CMAC Funding Recovers From Scandal’s Taint

Earlier this month, Denmark gave about $600,000 to the Cam­bodian Mine Action Cen­ter—two-and-a-half years late.

“This contribution to CMAC had been allocated in 1999, but was frozen as a result of the crisis of confidence that followed the release of the 1999 KPMG Audit Report,” states the news release announcing the recent donation.

In other words, three years ago Denmark and other foreign governments didn’t trust CMAC—the government’s demining agency—with their money. Now they do.

Donors and observers alike say that, while the job is not complete, CMAC has largely re­gained the confidence it lost in a 1999 scandal.

Claus Morgensen, Bangkok-based Danish aid counselor, said Denmark finally decided to release the funds late last year, when it decided CMAC had met its specific reform demands.

“By fulfilling the…demands, CMAC has regained our confidence,” Morgensen wrote in an e-mail.

Other donors agree. “By our assessment, CMAC has made a very good recovery,” said Ma­suda Shikahiro, assistant resident representative of the Japan International Cooperation Agency, the center’s largest contributor, pledging $6.5 million worth of equipment for 2002-2003.

The reforms have been “almost totally successful,” he said.

In 1999, a report by auditor KPMG finding financial mismanagement was just the biggest of many accusations of corruption and incompetence in CMAC. Donor countries froze or withdrew millions of dollars.

CMAC’s director-general at the time, Sam Sotha, was fired, and UN Development Program Project Coordinator Richard Warren left his post. Some 90 percent of the staff were laid off. The center neared extinction—at one point it had only enough funds left for two weeks’ operations.

Current CMAC Director General Khem Sophoan was appointed in August 1999 and charged with cleaning up a mess he didn’t create. The former military deputy commander-in-chief presided over the virtual gutting of the top-heavy organization as it tried to become coordinated, transparent and accountable.

“At that time CMAC was very bad in the eyes of the donors,” Khem Sophoan said. “I had to change things if CMAC was going to survive.”

Nearly three years later, CMAC is still afloat. Its 2001 budget of about $7.4 million is less than the $12 million to $13 million it received annually before the scandal, but Khem Sophoan and others say that’s because it operates more efficiently. In addition, some of its old responsibilities now lie with other agencies such as the Cambodian Mine Action Authority.

Donors say Khem Sophoan’s guidance has been a major factor. “Under his leadership, CMAC has made great strides toward reform,” a US Embassy official said. “We are confident they will use our funds in an effective manner to meet demining objectives.”

The US is the top monetary donor to CMAC, with over $1 million pledged this year. In 1999, the scandal prompted the US to transfer its demining donation from CMAC to the NGO Halo Trust.

Last year, CMAC cleared 9.63 square km of land—37 percent above its target for the year. Casualties from landmines and unexploded ordnance have decreased by over 60 percent since 1998.

In March, CMAC held its biannual meeting with donors and government representatives. “All of the donors offered their congratulations to CMAC for its leadership and management,” Khem Sophoan said. “It was the first time” they had given such a unanimous expression of approval.

A new KPMG audit last year reflected the improvement. There are four audit ratings: satisfactory, marginally deficient, deficient and seriously deficient. In 1999, CMAC was rated “seriously deficient.” In 2001, the rating was “marginally deficient.”

The audit determined that over 70 percent of the first audit’s recommendations have been or are being implemented. “This verdict is a major achievement,” said Swedish Counselor Daniel Asplund. Sweden is the second-largest cash donor to CMAC.

In the wake of the scandal, CMAC first had to clean up its finances, which it immediately did. But the donors said other things also needed to change, like the center’s organizational structure and its operating procedures:

• CMAC staff at Phnom Penh headquarters were reduced from 3,060 to 80, while the number of deminers increased, once donor money started coming in again. CMAC currently employs 2,264 people.

• Accounting, procurement, logistics and human resources were brought together in a single computer system—a major step toward coordinating CMAC’s operations. CMAC produced a comprehensive, credible inventory for the first time in November.

• Standard operating procedures for two-man demining teams were reformed. Before, one deminer with a metal detector would mark suspected mines, while the other would investigate whether a mine was present. If nothing was found, the first would come back and check again, resulting in a lot of back-and-forth. Now one deminer both detects and investigates. This change and others have reduced lane clearance time by 10 to 15 minutes, Khem Sophoan said.

• More planning decisions are made at the field level. Demining units now work with provincial and local authorities to decide which minefields most need to be cleared, rather than headquarters. And the units have the flexibility to change course if necessary. For example, if a minefield slated for clearance is too flooded to work on, the unit can switch to another location without having to ask permission.

Donors and observers say more transparency in CMAC’s finances is still needed. Coordination between CMAC and its partners—ministries, donors and NGOs—is improving gradually.

“CMAC has been very diligently working on building up their image, restructuring and changing the way they do things,” said Jay Steed of the private demining company UXB. “The donors are watching, and they are a lot more confident now.”


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