UN to cut food aid due to budget shortfall

WASHINGTON: The United Nations food aid agency said Wednesday it will be forced to cut programs even as hunger soars amid the global economic crisis because pledged donations have failed to materialize.

World Food Programme executive director Josette Sheeran said that the agency's 2009 budget of "assessed, approved needs" is 6.7 billion dollars.

The WFP now expects, after consultations with governments, donations of 3.7 billion.

"For the World Food Programme, we are facing a dangerous and unprecedented shortfall in emergency funding. This is mainly due to the fact that the needs which were greatly increased last year due to the food crisis have not come down, in fact have increased, just as we're seeing the numbers of hungry increase," Sheeran told reporters in Washington.

"So we are actively cutting three billion dollars of our program, which means a reduction in rations and programs throughout the world, including those to the world's most vulnerable people."

The head of the Rome-based UN agency did not provide specific details on the cutbacks and their timetable. She declined to name the countries that are not meeting their commitments.

Sheeran said the drop in donations this year was in part due to tight government budgets after the global financial crisis accelerated in late 2008, triggering the worst recession in decades.

She also suggested that the impact of the crisis was "not as dramatic at home" in the developed world, resulting in a reduced sense of urgency to provide relief to the world's hungry.

Those living on a dollar a day can only afford to buy about a third of the food they were able to buy a few years ago, she said.

Sheeran said that for the first time in history, 1.02 billion people are undernourished worldwide, up from 60 million just two years ago.

"One out of every six today are on the official list of the urgently hungry," she said. "One third of the world's children in the developing world are stunted."

Last year, the agency's needs doubled as food prices spiked, sparking riots in more than 30 countries, the overthrow of the Haitian government, and unrest in Italy over pasta prices, she recalled.

Sheeran highlighted the crucial role the WFP plays in reducing hunger in the developing world, where 80 percent of countries lack a food safety net.

Sheeran said the United States was "leading the way" in aid relief.

She praised Secretary of State Hillary Clinton for her "leadership on this issue to find not only solutions for the long term but to meet the emergency needs.

"The Obama administration has been an advocate on both scores and we're thankful for that. And the US Congress and the administration have really stepped up to the plate this year to make sure that the emergency needs are met," she added.

The WFP chief was in Washington meeting with key officials of President Barack Obama's administration and US lawmakers, as well as World Bank officials, WFP spokeswoman Jennifer Parmelee said.

REUTERS: WFP may ground Africa flights due to lack of funds

ROME, July 31 (Reuters) - The World Food Programme (WFP) may have to ground flights carrying aid workers to some of Africa's poorest countries within weeks unless it receives fresh donations, the United Nations relief agency said on Friday.

The WFP, suffering a funding shortfall this year as wealthy nations struggle to cope with the financial crisis, said its air service carrying aid workers to camps in the war-torn central African country of Chad would run out of money by Aug. 15.

The U.N. Humanitarian Air Service (UNHAS), operated by WFP, will run out money for its services in Liberia, Sierra Leone and Guinea by the end of August, the agency said. It needs $10 million to keep these services open until the end of the year.

"This is just an example of the stresses and strains we are under this year," said Greg Barrow, a spokesman for WFP in Rome. "We are having to suspend some programmes or reduce rations. These flights are very close to being scaled down and ultimately stopped completely, unless we receive more funding."

In February, WFP was forced to close the air service in the West African countries of Ivory Coast and Niger. The service in Niger, one of the world's poorest and least developed states, is expected to resume in August after a donation from the U.N. Common Emergency Relief Fund.

In Chad, UNHAS' six aircraft carry an average of 4,000 humanitarian passengers a month to 10 destinations, where they provide assistance to 250,000 Darfur refugees and 180,000 internally displaced people in the country's east.

"How will WFP reach the hungry? How will doctors reach their patients? How will people have clean water if the engineers who help to build wells can't get there?" asked Pierre Carrasse, head of WFP's aviation branch, in a statement.

Barrow said that if flights were suspended, WFP staff and other aid workers could travel by road but this would be slow due to the large distances involved and frequently dangerous due to rugged terrain and banditry.

WFP Executive Director Josette Sheeran said on Wednesday the organisation had received pledges for only $3.7 billion of the $6.7 billion it required in funding for 2009. (Reporting by Daniel Flynn; editing by Robin Pomeroy)

Head of WFP in Somalia covers up on Al Shabbab selling WFP food in Somalia

WFP is involved in another scandal these days. The Al Qaeda linked group Al Shabbab are selling in northern Somalia all WFP food that was directed to the poor somali.

Sources say that Peter Goosens, the WFP's Somalia Director is now covering up for this scandal and is trying to engage two private companies who would "investigate" and provide with an "independent report" on the situation on the ground.

Sources close to the situation say that Peter Goosens knew about the situation long before. He only acted upon when Rome Office made inquiries to the situation when USAID asked questions about the situation.

If WFP is serious about rooting out corruption and mismanagement, Rome office should fire immediately Peter Goosens and appoint a professional to lead Somalia Office.

Our blog will follow the situation in Somalia and report it in the future.

Stolen UN food in Somalia being sold in market

At a time when millions of people are starving in Somalia, thousands of sacks of food item, bearing the WFP logo and meant not-for-sale, are being sold in main markets. The UN has launched an enquiry into the fraud.

