1. What is the key problem or challenge?
2. Why do you think there has been an increase in fraud and corruption cases within the UN?
3. Why do you think support from the Senior Management Group (SMG) was not forthcoming for OIOS' initiative? Why was the Secretary-General also non-cimmital in supporting OIOS?
4. Are NGOs and the media appropriate partners to help Ratna put the topic on the agenda? What should Ratna do now that he has hit a barrier in his proposed plan? Please be specific.

TACKLING FRAUD AND CORRUPTION IN THE UNITED NATIONS As Rahul Ratna rode the elevator up to his office on the 35th floor of the United Nations (UN) Secretariat building in New York City, a sense of frustration came over him. He began to wonder whether he had made the right decision in taking on the job. Two years earlier, still in the 1990s, Ratna had been appointed as Head of the Office of Internal Oversight Services (OIOS) at the UN, whose mandate was, amongst others, to fight fraud and corruption within the UN. Ratna was keenly aware that he needed sufficient and capable staff as well as adequate funding for support if OIOS was to achieve any degree of success in this endeavour. Nonetheless, he was cautious that increasing the budget and headcount was a battle in and of itself. Ratna had just left the Committee Room of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), which vetted all requests for additional staff and funding before the Fifth Committee of the General Assembly approved such considerations. However, he was only met with frowns and furrowed brows during an exhaustive 90-minute session in the Committee Room. Even the Chairman, Tambiama Tawanda, shook his head in disagreement on many occasions. It was evident to Ratna that the ACABQ was unconvinced by his arguments and that his chances of getting more staff or funding were close to nil. Entering his office, Ratna slumped into his chair and looked at the ceiling, contemplating his next move. How was he going to get enough resources to fight fraud and corruption, particularly at a time when such malfeasance was on the rise? Office of Internal Oversight Services The OIOS was established in 1994 as an initiative of the Western nations in the UN led by the United States and other members of the Geneva Group that felt strongly about curbing wastage and corruption within the UN, not least because these countries funded the bulk of the UN's budget. While the mandate of OIOS covered audit, investigation, evaluation and inspection, it was the Investigations arm of OIOS that received the lion's share of attention as it brought to light cases of individuals involved in fraud and corruption. The Head of OIOS was ranked at the Under-Secretary-General level, which provided the OIOS with greater independence and clout than other divisions, and direct access to the Secretary-General. To The Geneva Group comprised 16 like-minded states focusing on transparency and integrity in UN administrative and financial matters. The members were Australia, Belgium, Canada, France, Germany, Japan, Italy, Mexico, Netherlands, Russia, Republic of Korea, Spain, Sweden, Switzerland, United Kingdom and United States. This case was written by Dr Clara Portela and Dileep Nair at the Singapore Management University. The case was prepared solely to provide material for class discussion. The authors do not intend to mustrate either effective or meffective handling of 9 managerial situation The authors may have disguised certain names and other identifying Information to protect condanballty.ensure that the Head retained his objectivity, it was stipulated that he or she serve a five-year non- The obvious cost of fraud and corruption is the loss of resources and additional expenditure that renewable contract with the UN. Moreover, the Office submitted resolutions directly to the General the UN incurs in its operations. A more pernicious impact is on the UN's reputation as a trusted Assembly. international organisation. This, in turn, affects the UN's ability to champion causes, raise funds as well as attract good and capable staff. Rocking the Boat A Comprehensive Approach Two years into the job, it became clear to Ratna that there was an increasing trend of misconduct, fraud and corruption in the organisation. While there were three divisions under the OIOS, it was the Ratna convened a brainstorming group that comprised senior members of the Investigations Division Investigations Division under Solange Beausoleil that occupied a disproportionate amount of Ratna's and his Executive Office to come up with ideas on what needed to be done. The UN was at the time. For one, the number of cases that came to the Division's attention was steadily increasing, forefront of the battle against fraud and corruption around the world, and participated actively in resulting in an increasing cumulative backlog. With the existing complement of 33 staff in the numerous multilateral and interagency endeavours. Yet, as an institution, it lacked a comprehensive Investigations