U.N. to name Canadian as new oversight chief

U.N. Secretary-General Ban Ki-moon has chosen a former World Bank auditor general, Carman Lapointe-Young, to lead the United Nations’ troubled internal oversight division, according to senior U.N.-based sources. The move comes less than a week after Turtle Bay revealed an explosive end-of-assignment report by the U.N.’s outgoing oversight chief, Inga-Britt Ahlenius, who accused Ban of undercutting her independence and leading the United Nations into an era of decline. Here’s a link to the complete 50-page report.

Lapointe-Young, a Canadian auditor, edged out several third-world candidates, including former South African World Bank auditors J. Graham Joscelyne and Leonard McCarthy, for the U.N.’s top audit and anti-corruption job. Over the next five years, she will head up an agency that has been buffeted by an internal power struggle between Ahlenius and Ban that has eroded its capacity to police the United Nations.

Ban disclosed his plan to hire Lapointe-Young in a meeting Friday with representatives of key U.N. regional groups, including African and Latin American diplomats who had urged the secretary-general to consider a candidate from the third world. Ban told the group that he could not find a qualified candidate from the developing world. "It didn’t go over well," said a U.N.-based official familiar with the meeting, noting that delegates expressed concern that the position is remaining under the control of Western donor states.

Ban’s swift move to fill the Ahlenius vacancy reflected the urgency the U.N. leader places in putting the controversy over the state of U.N. oversight behind him. A senior U.N. official said Thursday that Ban hoped to name a replacement for Ahlenius in a "days" and that the new leader would move quickly to fill key vacancies and restore the U.N.’s investigative capacity to full strength.

At the World Bank, Lapointe-Young oversaw a team of some 60 auditors from 28 countries. In a 2008 interview, she said she focused her team’s attention on establishing internal controls in the World Bank’s operations, and evaluating the risks of waste and mismanagement. She was not responsible for overseeing investigations into fraud and corruption, a key weakness in the U.N.’s oversight division. "Our goal is to provide an annual "positive assurance" opinion to senior management and the board on the overall quality of internal controls, not just on individual audits," she said. "That has been a major change, and there has been something of a price to pay, because we didn’t get additional resources to do this type of work. As a result, instead of doing 60 or 70 audits in the field, we can only do 20 or 25. The reduced visibility doesn’t have the same deterrent effect, but the results have much greater impact."

Lapoint-Young will take over the U.N. oversight agency at a period of deep crisis. The Office of Internal Oversight Services was created in 1994 to promote reform of management procedures and to investigate corruption, fraud, and other violations of U.N. rules. It includes an audit unit and an investigations division.

The U.N.’s investigations division, which has not had a permanent director since 2006, has been plagued by poor management since its inception, and repeatedly criticized for failing to uncover corruption, according to outside assessments of its work.

In 2008, a pair of independent reviews of the U.N.’s anti-corruption efforts provided a scathing indictment of the U.N.’s longstanding investigations chief, Barbara Dixon, who stepped down in 2006. "The management culture in the investigations division has been so dysfunctional, the author of one of the reviews wrote last summer, that the division should be shut down and replaced," I wrote in the Washington Post in 2008.  Dixon responded that the reports were riddled with so many inaccuracies that it had undercut their credibility.

Among the division’s alleged shortcomings: In 2004, it exonerated a U.N. procurement official, Sanjay Bahel, who was under suspicion of steering tens of millions of dollars in contracts to an Indian state company, according to U.N. documents. But a procurement task force, established in 2006, reinvestigated him, leading to his conviction in 2008 for bribery. In the same year, Human Rights Watch wrote in a letter to Secretary-General Ban that the U.N.’s investigations division had "ignored, minimized or shelved" allegations that Indian and Pakistani peacekeepers based in eastern Congo illegally traded gold, arms, and rations with local militias.

The two reports "confirmed my own concerns and conclusions: namely that the professional investigators were under very poor leadership in a flawed structure," Ahlenius said in an interview then. In her recent memo, Ahlenius said that Ban had repeatedly interfered with her attempts to fill the position with an American investigator, Robert Appleton, who had led the U.N. Procurement Task Force that led to Bahel’s prosecution.

Ban’s senior advisors blocked the appointment, initially on the grounds that no female candidates were included in the shortlist, and subsequently on the grounds that Ahlenius had refused to allow Ban to appoint the investigations chief from a short list of three candidates. They accused Ahlenius of violating U.N. staff rules in an effort to hire Appleton.

But Ahlenius and others say that the investigations division has been unfairly vilified. As a sign of its independence, the division has sometimes gone after senior U.N. officials for wrongdoing, only to be overruled by management, defenders say. For instance, U.N. investigators concluded that the Dutch former high commissioner for refugees, Ruud Lubbers, had improperly groped an employee and that Alan Doss, the former head of the U.N. mission in Congo, had improperly used his influence to get his daughter a job at the United Nations. Catherine Pollard, the U.N.’s top human resources official, said last week that the U.N. relied on a less-damning account of Doss’ role produced by his employer, the U.N. Development Program, which did not require a misconduct finding.

Ahlenius said that of four investigations into allegedly improper activities by four senior officials, none has resulted in a finding of misconduct. "Regrettably there is a strong perception in the organization that individual accountability does not exist uniformly; that senior staff can act with impunity, absent accountability."

Here’s a longer excerpt of Lapointe-Young’s 2008 interview:

"In the past, most of the audits in country operations looked only at financial and administrative activities. If an office in a particular country had a US $2 million budget, internal auditing would look at how it was managed or how the office hired people or secured the premises. The auditors weren’t looking at the portfolio of bank projects and trust funds being managed in the field; but that’s where the biggest risks lie–is the bank doing what it’s supposed to be doing?

Three years ago, we moved to doing full-scope audits of country operations in the field. We still look at the financial and administrative functions, but the real value is in looking at how well business risks are managed. That has been a major change, and there has been something of a price to pay, because we didn’t get additional resources to do this type of work. As a result, instead of doing 60 or 70 audits in the field, we can only do 20 or 25. The reduced visibility doesn’t have the same deterrent effect, but the results have much greater impact.

Of course, we also carry out a full program of business process, financial, treasury, and IT audits at headquarters. In recent years, we have developed extensive skills in IT auditing and data mining, and we’ve leveraged these skills to our advantage–our audit results are much more compelling.

Our goal is to provide an annual "positive assurance" opinion to senior management and the board on the overall quality of internal controls, not just on individual audits. This has meant a dramatic change in the way we assess risks and plan our audit work. It means doing enough work to be able to say with a level of confidence that we know all of the soft spots–the control weaknesses that can prevent the bank from achieving its goal….

Everyone feels uncomfortable around auditors. But occasionally people are feeling vulnerable because something improper is happening, so we try to prepare ourselves by making sure we know when we are walking into a difficult situation.

The internal audit function is not responsible for investigating fraud and corruption; we refer suspected fraud cases to our institutional integrity unit, which handles that responsibility. However, we always make sure we know what the unit is working on so we are at least going in with our eyes open. If we know that the unit is involved in a particularly sensitive investigation, we may try to avoid the field visits, or we may take our direction from the unit to work together more effectively."

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