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Outside auditors to track U.N. tsunami aid

/ Source: The Associated Press

In an unusual move, the United Nations said Monday it will use an outside accounting firm to help track the billions of dollars pledged to help the victims of the tsunami in the Indian Ocean.

Officials denied that the move was in response to allegations of corruption and mismanagement in Iraqi oil-for-food program for Iraq, which was administered by the United Nations.

Price-Waterhouse-Coopers has offered to help create a financial tracking system for the United Nations on a pro bono basis, said Kevin Kennedy, a senior official in the U.N. Office for the Coordination of Humanitarian Affairs.

He told reporters the accounting firm would be able to investigate credible allegations of fraud, waste or abuse.

“In my experience of disasters it is the first time I can recall in the past 10 years that we have used an outside accounting firm, at least at this juncture,” Kennedy said.

Past programs under fire
Kennedy said that he did not think humanitarian donors were being discouraged by the oil-for-food scandal from making contributions to those in need. The United Nations received more than $2 billion from donor states in response to appeals in 2004, he said.

More than 50 internal U.N. audits of the humanitarian program published by an independent commission Sunday revealed widespread mismanagement and showed how U.N. agencies squandered millions of dollars through suspected overpayment to contractors, poor management of purchasing and assets, and fraud by its employees.

Explaining the need for outside auditors, Kennedy said there is large interest in ensuring that money given to the United Nations and its humanitarian partners “is used efficiently and effectively and if this adds to the credibility and the transparency of the effort then so much the better.”

The United Nations already has a financial tracking system but Kennedy said the aim was to improve the way countries recorded their pledges.

Some $4 billion has already been pledged by governments, the World Bank and the Asian Development Bank for victims of the Dec. 26 earthquake and tsunami that swept across the Indian Ocean. That figure includes not only cash for the humanitarian relief effort but also aid and loans for long-term development and reconstruction.