions, questions...
Other, earlier Inner
City Press are listed here, and
some are available in the ProQuest service.
Copyright 2006 Inner City Press, Inc. To request
reprint or other permission, e-contact Editorial [at] innercitypress.com -
UN Office: S-453A,
UN, NY 10017 USA Tel: 212-963-1439
Reporter's mobile
(and weekends): 718-716-3540