UN Audits Criticize Oil-for-Food Program as Failing to Adequately Supervise and Audit Major Contractors

Strategic Insights -

Internal United Nations audits have criticized the oil-for-food program in Iraq for failing to adequately supervise and audit the companies hired to inspect the oil moving out and goods going in. The audits, prepared by the UN Office of Internal Oversight Services, cover several years of the program and have now been collected by Paul Volcker, who heads a UN-appointed commission investigating charges that billions of dollars were diverted from the program. The audits, totaling about 400 pages, criticize the administration of the aid program and highlight problems with all three of the program's main contractors hired to inspect transactions under the oil-for-food program.

Key Takeaways:

  • The UN Office of Internal Oversight Services auditors have prepared 58 reports, criticizing the administration of the oil-for-food program and highlighting problems with all three of the program's main contractors.
  • The audits identify accounting and operational lapses within the Office for Iraq Program, including the loss of money and equipment in the field and the understaffing of critical inspection posts.
  • The UN officials repeatedly warned Benon Sevan's office, led by Secretary General Kofi Annan's top aide, about its poor supervision of its own personnel and its major contractors.
  • The audits do not contain allegations of bribery or corruption, but rather identify problems with the program's administration and supervision.
  • Congressional investigators who have examined the audits say they reinforce questions about poor stewardship by the United Nations played a major role in widespread corruption in the administration of sanctions against Iraq.
  • The audits show that Annan had not seen the audit reports yet, but the UN has denied allegations that the audits show the United Nations did not adequately monitor the program.

Statistics:

  • 58 reports, totaling about 400 pages, were prepared by the UN Office of Internal Oversight Services.
  • 10 reports, obtained early by The New York Times, criticize the administration of the aid program.
  • The oil-for-food program was created in 1996 to ease the effect of sanctions on the Iraqi people.
  • The program's main contractors were hired to inspect transactions under the oil-for-food program.

Sources:

  • The New York Times
  • United Nations Office of Internal Oversight Services
  • Paul Volcker's UN-appointed commission investigating charges that billions of dollars were diverted from the program