Home | News    Friday 24 February 2006

UN peacekeeping procurement


By William M. Reilly

UNITED NATIONS, Feb. 22 (UPI) — U.N. Secretary-General Kofi Annan’s chief of staff, Mark Malloch Brown, briefing the Security Council on an inquiry into questionable procurement practices of United Nations peacekeeping operations, says the interim report may not be as bad as it initially appears.

The report was delivered Wednesday in the face of objections from groups representing the majority of the 191 states making up the United Nations, all members of the U.N. General Assembly. The Group of 77 plus China — actually now 132 mostly developing countries — and the Non-Aligned Movement raised the primary objections.

They said the council was encroaching on functions and powers of the assembly.

Their problem was the assembly had been mandated to oversee management of U.N. operations. A request to the Office of Internal Oversight Services should have been returned to them, rather than first given to the media, and now the council before members of the assembly were briefed.

Malloch Brown said he ordered the media briefing following a leak of the report to some media members.

Ambassador John Bolton of the United States, this month’s president of the Security Council, had requested the Secretariat briefing.

He said the 15-member panel had a right to view the request, arguing that if the council had not mandated peacekeeping operations there would not be any and the council had a right to oversee the operations.

Bolton also said since the United States paid for about 27 percent of peacekeeping operations, it had a right to hear how its taxpayers’ money was being used.

Malloch Brown said he was chosen to brief because he was familiar with the departments of management, peacekeeping and the OIOS report.

The chef-de-cabinet said he was also to brief the assembly’s budgetary panel Friday, "which I will be very pleased to do given the General Assembly’s lead role in these matters."

It was a clear tip of the hat in the council chamber to the assembly at the beginning of a debate that wielded no concrete results in the dispute between the two main bodies of the world organization.

The value of U.N. global procurement, 85 percent of which was allocated to peacekeeping, had grown from around $400 million to over $1.6 billion last year, and was expected to reach over $2 billion this year, Malloch Brown said.

"This surge in activity has produced a 70 percent increase in the number of military personnel deployed in peacekeeping missions, the vast majority of which rely on the United Nations for nearly all logistic support," he said.

"Deploying, feeding and supporting this number of people requires literally thousands of contracts every year," Malloch Brown said. "Last year alone, for example, the United Nations rotated nearly 150,000 troops, provided fuel, rations and movement for a field force of over 65,000, chartered hundreds of flights, dozens of sea lifts, moved hundreds of thousands of tons of cargo and operated thousands of vehicles in the field."

In that context, the secretariat welcomed the Assembly’s request to the OIOS to conduct an independent review as one part of the overall management audit of the peacekeeping department, he said.

The bottom line was that the United Nations "was exposed to serious risk of financial loss because internal controls are inadequate, management supervision and strategic guidance has, at times, been lacking and management had not done enough to exercise due diligence and establish a high level of ethical behavior and accountability, despite numerous irregularities reported in previous audits," according to Malloch Brown.

He said OIOS also believed there was evidence of financial loss having occurred through over-budgeting or inflation of requirements, while controls to ensure the United Nations received value for money in its procurement activities was lacking.

"There are also some indications of serious potential irregularities, including collusion or conflict of interest with vendors, as evidenced by inappropriate communications between U.N. officials, a national government and vendor representatives," Malloch Brown said, referring to the suspension, with pay, of eight procurement staffers. "That was very alarming and merited urgent investigation."

He said that most of the 32 OIOS audit recommendations for addressing these findings have already been accepted by the management and peacekeeping departments, while the remainder was under discussion.

However, he acknowledged there was a "strong disagreement" between the OIOS and the peacekeeping department about some parts of the report and said the realities, dangers and difficulties of U.N. field operations had to be taken into account, although there was zero tolerance for fraudulent behavior.

"Let me add a reservation of my own... I am concerned that some of the findings relate to judging them by a procurement system and procedures that are out of step with field realities and itself needs reform," Malloch Brown said.

Also, aiming at a more positive note, he attempted to puncture "the myth" the OIOS had uncovered $300 million in fraud.

"Actually what the audit documents is the likelihood of fraud in some narrow instances — which is now being investigated — and significant potential waste based in part on extrapolation from findings in the two missions (Congo and Sudan) investigated across all peacekeeping," Malloch Brown said.

"One of the most glaring findings of the audit," he said, arose from two missions where the fuel contract fell short of contract ceilings by a total of $65 million.

The chef-de-cabinet explained one of those missions was in Sudan where "considerably less fuel needed to be consumed simply because many of the troops had not arrived in theater on their original, planned schedule," pointing out there are such delays because of problems ranging from security conditions to the rainy season.

"So we need to be clear on our terms, funds reported as not spent on fuel remain in the bank," he said, softening the blow of the initial report.


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