23 January 2006 The United Nations is conducting some 200 investigations into its procurement activities and has placed eight officials on special leave with pay in that connection, the senior UN management official announced today, estimating that the funds involved could top the tens of millions of dollars.
Briefing reporters in New York, Christopher Burnham said a just-completed report of the UN’s internal watchdog – the Office of Internal Oversight Services (OIOS) – raised “a number of serious allegations and concerns” about UN procurement.
The report prompted the UN to place eight staff members – four from the Department of Management and four from the Department of Peacekeeping Operations – on special leave with full pay. The names of the staff members concerned were not disclosed.
“These measures are administrative, not disciplinary, and they fully the respect the due process rights of the staff members concerned and do not presume any wrongdoing,” Mr. Burnham stressed. Ongoing UN procurement activities have not been affected, he added.
Seeking to place today’s announcement in the broader context of UN efforts to strengthen management, he outlined steps the Organization has taken to improve its procurement practices, including providing more resources to OIOS so that it can undertake a wider investigation of the UN’s spending on supplies and services.
The UN is also fully cooperating with the United States law enforcement authorities. “The United Nations is being proactive,” Mr. Burnham declared, noting that OIOS turned over evidence it had gathered on procurement to the US Attorney for the Southern District which ultimately issued an indictment and obtained a guilty plea. Former procurement officer Alexander Yakovlev was arrested last August after Secretary-General Kofi Annan waived his immunity.
Other measures include a strengthened whistleblower protection policy, more demanding financial disclosure requirements for a broader range of senior officials, and the creation of an Ethics Office, the Under-Secretary-General said.
He repeatedly thanked “the courageous men and women of the United Nations who have continued to come forward to report fraud.” Asked whether this was the result of the new policies, he said there was anecdotal evidence that more staff are blowing the whistle but said it is too soon to have any valid statistics.
“We are doing all the right things to ensure that the global taxpayer’s money will be protected going forward, and we are ferreting out corruption and fraud where it existed and where it exists,” he stated.
While the UN is not making public the recent audit, Mr. Burnham quoted excerpts that pointed to “substantial evidence of abuse in procurement for peacekeeping operations leading to financial losses and significant inaccuracies in planning assumptions.”
Other excerpts described systemic failures. “The design and maintenance of controls needed to ensure that UN procurement complied with financial rules and regulations were insufficient,” Mr. Burnham quoted the report as saying. “Important controls were lacking while existing ones were often bypassed.”
Asked about the sums involved, Mr. Burnham, a former Undersecretary for Management in the US State Department, said, “Clearly, I think the potential abuse could go into the tens of millions of dollars. It could go higher than that, but we’re in the middle of looking at 200 different reports of abuse, and if the men and women of the United Nations continue to show the courage they have in the last six months, (then) in the next six months I expect that figure to go up.”
Deloitte Consulting recently undertook a review of UN procurement, and that effort would be followed by a more detailed forensic audit of recent procurement activities to identify specific instances of fraud and abuse, he said. Separately, OIOS is conducting its own work through its Procurement Fraud Task Force, which is conducting the 200 investigations. OIOS was also mandated by the General Assembly to conduct a wider probe of UN peacekeeping.
In addition to the eight staffers placed on special leave, an additional four others from the peacekeeping department were last week recalled from their missions in the field to provide information on the issue. They have since returned to their posts.
The Under-Secretary-General emphasized that most staff are completely innocent. “The vast majority of men and women working in the procurement area are hardworking, honest and sincere,” he said, adding that “a good number of them have come forward with reports of fraud and abuse.”
Although the audit report is not a public document, it will be distributed to UN Member States that request copies.