Published February 11, 2013
For more than three years, a sophisticated computerized management system intended to be a cornerstone of United Nations reform has been one of Secretary General Ban Ki-moon’s most embarrassing train wrecks, described as a “failure of management” on Ban’s part. Now, the world organization’s attempts to salvage the system -- known in-house as Umoja, a Swahili term for unity – have turned into an even bigger scandal.
Even after an admission that it was three years behind its initial scheduled completion as of a year ago, Umoja has been a victim of U.N. mismanagement, misjudgment and almost surreal levels of ineffective implementation, according to internal U.N. documents. Meantime, U.N. member states, including the U.S. – the organization’s biggest financial contributor-- fling additional tens of millions of dollars at the dysfunctional ERP project to turn it around.
The total anticipated cost of Umoja had risen from $285.6 million in 2008 to $315.8 million in 2009, to some $348.2 million by 2015—with three years still to go after that.
And the full extent of the U.S. tab for Umoja is difficult to estimate, because the cost keeps rising. But the Obama administration will have to ante up at least 28 percent of most of it, as the majority of Umoja’s funding will come from U.N. peacekeeping allocations, where Washington pays a higher percentage of the costs than for other U.N. operations.
In a resolution passed late on December 24—but only posted on U.N. internal websites on Feb. 6—the U.N. General Assembly agreed to spend nearly $70 million more on Umoja for 2013, while accepting that it would be completed—perhaps—by December 2018, another three years later than expected at the beginning of 2012.
At the same time as the General Assembly reached for its wallet—or rather the wallets of the score or so nations who pay most of the bills—it wrung its collective hands, expressing its “ongoing concern about delays in project implementation and the projected additional funding requirements to carry the project through” to the end.
Moreover, the remaining post-2015 work, known as Extension 2, is the part of Umoja that planners had placed their greatest hopes on using to bring new efficiencies to the U.N., meaning that until then, as a U.N. budget advisory committee puts it, the project runs the risk of perpetuating “the weaknesses of the current outmoded and stand-alone information and communications technology systems.”
The U.N. Secretariat is currently carrying out some of its critical financial bookkeeping, according to its budget advisory committee, on Excel spreadsheets. Its payroll and personnel record-keeping is also deemed by auditors to be something of a disaster.
Amidst that doleful situation, U.N. officials say the final phase of Umoja, from 2015-2018, will cost only about $30 million more. But the U.N.’s external auditors and the budget advisory committee are both deeply skeptical about that projection, not to mention the U.N.’s ability to meet its re-revised timetable, even while urging the project on “without additional delay.”
For one thing, after 2015, the U.N. proposes to disband the project management team that is currently tasked with building the project and replace it with an unspecified “center of excellence” within the U.N. to finish the work. This may be one reason for the relatively low projected cost of the last three years of Umoja’s build-out.
The problem is, the solution is basically imaginary, since no such “center of excellence” currently exists. As a result, the U.N.’s budget advisory committee warns delicately that it is “concerned that the dismantling of the project team prematurely presents risks that Umoja Extension 2 may not be implemented effectively.”
In view of the project’s history so far, that view could well be considered an ironic understatement.
All of that confusion, mismanagement and waste comes atop a staggering estimate of $744 million per year (as of 2010) that the U.N.’s auditors say Ban Ki-moon’s Secretariat already spends on wildly differing and incompatible information technology of many kinds—often ineffectual—for more than 43,000 staffers around the world and more than 100,000 U.N. peacekeepers.
In fact, that number may be little more than a wild guess, since, the auditors observed, the U.N.’s spending for ICT [information and communications technology] is done at the level of individual departments, and not consolidated, so that senior managers do not, in fact, know what is being spent overall.
Among other things, auditors note that there are some 2,000 software applications in use across the Secretariat, and the new Umoja system would replace only 600 or 700 of them.
But those are only the surface level of Umoja’s—and the U.N.’s -- problems, according to the analysts and auditors who have been poring over the system—and the culture that spawned it—during the past year.
There are plenty of others, which could still add tens, if not hundreds, of millions of dollars to the costs, and subtract equal amounts from the system’s purported benefits, with no guarantees so far that the system will ever fully work.
--The U.N.’s auditors reported last July, after an extensive investigation, that the Ban administration’s “reported costs and progress for the ERP project are lacking in transparency.” Translation: There is not a lot of credible evidence to back them up.
