UN organization protecting Mediterranean runs aground on 18-year bookkeeping mess
By George Russell
May 02, 2012
FoxNews.com
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The United Nations Environmental Program (UNEP), a organization leading the charge for a radical reorganization of global environmental governance, has added another item to its list of administrative fiascos:  this time, over how it has been protecting the Mediterranean Sea.
According to internal documents obtained by Fox News, a UNEP-administered program to protect the Mediterranean and its coasts overspent its budget by $5.1 million from 1994 to 2011 -- equivalent to about a quarter of its entire budget for 2010-2011 -- through a rudimentary accounting error that went undetected for most of the 18 years.  The cumulative error punched a major hole in the program's budget.
Despite some frenetic subsequent juggling of accounts and a quiet partial bailout by the European Union, the agency still has the Mediterranean protection program on a budgetary crash diet aimed at getting its books back in balance. UNEP claims that the cash squeeze has not affected any of its actual protection programs.
The analysis of UNEP's failings is contained  in a confidential internal audit of the fiasco undertaken by the U.N.'s internal watchdog, the Office of Internal Oversight Services, which was completed last September.   
Whether anyone at UNEP will ever be held accountable for the expensive and remarkable lengthy lapse in oversight remains a mystery.
Despite the relatively small amount of money involved -- globally, UNEP spends roughly half-a-billion dollars per year on a wide portfolio of activities -- the question of the agency's apparent inability for years to keep proper track of its own book-keeping -- or hold anyone public accountable when major blunders occur -- is of growing significance on the eve of the U.N.'s Rio + 20 summit conference on sustainable development, slated to begin in Brazil on June 21.
UNEP is one of the major advocates behind the conference, and hopes to be among its major beneficiaries. The Rio + 20 summit aims, among other things, to encourage a radical reorganization of the global economy, including the imposition of trillions of dollars worth of transfer payments and new taxes on developed countries, UNEP's executive director, Achim Steiner, heads the U.N. Environment Management Group which has specifically advocated those changes.
UNEP is also lobbying hard for an expanded role in a new structure of global international governance that U.N. organizers hope will be one of the summit meeting's main outcomes, meaning it hopes to have more administrative authority -- and responsibility -- in the future has to safeguard the world's environmental heritage.
The OIOS report came nearly a full year after a much broader and even more scathing examination of  UNEP's financial management of its relationship with more than 750 partners, ranging from government bureaucracies to private organizations, in furthering its work. That report said UNEP failed to keep track of millions of dollars passed on by its partners, didn't keep adequate records of what it accomplished with them, and often didn’t check out its partners' credentials.
Whatever housecleaning resulted from that previous investigation apparently did not reach UNEP's Mediterranean project. The Mediterranean Action Plan, or MAP, aims to support pollution control as well as sustainable management, and integrated development of the sea and its coastline under a 21-nation treaty that entered into force in 1995 as the Barcelona Convention.
MAP is only one of many similar UNEP projects around the world. In all, the U.N. organization has allocated more than $186 million for 2012-2013, to provide support to conventions, regional seas programs and protocols.  
With the aid of a UNEP-managed bureaucracy, MAP was intended to coordinate integrated coastal area management, national and local capacity building, and the formulation of sustainability strategies for the Mediterranean through a variety of regional centers -- much of which apparently amounted to holding workshops and financing consultants to study the area, as well as building a pollution database.
Financing for MAP was supposed to come though a UNEP-administered trust fund from countries that signed the Barcelona Convention. But some of those nations didn't pay up. The chief offender was apparently Greece, despite the vast spending spree the country was engaged in at the time, which led to its current deep financial crisis.
Rather than dealing with the shortfall, however, the audit notes, UNEP simply ordered up projects under the plan without noticing whether the amounts were in line with actual budgeted income received.
This resulted, the report says dryly, in UNEP/MAP spending funds it did not have.
To cover up the hole in its financing, MAP apparently just drew on other UNEP trust funds.
UNEP headquarters, which was ostensibly responsible for managing the entire process, had little or no clue what was going on, the report declares. Among other things, the audit says budgets prepared for the MAP effort were never even examined by UNEP's head offices before being sent on to Barcelona Convention countries, something investigators indicated was critical to its non-detection.
As one of its findings, the audit recommends that Steiner, UNEP's executive director, find out who was responsible for the financial mess, and who exactly failed to detect it for 18 years. The audit recommended Steiner hold those people accountable, without specifying any actions.
According to the audit document, UNEP promised that a panel of qualified U.N. staff would be named by Steiner, to provide findings and recommendations on possible negligence no later than March 30, 2012.
When asked by Fox News whether the panel had completed its work, and what subsequent actions had been taken, UNEP spokesman Nick Nuttall sidestepped the questions. UNEP had identified a series of problems related to management decisions and financial management in the Mediterranean Action Plan Secretariat in Athens, Nuttall declared, and had ordered up the special audit to fully understand how these problems had arisen.

While the spokesman said that UNEP took corrective action including in respect to the management and [cost] savings measures, there was no reference to the negligence panel or its findings.
George Russell is executive editor of Fox News and can be found on Twitter http://twitter.com/ \l %21/georgerussell @GeorgeRussell.