EU auditors see hopeful beginning for trust fund for Central African Republic despite shortcomings

The first-ever EU trust fund set up in Africa can be counted as a positive achievement according to a new report from the European Court of Auditors published last week (31 August). The Bêkou EU trust fund for the Central African Republic (CAR) has attracted aid and most of its projects have delivered their expected outputs.

A trust fund is a fund established for a specific development purpose with financial contributions from several donors, often set up in response to crises such as natural disasters or conflicts. By pooling their resources, donors can improve coordination and deliver aid more effectively.

Launched in July 2014, at the initiative of France, the Bêkou fund was the first of its kind managed by the European Commission. Its donors are the EU, France, Germany, the Netherlands, Italy and Switzerland, who together have pledged a total of €146 million to support the Central African Republic’s exit from crisis and its reconstruction.

Most of the money, about 75 % of the fund, has been pledged by the EU budget and the European Development Fund, followed by France and Germany with €15 million each. However, by the end of 2016 only €86 million had been actually received by the fund.

Asked by The Brussels Times how much funding is provided bilaterally by EU Member States, the audit team replied that this was outside the scope of the audit. “For information on the bilateral amounts by the countries, one would need to contact their relevant authorities.”

“Bêkou means hope in the Sango language of the Central African Republic,” said Mrs Bettina Jakobsen, the Member of the European Court of Auditors (ECA) responsible for the report. “We hope very much that the fund can contribute towards building the foundations of a better future for the country.”

Hope is indeed needed but hardly enough to deal with the worsening humanitarian crisis in the Central African Republic. According to recent news reports, violence between Christian and Muslim armed group in this former French colony is forcing aid workers out of the country and denying the population access to healthcare.

Despite the dangerous situation in CAR, where the elected government only controls the capital and surrounding areas, the EU auditors managed to visit the country and carry out on-the-spot checks of the projects supported by the trust fund.

The auditors assessed whether the fund’s establishment was justified, how well it was being managed and whether it was achieving its objectives. The reply to the last question was largely positive, with all of the 30 contracts audited on track as regards budget and schedule and a majority of them having fully or partially achieved their targets.

Since the trust fund for CAR was established, three more funds – for Syria, migration in Africa and Columbia – have come into place. From this point of view, the audit team considers the CAR trust fund as a kind of pilot test.

The auditors found that the choice to set up the fund and its design were appropriate, even though there was neither a formal assessment of the choice of funding vehicle nor a comprehensive needs analysis. “The choice of the most appropriate funding vehicles always needs to be established on a case by case basis,” the audit team told The Brussels Times.

Despite the absence of a formal assessment of various tools to channel development aid, the auditors apparently accepted the choice of the trust fund. At the time when the Bêkou trust fund was created, in the middle of an urgent crisis in CAR with no democratically elected government, other options could not be easily used.

Once established, the fund was struggling with management problems which could be due to the rotation of staff and has not yet reached its full potential. The fund had only limited influence on coordination among stakeholders. Monitoring and evaluation are not yet fully developed.

Such problems, though well-known in the management of external aid, seem to repeat themselves and did not come as a surprise to the auditors. Procedures could be more transparent, rapid and cost-effective, according to the auditors, who examined the choice of contractors and total management costs.

”This is the first such trust fund, and teething problems are not unusual with new aid vehicles, especially when considering the short timeframe in which the fund was established. Also, these problems are unfortunately commonplace with development aid,” the audit team explained.

Apart from a limited number of service contracts, the Bêkou trust fund has used three different selection methods to implement projects: delegated cooperation agreements with organizations from a Member State, direct awards and awards following a restricted call for expressions of interest.

These methods may speed up procedures but they have also disadvantages such as limited transparency, potential conflicts of interest and restricted access to funding for newer organizations.

The audit team was asked whether there should there have been more competitive bidding and if irregularities were suspected. “As auditors, we are always in favor of the most competitive processes possible. However, we recognize that in some instances, this is not always feasible. We do not comment on individual selection procedures in our report.”

The EU Financial Regulation stipulates that a maximum of 5 % of the amounts in a trust fund can be used to cover its management costs. In reality the management costs are higher but the full costs for managing the Bêkou trust fund were not calculated in the audit. An extra layer of management costs is added when a project is delegated to an implementing organization.

According to the audit team, complete figures will only be available once the fund has been wound up. “Despite attempts by the auditee to provide figures, it is simply impossible to provide accurate figures at this stage.”

Humanitarian crisis in CAR and warning of genocide

Following a mission to the CAR last July, the UN Under-Secretary-General for Humanitarian Affairs and Emergency Relief Coordinator, Stephen O’Brien, was extremely alarmed “by the increased scale and atrocity of needless and brutal violence in the country since the beginning of 2017 and the resurgence of inter-communal violence.”

“The recent upsurge in violence has added to humanitarian needs in what is already one of the largest humanitarian crises in the world,” he said in a statement to the UN Member States. “With 2.4 million people – representing half the population – in need of humanitarian aid to survive, the Central African Republic has the largest population in need per capita.”

“The number of internally displaced people have risen by 40 per cent this year, an increase of some 180,000, bringing the total to well over half a million, in addition to half a million refugees.”

“We cannot under-estimate the dangerous spread of militant groups in CAR, some of which have the clear intention to ethnically cleanse,“ Stephen O’Brien stated. “The early warning signs of genocide are there. We must act now, not pare down the UN’s effort and pray we don’t live to regret it.”

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