For one thing, management clung to an initial upward revision of the project cost to $315.8 million during two entire years of delays, without explanation, before raising the tab to its current $348 million. An earlier administration of “phased-in” ERP completion projected a cost for the same period of more like $398 million. The U.N.’s external auditors suggest that the $315.8 million figure was simply put there arbitrarily.
-- No-one really knows whether Umoja is running ahead of, or behind, its projected budgets so far, because, among other things, U.N. administrators “cannot determine what should have been achieved” for an initial $123 million in spending through April 2012, except by taking bureaucrats’ word for it.
A big reason, according to the U.N. budget advisory committee, is that Ban’s administration “did not have systems in place that could link the budget to milestones and deliverables” --meaning real measurements of accomplishment. Translation: For four entire years, Umoja did not have a concrete, measurable system for ensuring that it was actually being built to specification and on schedule.
Indeed, the committee said Ban’s officials told them that “linking the budget milestones and deliverables was not a requirement under the United Nations system accounting standards.”
The committee also warned that “some data required for Umoja do not exist in a consistent or usable format in United Nations legacy systems.”
--No-one at the U.N. has yet taken account of so-called “related costs” associated with transferring and archiving data from old systems onto Umoja, as well as building connections to some 300 surviving older systems which will be required , when—and if—the project is completed. The auditor’s say that an early analysis suggests the costs could be between $80 million and $110 million atop everything else.
The U.N.’s inattention to that detail is explained by Secretary General Ban, in a report where he declares that such costs will come out of regular department budgets—which are paid for by the same international contributors who are paying for Umoja. The costs are still unknown because the budgets for 2014 and 2015—the U.N. budgets two years at a time—have not been created.
Moreover, auditors note, “consolidated management information” on departmental budgets and spending “is not routinely prepared.” (That, indeed, is one of the problems Umoja is supposed to help remedy.)
--Ban’s managers at various times have claimed that the installed ERP system will provide yearly savings—known as “annual recurring benefits”-- of as much as $139 million to $220 million at the previous 2015 completion date. These have now been scaled up to as much as $230 million—but will only be fully realized after the latest postponement.
The U.N.’s auditors say, however, that so far, there are “no agreed plans on what changes the Organization needed to make in order to realize such benefits and simply building and rolling out a new information technology” won’t deliver them.
--No matter how much money has been spent so far, various parts of the U.N. apparently still don’t take the need for the new system all that seriously. The U.N.’s auditors, in a report published in December 2012, note that “many departments” are still operating without a local ICT committee to help determine “the needs and issues new systems could address.”
And even where such committees exist, it might not matter. The auditors note that Secretary General Ban’s Office of Information and Communications Technology “maintains no substantive records on the operation of the local ICT committees.”
The same auditors' report lays out the U.N.’s info-tech failings in a broader context that speaks of much more than a problem of mismanagement, but rather of an epic failure of vision.
In essence, the world organization never pondered its nature, as a sprawling, decentralized, and often badly governed archipelago of disparate offices and functions before launching into its attempt to reform itself through centralized cyber-technology.
Quite simply, Umoja was conceived as a solution for an organization that refused to put the facts of its own nature into the equation. The U.N.’s auditors declare in their December 2012 report that any “global ICT strategy for the United Nations is unlikely to be successful unless these fundamental managerial and structural issues are understood and addressed.”
Additionally, Ban and his top managers apparently gave shockingly little thought to how to carry their project out, even as they emitted clouds of rhetoric about the good that info-tech would eventually do.
The U.N.’s auditors observe that Umoja “was deemed to warrant only a one-page case study and one bullet point” in a major U.N. strategy document on info-tech published as recently as November 2010. The auditors viewed that as equating the U.N.’s most important reform project with the installation of instant messaging.
At other times, they note, decisions about how to proceed with the huge, complicated effort “were made on the basis of PowerPoint presentations with a single day of notice.”
If Umoja is ever to succeed, the auditors argue, it’s up to the sclerotic organization’s senior management “to establish a clear and shared vision” for what it could do to support the U.N.’s business needs and its “core objectives.”
Alarmingly, the auditors also note that Ban and his team still haven’t gotten around to doing that.
They deem it “essential” that he do so in a report for the General Assembly’s fall session, starting in September.
George Russell is editor-at-large of Fox News and can be found on Twitter @GeorgeRussell.
UPDATE: When this story was originally published, the advisory committee report linked to the story was not attached. It has now been properly linked.