At UNOPS, Lack of Oversight and Late Financials, Investigation Called For

UNITED NATIONS, January 25, Edited, corrected and amplified on Feb. 11, click here for note -- For an agency that has still not certified its 2004 and 2005 financial statement, Thursday the UN Office of Project Services and its director Jan Mattsson escaped relatively unscathed from the semi-annual Executive Board meeting. Stopped in the hallway afterwards, Jan Mattsson told Inner City Press he was heading to Copenhagen later that day, and therefore he couldn't name the consultant who is preparing a report on a possible UNOPS acquisition of the procurement functions of the UN Development Program. "It's a UNDP consultant," Mr. Mattsson said. "Ask them." Since Inner City Press has numerous questions, some of them weeks old, pending at UNDP, the question was put in writing to Mr. Mattsson. Five hours later, no response was received.

            Mr. Mattsson is not alone in traveling on the dime of UNOPS. His hand-picked deputy Vitaly Vanshelboim has in the past six months, sources say, racked up travel and relocations costs that have caused double-takes and outrage even among pro-UNOPS staff, who says that the Board of Auditors inquiry recently announced by Ban Ki-moon should act on them.

            Vitaly would have to be in the air, at first class rates, full time for six months to begin to justify those charges, one source told Inner City Press.

Traveling man Vitaly Vanshelboim, per UNDP

   In the UN's basement on Thursday, Jan Mattsson said there were no issues, no controversy concerning UNOPS move to Copenhagen. Mattsson referred to himself "returning pride and prominence to UNOPS," and concluded about "looking forward to any comments or questions, either in today's session, or bilaterally at any time. Mr. Vitaly Vansheloim, Deputy Executive Director, and Roswitha Newels, Director of our New York Office, are with me here to help in this regard."

   Canada's representative spoke of a "merger" of IAPSO and UNOPS, "now that both are in Copenhagen." Switzerland's envoy said he wanted to see the study of the UNOPS - IAPSO proposal, and the "terms of reference" of the study. Italy concurred, and asked who did the study. Mattsson replied that the study is by a UNDP consultant.

    While he portrays himself as arriving at UNOPS in mid-2006 to clean up a scandal that pre-dated him, while he was at UNDP he served on the MCC overseeing UNOPS. And once at UNOPS, he handed the above-recited funds to Vitaly Vanshelboim, and for example on November 3, 2006, handed a $59,000 consultancy contract to his favored vendor Dalberg Global Development Advisors, whose founder Henrik Skovby it can now be reported left both UNDP, and McKinsey, under less than ideal terms. Where is the oversight? Not at the Executive Board.

Note: Generally, it is Inner City Press' policy to make corrections where warranted on the web page on which the article to be corrected is and remains located, and to then note that the page has been edited. Recently the UN Office of Project Services has requested more than that -- hence a separate update on a different page (click here to view. The reporting will continue - and has, today, on UNOPS payments to Nay Htun, click here to view.)

  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.

Feedback: Editorial [at] innercitypress.com

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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 longtime crony Vitaly Vashelboim. Mattsson brought Vashelboim to New York, and has now sent him back to Copenhagen (where Mattsson's yet to move).  This back and forth involved a $21,583 "relocation grant" from UNDP in May 2005, followed by an additional $34,000 for re-relocation from UNOPS in June 2006.  In August 2006, UNOPS shelled out $22,800 more to Vashelboim in "Daily Sustenance Allowance." Nice work if you can get it. 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.

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

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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

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