One of the UN’s largest international relief efforts is under investigation after it emerged that thousands of sacks of food aid were being diverted from starving refugees and openly sold for profit.

Children are starving in Mogadishu but UNfood aid is being sold/ Photo credit: Times Online

The head of the UN’s $955 million (£580 million) aid operation inSomalia has launched an inquiry after being shown footage showing tonnes of food bearing the World Food Programme (WFP) logo widely on sale in Mogadishu, the capital.

Stacks of bags of maize and wheat and tins of cooking oil — marked “not for re-sale” and bearing the UN stamp — are on sale from ten warehouses and 15 shops in the city’s main market.

About 45,000 tonnes of WFP food are shipped to Somalia from Kenya every month. Mogadishu traders told Channel 4 News that they bought their supplies straight from UN staff.

“We buy [food] aid from WFP staff directly or from people they employ,” one market trader said.

“They take us to the warehouses used by the WFP and let us load our lorries.

The goods are freely available and you can buy as much as you like, but we usually buy no more than 500 to 1,000 sacks at a time. Just a tonne or half a tonne a day can be shifted more discreetly.”

The food could hardly be more needed. More than a million people have been driven from their homes by fighting in the area, including 117,000 thought to have fled from Mogadishu in the past month.

UN officials say that civil war and the worst drought in a decade have created “near-famine conditions”, with Somalia ranking alongside Darfur as the worst humanitarian emergency in the world.

The WFP is charged with feeding 3.5 million Somalis — almost half the population — and is struggling to overcome an operational shortfall of more than $84 million over the next six months.

Britain gave the WFP £9 million for Somalia last year through the Department for International Development and is now deciding whether to give more.

Another market trader described how he invented fictional refugee camps, which were then allocated food that he could sell. “You go to the WFP office and fill in an application form to create a camp,” he said. “When we receive the food, we give out some and then divide the rest between ourselves and the WFP guys who negotiated the deal.”

The scam is, according to Mark Bowden, the former British diplomat who is now the UN’s humanitarian coordinator for Somalia, “disturbing”. He is urging the WFP to speed up its inquiry.

Many of the sacks for sale are marked: “A gift from the American people”, with the US government’s aid agency, USAID, providing $274 million last year in food and in humanitarian assistance forSomalia.

Peter Goossens, the WFP’s Somalia director, describes food for sale as a “minor phenomenon”.

WFP In Pyongyang Has Korean Speakers Expelled, Flies African Children to Eat for G-8

UNITED NATIONS, July 2 -- While the UN in New York announced that its World Food Program will shrink what remains of its program in North Korea, in the midst of declining donor confidence and missile tests by Pyongyang, the UN was more quiet about the restrictions it had been under and is accepting in the country. WFP in a memorandum from Beijing notes that the Kim Jong Il government now requires that none of WFP's remaining international staff should be able to speak Korean.

Inner City Press is told that WFP - Pyongyang's main Korea speaker was expelled from the country as persona non grata on June 20 and that this bodes badly for UN Secretary General Ban Ki-moon naming a new UN envoy to North Korea. Reportedly, Ban had focused on a South Korean envoy, with an eye toward running the candidate by members at the upcoming G-8 meeting. But if Kim Jong Il is expelling from the country what few UN system Korean speakers remained, such an envoy seems even less likely.

Speaking of WFP and the G-8, for the upcoming meeting WFP is flying in children from Ghana to eat as a part of an "exhibit" for the spouses of G-8 leaders on July 10. The internal WFP email is below. Several WFP sources expressed disgust to Inner City Press at the event, which they ascribe to WFP head Josette Sheeran. One asked, "Would she parade around Food Stamp recipient in the United States?" They put the expenses of the event, including the substantial closure of the WFP headquarters on July 10, at $500,000.

The e-mail:

Rome colleagues:

As you know, Italy will be hosting the G8 Summit next week and leaders from more than two dozen countries will be in L’Aquila. We are honored that the Italian government has asked WFP to host an official program at our headquarters on Friday, 10 July, as part of the spouse program.
This visit is a profound testament to the increasing visibility of WFP's work -- and an opportunity to help the world better understand the important work we do. On our premises, we are arranging a simulated food distribution and a symbolic African schoolhouse, where a small group of Ghanaian schoolchildren will help celebrate our work. (You may have noticed the large exhibit being erected this morning behind the pool.)

Due to the security precautions mandated by the Italian government and the visiting delegations, only those employees involved in the event or deemed necessary for critical operations by their managers will be permitted on the main building premises during the morning of July 10. Among other things, parking will be severely limited at our main building and automobile access limited in Parco de Medici in general.

But we encourage you to take advantage of this special exhibit and bring your families, including your children, on the afternoon of 10 July – anytime after 2:00 – so they can get a taste of our field work and meet the schoolchildren. If you cannot bring your family on 10 July, note that the tent and displays will remain up on Monday, 13 July, so we invite you to bring family members to see the display then.

Though this is a special event, we realize it might cause some inconvenience. We hope you can appreciate what an historic opportunity this is for some of the world’s most influential people to understand what we do and to see the impact of their donations.

