Donors Cut Funds for Development Center

Donors have suspended aid to the Center for Social Develop­ment, as an independent investigation has found glaring inaccuracies in the handling of its fi­nanc­es, CSD President Chea Vannath said Tuesday.

Though the investigation team found no indication of fraud, it found unauthorized borrowings, in­adequate financial management policies and examples of incorrect financial statements—several of which were signed off by Chea Vannath, according to a copy of the investigation team’s report.

“Due to incompetence, inaccurate financial reports, unreliable fi­nancial information, the…re­sults would distort the whole organization’s operation and its integrity will be…affected,” the report said.

The investigation follows an au­dit by PriceWaterHouseCoo­pers Cambodia Ltd that discovered $3,655 was unaccounted for in the fiscal year ending Sept 30, 2003.

As a result, CSD’s donors, who contribute about $500,000 to the center each year, have frozen their distribution of funds until the center submits work plans to them, Chea Van­nath said Mon­day. The move will af­fect the or­gan­ization’s various projects, in­cluding its provincial court monitoring and surveys, workshops and forums on de­moc­racy and human rights.

“It’s very, very drastic,” she said. “All activities have been suspended.”

Only a few workshops and projects, which require little funding, will continue, she said. None of CSD’s nearly 30 staff members will lose their jobs, she said.

“Mainly, it’s just a weak system,” Chea Vannath said.

In response to the investigation team’s findings, CSD will provide training for its accounting staff and bring in a receiver next week to take care of its financial transactions, Chea Vannath said.

“We hope to pick up the pieces and move ahead,” she said.

According to Daisy Valence, the author of the investigation team’s report, poor financial management “is a common problem here in Cambodia [among] local NGOs, and other private firms.”

Chea Vannath said the investigation team is expected to finish its probe in early December.



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