Corruption

Third of tsunami funds go on overheads

A year after the Indian Ocean tsunami, up to a third of the $590 million so far spent under the United Nations’ $1.1 billion disaster flash appeal appears to have gone on administration, staff and related costs.

A two-month investigation by the Financial Times has also found that several UN agencies are still refusing to disclose details of their relief expenditure in spite of earlier pledges of transparency by senior UN officials.

The unprecedented international response to the tragedy that struck on Boxing Day last year killing more than 220,000 saw governments, companies and individuals pledge more than $13 billion to help affected countries, according to UN estimates.

The flash appeal covered the money donated by governments to the UN in the first weeks after the disaster to fund the early aid work. Spending details from that appeal obtained by the FT from UN-affiliated agencies such as the World Health Organisation and the World Food Programme show 18 per cent to 32 per cent of the expenditure related to staff, administration and other costs.

There is currently no accepted standard on what constitutes reasonable overhead costs for aid organisations.

Agencies such as the German development ministry say non-profit aid organisations should claim no more than 10 per cent of project funds for administration costs.

The figures can be difficult to compare, however. Some UN agencies will not disclose staff costs and others account for items such as transport and equipment differently.

Even the most basic overhead breakdowns can be sensitive in the relief world where highly paid consultants are often a significant expense for the UN and its agencies. Details of such costs are usually absent from public material.

Alex Jacobs, director of Mango, a non-profit group that aims to improve financial disclosure by aid agencies, said many also regularly reported either rosy or “meaningless” assessments of their administrative overheads.

However, senior UN officials insist its tsunami relief operations have been the most open.

Shawn Donnan, Financial Times, December 22, 2005

Categories: Corruption, Odious Debts

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