The United Nations’ flagship agency for global refugee relief, which has nearly doubled its multibillion-dollar budget in the past two years, is struggling with a software fiasco that makes it virtually impossible to track systematically how well it is actually helping the victims of war, famine, drought and other disasters, according to an internal auditing report.

The software mess at the Geneva-based office of the United Nations High Commissioner for Refugees, or UNHCR, has already involved “years of delays,” according to the internal U.N. audit of the situation, and the scramble to fix it may not be over until next year.

In the meantime, the audit report by the U.N.’s Office of Internal Oversight Services (OIOS) states, information “critical to the decision-making process” could not be recorded, and “users could not compare expenditures against budget, and actual performance against targets” in a sophisticated system that was supposed to provide managers with information on how well the organization is spending its money at myriad locations around the world.

Hundreds of millions of dollars in UNHCR spending have been affected by the lack of information, according to the report.

For its part, UNHCR is downplaying the problem. It refers to the effort of fixing the software program, known as Focus, merely as a planned-for “Phase 2” of the system’s development. “Phase 2” was  developed “ in response to feedback received from field users and managers in mid-2010 as well as the findings of the audit of the new system,” according to a UNHCR spokesman.

“As with any major reform project, a settling-in period is needed, which includes gathering feedback and making adjustments,” the spokesman told Fox News in response to questions about the Focus audit, which was undertaken in mid-2010 and finalized last October.

According to the UNHCR spokesman, “Phase 2” began  in November, 2010 -- immediately after the finalized audit was published -- and will extend through all of  2011. It will add $4 million to the $7 million already spent on the system, he said.

The main issue for the auditors, however, was not the extra cost of the software mess. Rather, the bigger issue is the management failings that caused it, and the blind spots created by the failure to develop the system as required, and on time, in an organization that has greatly expanded its ambitions -- and spending -- in the business of saving human lives.

The point of Focus was to help UNHCR better orient the organization toward “results-based management,” meaning to better measure its progress in alleviating human suffering in other terms than simply the amount of money spent on its goals.

But it appears that “results-based management” was only applied sparingly, if at all, to the development of Focus itself, according to the audit report.

Accepting the official explanation of Focus’ halting progress is sometimes difficult, in view of some of the audit criticisms. “Software testing was not adequately planned, performed or documented during the development of the Focus system,” they declare. In addition, “the test plans were not sufficiently documented nor were testing criteria defined.”

Indeed, the UNHCR team creating Focus did not even have a clear end date in mind for their project, the auditors say, which “makes it difficult to distinguish between the implementation of the initial system and upgrades undertaken to reflect new requirements.”

Moreover, the audit declared, “weaknesses in project governance and management meant that UNHCR could not demonstrate that the system developed (from the initial design to the version currently deployed) was cost-effective and met the users’ needs.”


The  report says the same weaknesses extend to the way that Focus has so far captured UNHCR’s most important financial data. Even though Focus is supposed to be “the starting point” of the UNHCR budget process, the auditors found mismatches in data transferred from UNHCR’s already established financial management system that amounted to tens of millions of  dollars. And changes made in budget information in the established financial accounting  system were not being mirrored in the newer one.

The problems grew even bigger when the auditors examined how the system tracked -- or failed to track -- the achievements of on-the-ground relief work -- the reason for UNHCR’s existence.

In large measure, these include efforts performed by people who are not UNHCR staffers themselves. Instead they are performed by a horde of “implementing partners” -- in effect, relief contractors -- who, according to the auditors, account for more than a third of UNHCR’s annual budget. The dense array of “implementing partners” do much of the UNHCR work of creating and managing relief camps and other difficult and often dangerous humanitarian relief.

They range from various local government agencies around the world to globe-girdling private relief organizations like the International Red Cross to hundreds of other forms of non-government organizations (NGOs).

In all, according to yet another OIOS audit of UNHCR released last year, the U.N. agency keeps a database of more than 3,200 implementing and other partners who may at any time be involved in its work.

The auditors set the value of that one-third of UNHCR’s budget devoted to implementing partners at $500 million, but the 2009 budget figures they were using as a base-line have grown enormously since the report was commissioned.

According to the auditors, Focus’ performance so far has shown “significant limits in the reporting process of the activities performed by implementing partners,”  which is one of the main purposes of the system. Indeed, the results of those contractors’ work “could not be recorded in Focus.”  Instead, they were still being compiled on ordinary electronic Word documents -- a labor-intensive process that obviously impairs the ability of UNHCR managers to know what is happening and make adjustments in real time.

George Russell is executive editor of Fox News and can be found on Twitter @GeorgeRussell.