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Annan orders probe of UN Procurement Office

Annan orders probe of UN Procurement Office

Secretary-General Kofi Annan today commissioned a full financial and internal control review of the United Nations procurement system, following irregularities uncovered by both the world body’s own oversight office and the UN-approved panel probing the Iraq oil-for-food programme.

To carry out this new review, the UN will be retaining the services of an independent external consultancy company. The review is expected to be completed by the end of September, according to Mr. Annan’s spokesman in New York.

The third Interim Report of the Independent Inquiry Committee (IIC), headed by former US Federal Reserve Chairman Paul Volcker, last week accused former procurement officer Alexander Yakovlev of soliciting kickbacks. It also concluded that the former Executive Director of the UN Office of the Iraq Programme, Benon Sevan, "corruptly benefited" from his role in the oil-for-food-programme.

Voicing deep concern at the report’s findings, Mr. Annan waived the immunity of Mr. Yakovlev, and stressed that he would do the same for Mr. Sevan, as soon as he receives any properly supported request from an appropriate law enforcement authority. Mr. Annan also said the UN would act vigorously to ensure there are no more “bad apples” in its procurement department, and pledged that the corruption outlined “will not happen again.”

As a temporary and exceptional measure, pending the completion of the external review Mr. Annan placed the procurement division under the direct authority of Warren Sachs, the UN Controller.

At the same time, the Office of Internal Oversight Services (OIOS) is continuing its investigations into Mr. Yakovlev, the former UN procurement officer who has been accused of criminal wrongdoing, in close cooperation with the United States Attorney’s Office, said UN spokesman Stephane Dujarric.

Once the investigation is complete, OIOS will make separate recommendations for reforms to the UN procurement system with a particular focus on strengthened supervision and controls over individual procurement officers.

“These reviews will complement a general assessment of UN procurement, completed in June by the National Institute of Governmental Purchasing, the results of which are being made public today,” Mr. Dujarric said. The Institute – an American-based not-for-profit organization - initiated the review at the UN’s request.

It compared existing procurement rules and regulations with the best global practice of outside organizations and companies and contains a large number of recommendations for improvements to UN procurement systems and practices.

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