Wednesday, December 13, 2006

NEW YORK — A U.N. office charged with promoting accountability has for years been steering millions of dollars in contributions from the Italian government toward projects that enrich Italian nationals but offer little of real value, according to former and current staff members.

The contributions have been used to hire unneeded consultants and establish international programs, often in Italy, say the staffers employed in the U.N. Department of Economic and Social Affairs (DESA).

The U.S. Mission to the United Nations has asked the U.N. watchdog agency to investigate the awarding of contracts by DESA and reports of retaliation against staff members. It is also seeking to have documents seized before they can be destroyed, according to internal U.S. communications.

Some sensitive financial data disappeared from the DESA Web site last week after a reporter began making inquiries.

Several staff members say they worry that well-connected DESA officials will seek senior positions in the administration of incoming Secretary-General Ban Ki-moon, who takes office Jan. 1. Most spoke on the condition of anonymity, saying internal U.N. controls are not sufficient to root out ingrained corruption or protect whistle-blowers at the department.

Two years after a U.N. report found extensive abuse in the Iraq oil-for-food program, disbursements to DESA still are only lightly reviewed by U.N. financial oversight offices.

DESA is a sprawling U.N. department with nearly 570 employees and a 2006-07 budget of $268.2 million, 40 percent of which comes from voluntary contributions. Its divisions are charged with providing economic data and other statistics to the General Assembly, as well as advancing the role of women, creating sustainable development policy and coordinating good governance.

One of its largest divisions is the Department for Public Administration and Development Management (DPADM), which promotes transparency and accountability in public administration.

DPADM, which is based in a glass-walled New York skyscraper but has an office in Rome and smaller outposts elsewhere, advises governments on improving management, providing social services and rooting out corruption.

The Italian government is by far the largest single donor to DESA and DPADM activities, contributing some $80.2 million since 2004 to various trust funds. These are overseen by DPADM Director Guido Bertucci and the chief of the personnel services unit, Furio de Tomassi, according to DESA officials. They report to Patrizio Civili, assistant secretary-general for DESA.

All three are Italian nationals. That, say current and former U.N. officials with knowledge of the program, makes it possible for the Italian government’s development office to channel its U.N. contributions to Italian nationals and pet causes, such as those focusing on the Mediterranean region.

The Italian Mission to the United Nations indirectly signs off on all disbursements from their contributions, according to U.N. officials, but Italian authorities have never requested a U.N. audit of the funds.

The Italian ambassador to the United Nations, Marcello Spatafora, declined through his spokesman to be interviewed for this article.

Checks and balances

Unlike any comparable division in the U.N. Secretariat, DESA has its own in-house human-resources department, enabling it to consolidate the hiring of consultants and independently funded “associate experts” under its own umbrella, away from the more accountable U.N. Office of Human Resources Management.

Current and former U.N. officials also say that contrary to standard procedure, the hiring, project-review and payment-authorization functions have been merged, concentrating power in the hands of Mr. Bertucci and a handful of people who work closely with him.

“It’s a simple system of checks and balances to make sure that whoever is hired does the work and then is paid,” said a current U.N. official who did not want to be named for fear of retaliation. Some DPADM staff members said they have been questioned by their supervisors about leaks from the department.

One area of concern is DESA’s $39 million Associate Expert Program, in which young and relatively inexperienced technocrats are brought to headquarters or member capitals for one- to two-year assignments working on governance issues such as civil-service professionalism, ethics and reform, and management.

Italians are recruited through DESA offices in Rome as well as in New York, while candidates from other nationalities must send their resumes to the New York headquarters.

Marie Oveissi, officer in charge of DESA’s Technical and Cooperation Management Services, said in a memo that 28 of this year’s 159 associate experts are Italian, more than any other nationality. An additional 111 Italian associate experts are deployed to independent U.N. agencies, as are experts of other nationalities.

In addition, Italy — which finances one-third to one-half of the total program each year — also subsidized the hiring this year of one associate from the developing world.

Some observers say the associate-experts program is, effectively, a talent pool for future DESA consultants and contractors.

In an interview last week, two senior DESA officials said there was nothing amiss within their organization and rejected any suggestion that Italian government funds have been misused.