Division, it was simply impossible to look into all cases. As a result, a triage system infrastructural integrity plan to tackle fraud and corruption in-house. He believed that unless the UN had to be devised to rank the cases and then assign investigators to the more serious incidents. This led by example and * walked the talk', it was at risk of losing credibility in promoting the norms of required nuanced judgment, and Ratna was often consulted by Beausoleil to advise on which cases good governance. should be investigated (refer to Exhibit 1, 2 and 3 for the OIOS organisational structure, incoming cases received during OIOS reporting periods and the cumulative backlog of pending investigations). Various UN agencies, as well as the World Bank, the Organisation for Economic Co-operation and Development (OECD) and Transparency International were advocating that Member States adopt a Investigations also had to be handled very sensitively, especially when senior staff were implicated National Integrity System as part of a holistic approach to counter corruption. The System or the reputation of the organisation was at risk. In 2000, there was the 'Boat Project', which encompassed the principal institutions and actors that contributed to integrity, transparency, and examined the profligate use of funds by Pino Arlacchi, the Executive Director of the United Nations accountability in a society, constitutive of good governance.* Office for Drug Control and Crime Prevention. Arlacchi was cited of running the agency as his own fiefdom, spending on projects regardless of their benefits. He was subsequently removed from his The brainstorming group felt a comprehensive two-pronged approach was needed: post. . Establish a high-level inter-agency Task Force led by OIOS to formulate an integrated There was yet another OIOS investigation conducted earlier in the same year into allegations of strategy to tackle fraud and corruption within the UN. This would involve assessing the sexual exploitation of women in West Africa by UN Peacekeepers. The investigation confirmed current nature and extent of corruption, and then developing the appropriate initiatives and these allegations and impugned the whole peacekeeping force there. The Department of Peace activities to rectify the situation. Keeping Operations had to make substantial changes to the management and oversight of Adapt some elements of the National Integrity System advocated to Member States for use peacekeeping troops in order to maintain the confidence of Member States, particularly those funding within the UN. A 'cocktail of best practices' tailored to the needs of the UN should be worked peacekeeping operations. out and implemented as part of the programme to fight fraud and corruption. A year later, another high-profile investigation into allegations of people-smuggling within refugee The group was aware that to form the Task Force, OIOS needed full support from the other camps in Lundya run by the United Nations High Commissioner for Refugees (UNHCR), was conducted. These camps had been set up for refugees fleeing conflict zones. Within these camps, Department Heads in the UN, namely, the other Under-Secretaries-General. That meant lobbying the numerous complaints were received which resulted in an OIOS investigation* that uncovered a Senior Management Group. criminal network involving local staff that exploited refugees. Hoping to be resettled in a host country, many refugees were taken advantage of by human traffickers promising bona fide relocation. Apart from pointing out poor oversight and supervision of the camps, these abuses severely undermined The Senior Management Group the credibility of the UNHCR. Ratna added, The Senior Management Group was the "cabinet' of the Secretary-General, made up of the heads of all UN departments, funds and programmes." It was effectively the highest internal policy-making 1 Hugh O'Shaughnessy, "UN Drug Agency Fiasco Exposed", The Guardian, July 29, 2001, body that existed in the UN Secretariat. Importantly, once a policy was agreed, group consensus https/www.theguardian.com/world/2001/jul/29/theobserverl, accessed October 2015. facilitated buy-in across all departments. The Group met weekly, and was chaired by the Secretary- UN General Assembly, Fifty-fifth Session, Agenda Item 126: Rules and Procedures to be Applied for the Investigation Functions General. Since not all Under-Secretaries-General were based in New York, some had to join by a Performed by the Office of Internal Oversight Services, October 11, 2000, https:/jundocs.org, accessed October 2015. UN General Assembly, Fifty-Sixth session, Agenda Item 130: Investigation into Allegations of Refugee Smuggling at the Nairobi Branch Office of the Office of the United Nations High Commissioner for Refugees, December 21, 2001, https:/www.refworld.org. Transparency International, "National Integrity System Assessment Toolkit", Berlin, 2013. accessed October 2015. Joachim Muller, "Management Reform in the United Nations", International Organizations Law Review, 2005, Vol 2, 417-36. 