Here are some guidelines for the day: If you work in the main building, please do not come to the office Friday morning, 10 July. The St. Martin’s building will remain open. As much as possible, please work from home... We expect the main building to re-open for business as usual at 2:00, so if it's feasible for you to return, please do so. If returning to the office in the afternoon is not feasible for you -- we recognize that some of the Parco de Medici transit options do not run in the afternoon, for instance – you are authorized special leave with full pay. Thank you,

Steve Taravella
Chief of Internal Communications, World Food Programme
Via C.G. Viola 68,Rome, Italy 00148

For G-8 Spouses, WFP Flies in Ghanaian Children for "Simulated Feeding," $500,000 Cost and Ms. Sheeran Disputed, re N. Korea

UNITED NATIONS, July 7 -- During the upcoming G-8 meeting in Italy, the UN World Food Program is flying school children from Ghana to Rome for a "simulated food distribution" display for the spouses of G-8 representatives. WFP has ordered staff not involved in the display to not come to work that day. They will, however, received "special leave with full pay."

Inner City Press wrote about this last week, quoting an internal WFP e-mail. On July 7, Inner City Press called in to what was described as a WFP press briefing about the G-8 and asked for response to criticism of the event as insensitive to beneficiaries of UN aid and for the cost, as well as about limitations WFP accepts from the government of North Korea.

The WFP officials on the conference call -- who will remain unnamed at their request -- at first did not answer the question, and then stated that the event would cost only a fraction of the figure Inner City Press used its its July 2 story, $500,000.

Inner City Press asked to be given on the record WFP's figure, including staff time, accommodation and air fare -- and carbon offsetting of the jet travel, if any. Four hours later, after close of business in Rome, a WFP spokesman said that an answer might be forthcoming. In the interim, WFP had scrubbed up and approved a quote from the "background" briefing for a less critical wire service piece.

And so, beyond the WFP e-mail below describing the event, here is the basis for Inner City Press' estimate of cost:

According to the WFP website, 'WFP employed 10,200 people in 2008 (91 percent of staff serve in the field.)' That means about 1000 work at WFP Headquarters in Rome. Even accounting for a satellite building that will stay in operation -- though who knows how many staff will show up or be able to get near it -- we estimate that 800 staff go home and that the average grade is the mid range of a P4 (grades are higher at WFP headquarters than in the field). The direct cost for such a post is about $100,000 but one must add to that pension, staff assessment and a large "post adjustment" because the dollar is weak against the Euro. Therefore a more realistic annual cost for a mid range P4 is perhaps $150,000-160,000.

The work year has 260 days, so a single day of labor lost costs the organization $576. Multiplied by 800, one gets about $467,000 -- plus related security costs, the cost of flying in the Ghanaian children to eat corn-soy blend in view of the G-8 spouses, the construction of a fake schoolhouse by WFP's pool, etc. In addition there is the Italian government paying rent on a building that is not being used to manage food aid but as a set for this theater. The last public figure on the website for the building costs was about $45 million per annum with a daily cost of roughly $123,000. So $467,000 plus $123,000 yields about $590,000.

Immediately after a senior WFP official on Tuesday's conference call said that costs were only "a fraction" of $500,000, Inner City Press formally asked for WFP's estimate of costs, and for confirmation that a WFP staffer was expelled from North Korea.

At deadline nine hours later, the following arrived:

Hi Matthew, On the question regarding the planned event at WFP headquarters on Friday 10 July, I refer you to the response given during the teleconference earlier today. On the question of DPRK, I have the following response:

A senior WFP official said one WFP staff member in DPRK has had to leave the country because his visa was not renewed by the authorities. A number of other WFP staff members have been reassigned, or rotated to new duty stations because WFP's operations have contracted and the number of people required to support WFP's activities have gone down.

"While WFP continues to operate under the new conditions imposed by the DPRK authorities, it has not formally accepted them, and WFP is continuing to push for a return to the original terms of agreement negotiated with the government at the launch of the current emergency operation," the official added.

We continue to wait for WFP's cost estimate. Inner City Press immediately followed up on the above, asking for the costs, if the WFP staff member who had to leave DPRK was from South Korea, and another question.

The initial questions were sent to WFP chief Josette Sheeran's e-mail address. Ms. Sheeran, on whom Inner City Press has previously reported, including where possible praising her work, has taken to hiring yet more former colleagues from the Washington Times, most recently Elizabeth "Lisa" Bryant.

Within the UN system community in Rome, many believe that Ms. Sheeran engaged in a quid pro quowith FAO chief Jacques Diouf, hiring a relative of his for an information technology post in exchange for FAO hiring the husband of her personal assistant, Tanujah Rastogi. They snark that since Ms. Sheeran Shiner bragged that while editing the Washington Times she ran story after story about the Clintons and Whitewater, the Obama Administration with Hilary Clinton as Secretary of State might want to see a change at the top of WFP. Through in the snafu of the $500,000 simulated feeding program and.... well, watch this site.

Rome colleagues:

As you know, Italy will be hosting the G8 Summit next week and leaders from more than two dozen countries will be in L’Aquila. We are honored that the Italian government has asked WFP to host an official program at our headquarters on Friday, 10 July, as part of the spouse program.
This visit is a profound testament to the increasing visibility of WFP's work -- and an opportunity to help the world better understand the important work we do. On our premises, we are arranging a simulated food distribution and a symbolic African schoolhouse, where a small group of Ghanaian schoolchildren will help celebrate our work. (You may have noticed the large exhibit being erected this morning behind the pool.)