However, when reporters began making inquiries about the administration of the DPADM unit, the public Web site was briefly shut down and information relating to the funds and programs was removed.

Nicolai Zaitsev, chief of office for DESA Undersecretary-General Jose Antonio Ocampo, said last week that he had been assured by the system administrator that nothing significant had been changed or removed from the Web site.

But substantive materials relating to the use of Italian contributions have been taken down. Documents that are no longer available include memorandums of an understanding between DESA and the Italian government on the use of its funds for:

• An electronic governance center.

• The establishment of DESA’s Rome office.

• The funding of associate experts.

• The establishment of several international programs to be based in Italy.

Other documents no longer available include four annual reports of DESA’s Committee of Experts in Public Administration and the Web site of a Greek-financed governance center that is subject to an ongoing U.N. investigation.

Mrs. Oveissi, whose department oversees much of DPADM’s work, defended the department and its management, saying that donor governments are routinely informed how their money will be used and have the opportunity to object or direct their contributions.

“I would say every donor is fully aware of the intent of the organization and how the money will be used,” she said. “It is defined in specific project documents, which have been agreed to by both parties and expenditures of those projects are reported back. … They may say, ‘We want to fund this, not that.’ ”

Mrs. Oveissi also stressed that all of the department’s trust funds are regularly monitored by internal and external auditors in accordance with U.N. regulations. She said she was aware of only one investigation, requested earlier this year by the Greek government.

Unneeded consultants

Greek officials gave the unit $5 million to establish the Thessaloniki Center for Public Service Professionalism in 1999 but said its work was undermined by a duplicative center that was established in Naples three years later. The project was to have been shut down and remaining funds and fees returned to Athens, but that has not yet happened.

Originally expected this week, the report on the center will not be concluded until mid-January, according to U.N. auditors, because DESA officials have not yet responded to their findings.

Some U.N. officials and DESA staffers say the Greek contretemps is emblematic of the secretive nature of DPADM, in which budgets and decision-making are held in near secrecy and the staff is often left with little idea of what is expected of them.

A former DESA official, who left the organization after more than a decade citing frustration with DPADM management, said one of the biggest problems was the hiring of consultants to do projects that were more suitably accomplished in-house.

“Not only was it a waste of $25,000 or $100,000, but it demoralized the staff,” the official said in an interview last week. “We would organize something, and then Mr. Bertucci would tell us not to bother. He would assign it to a consultant.”

The official, who asked not to be identified, described an atmosphere of uncertainty in which consultants would take up office space and then disappear, with no one knowing who they were, what projects they were working on or how they were funded.

“When organizing projects, we seldom knew what funds we could predictably spend; [Mr. Bertucci] held finances for all the branches in DPADM in some central fund, and there was no transparency or accountability in the planning and utilizing of funds,” the former official said.

Mrs. Oveissi, an American who has worked in DESA for more than a decade, was unable to say how many consultants had been hired in recent years, nor could she break down the number of Italian staff members and contract holders compared with other nationalities.

However, she rejected the suggestion that hiring favored any nationality.

Biennial review

All trust funds established within the U.N. Secretariat are audited every year, according to an official in the office of Program Planning, Budget and Accounts. However, he said, the funds are looked at as a whole and rarely dissected individually.

There is also a biennial review by the U.N. External Board of Auditors. In July 2004, the board found plenty to criticize in DESA’s handling of 73 active trust funds: A review of 25 percent of the funds found “eight had no work plans, 11 were without review plans, 16 did not specify performance indicators, five did not have monitoring and evaluation reports and three did not have financial and inventory reports.

“The board is concerned that the department may not be able to monitor effectively the implementation of the projects owing to the absence of project documents,” it said.

Mrs. Oveissi said the poor review was the result of a slow adoption of results-based budgeting, a new and improved form of evaluation that the department had not adopted at that point.

The chief U.N. watchdog agency, the Office of Internal Oversight Services (OIOS), has not conducted a comprehensive investigation of DESA or its trust funds, according to a manager within OIOS.

“Once in a while, not every year, we audit one or two of their projects, or their divisions at headquarters,” he said, speaking on the condition that he not be identified.

“There are so many trust funds even just under economic and social [affairs]. Sometimes we audit them on issues that are common to all trust funds, sometimes we audit individually.”

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