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Viewing cable 04ROME2218, WFP food diversions in Cambodia

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Reference ID Created Released Classification Origin
04ROME2218 2004-06-10 10:33 2011-08-30 01:44 UNCLASSIFIED Embassy Rome
This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS  ROME 002218 
 
SIPDIS 
 
 
FROM U.S. MISSION IN ROME 
 
PHNOM PENH FOR AMBASSADOR RAY AND USAID DIRECTOR 
STATE FOR AS/PRM DEWEY, PRM/P, EAP/BCLTV AND IO/EDA BEHREND 
AND KOTOK 
USAID FOR DAA/DCHA GRIGSBY, DCHA/FFP LANDIS, ANE/ESA 
USDA/FAS FOR CHAMBLISS/TILSWORTH/GAINOR 
GENEVA FOR AMBASSADOR MOLEY, RMA LYNCH AND NKYLOH/USAID 
USUN FOR AMBASSADOR NEGROPONTE AND MLUTZ 
BRUSSELS FOR USAID/LERNER 
NSC FOR JDWORKEN 
 
E.O. 12958: N/A 
TAGS: EAID EAGR AORC PREF KUNR WFP UNHCR
SUBJECT: WFP food diversions in Cambodia 
 
REF: (A) ROME 2096 
 
------- 
Summary 
------- 
 
1. WFP has uncovered a major case of commodity theft related 
to food for work (FFW) distributions in Kampong Speu 
cluster. An external team headed by an international 
consultant (a former WFP staff member who speaks Khmer), and 
two engineers seconded by Red R Australia, is carrying out 
physical verification and measurement of a random sample of 
367 FFW projects for which final distributions were made 
between November 1, 2003 and March 31, 2004. Once these 
findings are completed, WFP will request a formal meeting 
with the government in early July to discuss the matter and 
to ask for compensation. End summary. 
 
---------- 
Background 
---------- 
 
2. Two inspectors from WFP Headquarters' Division of 
Oversight Services (OEDO) spent most of March in Cambodia 
carrying out investigations in response to reports of misuse 
in food-for-work projects (FFW). They were assisted in their 
work by a locally recruited engineer. The investigation, 
including engineering survey of eight cases, found 
significant discrepancies with final output figures for all 
types of projects checked, ie. roads, irrigation canals, and 
ponds.  Many different players appear to have been involved 
in the diversions including government and technical 
implementing partners, WFP staff, truck drivers, traders, 
and some community leaders. 
 
3. The investigators determined that the fraud is carried 
out in two basic ways: i) requesting more food for FFW 
projects than is actually owed to beneficiaries; and ii) 
covering up and channeling the diverted food to non- 
beneficiaries. The generation of a surplus is done in 
several ways including falsifying the pre-assessment 
figures, inflating the final outputs, and requesting a 
surplus of food on the basis of false beneficiary lists. The 
diversion and covering-up of delivery to non-beneficiaries 
is done through "ghost" distribution sites, and food tickets 
to non-beneficiaries. 
 
--------------------------- 
Steps presently being taken 
--------------------------- 
 
4. All new FFW projects have been temporarily suspended, and 
all on-going projects are subject to further oversight by 
the country office prior to the release of food. WFP staff 
are currently conducting comprehensive monitoring of all on- 
going FFW projects (of which there are over 500).  New 
interim monitoring guidelines have been issued and field 
staff have been instructed that they must independently 
measure the final physical outputs of infrastructure works 
(previously done by project counterparts).  Refresher "on - 
site" training in how to take physical measurements was 
provided to all program staff. 
 
5. Staff from the WFP program unit in Phnom Penh, together 
with a locally recruited engineer, are carrying out spot 
checks to verify the measurements provided by the field 
staff.  All food release notes for FFW activities are being 
reviewed and adjustments made as necessary before food for 
any on-going project is released. 
 
6. Meetings have been held with technical partners who have 
actively collaborated with WFP in carrying out 
 
investigations and sharing information.  They have taken 
action against certain staff and instituted the following 
measures to ensure the integrity of works: establishing 
independent oversight teams, giving greater attention to 
final output measurements, modifying the forms used to 
record participation, and verifying participants against 
established lists. 
 
7. Transport companies have received a letter reiterating 
their contractual obligations and clarifying the 
expectations that WFP has of them.  On the advice of WFP's 
Legal and Insurance Service (OTI), the country office is 
partially withholding payment of outstanding invoices 
pending completion of the investigation. 
 
8. An external team headed by an international consultant (a 
former WFP staff member who speaks Khmer), and two engineers 
seconded by Red R Australia is carrying out physical 
verification and measurement of a random sample of 367 FFW 
projects for which final distributions were made between 
November 1, 2003 and March 31, 2004. Once these findings are 
completed, WFP will request a formal meeting with the 
government in early July to discuss the matter and to ask 
for compensation. 
 
-------------------- 
Disciplinary actions 
-------------------- 
 
9. Following the preliminary investigation, one WFP staff 
member from the Kampong Speu (KSP) sub-office was put on 
suspension and two staff members from the same office 
submitted letters of resignation (the head of sub-office, 
and a field monitor).  A national officer from the India 
country office is now heading this sub-office on temporay 
duty (TDY). 
 
10. On May 6, a disciplinary committee reviewed the cases of 
two field monitors from the Kampong Cham sub-office and the 
suspended program assistant from KSP. As a result, one 
monitor will not have his contract renewed and another will 
have her contract terminated early. Prior to this meeting, 
the program assistant also submitted his letter of 
resignation which was accepted. 
 
11. Recently, issues involving accountability and staff 
integrity have affected a number of UN agencies working in 
Cambodia. A working group, of which WFP is a member, has 
been formed to review agency specific codes of conduct and 
the "Standards of Conduct of the International Civil 
Service" to prepare a simplified summary applicable for 
national staff.  This will be translated in Khmer, discussed 
and distributed to all UN staff. 
 
------- 
Comment 
------- 
 
2. The United States, Japan and Australia have bee WFP's 
major funders in Cambodia. While WFP is tobe given due 
credit for identifying the problem, given the apparent 
sizable amounts of commodity leakage involved, WFP, the RGC 
and the principal donors now need to fix what appears to be 
seriously broken. For the United States, under formal 
Transfer Authorizations, we hold WFP directly responsible 
for good stewardship of the commodity up to the time of 
final delivery to beneficiaries. We expect that WFP will 
move smartly forward with its RGC partners to disaggregate 
the extent of these losses (tonnage and dollar wise) and 
insure that the RGC fully compensates WFP for these losses. 
Hall 
 
 
NNNN 
2004ROME02218 - Classification: UNCLASSIFIED