Due to the security precautions mandated by the Italian government and the visiting delegations, only those employees involved in the event or deemed necessary for critical operations by their managers will be permitted on the main building premises during the morning of July 10. Among other things, parking will be severely limited at our main building and automobile access limited in Parco de Medici in general.
But we encourage you to take advantage of this special exhibit and bring your families, including your children, on the afternoon of 10 July – anytime after 2:00 – so they can get a taste of our field work and meet the schoolchildren. If you cannot bring your family on 10 July, note that the tent and displays will remain up on Monday, 13 July, so we invite you to bring family members to see the display then.

Though this is a special event, we realize it might cause some inconvenience. We hope you can appreciate what an historic opportunity this is for some of the world’s most influential people to understand what we do and to see the impact of their donations.

Here are some guidelines for the day: If you work in the main building, please do not come to the office Friday morning, 10 July. The St. Martin’s building will remain open. As much as possible, please work from home... We expect the main building to re-open for business as usual at 2:00, so if it's feasible for you to return, please do so. If returning to the office in the afternoon is not feasible for you -- we recognize that some of the Parco de Medici transit options do not run in the afternoon, for instance – you are authorized special leave with full pay. Thank you,
Steve Taravella
Chief of Internal Communications, World Food Programme
Via C.G. Viola 68,Rome, Italy 00148

Footnote: one WFP staffer, anonymous from fear of retaliation, asked if Josette Sheeran would similarly "parade around Food Stamp recipient in the United States," and went on to suggest that if the G-8 spouses wanted to see "needy Africans" while in Italy, they could check out the camps onLampedusa...

WFP alarmed over alleged illegal sale of donated rice in Philippines

MANILA, Jun 03, 2009 (Xinhua via COMTEX) -- The United Nations World Food Program (WFP) is worried over alleged reports of illegal sale of its rice donated to thousands of displaced impoverished population in the conflict-torn southern Philippines, the U.N. agency said Wednesday.

In a statement, WFP country director Stephen Anderson said the WFP is conducting an investigation on the matter, noting that it is taking the issue of accountability "very seriously."

The U.N. official said his office is closely working with all concerned authorities to probe the two separate incidents that occurred last May 30 and 31 in Datu Saudi Ampatuan, Maguindanao province where two 10-wheeler trucks loaded with WFP supplies were intercepted.

Local media reports said about 3,330 bags of the rice were pilfered and sold.

"WFP food is meant for direct consumption by the intended beneficiaries and labeled bags of WFP rice are not meant for sale or tender by others or for resale in markets," Anderson said in a statement.

Meanwhile, Executive Secretary Eduardo Ermita said on a Wednesday press briefing that the President Gloria Macapagal- Arroyo has ordered a thorough investigation into the incident and the authorities will punish local officials who are found culpable.

Since last year, the WFP has been extending rice supplies to thousands of displaced persons in Maguindanao and other conflict zones in Mindanao, especially after the escalation of clashes between government troops and the Muslim rebels fighting for greater autonomy in Muslim Mindanao.

The renewed fighting in central Mindanao late last year, triggered by a Supreme Court order barring the government and the Moro Islamic Liberation Front (MILF) to sign a key agreement in peace progress, has displaced over 600,000 people at the height.

Last year alone, the WFP dispatched more than 900 metric tons of rice to the displaced families in Mindanao.

Internal Investigation Report of WFP to EB raises issues

OVERSIGHT HIGHLIGHTS

Room for improvement has been identified in the following areas:

• worsening security situations in the field offices
• slow implementation of high risk audit recommendations to programmes, operations and financial processes
• inadequacies in some cooperating partners
• weak project monitoring and implementation
• weak and irregular procurement processes
• lapses in logistics
• non-compliance with HR rules and procedures for compensation and benefits payments to international staff
• inadequate configuration management of the WINGS
• Headquarters local area network (LAN) is lacking
• lack of standardized corporate guidance for IT officers
• Food diversions and various fraud cases and general discrepancies in the country offices
• Conflict of interest/bribery
• Harassment, Sexual Harassment and Abuse of Power (para 43-61)

Key improvements in the internal audit can be expected in the following areas:

• Improvements in the governance aspects – on information disclosure policy, anti fraud and anti corruption policy and revision of the inspector general and Oversight Services Division Charter.
• Improvements in the internal tools – development of a risk barometer, updating audit and investigation manuals and reform of the UN system of Internal Justice
• improvements in the regular work – audit work plan 2009, inspections and investigations work plan 2009 and external and internal coordination (para 63 -71)

Questions Are Raised About Who Profits from UN Aid to North Korea

Is North Korea's dictatorial regime quietly profiting from U.N. emergency food supplies delivered to its starving people, even as the regime squeezes those deliveries down to a trickle?

Documents produced by the World Food Program, the U.N.'s flagship relief agency, outlining its current emergency operations in the insular communist state, raise a number of touchy questions about the financing and logistics of the effort, which was originally intended to feed some 6.2 million of North Korea's most vulnerable people, but which is currently providing limited rations only to 1.33 million.

The $500 million program was meant to run from September, 1, 2008 to November 31, 2009, to deliver nearly 630,000 tons of food aid to North Korea at a time when it is suffering from severe flood damage and fertilizer shortages that have led to local food price increases.

