September 26, 2014 / 5:14 AM / 5 years ago

Humanitarian arm of Syrian opposition stumbles at audit hurdle

ISTANBUL (Reuters) - Auditors have been unable to trace $1 million (613,000 pounds) in aid spending by Syria’s Western-backed opposition, highlighting how hard it is to build viable alternatives to the institutions of President Bashar al-Assad’s war-torn state.

The Syrian National Coalition set up the ACU as its humanitarian arm to coordinate efforts by a series of non-government organisations, U.N. bodies and local councils to tackle what has become the world’s worst humanitarian crisis.

Most of its $62 million revenue - a fraction of overall international aid to Syria - was donated by Qatar. The United Arab Emirates, UK, and United States have donated between $2 and $3 million each, preferring in-kind donations to cash.

In a 2013 audit made public this week, accounting firm Deloitte said it was unable trace ACU expenses of almost $800,000 and cash payments of more than $265,000, meaning it could not be certain that they were valid.

The ACU (Assistance Coordination Unit) said the fact it released accounts at all showed it was trying to be transparent.

“This was the first physical year. We’ve had eight managers come through the ACU and this was our challenge,” the ACU’s internal auditor Abdul Aziz told Reuters, adding that completing the audit was a success in itself.

More moderate rebel groups are now struggling against fellow-Sunni Islamic State militants as well as Assad’s forces after three and a half years of civil war. The exiled Syrian National Coalition, the political body set up to represent them, has yet to make its accounts public, despite calls for it to do so.

Opposition groups as well as Syrian and international non-governmental organisations are working out of Turkey to try to restore public services and deliver food and clothing to some 10.8 million people in need of urgent humanitarian assistance.

Continued fighting, including aerial bombardment, and many administrative and organisational hurdles have stalled progress.

Deloitte gave the ACU a “qualified opinion”, an accounting term used when exceptions such as missing data prevent auditors from giving an organisation a fully clean bill of health. It was not immediately clear whether this would put donors off.

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In a video statement on its website, the ACU said it had submitted almost 80 percent of the documentation for the $800,000 in expenses incurred in rebel-held areas of Syria. The remaining cash payments were made by previous management which had not provided all the documentation, it said.

Deloitte said it had also been unable to verify the source of $14 million of the ACU’s $62 million in grants because it had not heard back from the countries listed as giving them.

The auditor, engaged in March, said it could not observe the physical counting of more than $2 million of inventories nor more than $252,000 of cash. The ACU’s accounting year ended on Dec 31.

In November, ACU staff in Gaziantep in southeastern Turkey went on strike, accusing the body of corrupt policies and mismanagement, according to leaked emails to donors seen by Reuters and to ACU workers who declined to be named.

The ACU management acknowledged some problems at the time but declined to comment on specific allegations.

The opposition coalition appointed a chief executive, Osama Al-Kadi, in December to try to improve its efficiency, but a replacement for him was expected to start soon, a coalition member said. Al-Kadi was not immediately available for comment.

In a letter in the report, ACU President Suheir Atassi said: “We made some administrative mistakes since we are in our first year and we couldn’t eradicate bureaucracy entirely.”

The ACU’s most high-profile project so far has been to lead seven rounds of polio vaccinations as part of a task force which included local councils and NGOs in seven provinces.

The UK has allocated more than a hundred times more aid to Syria in total - 329 million pounds - than it has to the ACU. It has given most to large international NGOs and U.N. agencies which often use local Syrian organisations to deliver aid.

Editing by Nick Tattersall and Philippa Fletcher

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