UNITED NATIONS: HOUSING CONFERENCE FINANCIALLY MISMANAGED

SUNS 4314 Monday 2 November 1998

UNITED NATIONS: HOUSING CONFERENCE FINANCIALLY MISMANAGED

United Nations, Oct 29 (IP/Thalif Deen) -- The organisers of a major U.N. conference - aimed at resolving the housing problems of poorer nations - mismanaged and overspent some 4.5 million dollars, according to a new U.N. report released here.

After an audit lasting two years, the U.N. Office of Internal Oversight Services (OIOS) found that the Habitat II conference on human settlements was marked "by serious financial management problems." The conference was held in Istanbul in June 1996.

"A breakdown of internal controls resulted in inadequate financial accountability and left the U.N. Centre for Human Settlements (UNCHS) in Nairobi with an uncovered deficit in the range of two million dollars," OIOS said in a report released Wednesday.

The UNCHS and its Habitat II secretariat hired consultants at a total cost of 2.5 million dollars "without the benefits of competitive bidding and, in some cases, with little value received in return," the OIOS said.

According to the report, the Secretary-General of the conference "travelled more than 80 percent of his time, incurring travel costs of 370,000 dollars." Similarly, the deputy Secretary-General of the
conference spent more than 50 percent of his time, also on the move.

Despite the waste and bungling, the conference was "widely acknowledged as an important and successful political event in the area of human settlements," the OIOS conceded.

In May 1996, a month before the conference, the U.S. challenged the decision of the Habitat II secretariat to dip into a housing fund to borrow 1.4 million dollars to pay for preparatory work of the
conference. The fund had been set up to aid housing projects in developing countries.

James Rubin, then spokesman for the U.S. Mission to the United Nations, expressed reservations about the funding of the conference. "We do have serious questions about the financing and accountability of activities in the centre in Nairobi and will urge the U.N. Inspector General to audit and investigate those activities," he said.

The audit report said that the Habitat II secretariat succeeded in raising some 8.2 million dollars in voluntary contributions for the conference but it never submitted a cost plan for the use of the money, the report noted.

"Conference expenditures were shifted to and borrowed from other funds to compensate for the shortfall in voluntary contributions," the report said. "Accounting for donors' contributions was incomplete; and the preparation of financial statements was delayed."

Since then, UNCHS has claimed that it has taken action to address some of the financial problems identified by OIOS on an earlier occasion.

However, OIOS has admitted that criticism of the Habitat II secretariat "must be tempered with the understanding that the mounting of a successful international conference on the scale of Habitat II requires an appropriate level of financial resources."

This did not "de-emphasize the seriousness of the financial and managerial problems of Habitat II," the report stressed.

The Habitat II conference in Istanbul was the last in a series of major U.N. gatherings that began with the World Summit on Children in New York in October 1990.

Subsequently, the United Nations also hosted six major conferences: on the environment in Rio de Janeiro in June 1992; Human Rights in Vienna in June 1993, Small Island Developing States in Bridgetown in April 1994; Population and Development in Cairo in September 1994; Social
Development in Copenhagen in March 1995 and on Women in Beijing in September 1995.

The primary objective of Habitat II was to help resolve the housing problems of developing nations. Currently, there are about half a billion people without homes or adequate shelter.

When the General Assembly sanctioned the first U.N. conference on human settlements - Habitat I - in 1976, it voted seven million dollars for the meeting. But 20 years later, the Assembly approved only 1.7 million dollars for Habitat II. The rest of the funding came from voluntary contributions, mostly from member states.

Soon after the Istanbul meeting, the United States called for a moratorium on all major U.N. conferences until declarations adopted at the 'talk-fests' had been implemented.

Then U.S. Ambassador Madeleine Albright said the United Nations should not host any new conferences "until we have absorbed and acted upon the results of the most recent series."

As part of the restructuring of the world body, U.N. Secretary-General Kofi Annan recently proposed that all future U.N. conferences be held in New York under the umbrella of a "special session of the General Assembly" in order to cut costs and to provide a higher profile for the 185-member Assembly.