UN procurement under review after fraud fear

24 August 2005
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25 August 2005 | Anusha Bradley

The United Nations' procurement system is to be independently reviewed after a purchaser admitted fraud charges.

Secretary-general Kofi Annan has already committed the UN to implementing the recommendations made in the review, which is to be completed next month.

The review follows an internal investigation into the running of the oil-for-food programme in Iraq, which found "irregularities" in procurement.

The UN said former senior procurement officer Alexander Yakovlev has been accused of criminal wrongdoing. According to the United States Attorney Southern District of New York, earlier this month Yakovlev pleaded guilty "to conspiracy, wire fraud and money laundering charges arising from his receipt of at least several hundred thousand dollars from foreign companies in connection with his duties as a procurement officer at the UN between 1993 and 2005".

The UN has also announced that as a "temporary and exceptional measure", Annan has ordered UN controller Warren Sach to assume "direct oversight" of the procurement function, which is led by assistant secretary-general Andrew Toh.

A spokesman said Toh was not under investigation and would retain all responsibilities.

"The review does not imply any improper management or wrongdoing," he said.

The spokesman told SM there were rigorous checks in place to prevent corruption and the review would determine what had gone wrong. Checks included evaluation criteria set before bidding begins, and the use of standard contracts.

He said financial bids were kept sealed and opened only after technical bids had been evaluated. The procurement service had been audited about 50 times in the past year, he added.

Purchasing fraud expert Eric Evans said it showed the difficulty in preventing corruption at any level.

Darren Ford, corporate social responsibility specialist at CIPS, agreed. He will head an upcoming project with Transparency International to create guidelines for purchasers to combat fraud.

SMaug2005

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