The report highlighted problems including signs of “fraudulent activities” at two country offices and “suspicions of collusion among the various project managers” at another, without naming the countries.
“Issues identified by the audit could seriously compromise the achievement of the objectives of the audited entity,” the report said.
The GEF was set up in 1991 as part of the World Bank to help fight environmental challenges such as deforestation, species conservation and pollution. It has since split out to become an independent organization and disbursed more than $21 billion in 170 countries, including $7 billion in projects managed by the UNDP.
The audit of the UNDP’s GEF-funded projects — which covers 2018 and 2019 and is the first review of its kind since 2013 — comes against a backdrop of rising concern from some donor countries over management and oversight issues at the UNDP.
An investigation by Foreign Policy in 2019 published whistleblower accounts alleging the misappropriation of millions of dollars at a UNDP-run GEF project in Russia. Twelve donor countries — including the U.S., France, Australia and Japan — have since sought an independent review of the UNDP’s handling of that project, according to a letter seen by the FT.
“Matters of misconduct and misappropriation of funds continue to obstruct sustainable development across the world,” the donors said in March in the letter to Achim Steiner, the UNDP administrator since 2017.
In a written response to the FT, the UNDP said it “takes all cases of financial mismanagement and other irregularities extremely seriously”, adding that its GEF projects were some of the organization’s “most closely monitored”.
“The portfolio, the majority of which is implemented by national and subnational institutions, civil society organizations as well as other UN organizations, is subject to an intricate system of regular reviews, independent assessments and audits,” the UNDP said.
While there have been “allegations of misuse of funds” at certain projects, such complaints affected “a tiny fraction — 1.4 per cent” of the UNDP’s GEF-funded portfolio, it added. The GEF did not respond to a request to comment for this article.
Other project audits from independent consultants as well as written complaints from current and former UNDP staff, all seen by the FT, suggest that concerns over alleged financial misconduct and poor oversight at the UNDP may be widespread.
“What happened in Russia is a Russian problem. But things going wrong are very common,” said Frank Klinckenberg, a European environmental expert who has reviewed GEF programmes across the world for more than 10 years.
An independent review of a GEF-funded UNDP project in Uzbekistan, seen by the FT, warned that financial information provided by the UNDP was not reliable and “must be questioned”. “As a further result, this [midterm review] is required, by UNDP guidelines, to refer this project for a fraud investigation,” the draft report said.
According to another long-term external consultant to the UNDP, problems raised in project reviews frequently seemed to be ignored by senior staff.
“I don’t understand some of the management responses that have been made,” said the consultant, who asked not to be named. “We have an urgent climate crisis.”
The claims of misconduct at the UNDP are not the first allegations of impropriety linked to the UN’s climate work and represent one of the many challenges facing the UN as it seeks to co-ordinate a global response to climate change.