Photo/Illutration The United Nations headquarters in New York (Asahi Shimbun file photo)

Japan’s Board of Audit found that 453 billion yen ($3 billion) in public money effectively went down the drain due to lax oversight by the government over voluntary funding to international organizations such as the United Nations.

It said ministries continued making payments without bothering to confirm whether the funds were even needed. And there were occasions when the entities had a surplus of funds, rendering payments unnecessary.

The watchdog body identified 123 such instances, representing around 30 percent of all voluntary contributions by Japan during fiscal 2018 to 2021.

There were also examples of ministries continuing to pay a fixed amount every year without receiving financial reports from the organizations concerned.

LARGEST PAYMENT FOR UKRAINE

Government spending to international bodies falls into three categories: mandatory assessed contributions based on resolutions of general assemblies and the like, voluntary contributions for specific initiatives and capital contributions to entities like the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD).

The Board of Audit of Japan tallied 722 payments made by all 24 government agencies in fiscal 2018–2023.

Total spending over the six years came to 5.0237 trillion yen.

Expenditures have trended upward since fiscal 2020 due to outlays triggered by the COVID-19 pandemic.

The single largest payment was in fiscal 2023 when the Finance Ministry gave 685 billion yen to the IBRD’s Ukraine reconstruction fund.

ISSUE OF SURPLUS FUNDS

Voluntary contributions accounted for 3.03 trillion yen, 60 percent of the 5.02-trillion-yen total, prompting the board to examine 426 payments by 17 government agencies in fiscal 2018 to 2021 to check whether the government was aware of each organization’s carryover amounts and other factors.

It cited 384 cases where additional funds were paid in subsequent fiscal years.

In 38 cases, the government did not regularly receive financial reports. In 49 instances, the government failed to account for carryover amounts. And in 36 cases, the government did not verify whether there were any “surplus funds” not designated for use.

In 123, or 32 percent of cases, the government failed to adequately verify demand before providing extra funds.

Combined with additional contributions, these amounts totaled 453 billion yen over fiscal 2018 to 2023.

The board noted there were cases where ministries and agencies, after being questioned during the audit, contacted the organizations and learned that there were large carryovers.

Key expenditures included the Foreign Ministry’s 66.9 billion yen in contributions to UNICEF in fiscal 2018 to 2023 as well as 61.4 billion yen to the World Food Programme over the same period and 44.5 billion yen to the United Nations Development Programme.

GOVERNMENT’S RATIONALE

Among explanations given to the board by ministries and agencies was the necessity to make contributions regardless of surplus funds “to maintain a certain presence in the international community.”

The board countered that ministries and agencies “need to appropriately grasp the status of contributions, for example, by inquiring about the presence of surplus funds to encourage international organizations to use funds effectively.”

A Foreign Ministry representative told The Asahi Shimbun that Japan makes voluntary contributions after taking into account any changes in priorities stemming from a volatile international situation.

“We will respond thoroughly to ensure that financial contributions do not remain idle,” the official said.

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