UNDP audit of DPRK

by Nicole Kurokawa - September 19, 2008 -

As referenced earlier, the UN’s internal audit of the UN Development Program’s operations in North Korea revealed some serious cracks in the system.

Now it’s one thing to run an audit on the program after the fact and find fault. But what happens when red flags are raised during the program? That’s what actually happened in North Korea (Democratic People’s Republic of Korea), where a program official complained repeatedly about problems. Chapter 6 of a Confidential Report of the program released May 1, 2008 details how Artjon Shkurtaj raised concerns about multiple aspects of the program; these allegations were largely ignored at the time, and his character later slandered. From the report:

The Panel concludes that UNDP’s response to Shkurtaj’s complaints was
reasonable. Indeed, it is clear from the evidence that at the Country Office and
Headquarters levels, UNDP engaged in numerous discussions on the subject and
considered solutions to the problem. This is not to say that Headquarters
pursued all available avenues to address the matter. But the evidence reveals
that far from ignoring Shkurtaj, UNDP officials agreed with him and took steps
to remedy and reduce the use of hard currency payments. (p. 274)

The report goes on:

Shkurtaj raised other concerns about UNDP’s operations in the DPRK. At various
points, Shkurtaj flagged concerns about issues such as the international staff’s
lack of access to the DPRK’s Foreign Trade Bank, insufficient project
monitoring, and the degree to which the DPRK government monitored and controlled UNDP’s operations. Shkurtaj did not, however, pursue these matters as
consistently or with the same persistence as he did with respect to the issue of
hard currency payments. (p. 274)

So the guy complains about one aspect of the program that UNDP officials “discussed” and “considered solutions” for, and the problem is sort of addressed. Then he raises other, much larger, structural concerns about the program, and suddenly it’s his fault he didn’t pursue the matter as stridently?

The section mainly focuses on the question of whether or not the employee was retaliated against for whistleblowing (no, in case you were wondering), but does not dispute that significant problems existed, that he complained, and that not much was done about those problems.

Incidentally, Shkurtaj’s allegations largely panned out. The Board of Auditors report in 2007 concluded:

• “In respect of local staff hiring, personnel were hired by UNDP, UNFPA and
UNICEF through a government agency of DPRK, contrary to relevant instructions
and procedures.” Among the conclusions with respect to local staff hiring, the
Board noted that UNDP paid local staff salaries to the government of DPRK, as
opposed to the local staff members directly. Such payments were made in
convertible Won and Euros.
• “In respect of foreign currency transactions,
local payments made in foreign currencies were without requisite authority in
the case of UNDP, UNFPA and UNOPS.” The Board explained concerns that UNDP “made
some payments to local suppliers and local staff (including allowances) in
foreign currency contrary to the [SBAA].” The Board noted that applicable rules
and regulations “were not sufficiently comprehensive in dealing with DPRK
country office payments in local and foreign currencies.”
• “In respect of
free access to local projects, the Board obtained evidence that project visits
had taken place, but were done under the supervision of the DPRK authorities.”
(p. 310)

Let’s not forget, if he didn’t leak information to the press, none of this information would have ever come to light in the first place — and we’d be none the wiser.

To recap: If a program is poorly managed, there are no consequences. If somebody complains about the program while it’s occurring, no action is taken. If an audit reveals the program is flawed, nobody will find out about it. Sounds like an efficient system to me.