UN review finds procurement ‘abuse’ 

By Mark Turner
January 21, 2006
The Financial Times
Original Source: http://news.ft.com/cms/s/4c8b1fc6-8a13-11da-86d1-0000779e2340.html

An internal review of United Nations peacekeeping activities has found “substantial evidence of abuse” in procurement operations, leading to “financial losses and significant inaccuracies in planning assumptions”, according to a copy of the report circulating in New York.
The review, which may be published imminently, also expresses “great concern” at a failure of UN management to enforce accountability and adhere to internal control procedures.
The findings are likely to deal a powerful new blow to the world body headed by Kofi Annan, its secretary-general, as it tries to recover from scandal over its mismanagement of the multi-billion-dollar oil-for-food programme in Iraq.
Earlier this week, the UN announced it had put eight staff members on paid leave until it completed an investigation into peacekeeping procurement. Among the eight is Andrew Toh, the procurement chief. Mr Toh says he has done nothing wrong.
UN peacekeeping operations run in 18 countries and involve 85,000 troops and other personnel.
It is already struggling to overcome criticism of its failure to curb the sexual abuse and exploitation of women and children by its staff.
OIOS, the UN’s internal investigative arm, discovered a “lack of proper care and attention by senior officials responsible for the design of procurement related internal controls”, and “overrides” of major controls designed to ensure procurement was competitive and economical, according to the report, a copy of which has been seen by the Financial Times.
It said that in several instances the peacekeeping budget was over-estimated or inflated, which in some cases led to the build-up of a reserve of supplies above the UN peacekeeping operations’ actual needs.
For example, fuel contracts for Unmis (Sudan) and Minustah (Haiti) were in excess of requirements by at least $34m and $31m, respectively, and Monuc (the Democratic Republic of Congo) received seven aircraft hangars worth $2.4 million in 2002 that are still not being used.
It added that “in many instances, UN peacekeeping operations depended on a limited number of vendors, which made the missions vulnerable to overcharge”, and warned that inattention by officials in charge of controls led to “resource mismanagement and possibly fraudulent activities”.
The news may prove particularly damaging amid US calls to reassess the value of UN peacekeeping missions around the world, including the current force in Ivory Coast.
The UN has called for an extra 3,400 troops there, but Washington opposes the move.
New findings of procurement irregularities are unlikely to further undermine the UN’s case in Congress, which pays a quarter of the budget for peacekeeping operations.