Clear lessons on the need to improve accounting procedures at the United Nations have been spelt out by the interim report into alleged fraud and corruption at the now defunct UN Iraq Oil-for-Food Programme.
They were made by an independent inquiry committee led by former US Federal Reserve Board chairman Paul Volcker in a report accusing the programme’s chief Benon Savan of ‘ethically improper’ conduct.
The report focused on his work in Iraq for a trading company, African Middle East Petroleum Co Ltd Inc, (AMEP), while he was executive director of the UN programme. The report found he helped arrange for AMEP to handle 7.3 million barrels of Iraqi oil, sold at a $1.5m (£0.8m) profit.
There was also concern over $160,000 in cash that Savan received between 1999 and 2003, which he claimed was received from an aunt in Cyprus. She, said the panel, was ‘a retired government photographer, living on a modest pension’, who ‘had never shown signs of having access to large amounts of cash’.
As a result of this and other disclosures, the report calls for increased ‘transparency of the administration of (UN) funds and programmes’, even though the Oil-for-Food scheme was ‘unique for the UN in many respects, namely its sheer size, scope and political and geographic complexities’.
There was a general need, said the panel, for greater clarity in procedures ‘especially in relation to the need to review, based on detailed financial reports, budgetary, disbursement, and cost allocation processes and decisions’.
It called for more detailed and descriptive financial statements and reports, and said the UN should consider publishing them.
The panel emphasised ‘the importance of establishing and maintaining high standards of documentation, controls, oversight and reporting for large humanitarian aid programmes … particularly those involving extra-budgetary finding sources’.
Further reports will also be issued, dealing notably with the question of whether Savan committed any crimes for which he should face prosecution.
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