Currently, WFP says that only $75.4 million worth of food aid has been delivered under the emergency program, as international donors have recoiled at the Kim Jong Il regime's recent nuclear detonation and provocative missile launchings toward Japan and Hawaii.

WFP emergency relief program documents obtained by FOX News show that from the outset the food agency planned to pay extraordinarily high transportation costs for sending relief supplies to North Korea from around the world--about a dollar for every two dollar's worth of food aid shipped into the country under the program.

Moreover, enormous sums were involved: $130,334,172 for “external transport” of 629,938 tons of grain and other food relief supplies for the overall program. (The food supplies themselves are projected to cost $297,396,729.)

Click here to see WFP's planned cost for food aid and transportation.

For comparative purposes, the “external” shipping costs planned by WFP for the aid program average about $206.90 per metric ton of food aid .

Those rates were described as “absolutely ridiculous” by an expert on bulk shipping consulted by FOX News, even for sending goods by international shipping carriers to the remote region that includes North Korea. Another international grain expert consulted by FOX News described them as “way out of line” with past and present international shipping rates for bulk grain and other basic food commodities.

What WFP has not revealed in its documentation until questioned by FOX News, however, is that a substantial, but unspecified, amount of that money is intended to move the emergency aid from China to its final North Korean destination via shipping firms owned by the Kim Jong Il government.

Nowhere in the WFP program documents, which appeared on WFP's public website only after Fox News began raising questions about them, is there any mention of the North Korean shipping involvement.

Click here to read the entire program document.

Even though WFP has not revealed how much of the $130-plus million in planned “external transport” money Kim Jong Il's shipping firms are in line to receive, an analysis of the current costs involved in getting such supplies to their second-last destination reveal that the amount slated to pay for the last leg of the journey to North Korea could be huge.

A WFP spokesman blamed the overall high cost on “ the remote geographical location of [North Korea] from place of procurement (normally Black Seas, South Africa and South America).”

All WFP food aid, he added, was first shipped to the northern Chinese port of Dalian, before moving on to the North Korean port of Nampo.

But the spokesman then added that high costs were also due to “the lack of competition of transporters for transshipment” between Dalian and Nampo.

In fact, shipments to and from Dalian, China, one of the major centers of China's huge export sector, are commonplace and hardly expensive by international standards. Data kept by the U.S. Department of Agriculture, for example, shows that grain shipments from Brazil to China between April and June of this year have varied from $32.50 to $42 per metric ton.

Moreover, those international shipping rates have been on a precipitous downward slide since June, 2008-three months before the WFP aid program began. Even allowing for higher rates from the Black Sea and South Africa, international shipping experts told FOX News that the rates would come nowhere near $206 per ton-especially as there is currently a surplus of international shipping capacity.

The same, however, apparently can't be said of transport between Dalian and Nampo-a distance of 210 nautical miles.

There, the WFP spokesman said, WFP relies entirely on “feeder vessels belonging to the [North Korean] government.”

Asked late last week by FOX News to provide specifics of the rates charged by North Korean vessels for carrying international food aid home, the WFP spokesman did not provide an answer before this article was published.

However much the Kim Jong Il regime charges for bringing food to its people, it is not the only money that WFP provides to Kim for humanitarian assistance.

The WFP documents show that the government was to receive an additional projected $5,039,504 as a transport fuel subsidy if the relief program gets back into full swing. The “fuel reimbursement levy” amounts to $8 per ton of aid delivered, and according to the WFP spokesman, is normally not provided to countries that receive food aid-they are expected to chip in for this cost on their own--except under a waiver that North Korea has been granted.

So far, the Kim regime's National Coordinating Committee, a subsidiary of the Ministry of Foreign Affairs, has received $1.16 million under this waiver since September 2008, with the promise of an additional $361,400 to come. The WFP spokesman emphasized that the money was not paid in hard currency.

The same apparently applies to $4,409,566 intended by WFP to enhance a “capacity building strategy of government counterparts” envisaged in the relief plan. According to the WFP spokesman, this means management training and information systems upgrades for the Kim government to handle the new food aid. WFP is also paying for warehouses and equipment to handle the aid. So far, the regime has only $103,200 of the projected total, with another $155,000 committed.

Amid all the fuzzy math of the WFP relief program, there is a final quirk: the inexplicably high transportation costs work to the benefit not only of the Kim regime, but also to the benefit of WFP.

As a matter of standard practice, WFP charges a standard 7% management fee against “direct operational costs” of such relief efforts to support its worldwide operations, over and above the costs it incurs in the specific relief exercise. These, in WFP-speak, are known as the organization's “indirect support costs.”

Based on direct operational costs in North Korea of $445,033,971-including the $133.3 million in “external transport” costs-- WFP expected to reap $32,948,811 as its 7% share of “indirect support costs.”

Its 7% “indirect support” levy on the extraordinary $130.3 million transport bill would amount to about $9.1 million.

George Russell is executive editor of Fox News

World Food Program Wants Even More Money, Despite Ease in Crisis

A little more than a year after the United Nations World Food Program declared that the globe faced a "silent tsunami" of rising food prices and oil costs, the crisis appears to be over. But for the WFP the fact that the tsunami has receded hasn't stopped it from asking for more money than ever.

