NEW YORK, January 6 (C-FAM) - A confidential audit of UNICEF and UNFPA found “gross” failures in transparency and surprisingly billions of dollars of unspent cash. Both agencies refused to disclose information on staff costs and travel. The auditor found that donors have “little knowledge regarding the ultimate destiny” of funds.

Fox News editor George Russell studied the yet-to-be-disclosed two-volume draft report written by the consulting firm IDC at the request of the government of Norway.  UNFPA and UNICEF refused to answer Fox News’ questions, other than claiming the cash reserves were earmarked for future work on programs.

The audit of five UN agencies sought to discover “where does the money go.” The report found UNFPA and UNICEF had $3.2 billion in cash in 2009. UNICEF, which is free to spend money where it wants despite the project that earned it, gained $109 million in interest income in 2008. The United Nations Development Program had $5 billion in cash reserves, invested large amounts on bonds, and increased personnel costs 80% in the last decade. These together with the World Food Program (which alone was judged transparent and its performance “impressive”) had $12.2 billion in unspent cash. The United Nations High Commission on Refugees did not have a cash stockpile but refused to disclose spending, particularly on staff costs.

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The report found UNFPA was unable, or unwilling, to account for $200 million a year funneled to governments and non-governmental groups. It refused to disclose details of wages, salaries, travel, consultant costs, and other items. The report declared, “UNFPA fails grossly” in its official commitment to transparency.

Details on UNICEF’s overhead were lacking, and scraps of information on expenditures make “it difficult to track use of funds from headquarters down to the ultimate beneficiaries on the ground.” It, too, could not account for expenditures within countries, which is the majority of its spending, earning a designation of “gross failure.”

Several UN agencies are increasingly focusing on giving policy advice and advocacy, and relying on others to deliver goods and services. They form vague strategic plans at headquarters that defy tracking outcomes or progress within countries. The UN refugee agency delegates most of its program activities to “implementing partners” that do the work on the ground.

The study warned that the hoard of money “implies that substantial donor funding is not being used for development purposes.” Donors may be reluctant to fund the UN until the “reserves are utilized.”

For years UN agencies have resisted divulging their finances. Government officials have suspected the lack of transparency hides lavish salaries and expensive travel. Diverting funds to non-governmental groups provides a coterie of accomplices who defend the UN agencies.

Shadowy accounting often signals systemic waste, fraud and abuse. In a moment of candor in 2007, a UNFPA executive boasted at a conference that, though the agency was barred from directly funding abortion, it disburses money to abortion providers.

An examination of UNFPA annual reports finds its budget ballooned from $249.9 million in 1999 to $870 million in 2010. Despite its vast resources and audit failure, in November it urged leaders to “galvanize greater political, financial support for family planning.”

Reprinted with permission from c-fam.org