EXCLUSIVE: The United Nations for years handed out tens of millions of dollars to non-government organizations involved in humanitarian work in strife-battered Somalia with “no assurance” that the money was used for the intended purposes,” according to a report by the U.N.’s own internal auditing watchdog.
In fact, they concluded, “there was no effective financial monitoring” of the work.
According to the watchdogs, any subcontractors used by the NGOs to help carry out their work were not listed in U.N. agreements, meaning that the U.N. may lack any legal right to find out whether the money it handed over went for the proper purposes.
And atop all that, the U.N.’s chief humanitarian coordinator, the Office for the Coordination of Humanitarian Affairs, or OCHA, lacked any appropriate guidelines for handing out the money in the first place. So instead it handed over more than 80 percent of its project funding in advance of any work done, on a quick-impact emergency basis, a method that the auditors said should be ended “immediately” -- but which apparently is continuing into next year.
Those conclusions vary considerably from what OCHA said at the time about its “accountability” for the money under its care: that it kept meticulous and carefully supervised records on who was doing what and where, with auditing of all projects to guarantee financial probity, and an elaborate system of reporting on “achievements against planned activities and outcomes.”
According to the U.N.’s watchdog Office for Internal Oversight Services (OIOS), however, that was not the way things were actually working with the Common Humanitarian Fund for Somalia, described as “an important country-level finance tool which provides quick, predictable and strategic funding to U.N. agencies, international and local NGOs working in Somalia.”
For at least 2 ½ years, the watchdogs say, the U.N. coordinating agency’s auditing ran far behind schedule on much of the $162 million portion that it managed from the $262 million in the Fund from 2010 through 2013. (Much of the remainder went to other U.N. agencies.)
In addition, financial reporting requirements for recipients of OCHA’s share of the Fund varied widely, field visits to actually see how work was done were relatively rare, and the performance reports of NGOs who were paid to do the job “could not always be verified.”
According to the U.N. auditors, the coordinating agency’s overall performance as the managing agent for the Fund was “unsatisfactory”— the watchdogs’ highest negative rating, which they blandly say means that “critical and/or pervasive important deficiencies exist” so that “reasonable assurance cannot be provided with regard to the achievement of control and/or business objectives under review.”
Translation: problems are big enough that there is no way to tell for sure that the inspected activity is working.
The Common Humanitarian Fund by no means includes all the money that wealthy donor countries, led by the U.S., have sent to Somalia, a country racked for decades by war, terrorism, drought, food supply failures and countless other woes.
In 2013, the year when the U.N. auditors’ examination of the Fund ends, the world gave $714.4 million to Somalia via an OCHA consolidated appeal for various emergencies, with the U.S. aid share amounting to $184.4 million, or nearly 26 percent.
This year, the U.S. has contributed even more to the same consolidated appeal: $207.6 million, or nearly 38 percent of the total donated so far. Overall, Somalia’s consolidated aid appeal for 2014 is calling for $933 million.
What made the Common Humanitarian Fund different, according to its website, is that it is intended “to support aid agencies in response to the most urgent humanitarian needs” under the direct management of OCHA itself.
Both aspects are a tall order in a country where conditions are often desperate and violent, and where U.N. efforts to provide security programs for the battered citizenry have also suffered from oversight woes made worse by terrorist attacks.
The auditors’ conclusions about the “unsatisfactory” management of the Fund are contained in an internal audit report that was published last August, based on field work that took place a year earlier than that -- an unusually long gestation period.
Perhaps inspired by the auditors’ impending attentions, OCHA’s own concerns about its operations were apparently already percolating. According to the OIOS document, in 2013 -- three years after the Fund was launched -- OCHA started an internal review to determine whether the NGOs it gave money to “had the requisite capacity to receive and manage CHF funds and implement the projects with efficiency and effectiveness.”
Up to that point, according to the auditors, even though key recipients of money “had previously implemented CHF projects,” they had never been asked to provide an assessment of their own capabilities.
The OCHA review of those capabilities, however, mainly amount to a “desk review” of documents submitted by the NGOs, along with opinions offered by clusters of U.N. organizations in Somalia, who all “used the same pool of national and international NGOs” in their work, according to the auditors’ report.
Moreover, OCHA apparently never quite told the participants in its survey everything it was up to. As the auditors put it, “The terms of reference of the review were not shared with participating agencies to ensure that the assessment was comprehensive.”
What the auditors discovered, in fact, was that OCHA never had “specific guidelines” for how it was supposed to hand out money from the Fund, and on what terms, so it simply used rules for emergency handouts—which were never intended for projects running as long (a year or so) as those sponsored by the Fund did.
The quick-and-dirty funding approach gave the green light to handing out 80 percent of project money to recipients up-front, even as the humanitarian coordinator gradually acknowledged that it didn’t have the capability itself to see how well its commissioned projects were faring.
OCHA tried to hire an independent contractor to do that work, but the effort was apparently a fiasco. At the time the auditors had arrived, the coordinating agency was trying to sign up four more contractors to do the same job.
Along with lack of oversight, OCHA apparently got little in the way of financial statements from the NGOs it hired to prove that they had spent the money as the humanitarian agency wanted. According to the auditors, a review of 43 out of 267 projects under the fund’s aegis revealed that none of them had filed certified financial statements about their activities, as required.
Local auditors who had been hired to look at the projects hadn’t provided much insight either. Out of 205 completed Fund projects, only 64 had been audited locally when the investigators arrived. Most of the audits were “desk based,” OIOS noted, and the auditors “did not verify the existence of any activities that took place” under the projects.
In short, “there was no effective financial monitoring of CHF projects,” the watchdogs concluded.
All of that has now changed according to OCHA. In reply to questions from Fox News, the agency reported -- as does the audit -- that the humanitarian coordinator has accepted all OIOS recommendations for improving the situation -- sort of.
All of the backlogged local audits of projects, for example, have been completed, an OCHA spokesman told Fox News. But when it comes to discontinuing its 80 percent up-front payment policy, the agency said, “OCHA is still on track to meet that goal and expects to start rolling out the new policy in the first quarter of 2015.”
Problem is that U.N. auditors recommended that the change occur “immediately,” meaning a still-unknown amount of time before August 2014, when the audit, with accompanying to-and-fro comments from management, finally appeared after a long period in the U.N.’s back rooms.
The same goes for “provisions for operational accountability of implementing partners, including the disclosure of main sub-contractors in agreements” -- these are also supposed to take effect in early 2015, OCHA said.
OCHA declined to provide Fox News with a list of all the “implementing partners,” meaning U.N. agencies and non-government organizations that were involved in the Fund’s work during the long, lax period examined by the U.N. audit.
The drawn curtain is necessary “so as not to compromise the security of those partners,” OCHA’s spokesman told Fox News.
Disclosing those beneficiaries of its funding “would be highly irresponsible,” OCHA’s spokesman added. “Somalia remains an extremely difficult and dangerous place for aid workers. Armed groups continue to carry out targeted attacks against aid workers and ongoing military operations disrupt the delivery of humanitarian assistance.”
Yet despite those avowed safety concerns on OCHA’s part, a provisional list of the Common Humanitarian Fund’s projects for 2014 -- including project locations, and the acronyms, and sometimes names, of implementing partners -- currently appears on the agency’s website.