Monday, May 14, 2012

WallStreetJournal: UNDP in Afghanistan involved in yet another scandal - will Jens Wandel clean up house (while Darshak Shah's wife runs for UNFCU top board position?)


U.N. Defends Afghan Police Fund as Donors Seek Probe

KABUL—International donors called on Sunday for an inquiry into potential mismanagement of the United Nations-administered trust fund that helps pay for Afghanistan's fledgling police force, even as the U.N. reiterated its support for the program and denied the accusations.
The Wall Street Journal reported late last week that the Monitoring and Evaluation Committee, an anticorruption group composed of high-level Afghan and international officials, expressed concerns about the Law and Order Trust Fund for Afghanistan, or Lotfa. Administered by the U.N. Development Program, Lotfa covers salaries, benefits and other operating costs for the Afghan National Police.
The issue is sensitive because Lotfa—established in 2002 as a result of international donor concerns that the Afghan government was at the time unable to properly disburse the money itself—is supposed to be an example of probity.
Most of the money in the fund comes from the U.S., European nations and Japan. "We will request a detailed investigation and accountability," a senior Western official said Sunday. "There is zero tolerance of mismanagement and corruption."
An American official in Kabul added that the U.S. has strongly supported the work of the committee that highlighted the problems at Lotfa. "We encourage the UNDP to be responsive to the concerns raised by the MEC that have been reported on," the U.S. official said.
In Brussels, a spokesman for the European Union's External Action Service, which is responsible for foreign aid, said the issues raised by the Journal article "are indeed a matter of serious concern." The EU would follow up with the UNDP "to ensure all necessary actions are taken to restore donor confidence in the management of Lotfa," he said.
In a detailed response to the Journal's article, the UNDP on Sunday denied allegations that the fund was vulnerable to fraud, and said specific incidents of possible corruption, raised by apparent whistleblowers in documents reviewed by the Journal, were incorrect.
The U.N. mission in Afghanistan added that a recently conducted financial audit of Lotfa by KPMG found no financial irregularities. "I am confident that comprehensive steps to ensure transparency and oversight are being taken by UNDP to further its efforts to contribute to a robust and professional police force in Afghanistan," said Michael Keating, the U.N. mission's deputy head.
In a finding issued to donors Friday, the Monitoring and Evaluation Committee said Lotfa "has been and will continue to be vulnerable to corruption," even though the fund is crucial to Afghanistan's security.
"The lack of proper oversight and accountability of Lotfa has been flagged by a number of institutions as insufficient for a trust fund of this size and importance," the finding says. "UNDP Country Office has received internal complaints and is conducting its own integrity checks and financial audits which need to be published and made public."
The committee also called for the fund's management to publish the results of a recent internal audit, which UNDP officials said showed no evidence of irregularity.
On Sunday, Ashraf Ghani, Afghanistan's presidential adviser who oversees the transition of security to Afghan control, told reporters in Kabul that the U.N. needs to overhaul its auditing system. "Its auditing system is of a different century," he said.
Among the internal complaints raised within Lotfa were suspicions that the program may have overpaid for office supplies and equipment, or paid worker salaries for positions that went unfilled, according to the whistleblower documents reviewed by the Journal.
Satinder Bindra, the UNDP's director of communications, said in a statement Sunday that the agency "has a zero-tolerance policy towards any form of mismanagement or corruption for its entire country program in Afghanistan," and added that it was "committed to diligently following up on" the committee's recommendations.
Responding to specific allegations of the misallocation of funds, the UNDP said it found no evidence of wrongdoing. A luxury furniture set flagged in one internal document as possibly not being documented or delivered was "procured with full procedural checks and are still being used by the head of the Afghan Border Police," the UNDP said.
An $800 paper shredder mentioned in a report as possibly being purchased for above market price "was in line with our procurement policy and was only approved after the project justified its need for a more robust product," the UNDP said.
The UNDP acknowledged in its response that it was aware of the risk of "no-show" workers at Afghanistan's interior ministry who may still be paid on contract by Lotfa.
"Precisely because we are fully aware of this risk, a system was established for all the staff in the Ministry of Interior in key departments to work under contract," the statement said. "Payments to staff are only processed after the examination of monthly attendance sheets submitted to supervisors, who sign off on the entire process."
The Afghan interior ministry didn't immediately respond to a request for comment.

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