Fraud on huge scale alleged at United Nations

2 February 2006
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02 February 2006 | Anusha Bradley

The UN is investigating claims of widespread procurement fraud which it expects will run into "tens of millions of dollars," said Christopher Burnham, under-secretary general for management (pictured left).

The massive operation, looking into 200 allegations of fraudulent purchasing, has seen staff suspended and others recalled from their posts.

The surge of new allegations - which has doubled in the past six months - was prompted after a system was introduced to protect "whistle-blowers".

At a press conference at the UN's headquarters in New York last Tuesday, he said the abuse could potentially "go into tens of millions of dollars".

"If the men and women of the United Nations continue to show the courage they have had in the past six months over the next few months, I expect that figure to go up," he said.

Burnham believes the "vast majority" of the UN's 33 professional purchasers and 39 general service staff involved in procurement were "hardworking, honest and sincere," adding that "a number have come forward with reports of fraud and abuse".

Meanwhile, an internal investigation by the UN's Office of International Oversight Service (OIOS), also published last week, found "substantial evidence of abuse in procurement for peacekeeping operations".

The findings will not be made public but will be available to member states upon request. The review is reported to have discovered "systematic failures".

According to Burnham, the OIOS report found "the design and maintenance of controls needed to ensure that UN procurement complied with financial rules and regulations were insufficient" and "important controls were lacking while existing ones were often bypassed".

The report follows a review of procurement processes by Deloitte, carried out in December last year after corruption surfaced during an internal investigation into the oil-for-food programme.

Deloitte concluded the UN's "outdated" procurement system left it open to fraud.

It recommended the UN update its processes and guidelines, improve staff development, including an ethics programme, and put a staff rotation policy in place. Kofi Annan, secretary-general, committed the organisation to implementing the recommendations ahead of the report's publication.

On 23 January, the UN announced it was keeping Deloitte on for a further six months so it could "carry out a comprehensive audit of procurement as a follow-up".

On the same day, the UN suspended eight procurement officials as part of its investigation. An additional four peacekeeping staff were recalled to help with the inquiry but have since returned to their posts.

The OIOS has established a procurement fraud task force to conduct the 200 investigations and probe the UN's wider peacekeeping operations.

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