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Little clarity on how aid gets spent
Shawn Donnan

          WHEN Jan Egeland, the United Nations top disaster official, announced in March that PwC, the professional services firm, would help monitor the expenditure of funds collected under the UN's $1.1bn tsunami "flash appeal" he offered a simple gauge for what would result. The new system, he said, would mean that "my aunt can go in and can see how her money for Unicef (the UN children's fund) is being spent".
Mr Egeland had good reasons for pledging transparency. UN officials cite Paul Volcker's investigation into corruption, in the UN's oil-for-food programme, well under way when last December's tsunami struck, as part of the impetus. So too was the sheer size of the outpouring from companies, governments, and individuals worldwide in response to the tsunami and the responsibilities that came with that.
Yet a year after the disaster Mr Egeland's aunt would have a difficult time learning very much. Not unless, as a senior UN official puts it, Mr Egeland has a "very smart aunt". Or, "she is very patient", adds a senior official with a large aid agency. Mr Egeland contends only that nine months later his aunt "would be happy with a work in progress".
A year after the tsunami, pledges of transparency and accountability for the UN's appeal appear a long way from being realised. This is primarily blamed on duelling UN bureaucracies and accounting methods plus what in many cases appears to be institutional paranoia.
"The good news is that it's the best [financial] tracking ever. The bad news is that it's not good enough," Mr Egeland conceded in an interview recently.
According to the UN's publicly available figures, as of December 22 more than $635m (Euro530m, 360m) of the $1.1bn pledged had been spent on areas such as "food" ($152.6m), "co-ordination and support services" ($106.5m), "health" ($94.7m), and "shelter and non-food items" ($84.6m). What is harder to determine is how that money has actually been spent, according to a two-month investigation by the Financial Times.
Mr Egeland argues that procedures are changing. "In a few years from now there will be a whole different degree of openness," he says. For the time being, however, there is no publicly accessible information detailing how much of the flash appeal -- only a small portion of the more than $13bn raised for tsunami relief worldwide according to UN estimates -- has gone to $10,000-a-month consultants or administrative overheads as opposed to the delivery of relief supplies, for example. The only way to get financial details of what in some cases are $100m projects with titles such as "emergency support for basic education" is to approach each of the 39 agencies listed in the appeal, UN officials say.
The FT approached many of those agencies, Some declined, or ignored, requests for information. Others offered incomplete or, as with the UN Environment Programme, "preliminary, unconfirmed and unofficial" expenditure data.
Information often took weeks to obtain. Mr Egeland's own agency, the UN Office for the Co-ordination of Humanitarian Affairs, OCHA, had still to provide numbers at the time of going to press.
An initial request for information from Unicef was sent on October 20. But it was not until the third week of this month that the agency provided details of the $169.5m it had spent as of November 1, almost 20 per cent of which went on staff and administrative or related costs.
The UN Development Programme said it had spent $82.5m, of the $120.2m received under the flash appeal as of December 8. Five per cent of the $120.2m was allocated to administrative overheads while staff salaries amounted to $1.4m.
William Orme, the UNDP's lead spokesman in New York, said that absent from those costings, however, were the salaries of the highly paid consultants who do much of the UNDP's field work.
The World Food Programme had spent more than $215m of the flash appeal distributing food to tsunami victims by the end of October, 18 per cent of which went to staff salaries, administrative overheads, and vehicles and equipment. The UNHCR, the UN's refugee agency, disclosed that $2.5m of the $11.2m -- or 22 per cent -- of what it had spent in Indonesia by the end of October went on staff and administrative costs. The World health Organisation said that by early December 32 per cent of the $49m it has spent had gone on personnel costs, administrative overheads, or associated "miscellaneous" costs.
It is difficult to say how those costs compare with private sector aid agencies. According to Alex Jacobs, director of Mango, a UK-based non-profit organisation that offers accounting advice to aid agencies, no international standards exist for either what constitute reasonable overhead costs or their disclosure. And what is disclosed by aid agencies is often "meaningless", he said.
Oxfam declined to provide details of its tsunami expenditure, although in a report this month it said that it had spent 10 per cent of donations on administration costs.
It appears the disaster-relief world has a long way to go before it catches up with the private sector. Even if, as Eric Schwartz, UN tsunami envoy Bill Clinton's deputy at the UN, says: "We should be as accountable -- if not more accountable -- as the private sector."
FT Syndication Service


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