The gaping holes and lack of competencies revealed by the report in the safeguards surrounding UNDP procurement have implications not only for the flagship anti-poverty agency but conceivably for many other U.N. agencies.
UNDP does business in 160 countries, where it designs all kinds of development programs in close collaboration with local governments, including a variety of radical dictatorships and many nations with abysmal corruption records.
UNDP has touted itself as a safeguard for the honesty and transparency of procurement exercises carried out on behalf of those governments ? a view of UNDP probity and efficiency that the audit report essentially explodes.
Moreover, UNDP often conducts its procurement exercises to further the programs of other U.N. agencies among its far-flung constituencies, and the UNDP resident representative in each country is empowered as the U.N. secretary-general?s envoy.
UNDP is also taking the lead in an eight-country U.N. experiment known as "One U.N.," which will make the anti-poverty agency even more a conduit of all U.N. business in each nation, especially as "One U.N." rolls out further in the years ahead.
Among other things, the audit report gives grounds for questioning the wisdom of that process as it has been practiced.
The report includes a mini-digest of procurement cases with suspicious, unsatisfactory or unjustified results ranging from Ukraine ("the procurement process was unfair and non-transparent") to Colombia ("the soundness and effectiveness of the procurement process were questionable") to Somalia ("donor had requested a specific international company to be considered even though the solicitation process was local").
The importance of UNDP in the U.N. scheme of things and the controversy that has surrounded some of its recent actions are likely reasons for the apparent management scramble to meet its auditors? concerns, especially as a key meeting of UNDP?s 36-nation supervisory executive board is scheduled to take place mid-June in Geneva.
On some issues examined in the report ? notably, on the need to run background checks on vendors ? management declares it will have a new system in place in June. Terrorist cross-checks, however, will take at least until July. So will the need to demonstrate planning along with "demonstrated capacity and performance," especially at the level of individual countries.
(Among other things, the audit report notes that some countries "have a rejection of 50 percent or more" on their first attempts at procurement submissions, while the overall rejection rates for Africa as a whole are "more than 40 percent.")
In April, UNDP took strong exception to a FOX News report that cited the development organization's own internal documents to show that over the past three years, UNDP had waived competitive bidding procedures for goods and services worth $879 million, roughly 58 percent of the total disbursed by UNDP headquarters during that time.
Some of the largest volumes of waivers went to countries such as the Democratic Republic of Congo, where official corruption has reached shocking levels.
In its response to the FOX report, UNDP claimed that procurement during the three-year period was $6.96 billion and claimed that waivers of competition amounted to only 7 percent of the total. That percentage, however, amounted to a redefinition of the term "waiver of competitive bidding" as used on the UNDP documents obtained by FOX.
The same month, after FOX questioned the existence of a $2.3 million UNDP procurement of U.S.-made airport scanners on behalf of the radical Chavez government in Venezuela, UNDP posted a purchase order whose date and number did not match earlier documents that the agency had said were used to ship the equipment ? three weeks before the later documents attested that the deal had been done.
International anti-corruption watchdogs rank Venezuela as being on the same level as the Democratic Republic of Congo.
UNDP practices in its client countries have been controversial since January 2007, when then-U.S. ambassador to the U.N. Mark Wallace raised questions about the agency?s use of cash payments to North Koreans who were employees of the Kim Jong-Il regime and who also occupied sensitive UNDP local posts. Subsequent investigation revealed that the Kim regime had also used UNDP bank accounts to funnel money to its nuclear weapons program.
UNDP subsequently fired a member of its staff who blew the whistle on the North Korean practices and declared it was not bound by U.N. rules when the U.N.'s newly appointed ethics officer declared he had found "prima facie evidence" of retaliation against the whistleblower. An ostensibly independent report on the whistleblower?s status, written by three panelists chosen by UNDP, is expected shortly.
How successful UNDP will be at fixing the mess described in the April draft audit report remains to be seen.
Among other things, top management agreed with the auditors that greater regional supervision of UNDP country procurement decisions is required. (The auditors suggested that for waivers of competition where "exigency for the requirement" is cited as justification, "the Regional Bureau concerned should be requested to confirm that there is indeed a ?genuine exigency.?")
But management also said that the changes in supervision would not be implemented before the end of this year.
George Russell is executive editor of FOX News.
http://www.foxnews.com/story/0,2933,358953,00.html
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