Wed, Jan 12, 2005 - Page 5 News List

Accounting firm to monitor aid money

TSUNAMI RELIEF Price-Waterhouse-Coopers has offered its services pro bono to the UN track use of donations and investigate any allegations of fraud or abuse


In an unusual move, the UN said it will use an outside firm of accountants to help track the billions of dollars pledged to help the victims of the tsunami in the Indian Ocean.

PriceWaterhouseCoopers has offered its services on a pro bono, or no fee, basis to the UN to help create a financial tracking system, Kevin Kennedy, a senior official in the UN Office for the Coordination of Humanitarian Affairs, said on Monday.

He told reporters the accounting firm would be able to investigate credible allegations of fraud, waste or abuse.

"In my experience of disasters it is the first time I can recall in the past 10 years that we have used an outside accounting firm, at least at this juncture," Kennedy said.

He denied that the move was in response to allegations of corruption and mismanagement in the UN oil-for-food program for Iraq. More than 50 internal UN audits of the humanitarian program published by an independent commission on Sunday revealed widespread mis-management and showed how UN agencies squandered millions of dollars through suspect overpayment to contractors, poor management of purchasing and assets, and fraud by its employees.

Kennedy said that he did not think humanitarian donors were being discouraged by the oil-for-food scandal from making contributions to those in need.

"Last year in 2004 we received over US$2 billion from donor states in response to consolidated appeals. If there were real concerns ... I don't think we would have received over US$2 billion," he said.

Explaining why the new financial tracking system was being instituted, Kennedy said, "We are reasonably confident with the procedures we have in place. However, this will certainly enhance our capability to track money and make sure it is spent wisely."

He said there is widespread interest in ensuring that money given to the UN and its humanitarian partners "is used efficiently and effectively and if this adds to the credibility and the transparency of the effort then so much the better."

Some US$4 billion has already been pledged by governments, the World Bank and the Asian Development Bank for victims of the Dec. 26 earthquake and tidal wave that swept across the Indian Ocean. That figure includes not only cash for the humanitarian relief effort but also long-term development aid, reconstruction aid, and loans.

Kennedy said the death toll in the tsunami exceeded 150,000.

"It could go as high as 200,000 but this will be seen in the coming days," he said.

A first round of discussions on how the new financial tracking system will work was held over the weekend. Further talks would be held this week in Geneva with the World Food Program and UNICEF, Kennedy said.

The UN already has a financial tracking system but Kennedy said the aim was to improve the way countries recorded their pledges.

"We have an advanced tracking system but it is very much of a voluntary system, so money may be pledged by a government in some form or fashion but unless it is officially recorded it doesn't reflect in the system," he said.

He said the new system would first focus on money pledged under the UN consolidated appeal because funds offered there were tied to specific projects and so were easier to track. Other pledges were harder to follow because each country counts its contribution in a different way and some of the aid was long-term or bilateral, he said, adding that Price-WaterhouseCoopers would look into such contributions.

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