Fraud, Mismanagement In Kenya Costs Unicef Up To $10 Million

The United Nations Children’s Fund lost as much as $10 million to serious fraud and mismanagement by its Kenya office in 1993 and 1994, UNICEF’s new executive director, Carol Bellamy, reported on Thursday.

The losses, which auditors have traced to two dozen UNICEF employees in Nairobi, represent more than a quarter of the office’s budget of $37 million for the two-year period, which coincided with drought and an influx of refugees from the war in Somalia.

So far, eight staff members have been dismissed and 15 others, including two former directors for Kenya, have been suspended and charged with serious misconduct. One suspended employee has been accused of simple mismanagement, bringing the total to 24. There are still 23 more cases under investigation.

“This is a serious blow to UNICEF,” said Bellamy, sounding angry as she disclosed details of what has become the worst scandal in the agency’s history.

She described UNICEF as “an organization which has earned a well deserved reputation for its dedication and its commitment to saving children’s lives and for their development and for their protection.”

Bellamy spoke at a news conference after briefing UNICEF’s executive board on the scandal. She said the corruption uncovered was not systemic and did not involve other UNICEF operations run out of Nairobi for neighboring Somalia and Sudan.

The first irregularities were uncovered by a UNICEF auditor during an unannounced visit to Nairobi last November. UNICEF brought in more auditors in January to comb through the Kenyan office, where they found $500,000 in unpaid bills. Though the scandal became common knowledge at the United Nations, Thursday was the first time that losses were estimated at $10 million. The exact extent of theft and waste is still not known.

“This kind of behavior is just totally unacceptable,” said Bellamy, who became executive director in April, well after the corruption was uncovered. She promised to make management changes a top priority.

So far, auditors have identified more than $1 million lost through fraud. The fraud included payments for non-existent services, double billing, failures to disclose links to bogus contractors, and insurance claims for non-existent medical treatments.

Among those accused are six foreigners, including the two former directors, and 18 Kenyans.