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UN Probe Says Procurement at Its $5 Billion Anti-Poverty Agency a Shambles

By George Russell

Fox News

May 29, 2008

The multibillion-dollar procurement business of the United Nations Development Program (UNDP), the U.N.’s flagship anti-poverty agency, is a gigantic shambles, according to UNDP’s own investigators.

Moreover, UNDP’s management has privately acknowledged that fact and is scrambling to fix the mess — even as it loudly denied concerns of a procurement scandal that have been raised by FOX News, among others.

In a confidential report obtained by FOX News, UNDP’s auditors have described the UNDP procurement organization that is spending well over $2 billion annually as:

— overwhelmed by its caseload at headquarters and in the field, while procurement ballooned from $800 million in 2003 to $2.5 billion in 2006 and $2.2 billion last year;

— often failing to provide plans to support its buying activities, which the report says causes many purchases of goods and services to be carried out on an "ad hoc basis" (in fact, more than $595 million worth of non-existent purchases were recorded, although the audit notes that they were not paid for);

— wallowing in shoddy paperwork and faulty bidding processes, which contributed to a "high number of waivers of the competitive process and to quality problems in the procurement process in general";

— lacking the expertise to evaluate hundreds of millions of dollars worth of its most expensive and important purchases in civic construction and high-tech communications;

— drastically unqualified: Fully half of the organization’s procurement staff around the world were not certified for the basic requirements of their jobs, while the auditors also found the six-hour course for those who were certified to be "inadequate." Additionally, the auditors noted, "there are entire offices without a single certified buyer";

— suffering from an "apparent" conflict of interest at the top, where the people charged with vetting the procurement process for flaws are also members of the procurement office staff.

The same potentials for conflict of interest apparently dog local staffers, who, the report says, had not received official guidelines for disclosing their finances and interests, even though a policy demanding those declarations had been issued a year earlier.

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