Staff responsible for billions of dollars in contracts are not scrutinised by a United Nations programme that monitors conflicts of interest, a recent audit from the UN’s Office of Internal Oversight (OIOS) found.
The loophole is one of many findings included in the audit of the Financial Disclosure Programme, an ethics scheme that requires some staff – but not all – to declare their financial interests to avoid possible conflicts.
The audit found that some staff, across a range of agencies and departments that manage more than $10 billion in contracts and grants, are not mandated to take part in the financial disclosure programme – even if they are directly involved with contracts and are categorised as “high risk” of conflicts of interest.
This loophole includes a majority of staff who approve grants or manage large trust funds with the UN’s humanitarian aid coordination arm, OCHA, and its human rights office, OHCHR, the audit said. In addition, technical experts and contract managers in two other bodies – the Office of Supply Chain Management and the Office of Information and Communications Technology – were not required to participate in the disclosure programme, even though their departments handled some $7.39 billion in active contracts in 2022.
The audit highlighted other gaps:
- Staff who deal with donors, NGOs, and governments could face “political and external influence”, but aren’t necessarily required to to participate in the disclosure programme.
- The disclosure programme’s questionnaire doesn’t cover “staff members taking instructions from external parties or receiving offers of employment”, leading to situations where a UN staffer accepted a senior role at an NGO partner within a month of retirement, for example.
- “Professional” staff pose a higher risk of conflict of interest, but “general services” staff are more consistently scrutinised. Under the UN’s staff category system, professional staff are usually internationally recruited, while general services staff typically perform support roles and are local hires.
The report provides a rare look into the UN’s conflict of interest policy – and its vulnerabilities. One former UN official told The New Humanitarian the findings were alarming and indicative of a larger problem: The process relies on what employees decide to disclose.
“I've never seen it or was in any way aware of any effort by the UN to verify the information that was contained in financial disclosures,” said Tony Banbury, a long-serving former UN official and assistant secretary-general for field support until 2016. “It was an honour system. So I think it would be very easy [to avoid disclosing conflicts of interest].”
But the process itself isn’t built to weed out those who intentionally fail to disclose potential conflicts, critics say.
But a UN spokesperson said the audit shows the disclosure scheme works, even if there are areas to improve. “The programme effectively contributed to proactively detecting and managing conflicts of interests of designated staff participants,” Stéphane Dujarric, spokesperson for the UN secretary-general, said in an emailed statement.
The OIOS audit recommendations include urging the UN Ethics Office to include more staff in the financial disclosure programme, to concentrate on staff in positions with high risk of conflicts of interest, and to improve guidance and training for staff and organisation heads.
More than 350 conflicts of interest
The OIOS audit was aimed at assessing how the financial disclosure programme is managed, and its ability to mitigate conflict-of-interest risks.
Between 2020 and 2022, external reviewers found 351 conflicts of interest, according to the audit report.
Four of the 351 cases were subject to “accountability measures”. Action – which could include reprimands, cautions or warnings, or fines – was taken in two of these cases, the audit said. In the two remaining cases, staff “separated” before the end of the disciplinary process.
Overall, OIOS found that the programme “effectively contributed” to “detecting and managing conflicts of interests” of designated staff.
“However,” the auditors wrote, “some staff with a high risk of conflict of interest were not participating in the programme.” The programme’s “effectiveness and efficiency could be enhanced”, they concluded.
The OIOS auditors did not weigh in on the degree of seriousness of the cases. Generally, conflicts of interest can span a range of situations, and do not necessarily indicate corruption or wrongdoing.
The most common types of conflicts of interest within the UN, the audit said, are outside employment or activities, followed by family relationships within the UN. Examples of “outside activities” include holding board of directors or management positions, or interests in companies that deal with the UN.
But not enough staff at a high risk of conflict of interest are included in the financial disclosure programme, the auditors found.
Using UN Ethics Office guidelines, heads of departments are responsible for indicating which staff should file disclosure statements. But the audit found that the Ethics Office “had not adequately socialised” the guidelines to heads of office, or the criteria for conducting risk assessments, “resulting in uneven practices in identifying staff to participate” .
“Some heads of entities did not fully understand their role in assessing risks for potential conflict of interest,” David Nyskohus, chief of the Office of the Under-Secretary-General for Internal Oversight Services, wrote in an email response to questions.
This has led to situations where staff responsible for billions of dollars in grants or spending aren’t included in the programme, even if they are directly involved with contracts and could be at a “high risk of conflict of interest”.
This includes staff who serve on grants committees, who oversee relations with donors or implementation partners, or who manage large trust funds. For example, some 87% of staff who perform these roles for OCHA did not file a financial disclosure, the audit reported.
The OIOS audit recommends that the Ethics Office improve guidance and better target its training: Some cases could be resolved by a better understanding of what potential conflicts of interest are.
The audit also recommends expanding the disclosure programme to staff not currently covered. But doing so would require more money, and approval from the UN General Assembly as part of its 2025 budget, at a time when the UN Secretariat, which oversees the Ethics Office, is facing a liquidity crisis affecting the hiring of consultants, staff, and experts.
The financial disclosure programme currently costs an estimated $1.4 million each year.
Dujarric said the UN has accepted the audit’s recommendation to expand the programme, “subject to the General Assembly’s decisions and additional funding allocation”. Senior leaders at the UN receive briefings about their responsibilities, and the guidelines covering which staff must participate in the programme “have recently been updated and will continue to be updated from time to time”, he added.
A member of the UN committee responsible for the budget told The New Humanitarian that the additional funding request has not yet been received, as of early June.
But the process itself isn’t built to weed out those who intentionally fail to disclose potential conflicts, critics say.
“The extent to which there was the double dip thing, and contracts steering and some of the other major issues, was enormous when I was in the UN and it was an open secret,’’ James Wasserstrom, a former anti-corruption officer at the UN mission in Kosovo until 2008, told The New Humanitarian in an interview.
In 2008, Wasserstrom flagged a kickback scheme at the Kosovo mission and was punished for his efforts. He now leads a whistleblower organisation, the Integrity Fellowship and Sanctuary, which he founded in 2021.
Other types of conflict of interest can easily slip under the radar: Banbury said it is common for employees to “take instructions” from their own governments. The financial disclosure programme questionnaire does not ask questions about taking instructions from external parties, the audit said.
“All staff are required to undertake ethics training and any staff meeting this mandatory training requirement should be aware of the programme,” Nyskohus said in response to questions about staff not disclosing potential conflicts of interest. “The [financial disclosure programme] is an honour-based system that relies on a strong culture of ethics, transparency, and accountability to ensure full compliance.”
Edited by Irwin Loy.