2/8 3/8video-link. enforcement to also encompass planning, diagnostics, coalition building, advocacy, training, and counselling. However, it was soon apparent that there was no consensus within the Group. Deputy Ratna wanted to convince the Group that the approach his team had brainstormed was the best option Secretary-General Khadra therefore suggested that the matter be referred to the Secretary-General to for tackling fraud and corruption within the UN, and that OIOS was the ideal candidate to lead the be tabled for further discussion. Although Ratna left the meeting disappointed, there remained a proposed inter-agency Task Force. flicker of hope in getting the Secretary-General's support. At the meeting, Ratna presented his plan to the Senior Management Group to tackle fraud and corruption at the UN. Because the Secretary-General was travelling on that day, the Deputy The Secretary-General Secretary-General, Salma Khadra, chaired the meeting. Ratna could not get an early appointment to see Secretary-General Didier Chamoiseau so instead he Ratna began with the pivotal role of the UN, sent him a memorandum with the hope that he would find time to read it. In the memo, Ratna laid out the views of the Senior Management Group members on the OIOS proposal, and explained why The UN must be at the forefront of the battle against fraud and corruption. Countries' economies the UNICEF Ethics Initiative was too narrow for the UN as a whole. He then reiterated the critical flounder on fraudulent and corrupt practices; terrorists succeed with help from corrupt banking need for establishing an inter-agency Task Force to kick-start the OIOS proposal. systems; people are made homeless and hapless by the corrupt deprivation of land and the means to support their families. If the Organisation is to prevail in our mandates, we must recognise that the cancer of corruption can undermine our efforts to promote and support sustainable Ratna's expectations were again let down. The following day he received a call from Chamoiseau, development, fair trade and commerce, economic growth, and ultimately, peace and security. who said that he had read his memo and had also been briefed by Khadra. Chamoiseau agreed with Ratna on the need for the UN to be at the vanguard in fighting fraud and corruption, and that it had He stressed to the Group members the gravity of the situation as shown by the statistics. He pointed the moral authority to do so. Given the various initiatives that the UN had embarked on, it was also out the alarming rate at which fraud and corruption cases were being reported in the UN, and the fact necessary to take into account all new projects and prioritise accordingly. Chamoiseau commended that almost half of the reported cases involved criminal matters. Ratna went on to say how the work OIOS had been doing and suggested that OIOS continue working within its existing understaffed OIOS currently was, making it difficult to look into all the reported cases. Only the most resources. He added that Ratna could petition for additional resources in the next budget cycle but egregious cases were investigated. As a result, there was a very high risk of corruption being was non-committal on the inter-agency Task Force, saying that Ratna could invite other Under- ingrained into the culture of the UN. He reiterated that the UN had to lead by example, and outlined Secretaries-General to join it. his team's suggested course of action. His heart sank as he listened to Chamoiseau over the phone. Ratna knew all too well that unless there Ratna did not broach the issue of the additional budget required to undertake his team's proposal. He was firm and unequivocal support from Chamoiseau, there was little hope of the proposal taking off. had earlier debated whether it would be better to do so in order for the Group to have an idea of the In particular, without a directive from Chamoiseau to the other Under-Secretaries-General, it was cost involved. Eventually, he decided to leave it out as otherwise he might be seen as pre-empting unlikely that they would be willing to join the Task Force. And even if they did, representation would what the proposed Task Force would eventually recommend. More importantly, Ratna did not want be at such a low level that decision-making would be difficult. to 'scare' the Group members with the possible size of the additional budget. Flustered after the call, Ratna wondered why he was getting such pushback on the proposal. A big Unfortunately, the response from the Group was far from supportive. Many of the Under-Secretaries- issue was resources-the allocation of funds to engage the additional investigators he needed, as well General took issue with the statistics that Ratna presented, asserting that the so-called increase may as funds to undertake the various initiatives that the OIOS proposal encompassed. He recalled have been due to better detection and not necessarily an actual rise in the