Press Briefing by United Nations Development Programme

Preview Language:   English
03-Mar-1997 00:23:12
James Gustave Speth, Administrator of the United Nations Development Programme (UNDP); Robin Kinloch, Programme Director of Office of Human Resources; James Currie, Director of the Division for Audit and Management Review; and Rafeeuddin Ahmed, Associate Administrator, brief correspondents on the Programme's investigation of overpayments for the agency's office premises and housing construction in some countries.

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In opening remarks, Mr. Speth said that the UNDP and other United Nations bodies have to be held to a high standard of accountability and openness in their relations with the public. The UNDP operated in over 150 countries and, every year, managed over $2 billion and engaged in hundreds of financial transactions involving thousands of people. Misconduct in the management of the organization's financial resources was quite rare. He stressed: "If they do occur, it is also our responsibility to discover them and take corrective actions, to act decisively, to learn from the experience and to make the matter public." Mr. Speth said that, following investigations he had began after gathering evidence that accounting and financial improprieties might have occurred in the construction of UNDP premises in developing countries, the first major report was presented to him this week by its Division for Audit and Management Review. The Division had concluded that during an eight-year period, the UNDP had overpaid as much as $6 million from its reserve for field accommodations, a special account set up for the construction of UNDP housing and United Nations housing in selected countries. As a result, it had ended up with some properties that were now worth less than it had paid for them.

While the UNDP had originally thought that the overpayments were the result of cost escalations associated with the difficult task of carrying out such projects in countries that lacked the infrastructure to aid the work, he said that closer scrutiny revealed that overspending had also resulted from irregularities in contracting with outside parties, repeated failures in the organization's financial controls and management oversight. Unauthorized expenditures had been incurred in violation of UNDP's financial rules and regulations, and as a result of the inquiry so far, the conduct or performance of 16 present and former staff members of the UNDP was at issue.

He told correspondents that: subject to due process, swift and appropriate corrective actions would be taken; sanctions would be applied to staff members wherever required, ranging from dismissal to reprimand, as well as recovery of funds; and two members of staff had already been suspended.

The Office of Internal Oversight Services was cooperating in the "external phase" of the investigation, he pointed out, a phase now gathering evidence regarding contractual services provided to the UNDP, including apparent billing irregularities. It would examine the possibility of liabilities outside of the UNDP, and while he had kept the Executive Board abreast of developments, Mr. Speth said he would be presenting a summary of the findings to the Board when it met to begin its second regular session of 1997 on Monday, 10 March.

Mr. Speth said that in the interest of due process and of the success of the external investigation, details of the review and the identities of those involved could not be made available yet, but the organization was taking steps to prevent similar actions from happening again, one of them being the changing of the management structures and staffing of the unit that handles the reserve for field accommodations. Administrative structures and functions were also being reorganized and streamlined, including the establishment of a financial and policy control unit to strengthen overall management and accountability. "I have put in place stricter monitoring and control procedures over the assets of the reserves; I have made it clear that no deviation from these procedures will be tolerated; the UNDP will not construct or purchase any further housing premises", he stressed.

He further told correspondents that the investigation had spanned three continents, expressing confidence that all those involved in wrongdoing on the matter would be identified and held accountable, adding that everyone in the UNDP was "deeply disturbed" by the findings.

Mr. Speth emphasized: "I speak for everyone in UNDP when I say that we are very upset by these findings, and we are committed to correcting the mistakes that have been made, to recovering as much as we can from the funds that have been lost, and to ensuring that something like this never happens again."

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