Nielson takes back money from ‘mismanaged’ NGOs

Date: 10/05/01

By Simon Taylor

Development Commissioner Poul Nielson is to claw back €325,000 from development aid groups for alleged financial mismanagement.

Nielson reached an agreement with the Liaison Committee of Non-Governmental Organisations (CLONG) last week under which the umbrella group will hand back the sum over the next three years.

In return, the EU executive will unfreeze over €700,000 in funds.

Announcing the deal, Nielson said: "[This agreement] not only safeguards the interests of the European taxpayer but also guarantees the future of an important NGO network."

But Sam Biesemans, CLONG's spokesman, warned that the European Commission's action had been devastating for his organisation, which has been forced to shed valuable staff.

"We will be very poor for some time to come. The role of European NGOs has become very weak and it will take a long time to rebuild."

Biesemans said that his organisation did not accept some of the accusations levelled by the Commission.

"This is a political compromise," he stressed. As part of its side of the deal, CLONG will ask for a delay in a court ruling on the Commission's original decision to freeze €700,000 in funding for 2000.

The agreement follows an external audit demanded by the executive last October into the financial management of EU funds by CLONG.

It found that the Commission was entitled to claim back nearly €1 million because of "insufficiently documented or ineligible expenditure".

The report stressed, however, that no fraud had occurred. Following a supplementary audit requested by the NGO group examining new documents produced by the organisation, the sum to be taken back was reduced by more than 40%.

The decision by the Commission to launch an investigation into NGOs' financial competence has provoked claims that Nielson does not trust campaign groups.

Some observers cite the Commission's recent move to channel more EU funds to United Nations development agencies as evidence of Nielson's distrust of NGOs.

The Danish Commissioner rejects this accusation, saying that his only motivation is to ensure that EU money is spent properly.

He said: "Despite the polemics, the only issue at stake this whole time has been the question of sound financial management and the respect of financial regulations.

"Improving financial management applies equally to our partner countries and to NGOs in Europe".

Nielson, meanwhile, has offered the Democratic Republic of the Congo €120 million in EU development aid to encourage the government of Joseph Kabila.

But Kabila's administration has not yet responded to the Commission's offer. The money was frozen during the rule of President Mobutu.

Development Commissioner Poul Nielson is to claw back €325,000 from development aid groups for alleged financial mismanagement.