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UN wasted $10 mln in Sudan peace mission - audit

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February 10, 2008 (UNITED NATIONS) — The United Nations has wasted tens of millions of dollars in its peacekeeping operations in Sudan over the past three years, according to the findings of U.N. auditors examining the financial practices of the global body’s overseas missions.

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UN peacekeepers from Bangladesh work in Juba, Sudan (Reuters).

U.N. officers in Sudan have squandered millions by renting warehouses that were never used, booking blocks of hotel rooms that were never filled, and losing thousands of food rations to theft and spoilage, according to several internal audits by the U.N. Office for International Oversight Services. One U.N. purchasing agent has been accused of steering a $589,000 contract for airport runway lights to a company that helped his wife obtain a student visa, while two senior procurement officials from the United States and New Zealand have been charged by a U.N. panel with misconduct for not complying with rules designed to prevent corruption.

The U.N. procurement division "did not have the necessary capacity and expertise to handle the large magnitude of procurement actions" in Sudan, particularly during the early phases of the mission, according to a confidential October 2006 audit obtained by The Washington Post. Investigators also detected "a number of potential fraud indicators and cases of mismanagement and waste."

The internal United Nations audits provide a rare glimpse into the messy business of assembling a massive multinational expeditionary force in a war-torn nation. They also highlight the Bush administration’s struggles to make progress on its top Africa initiative: ending a decades-long civil war between Sudan’s Islamic government and southern rebels, and halting the mass killing of civilians in the country’s southern region of Darfur.

U.N. peacekeeping officials maintain that the auditors’ allegations are overblown, and that they neglect the difficulties of launching a major operation in a nation with few roads and a government hostile to foreigners. "This is seen as a witch hunt that is not warranted given the fluidity and complexity of that mission," said one U.N. official who served in Sudan, who was not authorized to speak publicly about the investigations.

A U.N. task force is examining the United Nations’ handling of nearly $300 million in contracts for food, transportation and fuel for Sudan, including a $200 million contract with Eurest Support Services, a Cyprus-based subsidiary of the Compass Group, a British catering company. ESS also has been charged with rigging bids in Liberia, Congo, Ethiopia and Eritrea.

There is no excuse for having poor internal control mechanisms and for tolerating mismanagement," Inga-Britt Ahlenius, the undersecretary general of the oversight office, told reporters last month. "We are handling public money and considerable funds and should care about that as if it were our own money."

The Security Council established the U.N. mission in Sudan in March 2005, sending more than 10,000 peacekeepers to oversee a settlement ending a bloody, 22-year civil war that left more then 2 million dead in southern Sudan. The council has since authorized an African Union-United Nations mission to halt the killing of civilians in Darfur, a force that is expected to reach 26,000 troops by the end of 2008.

U.N. auditors have identified dozens of irregularities, including an "exorbitant" rate on a contract to supply gravel for peacekeeping barracks and $1.2 million in "unnecessary expenditures" for block bookings of hotel rooms that the United Nations was unable to fill, according to the audits.

U.N. officials also spent more than $9 million in unnecessary fees to a Canadian company, Skylink Aviation, by releasing it from its obligation to renew a nine-month contract to supply fuel for the mission, the auditors allege. Skylink then renegotiated a second nine-month contract at a much higher cost. "They clearly made it easier for us to negotiate," said Jan Ottens, a senior executive at Skylink. Ottens said the terms of the initial contract were unfair because the slow deployment of troops reduced the amount of fuel that was needed. "We were losing money big time."

U.N. peacekeeping officials acknowledge problems in Sudan. But they contend that the two procurement officials were perhaps in over their heads, but not corrupt. Understaffing, a shifting troop-deployment schedule, and Sudanese obstruction often upended U.N. plans and led to higher costs.

These officials cite a case in which the auditors accused the mission of wasting $9 million by hiring a local company to clear U.N. goods through customs, rather than relying on U.N. staff. Peacekeeping officials agree the costs are high but say that the government has prohibited the United Nations from doing the job, and that the U.N. secretary general and the Security Council have been unable to convince Khartoum to back down.

They also defended a contract for a New Zealand firm, Radiola Aerospace, to install solar-powered runway lights at the Kadugli airport, southwest of Khartoum, despite evidence that the bidding process was manipulated. Investigators found that the company improperly helped a U.N. procurement official draft the specifications of a contract that the company later won. It also sponsored a New Zealand visa application for the official’s wife and pledged to cover any financial liabilities she might incur while in the country.

At the same time, the official pressed the United Nations to approve Radiola’s contract after U.N. headquarters had ordered the contract terminated because the lights "failed to meet the safety specifications of the United Nations and the International Civil Aviation Organization," according to an October report by U.N. investigators.

Radiola acknowledged that it violated U.N. rules by sponsoring the visa, but the company said it fairly won the bid for the contract. "In hindsight it was inappropriate we should not have done it," said Brent Albiston, Radiola’s managing director. "But absolutely no money passed hands."

Albiston said that his company informed the United Nations that solar power lights did not meet international standards, but that they made sense in a remote location where power supplies were unreliable, a position that senior U.N. peacekeeping officials backed. "The quality of the lights at Kadugli are better than they are at the international airport in Khartoum," Albiston said.

(Washington Post)

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