WFP says it needs $6.3 billion this year, and roughly the same amount in 2010 and 2011 to feed the world's most desperately hungry. That's $600 million more than last year, when the so-called hunger tsunami was at its worst. And it's considerably more than double the roughly $2.7 billion annually that the agency spent before WFP chief Josette Sheeran declared the existence of a food crisis on April 22, 2008.

So far, it's received only $1.13 billion of the 2009 total, though the agency says it's confident that all $6.3 billion will be collected.

Meantime, however, world oil prices, which have ticked upward beyond $58 per barrel in the past few days, are still less than 40% of the $150 per barrel they reached in April, 2008, when the food crisis was declared.

International food prices-especially for grains-are down 35% to 50%, from their highs, after a record harvest of many crops last year and more of the same forecast this year. WFP says world wheat supplies are at their highest level in six years. According to a report by Commodity Information Systems, Inc., a U.S.-based analytics firm, U.S. wheat stocks rose by 9% between April and May alone. And a new report by the U.N.'s Food and Agricultural Organization says that world cereal stocks by the end of 2009 should be at their highest level since 2002.

Click here to read the FAO Report.

According to the WFP itself, grain prices will remain "at current levels or to increase slightly over the next 18 months."

But despite those dramatic decreases in food costs, a WFP spokesman says the organization has dropped its own budget estimates for this year and the near future by only $1 billion, or about 14%.

Why the difference between WFP's budget planning and food and energy costs in the real world?

According to WFP, a number of factors are involved, starting with the fact that the agency is feeding more hungry people: 105 million in 2009, vs. 86.1 million in 2007.

For some of its operations, WFP is also feeding them longer; an average of four months vs. the previous year's three. "In dire situations, like in the Horn of Africa, some people require sustained food supplies throughout the year, not just during peak hunger periods," according to the agency spokesman.

In addition, the spokesman said, it simply didn't lower its costs to the levels that current prices might indicate were appropriate. "Our downward budget revision reflected a 25% reduction in our food costs and a 7% reduction in our transport costs," the spokesman said, adding that "only 20% of our transport costs move in tandem with fuel."

But that would still seem to leave a lot of leeway. And in some cases, WFP not been spending less money on food but more—purchasing expensive food products that cost many times more than the basics it provided before there was a food emergency. Among the items mentioned by a WFP spokesman were corn soya grain blends rather than traditional corn; and chickpea- and peanut-based manufactured products, which the spokesman said were "more nutritious".

But they are also much more expensive. Using South African prices as a baseline, the spokesman said corn soya blend costs 45% more than traditional corn, and chickpeas a whopping 1,100% more, while one ready-to-use peanut-based product cost 1,400% more.

The spokesman did not cite the amounts involved, but in a tacit admission that WFP may have overused the pricey commodities last year-despite the "silent tsunami"-said that "we have encouraged our country directors this year to look at ways to use these more nutritious products selectively and where they can have the most nutritional impact."

But the most dramatic switch for WFP from its past policies, is not what it purchases but how it purchases.

WFP is now using its increase in funds to make much greater numbers of cash-on-the-barrelhead purchases of local food supplies in developing regions, rather than passing on large quantities of foodstuffs donated by rich exporters like the U.S.

Last year, for example, WFP got $4.15 billion in cash from donors and only $887 million in in-kind food supplies, and according to the spokesman spent $1.1 billion procuring food in 73 developing countries.

The change in WFP's cash vs. in-kind balance is something that it has sought as a long term strategy to become more of an international food welfare agency doling out cash than a food bank handing out imported emergency supplies.

Many WFP experts have long argued that in-kind contributions stunt local food markets and depress local food prices, and that the agency's increasing use of cash in local markets "helps small farmers produce food and gain access to income so they no longer need food assistance," as the WFP spokesman put it.

But at the same time as the WFP has been buying local food in a major way, the spokesman revealed that "an analysis of domestic food prices for 58 developing countries shows that in around 80% of the cases, food prices are higher than 12 months ago, and in around 40% higher than three months ago. In 17% of the cases, the latest price quotations are the highest on record."

This price hike, the spokesman said, hit hardest at the "urban poor and food deficit farmers who are dependent on the market to access food."

WFP insists that its own food purchases in those fragile markets have had little to do with the devastating local food price spiral-which has been going on despite the drop in world food prices.

"We always seek to [procure food] in a way that disrupts markets as little as possible," the spokesman said. "We have competitive tenders and do not pay monopoly prices."

That may be so, but competitive tenders for additional supplies in tight food markets can cause prices to go up. And prices where WFP buys food are definitely going up.

In fact, that is where the "silent tsunami" seems to have moved: from world markets, where basic food commodities appear to be in abundance, to local markets in the struggling parts of the world where the WFP is now buying increasing amounts of its supplies.

And WFP intends to keep buying.

George Russell is executive editor of FOX News

U.N.'s World Food Program Cried Poverty While Sitting on Cash Stockpile of More Than $1.22 Billion

Just weeks before it announced the onset of a global food crisis and the urgent need for donors to provide at least $775 million in additional funding, the World Food Program was sitting on a cash and near-cash stockpile of more than $1.22 billion.

The startling figure is contained in the latest audited statements of the WFP, which were endorsed by the WFP’s executive director, Josette Sheeran, on March 31, just a month before Sheeran announced at an international aid conference on April 22 that a "silent tsunami" in rising food prices demanded the huge infusion of cash for the WFP’s latest budget.

