Christian Friis Bach, Denmark’s Minister for Development Cooperation announced to
stop funding for three projects in Vietnam.
Denmark government, via the Danish International Development Assistance (DIDA), has provided grant assistance to the implementation of four research projects on climate change in Vietnam.
The first rumor about misuse at the four projects appeared in early this year. In April, the Danish Embassy in Hanoi received a detailed report on wrongful spending of these projects, from the Danish Auditing Office. Based on this report, the embassy hired the PriceWaterhouseCoopers (PWC) to audit these projects, which received Denmark’s ODA from October 2011.
The Danish Foreign Ministry published the PWC’s auditing report on its website last week, showing that all four projects committed misuse and ‘all violations were committed by the Vietnamese side.’
The total funding for these projects is 19.9 million kroner, equivalent to $3.45 million. So far, $2.45 million has been disbursed to the Vietnamese partners and according to the investigation, they misused $550,000 or 23 percent of the capital.
This is the reason for the Danish Embassy’s decision to immediately stop funding three projects. The remaining project, as the misused money is only $15,000, is still being implemented, under a stricter supervision and management.
The frauds detected by the PWC include use of consultancies for own benefit, overcharge of internal facilities and cash deficit compared to the balance of the cash book, according to the Danish Embassy.
The Embassy, however, said it has yet to able to comment further on the case with reference to the on-going verification, adding “the observations need careful evaluation by the two governments and the implementing institutions before final conclusions can be made.
These projects include: “Impacts of Climate Change on Land Use change in the Red River Delta and its Community Livelihood Change,” “Assessing the Impact Trends of Climate Change on Physical and Environmental Conditions and Socio-Economic Development in Central Vietnam,” “Climate Change and Estuarine Ecosystems in Vietnam,” and “Improving rice tolerance of submergence and salinity to cope with climate change in coastal areas of Vietnamese Deltas.”
The “Impacts of Climate Change on Land Use change in the Red River Delta and its Community Livelihood Change” (ICARGC) project has ten suspicious points, with the deficit of around $220,000. The Vietnamese partner in this project is the International Center for Global Climate Change Research, a unit under the Hanoi National University. The Danish partner is the National Institute for Environmental Research under the Aarhus University.
According to PWC, over VND900 million ($45,000) was transferred into the fund of ICARGC without vouchers while it was reported to the Danida as paying salary. Over $50,000 was paid to two employees of ICARGC, who were in charge of collecting data, while these people had been paid before. Another $50,000 was also spent unclearly and ICARGC explained as the pre-payment for the project. In addition, PWC noted around $40,000 that was advanced for four employees without clear explanation.
The Assessing the Impact Trends of Climate Change on Physical and Environmental Conditions and Socio-Economic Development in Central Vietnam project, is defined to misuse up to VND5.4 billion (over $200,000). The Vietnamese partner in this project is the Geography Institute under the Vietnam Institute for Science and Technology.
Around VND2.1 billion ($100,000) was paid to many people and for some tasks without clear explanation. VND615 million ($30,000) was used to buy a car for the project but investigation showed that the car was not used frequently because the researcher used to do field-trips by airplane. In addition, the institute ‘borrowed’ money from the project to deposit at bank and returned it after a period of time.
According to PWC, the Climate Change and Estuarine Ecosystems in Vietnam project misused VND1.3 billion ($60,000), in which VND830 million ($40,000) was used as a scholarship for the daughter of the project coordinator. This girl worked at the Institute for Oceanography before taking the scholarship and left the institute after finishing study.
In the fourth project, entitled Improving rice tolerance of submergence and salinity to cope with climate change in coastal areas of Vietnamese Deltas, PWC detected two suspicious points, worth nearly VND300 million ($15,000) of misuse. The Vietnamese partner is the Institute for Agricultural Genetics.
Vietnam is the only Asian country that Denmark provides ODA grants for climate change projects.
“We are now working with the Vietnamese government and partner institutions to deal with this serious issue. The initial response from the Vietnamese government has been cooperative,” states the Danish Ambassador to Vietnam, John Nielsen, in a statement released Friday.
“It is important to crack down on those caught misusing Danish aid funds in order to clearly demonstrate the consequences. Those that cheat must be stopped and punished,” Christian Friis Bach, Denmark’s Minister for Development Cooperation, wrote on the ministry’s website.
Mr. Hoang Viet Khang, chief of the External Economic Relations Department of the Ministry of Planning and Investment, the agency in charge of managing ODA, told VNeconomy that he knew the information through the media.
Khang said that these are research projects so they are directly managed by the Ministry of Science and Technology.
The Ministry of Planning and Investment has sent a dispatch to the Ministry of Science and Technology to ask it to investigate the case.
Khang said that not many similar cases have been detected in Vietnam.
Mr. Bui Quang Vinh, minister of Planning and Investment, stressed that any wrongdoings or misuse of ODA will be severely dealt with. He made this statement when interviewed at a meeting of the National Assembly.
The decision to stop funding these projects was released by the Danish Embassy on June 1, several days before the mid-term consultative group (CG) meeting in the central province of Quang Tri on June 4-5.
At this meeting, international donors will consider Vietnam’s macro-economic situation in the first half of 2012, have dialogue on hunger eradication and poverty reduction, natural calamity relief, dialogue on improving infrastructure to serve social and economic development in central Vietnam and discuss the renovation of the method of organizing CG meetings.