The Report of the Board of Auditors to the President of the UN General Assembly dated July 24, 2019 disclosed an UNRWA (United Nations Relief and Works Agency for Palestine Refugees in the Near East) budget surplus of a whopping $105.01 million, with the program budget alone–which finances the core activities of the Agency—recording a surplus of $100.38 million.
The report noted that the surplus was ‘due to efforts made by the Agency to mobilize resources from various donors’, as well as a reduction in ‘non-core operations’ costs.
Other Key Audit Findings:
- Treasury and Cash Management: Among the issues that the auditors identified were differences between the amount of the trial balance as of December 31, 2018, and the cash count conducted by the Board of Auditors.
- Asset Management: The Board performed an assessment of inventory at the Jordan field office warehouse and observed that the information recorded in the UNRWA system did not represent the physical stock of inventory in the The finding reflected a weakness in the integrity and accuracy of economic events, contrary to the stipulations of the Conceptual Framework for General Purpose Financial Reporting by Public Sector Entities.
- Human Resources Management: Attendance forms that staff members were supposed to use to record their daily attendance were not available in all UNRWA departments. Furthermore, the Department of Human Resources at UN headquarters informed the Board of Auditors that recording attendance at the Agency was ‘not mandatory’. In addition, while the Lebanon field office had a register of its staff’s monthly attendance prepared by a senior officer, that was not the case for the Jordan and West Bank field offices, which only kept signed spreadsheets ‘as a backup’ for staff attendance. The West Bank field office, for example, stated that each of its departments determined its own method for recording attendance— if it had one!
This situation was found to be contrary to the stipulations of the UN personnel directive (No. A/1/Rev.1/Amend.1), which establishes the way in which attendance is to be recorded. The Board of Auditors considered that the ‘lack of a reliable and consistent control mechanism’ that enables the verification of compliance with established working hours, may hinder the completion of the work hours established under the area staff rule. Conversely, having a mechanism that objectively registers daily attendance makes it possible to verify compliance with working hours and schedules and to keep a record of absences.
- Procurement and Contract Management: After checking the list of vendors identified as being ineligible for participation in the United Nations Global Marketplace and the list of vendors identified as having been removed from the UNRWA vendor roster on the basis of “poor performance”, and comparing those lists with the list of suppliers that were awarded contracts by UNRWA between January and October 2018, it was observed that an ineligible vendor, “United Electronic ”, had been selected by the Agency in contravention of its procurement manual. The vendor had been declared ineligible by the United Nations Global Marketplace since 20 May 2008, and its status under “vendor’s master data” in the REACH system had been listed as “blocked” since 30 October 2017. The basis for the block was due to its being included on the sanctions list issued in September 2017. Nevertheless, UNRWA created a new ‘micropurchase order’ for the vendor on May 28, 2018.
The Board of Auditors included a list of recommendations with their ‘Financial Report and Audited Financial Statements’, but also noted that ‘of the 54 outstanding recommendations from the previous year’s audit, only 32 were ever fully implemented’ by UNRWA.
*David Bedein, MSW, who founded and has directed Israel Resource News Agency in Jerusalem since 1987, administers the Center for Near East Policy Research in Jerusalem. He is the author of Roadblock to Peace – How the UN Perpetuates the Arab-Israeli Conflict: UNRWA Policies Reconsidered and The Genesis of the Palestinian Authority. His website can be found at www.IsraelBehindTheNews.com