After 30 years with the organization, I estimate that three out of four UNICEF staff are only hired to touch the money on its way from the donor to the host country. This might be an under-estimation.
Only a tiny fraction of UNICEF staff actually talks to governments and advises them what to do. Even fewer staff monitor whether existing or changing policies of host governments are having the desired effect. When you meet a UNICEF public health or education expert in a country office, you'll inevitably learn that they need funding to manage their projects; touching money is their raison d'être.
Thus, over the course of a year, hundreds of thousands of payments must be entered into the PIDB (Programme Information Database) with a code so that other staff can review, process, check, approve, aggregate, analyze, report and audit the expenditure. It is easy to get lost amidst the many goals and focus areas, strategies, cross-cutting matters, enablers, accelerators, hundreds of outputs and indicators and even more activities. To stop UNICEF staff agonizing over budget codes, UNICEF released, a few months ago, a new application:
This is great. Artificial Intelligence will correctly code any expenditure, even when UNICEF staff no longer know what they are doing.
The UN is notoriously bad at handling money. Not only does a significant portion of the funds not end up in a program country, it often takes years for them to pass through the system. Of all the ways to transfer money to those in need, the excessive micromanaging bureaucracy of the UN development agencies is the least able to do so efficiently.
If UN agencies want to really cut down on bureaucracy and staff costs, it doesn't help to move offices and staff around; instead, the number of transactions and the UN role in the administration of money needs to be radically reduced. Here is how to go about it:
Not only my recommendation
UNICEF experts shall advise their ministerial counterparts on reforms and necessary investments. Both agree on the result the government plans to achieve, with the money that UNICEF makes available for the purpose - for example to enroll an additional half a million children in school. The loot should be handed over, in one go, to the responsible Ministry.
The Ministry will do whatever it is necessary to achieve the result. It will amend its policies, consult the public, buy services and supplies and hire any specialists of their choice – just as any government does in the rest of the world. The money spent by UNICEF on its own staff for accounting, administering, or contracting will be saved and added to the Ministry's budget. Every year the government transparently reports to its own citizens on progress and how the sector funds have been spent – including any grants received from UNICEF and any other donor.
UNICEF monitors progress, provides advice where needed, and appraises results. If all is good, cooperation with the Ministry will continue. If any failure cannot be satisfactorily explained by the government, UNICEF will reallocate future funding to other ministries or countries.
Sounds revolutionary? This was exactly the business model when UNICEF and other UN Funds were created, more than 75 years ago.
What about accountability?
The typical UN official will insist that they are accountable for the money entrusted to them. But the only thing we want to know is whether a government manages to get more children into school, given the additional resources it got from UNICEF and others. This is called results-based management, to which everyone under the sun has subscribed.
So where is the accountability?
- Governments are accountable to their own citizens for the good use of all resources available to them – including tax revenue, any other income and any grants and donations. If a government is not transparent to its own citizens, it must bring its house in order. Otherwise, there is no point for a donor to follow the penny, as money is fungible.
- UNICEF is accountable to its donors for disbursing funds responsibly – not for managing and tracking every cent until it reaches a child. If UNICEF is satisfied that the government genuinely cares and vigorously pursues and achieves agreed-upon targets, UNICEF continues financial support next year. If a government is opaque, and UNICEF has doubts about the government's seriousness, financial support will be discontinued.
Some may call this conditional budget support. Details and the approach can be discussed, but this should be the intent. It will
- reduce bureaucracy on all sides,
- turn the focus on results,
- strengthen national accountability mechanisms,
- remove the parallel universe in which UN development agencies operate,
- increase the amount of money available for developing countries.
Do you agree? If not, tell me why.
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as a wise person once said : money is the "poison in the soup" . UNICEF has pediatricians, Water engineers, experts in child development who spend much of their time chasing a cash advance to government or writing up proposals to donors for more money or reporting on the money we have.
ReplyDeleteEqually bad, the only way these skilled paediatricians and water engineers could get promoted was to get into management, an area where they had no skills. So UNICEF often lost a good paediatrician and gained a bad manager. That is no way to run a railroad.
DeleteThere are AI tools for UNICEF staff to pick the right PIDB codes and even to determine if our COAR has some politically sensitive information we should check. These are some useful tools that could potentially replace whole cadres of staff and consultants we had counting beans and text and indicator codes.
ReplyDeleteI think the ambition of channelling money directly to ministries is good in theory and works in many countries. However there are other countries where the government is not in a position to be accountable for funds and we do need alternative options. This is often the case in countries in crisis where UNICEF's support is badly needed. A good example is my last duty station, Lebanon where, following the economic crisis of 2018, it was not possible to provide funds directly to the government. Donors relied on UNICEF to manage substantial funds, including in my area of work, WASH. Donors trusted UNICEF to manage and account for the funds. This enabled us to do some excellent work, with a team of highly skilled WASH professionals, mostly national staff, collaborating with local consultants and contractors. We developed efficient and effective systems for putting work packages together and achieved a very good level of success, literally keeping water flowing in the country at a critical time.