In a May 1 International Herald Tribune op-ed, U.N. Secretary-General Ban Ki-moon further declared that the WFP had just "$18 million cash in hand" in the wake of its appeal for emergency funding.

The audited statements are due to be presented to the annual Rome meeting of the WFP’s supervisory executive board in June.

Click here to see the audited financial statements.

The $1.22 billion figure, tallied as of Dec. 31, represents an increase of nearly $400 million over the WFP’s cash reserves a year earlier, as laid out in a report to the WFP’s governing executive board in June 2007.

Click here to see the investment performance report.

The cash stockpile was in addition to pledges for an additional $1.33 billion, all of which left the organization with more than $2 billion in anticipated cash and reserves just before it made its most recent urgent appeal.

In all, the auditors declared, the WFP had added an additional $91 million in cash assets over the 12-month period, leaving the U.N.’s emergency food supplier with roughly the same reserve assets it held in 2005.

Ever since the WFP announced the looming crisis of food aid for the world’s poorest people — based largely on dramatic international hikes in food costs — the World Food Program and other U.N. spokesmen, including Ban, have been steadily ratcheting up the tab required to top off the WFP’s budget to meet 2008 needs.

Initially, Sheeran announced that some $500 million was needed, though she added that would not fully fund such things as school food programs for some 20 million hungry youngsters. By the time of the aid conference, attended largely by U.N. agencies and World Bank representatives, the needed funding had risen to $775 million.

By the time the conference ended, Ban had put the shortfall at roughly $1 billion.

Ban also announced that a U.N. task force dealing with the food crisis would need as much as $1.6 billion in additional funding for seed programs and other means of expanding the global food supply.

On Thursday, President George W. Bush called on Congress to add $770 million in new international food aid to some $350 million in new aid he disclosed after the WFP announced the "silent tsunami" crisis.

Update:

Hours after FOX News’ publication of this story, WFP acknowledged the $1.22 billion in cash reserves, which it said “represents between three and four months of WFP's annual operating revenue.

"Of that $1.22 billion, more than 90 percent is either committed to ongoing food needs, or comprises mandatory reserve requirements necessary for prudent financial management of an organization of its size (i.e. unfunded liabilities for pensions),” Brenda Barton, WFP’s deputy director of communications and public policy strategy e-mailed FOX News.

“This system of cash management is akin to that of a family who has $2,000 in the bank, of which the majority is committed for mortgage, car payment and groceries," she wrote.

Barton also declared that the $800 million figure cited by FOX News is incorrect. "At the end of 2006 the equivalent cash and short term investment fund was $1.12 billion.” The cash reserve currently stands at $1.115 billion, WFP said.

Interest on the reserves, Barton said, are “plowed back” into WFP projects. She emphasized that the reserves, “ which allow for cash flow in critical situations, have been approved by donor governments.”

World Vision scandal puts spotlight on efforts to stamp out aid corruption

Written by: George Fominyen

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A schoolboy eats a plate of food in Nairobi's Kibera slum.
REUTERS/Finbarr O'Reilly

With a $1 million alleged fraud case in Liberia, World Vision has become the latest aid agency to be embroiled in a corruption scandal. The Christian organisation has rushed to implement new systems to prevent such abuse in the future, but analysts say fear of negative publicity, lack of external monitoring and a degree of complacency are hampering efforts to stamp out corruption in the aid world.

The Liberian case involves three former World Vision officials who are accused of stealing food and construction materials meant to help people recover from the country's 14-year-long civil war. They allegedly masterminded a scam in which food aid was sold for profit in local markets.

Corruption in humanitarian emergencies is widespread, particularly in countries that already have high levels of graft. Yet aid agencies say little about this problem because they fear it will harm their reputation and donations, analysts say.

George Ward, senior vice-president for international programmes at World Vision United States, told AlertNet the Liberian case had been a "heavy blow" for the organisation.

To avoid a repeat, World Vision has taken a number of steps, including increased field oversight of programs and improved background check procedures. It also funded training programs to increase the ability of local staff to detect fraud. In addition, the aid agency enhanced its international, 24/7 "integrity hotline" which World Vision employees can call confidentially if they become aware of anything suspicious.

WHY IS AID PRONE TO CORRUPTION?

Dishonest staff are not the only problem. Some anti-graft watchers also blame corruption on a lack or resources for external monitoring.

"Often, in an effort to cut overhead costs, on-site external monitoring is de-prioritised. Regular audits only pick up areas where procedures have not been followed, not where procedures have been manipulated to cover up fraud," says Jessica Shultz, programme coordinator at the Norway-based U4 Anti-Corruption Resource Centre.

In addition, there is a sense of complacency towards corruption.

"Paying bribes to get goods past a road block, for example, may seem acceptable at the height of an emergency when lives may really be at stake. However, that thinking is being challenged now even in emergency situations," Shultz said.

A notorious corruption case surfaced in 2002 when a study brought to light allegations of widespread sexual exploitation of refugee children in Liberia, Guinea, and Sierra Leone by aid workers and peacekeepers from 40 agencies in exchange for relief supplies.

Food distribution, a cornerstone of humanitarian assistance, is particularly vulnerable because the complex logistics of aid delivery make corruption hard to detect.

