UN Agrees Audit on Tsunami Relief Fund to Ease Iraq Corruption Allegations

The United Nations (UN) has announced an agreement with the renowned audit firm PricewaterhouseCoopers to monitor disbursement of its US$1 billion tsunami relief fund. According to the UN, it is a "broader effort to boost transparency and accountability and guard against mismanagement and corruption".

The reputation of the UN has been impoverished by the allegations of corruption in its "oil for food" programme in Iraq. In post-war Iraq, via resolution 1483, the UN established the Coalition Provisional Authority (CPA), whereby all Iraqi oil and other seized funds must be used to meet the humanitarian needs of the Iraqi people and to finance the rebuilding of its shattered infrastructure.

In a press release from the British charity Christian Aid dated on 2nd February, multi-billion-dollars have fallen into financial black holes in the "oil for food" programme over the past decades without any clarification. Christian Aid suspected that the funds were being creamed off for the benefit of US companies.

As rumours surfaced of mismanagement and corruption in the disbursement of the "oil for food" relief to Iraqis, it is clear that the problem has come about due to a lack of accountability and transparency in the functioning of the UN. Since then, UN Secretary General Kofi Annan has repeatedly pledged a policy of transparency.

The devastating tsunami which claimed 200,000 lives in South East Asia, has resulted in the UN pledging a $977 million appeal. UN Emergency Relief Coordinator Jan Egeland said in a news conference in New York, 90 percent of the appeal was covered by more than $500 million already paid up, and the rest firmly committed.

"I have heard no such problem raised so far but I expect there to be," he added referring to the audit of its tsunami relief efforts.

"I'm sure there will be cases of possible mismanagement, mishandling, but I'm sure also there will be many allegations that may not be correct and that's why it's so good to have this kind of investigative tool, because we can quicker, I think, confirm whether there is something wrong or we can confirm that it's actually nothing wrong," he said.

Egeland said that this was a "very important agreement" and "will mean unprecedented transparency and investigations capacity."

Although the UN has other agreements with the private sector, this is the first of its kind in the field of transparency and accountability and "we do not see it as the last, there may be many more to come," Egeland noted.

PricewaterhouseCoopers will perform 8,000 hours of pro-bono work according to the agreement with the UN. Frank Brown, global leader of advisory services at PricewaterhouseCoopers, said the firm would focus on two main areas: enhancing the financial tracking system and using forensic techniques to identify and probe potential instances of improper payments.