ReplyDeleteSo, my suggestion is to operate based on what gets the most value for children out of the funds available. It is a complicated equation, needing to balance donor needs for accountability with being efficient and effective. I am sure that in many cases we could remove layers of unnecessary procedures and enable more money to reach where it needs to reach. In particular, the whole business of NGO partnerships needs looking at, as a lot of funding gets tied up in the administration of these on both sides. We should always be clear on the added value of UNICEF in all cases, and even cut ourselves out where we are not adding value for the children. If we don't do this the donors will surely do it for us!
So, in summary, I suggest we can make huge savings by cutting out redundant processes, but in doing so be careful not to throw the baby out with the bathwater.
@ Paul. By default UNICEF manages resources in all countries, including stable low and middle-income countries, according to the meanwhile outdated CPD and increasingly convoluted programme process and financial operations. The default should be a type of conditional budget support. A simplified mechanism can also applied for humanitarian situations, which today are not covered by the CPDs process anyway, but by humanitarian appeals.
DeleteEmergency funding is about one third of all UNICEF funding. Globally, only 14% of all aid is humanitarian.
Thanks Detlef - your point then raises the question of why would donors want to channel funds through UNICEF when they could give them directly to a government? And is UNICEF showing added value by simply receiving the funds and passing them on to government? Perhaps in cases where funds could be given directly to government in the way you suggest then UNICEF should encourage the donor to do this directly while making the case that UNICEF can bring added value to make the use of the funds more effective. We would then receive a small amount of funding from the donor for this added value. This would make us a smaller organization in funding terms but perhaps a more effective organization if seen from the perspective of results for children. This approach would require good collaboration between the host government and UNICEF regarding the perception of UNICEF's added value but arguably it would be a more honest relationship.
DeleteWould this work where Governments are not able to a) effectively track the use of funds provided; b) disburse them in a reasonable time from Treasury; or c) guarantee their use for the purposes agreed? I am afraid there are many Governments in these conditions, not least in some of the poorest countries with the worst situations for children, as well as elsewhere. (and by the way, I would not have advised UNICEF to give money to the UK in 2021 for procurement of COVID supplies!). I am afraid the Governance issue raises its head.
ReplyDeleteThe inability of certain governments to transparently manage their own resources (including those provided by donors) is indeed by the major cause of slow development. Subsidizing social services and individual donor projects help to maintain these inefficient and wasteful (and sometimes unscrupulous) practices. If poor governance is a problem, we cannot ignore it. As said above, humanitarian assistance might warrant exceptions, though also there those responsible should be held accountable.
DeletePROMS with AI! quick - run for the hills!
ReplyDeleteWhat you are loosely describing is what Ethiopia wanted all those years ago when they suggested UNICEF could get lost. You just stay in New York and send us a cheque! But i dont disagree with you, i think there must be a more efficient way of doing business and back to the future to some extent probably makes sense
These sentiments were not unique to Ethiopia, they were common.
DeleteSorry, that last comment was me Colin Davis, i didnt mean it to be anonymous
ReplyDeleteI agree with most of what you say Detlef. But to take it one step further, in many cases money really isn't the issue any more that prevents Governments from doing the right thing for children. It is a combination of poor governance, lack of political will, or lack of understanding/awareness/technical capacity. This was very obvious in the UMIC where I worked previously, and not really much different in the LMIC where I work now. We need to get to a situation where our technical experts spend >90% of their time on technical work - practically advising, advocating and supporting government counterparts in their decision making on issues that matter to children. Providing high quality evidence and analysis. Providing detailed advice on proven solutions. Negotiating, lobbying, with government, private sector, civil society to leverage their resources for children. Out of my long working day today, only 90 minutes potentially had a real meaning for children, when sitting in a Government meeting I was able to point out some serious gaps in the latest national development plan, where important issues that matter to children were forgotten about. Makes you think...
ReplyDelete@Paul and Arthur – we seem to be thinking in the same direction. The UN should not be handling money, and donors can directly transfer their money to a developing country, as conditional budget support and insisting on budget transparency by the host government. Any UN expert can advise; or perhaps the host government uses the donor funds to hire who they think would be the best advisor in line with their priorities.
ReplyDeleteThis was proposed in 2007, when UNICEF’s role in middle-income countries was discussed, organization-wide. It was also discussed in the wake of the so called UN reform – both times quickly dismissed because UN agencies would not be able to take their cut, and would have to compete with other experts.
If I recall correctly, in the early days, UNICEF was noted for handing over supplies and equipment to government and NGOs for them to use to help children.
ReplyDeleteThe model of working more comprehensively with planning departments seems to have been emphasized later when UNICEF tried to provide aid for development and not just emergency aid.
Nevertheless, emergencies, would still motivate (trigger) funding for relief efforts.
My encounter (perception of) with 'budgetary support' came later; however, it appeared to have some negative aspects - as follows:
1. Some of the motivation appeared to be that those proving funding wanted to be able to disburse the money 'on-time'; and not be concerned about the pace of implementation nor lack thereof. Otherwise their budgets might be cut if they didn't spend as planned.