Moreover, food is a valuable commodity and there are many opportunities for corruption in the process of shipping, storing and distributing food aid.

The World Food Programme says it has set up a system that aims to provide food directly to women and heads of families. People are registered before the food is delivered and there's post-distribution monitoring to ensure it has been used by those it was intended for.

Following the Liberian case, World Vision has opted for inspection at all levels of the process.

"When inspectors (receive) the documents (that) have been signed by recipients (of food aid), they take them back to the villages and they re-interview the recipients to ensure that the people did receive the food. We do not take our internal documents at face value," Ward said.

SPEAKING OUT

Analysts believe an important first step that agencies can take in tackling corruption is to promote open discussion.

"Corruption remains a taboo topic," said Sarah Bailey, author of a policy brief on corruption for the British Overseas Development Institute (ODI) think-tank.

"Agencies should make sure that staff and aid recipients have channels to safely report suspected abuses. If people feel intimidated or that they are risking their job in reporting abuses, this presents a serious disincentive.

"We need to encourage aid agencies and aid workers to confront corruption honestly and openly - if it remains a taboo topic or agencies withhold assistance then no one will win - least of all the people who need assistance."

Providing recipients of aid with better information about the process also improves openness. Experts say more needs to be done to make sure that assistance is transparent and that people have ways to communicate suspected fraud.

Anti-corruption organisation Transparency International is producing a handbook on preventing corruption in humanitarian assistance based on research with the ODI and Tufts University in the United States, due for publication later this year.

Both high-level official support and grass-roots activism are also crucial in the fight against aid corruption.

Liberia's President Ellen Johnson-Sirleaf spoke out against corruption last week when the World Vision case came to light. The scandal also galvanised about 15 civil society organisations to hold a march in the capital Monrovia on Tuesday. The participants presented a memorandum to the U.S Ambassador to Liberia, asking that no visa be given to people under investigation for corruption.

Read more on how corruption is affecting aid work and what can be done to tackle it in our Q+A with Transparency International.

Mismanagement Plagues Aid Program in Western Sahara

For at least five years, a UN humanitarian program responsible for providing food to refugees in western Algeria has been beset by mismanagement and corruption, according to documents obtained by the Center for Individual Freedom.

The documents -- reports prepared by the Inspectors General of the UN High Commission on Human Rights (UNHCR) and the World Food Program (WFP) -- detail allegations that Algerians working for the UN have been diverting food aid intended for refugees. Even more disturbing, the reports raise the possibility that the beneficiaries of this ongoing theft are the Algerian-backed combatants in a long-running conflict with the government of Morocco. (You can read the full reports for yourself by following the links at the bottom of the page.)

The UN first began providing food assistance to refugees in western Algeria – also known as the Western Sahara region – in 1977. The Saharan refugees were originally displaced from their homes, generally in Morocco, as a result of fighting between Moroccan government troops and Algerian-backed fighters of the Polisario Front. Fighting has continued on and off ever since.

Because the Algerians continue to support Saharans in their conflict with Morocco, they have an obvious interest in providing whatever assistance they can. And thanks to its own mismanagement, the UN has become a partner in that effort.

Here's how: according to the two Inspectors' General reports, the UN receives an estimate on the number of refugees in need of assistance from the Algerian government. Though the UN has made several attempts to independently verify the count, these requests have come to nothing in the face of Algerian inaction. This lack of an independent and reliable count, "for such a prolonged period constituted an abnormal and unique situation in UNHCR's history," one report says.

That allows the Algerians to grossly inflate the number of refugees in need of assistance. According to the IGs' reports, Algeria lately has requested aid for about 156,000 refugees. The UNHCR Inspector General estimates there are actually 91,000.

As a result, aid shipped to Algeria ostensibly to help refugees could be diverted to other, less charitable, uses. Thanks to UN mismanagement, such gaming of the system is no problem at all.

From the very first moment that the aid supplies arrive in Algerian ports, both reports describe how serious problems can allow supplies to be skimmed, stolen and diverted. The WFP IG's report includes page after page of problems with basic procedures that are contrary to standard practice and basic common sense. These range from warehouses that are so poorly managed it's impossible to determine what supplies are actually present to shipping containers being opened at ports of entry in order for load to be shifted without records of what happens to the supplies that are unloaded.

Further mismanagement makes it impossible to determine just how much is being carried away because basic records of shipments and deliveries – which are supposed to be maintained by local UN personnel – are nothing but an idyllic fantasy.

Worst of all, most of these problems were first discovered in audits conducted in 2000 and 2001. But no steps have been taken to rectify even the most basic problems.

So they continue. Agencies and organizations working for the UN that are supposed distribute food to refugees are stealing it. And the UN sits by and does nothing. As a result, Algeria is able to utilize UN-provided resources to support troops in the Western Sahara as they harass Algeria's neighbor, Morocco.

To the casual reader, this story may sound fairly insignificant. But consider the number of similar aid programs that the UN is currently running around the globe. And apply the fundamental mismanagement and corruption that infects the UN's Western Sahara program to each of those aid efforts.

The implications are staggering.

But given the UN's track record, that shouldn't surprise us at all.

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To read the Report of the Inspector General's Office, UN High Commission on Human Rights, click here. (.pdf)

To read the Report of the Office of the Inspector General, World Food Programme, click here. (.pdf)