U.N. agencies asked to return $33 million in excess funds
By Betsy Pisik
August 31, 2005
The Washington Times
Original Source: http://www.washingtontimes.com/world/20050830-095420-6871r.htm

NEW YORK -- The U.N. controller has asked a variety of U.N. agencies working in Iraq under the oil-for-food program to return about $33 million in excess funds to the Iraqi government. 

Controller Warren Sach has sent letters to the U.N. World Food Program, U.N. Development Program and others asking them to refund surplus cash that was set aside in 2003 to wind up contracts and close down their efforts. 

The letter is a result of inquiries by the independent panel investigating wrongdoing in the U.N. oil-for-food program, which has been the subject of legal and congressional scrutiny. Mr. Sach and others, however, said the $33 million plainly was accounted for and not likely related to the criminal inquiries. 

I haven't heard any allegations of fraud or mismanagement, Mr. Sach told The Washington Times yesterday. 

He said the Office of the Iraq Program set aside 3 percent of program costs in 2003 to close down operations in the country, but later reduced the amount to 1 percent. 

In fact, the most appropriate figure would have been one-half percent, Mr. Sach said yesterday. 

The money is to be returned to the internationally financed Development Fund for Iraq (DFI), which is administered by the Iraqi government. 

The Rome-based World Food Program, for example, already has transferred about $14 million back to the DFI's escrow account. 

We knew we had extra money and had wanted to use it for emergency programs, such as a school feeding program and other [efforts] in Iraq, said Neil Gallagher, the director of communications for WFP. 

We had considered allocating it to other programs, all in Iraq, and we are hoping that the [Iraqi] government will ultimately pay for that. 

The U.N. Office for Project Services, which provides support to other agencies, is planning to return $11.5 million on holdings of $15.6 million. 

The U.N. Development Program will return $2.3 million on $10.7 million set aside. 

And the Food and Agriculture Organization has a surplus of $1.2 million on $6.3 million, Mr. Sach said. 

He said that some agencies had the money in hand, while others would refund it in phases. 

The Independent Inquiry Committee (IIC), led by former Federal Reserve Chairman Paul Volcker, has investigated the use of funds by those and a half-dozen other U.N. agencies. 

Mr. Sach said the panel had communicated its concerns to him several weeks ago, prompting the effort to return the surplus funds. 

IIC spokesman Michael Holtzman said yesterday that the next report of the IIC will be released next week, and described it as a massive effort running 700 to 1,000 pages. 

The report will examine the workings of the oil-for-food program, which used oil proceeds to buy humanitarian goods and services for ordinary Iraqis between 1997 and 2003.