2. Budgetary support could also be viewed as some sort of tip (or bribe) to get a government to agree to do something (which it might later renege upon).
A well educated and well informed citizen of Kenya once told me he would rather receive aid in the form of supplies or finished projects than the money passing through government channels.
One might counter against this by saying that UNICEF should not try to work in a country where the government channels are so unreliable (corrupt).
A precondition of conditional budget support is the transparency of government on its expenditure to its own citizens. All development aid is in vain, if Governments do not demonstrate commitment and account transparently for their (entire!) expenditure to their public.
DeleteDevelopment is an ‘internal’ affair, that can be helped by money from outside.
Countries develop themselves, and are not developed by foreign experts and donations. Outside finance does not replace the need for the government to bring its house in order, to provide an environment for economic growth.
Many low income countries do not receive the necessary investments, because the conditions are not there. Instead, there is capital flight and the UN continues to buy the vaccines.
Hello Detlef, I am a keen reader of your articles. However, in the current climate I am concerned that your estimates (such as "three in four UNICEF staff") could be taken out of context by those forces that have undermined WHO, UNRWA, etc. and totally demolished USAID, an organisation that was far from perfect but surely did not merit this brutal attack. Can we all work to share some positive stories that can inspire constructive reforms? Greetings from Dakar. Ian Hopwood
DeleteAre there many sustainable success stories of significance that can be held up in Africa? After all, Africa is relatively poorer today than it was 50 - 60 years ago and extreme poverty is on the rise. Perhaps a better approach would be to admit to failures and managerial shortcomings ourselves, rather than having them pointed out to us by the likes of Musk. That said, I do not know how this could be done honestly and with a minimum of embarrassment. How do you explain that we spent more on ourselves than on African children or that we paid criminals to leave the organisation, to save our reputation, as opposed to having them prosecuted?
DeleteBravo Detlef! For years I, as a senior operations person, railed against the methods that form the construct of HACT (for those who may have forgotten, it's the Harmonized Approach to Cash Transfers), but sadly I was generally alone. Part of that solitude was no doubt because an operations person had no validity in what was considered a programme matter. Sigh. The acronym HACT itself sounds either like an upper respiratory infection or a cyber security threat, not to mention the stunning vulgarity of the wording "Cash Transfers" to define budget support to partners who are, for the most part, governments of sovereign states. But the greater issue is what Detlef discusses in the article. The complexity managing HACT is mind-boggling, and its imposition on partners smacks of extraordinary UN arrogance, and this compounds as much as confounds efforts to reach the intended targets . We are long past the need for an overhaul and, as despicable as the current US government's actions are, perhaps this is an opportunity to go back to the future. That said, I dare not say that we should make things great again!
ReplyDeleteThere is a proverb along the lines that it is a good idea to clean staircases from the top down. While DEI might be important, it would perhaps give both donor and programme countries more confidence if more of the UNICEF top executives were from countries, such as South Korea, Singapore and Botswana, which have shown that they know how to develop fast.
ReplyDeletedear Detlef, I am an admirer of your essays. Read every one! Your humor and the sometimes cynical twist you put on things, so often you hit the head and the heart with eye-openers. But today's opener: "UNICEF is in the business of transferring money from the global north to poor and middle-income countries" is, as you know, incomplete. It is a gesture, I guess, to make a point. Provocative. But it is also a miscalculation. What is transferred is not just cash. Again you know this as well or maybe better than anyone. You also know that UNICEF's work has many levels of suspension of disbelief. Call it a theory of change. Results must be measurable, and there will be outcomes, there will be impact. But the CRC does require a suspension of disbelief. And the CRC has changed the world, you could say. You would not be wrong to say so. The CRC is the most ratified human rights instrument for a reason, universally ratified (I would say). That cannot be measured in cash. Yes, let's be efficient and effective. We need to spend penny-wise. The UNICEF colleagues I have worked with over the years have done their level best to make UNICEF count. UNICEF counts. That's my two cents. With best wishes and admiration, Saudamini
ReplyDeleteDear Siegrist, thank you for your comment. I agree with you on the importance of the CRC.
DeleteLet us remind us that – even according to UNICEF’s own website - translating child rights principles into practice requires action and leadership by governments. The UN Committee on the Rights of the Child is the monitoring body, and as the treaty body makes recommendations to the state party. The responsibility lies with the government.
UNICEF can and should be the best recognized lobbyist for children’s rights and welfare, but it is the state party that has to act using its own resources including any grants.
No one questions the importance of the CRC and all 54 countries in Africa ratified it decades ago. Have all those countries submitted the first report that was due two years after ratification? How many have submitted all the reports due every 5th year? Such information is basic but does not appear to be very easily accessible through a quick search. UNICEF has a presence in all of these 54 countries and if the CRC is as important to the organization as it claims such information should be much more readily available. If the countries UNICEF is working closely with do report diligently and act on feedback it should be held up as an example of how well UNICEF's advocacy works. That could be one of those success stories that have been called for elsewhere on this blog.
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