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Baroness Scotland, head of the Commonwealth Secretariat, was criticised by auditors for “circumventing” regular aggressive tendering guidelines
The British authorities has suspended its funding of the Commonwealth Secretariat, the physique that runs the worldwide organisation from London, the BBC has discovered.
UK diplomats have instructed Woman Scotland, the secretary-general of the Commonwealth, that Britain’s annual £4.7m voluntary contribution shall be withheld till her secretariat improves its monetary procedures.
The Secretariat insisted it was implementing suggestions made by exterior auditors.
The UK resolution got here after Woman Scotland was criticised by auditors for “circumventing” regular aggressive tendering guidelines when she awarded a profitable consultancy contract to an organization run by a pal.
The auditors additionally found that procurement guidelines had been waived by the secretariat on no fewer than 50 events over three years.
Each New Zealand and Australia have additionally suspended their discretionary funding to the Commonwealth Secretariat till its monetary programs are tightened up and examined by exterior auditors.
The UK resolution threatens to plunge the secretariat right into a monetary disaster and can elevate contemporary questions on Woman Scotland’s management.
Commonwealth heads of presidency have already rejected calls to offer Woman Scotland an computerized second time period of workplace when it comes up for renewal this 12 months.
The funding disaster got here to a head final week when Commonwealth excessive commissioners in London – who collectively kind the organisation’s board of governors – met to debate the outcomes of the investigation by the exterior accountancy agency KPMG.
The Commonwealth Secretariat is the central administrative hub for the intergovernmental organisation that contains 54 nations – a lot of them former British colonies – and encompasses virtually a 3rd of the world’s inhabitants.
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About two-thirds of the Commonwealth Secretariat’s funding – some £18.4m in 2018 – comes from computerized subscriptions from member states.
However there may be additionally a second price range for the secretariat – the Commonwealth Fund for Technical Cooperation – which is discretionary and offers a couple of third of its funding, price about £12m in the latest audited accounts. The UK is the most important contributor to this fund.
A senior British diplomat wrote to Woman Scotland on three February to say that continued UK funding can be suspended till the Commonwealth Secretariat complied with the suggestions of the KPMG report.
These circumstances included a register of events when procurement guidelines have been waived, a register of actual and potential conflicts of curiosity, and an updating of the physique’s whistleblower coverage.
The official gave the secretariat a deadline of 21 February to implement all of the reforms which must be signed off by the chairman of the Commonwealth’s unbiased audit committee.
A spokesperson for the International Workplace mentioned: “We’re dedicated to an efficient Commonwealth that delivers for its member states, so now we have set various circumstances on UK funding to the Commonwealth Fund for Technical Cooperation for this monetary 12 months.
“These embody circumstances relating to making sure that the Secretariat’s procurement coverage and its implementation are consistent with worldwide greatest apply.”
A Commonwealth spokesperson mentioned: “The Commonwealth Secretariat doesn’t touch upon non-public exchanges with its member nations.
“The Secretariat complies absolutely with the audit course of and implements suggestions accordingly.”
‘Apparently bancrupt’
New Zealand has additionally put its £1.5m contribution on maintain.
A spokesman for its Ministry of International Affairs and Commerce mentioned: “An unbiased audit report by KPMG has recognized important weaknesses within the Commonwealth Secretariat’s strategy to managing procurement. In consequence, New Zealand has placed on maintain its voluntary monetary contribution to the Secretariat till we obtain unbiased affirmation the suggestions from the audit report have been addressed by the Secretariat.”
Australia has gone one step additional and lower its funding to the Commonwealth Secretariat by £414,000 and has made its remaining contribution of £260,000 contingent on the reforms being applied.
A spokesperson for Australia’s Division for International Affairs and Commerce mentioned: “This new funding quantity shall be paid solely after there may be unbiased affirmation that the problems recognized within the audit have been addressed by the…