occurrence of fraud and Chamoiseau's words about working within existing resources or seeking more in the next budget. corruption in the organisation. Others felt that OIOS was adopting a rather 'repressive' approach and He mused that perhaps he should instead get the additional resources first. The other departments was too focused on punishing misconduct. There was an unspoken fear that any Task Force led by might then be keener to come on board. OIOS would naturally home in on strict enforcement of rules to identify 'guilty' staff for disciplinary action. Instead of improving the reputation of the UN, they felt this initiative had the potential of tarnishing it. Some even felt that not talking about it would be preferable. The Head of the United A New Approach Nations Children's Fund (UNICEF), Jarmila Hesova, suggested that the UNICEF Ethics Initiative, which was being developed by UNICEF for in-house ethical counselling and training, could be To get additional resources, Ratna knew that he had to first convince the ACABQ', and therefore extended to cover the whole UN. Many Under-Secretaries-General supported this alternative approach. 7 The Advisory Committee on Administrative and Budgetary Questions (ACABQ) was an expert committee of sixteen members elected by the General Assembly for a period of three years, on the basis of a broad geographical representation. Members serve in a personal Ratna tried to explain that the OIOS approach was actually more holistic. It went beyond simple capacity and not as representatives of Member States. The Committee held three sessions a year with the total meeting time between nine and ten months per year. The Chairman and Vice-Chairman of the Committee were elected by the Members of the Advisory Committee. 4/8 5/8Tawanda, someone who Ratna knew fairly well. A suave Senegalese diplomat, Tawanda had been EXHIBIT 1: OFFICE OF INTERNAL OVERSIGHT SERVICES, ORGANISATIONAL STRUCTURE the Chairman of ACABQ for decades, and was an old hand at the inner workings of the UN. Ratna AND POST DISTRIBUTION AS OF SEPTEMBER 1, 2002 decided to schedule lunch with Tawanda to sound him out about the OIOS proposal and its budgetary implications. Tawanda listened intently as Ratna outlined the need to undertake a holistic and Office of the Under- comprehensive programme designed to improve the credibility and reputation of the UN in the eyes Secretary General of the world. Ratna also mentioned that he would need more investigators to tackle the backlog of (New York) 8 Staff cases as well as increasing workload. For a start, he was requesting for just 11 more investigators, which was actually only a quarter of the total number that was needed. For these additional posts, he would need an annual budget increase of US$500,000. When Tawanda heard that, he let out a low whistle and shook his head, Even if I were to agree with you on the need for your initiative, where would the UN get the additional funding for O10S? Member states are already in a budget-cutting mood and we will Monitoring, Evaluation, and Consulting Division be lucky if we can get by with a standstill budget for next year. New proposals for funding have (New York) 20 Staff a very slim chance of getting through Tawanda told Ratna to submit his proposal to ACABQ in the following month in any case, assuring him that it would get a fair hearing. Ratna believed there was always the off chance that the majority of ACABQ members might see the critical need behind the OIOS proposal and support the funding requirement. Still, Ratna understood that it was more likely that Tawanda was just being diplomatic by asking him to submit the proposal to ACABQ. It was already apparent that there was no budget appetite for new initiatives, especially for proposals that lacked strong political backing. Ratna wondered what alternatives he had. Could he really ride on the Ethics Initiative of UNICEF? Was it possible to look outside the UN for funding from individual countries and international civil society organisations that took a strong stance against corruption and fraud? What about getting outside help in kind, for instance, from educational institutions to provide training for UN staff? But would they have the accreditation and expertise needed? These and other questions swirled through Source: UN General Assembly Report (A/57/451) his head as Ratna contemplated his next move. 6/8 7/8EXHIBIT 2: INCOMING CASES RECEIVED DURING EACH OF THE OIOS REPORTING PERIODS 500 433 450 400 287 350 747 300 250 204 173 173 200 95 150 70 100 50 0 Pre- 1994- 1995- 1996- 1997- 1998- 1999- 2000- OIOS 1995a 1996 19976 1998 1999 2000 2001 -Cases received Source: UN General Assembly Report (A/56/381), Report of the Office of Internal Oversight Services, p.44 EXHIBIT 3: CUMULATIVE BACKLOG OF THE INVESTIGATION'S CASELOAD AT THE END OF EACH REPORTING PERIOD 300 274 250 194 Cases Open 200 150 121 100 50 0 2000 June 2001 Cases open Source: UN General Assembly Report (A/56/381), Report of the Office of Internal Oversight Services, p.44