UNICEF has confirmed to a group of donors that an estimated US$4 million of donor funds has been misappropriated from its US$6.2 million school rehabilitation project implemented in 2009-2010 in Khyber Paktunkhwa Province, northwestern Pakistan.

UNICEF first uncovered irregularities in the project via its internal financial oversight system in 2010, and alerted a group of donors in Pakistan to the potential loss of funds in October of that year.

UNICEF provided confirmation to donors in January 2012 that it had completed a series of investigations and that funds had been misappropriated. It revealed that funds from Australia, Canada, the European Commission, Italy, Japan, New Zealand and the United States were among those affected.

Fraud against programs delivered by international organisations such as UNICEF is stealing funds intended to help poor people in developing countries and undermines public confidence in international development efforts. As donors, we do not tolerate fraud and urge partners to take swift and decisive action when any fraud is detected.

We commend UNICEF for the steps it has taken to date to uncover and report on this matter and urge it to continue its efforts, including in cooperation with the Government of Pakistan, to secure recovery of the misappropriated funds. We also welcome the measures that UNICEF has undertaken to improve monitoring and risk management systems and strengthen compliance with internal audit control requirements, in line with the recommendations of its investigations. Together with UNICEF we are working to ensure that appropriate safeguards are in place to prevent incidents such as this happening again, and to ensure that information about UNICEF’s programs and safeguards is publicly available on UNICEF’s website.

UNICEF plays a vital role in delivering humanitarian and development assistance to children and women. As members of the international donor community, we have a history of successful engagement with UNICEF, including in Pakistan. We will continue to work with UNICEF to deliver critical humanitarian and development assistance, including in fragile and insecure environments.

USAID Media Contact: Ms. Alex Glass; aglass@usaid.gov