Audit Finds Mismanaged Government Funds to International Institutions, Account for 30% of Total Cases

The Yomiuri Shimbun
The Board of Audit

Government bodies have mismanaged funds that were provided to the United Nations and other international organizations in more than 30% of cases between fiscal 2018 and fiscal 2021, according to the Board of Audit of Japan.

Problems were found in 145 of the 426 cases, the board said.

The funds are called voluntary funds, which countries provide to international institutions to support their operations. According to the audit, Japan provided more than ¥3 trillion over the six years from fiscal 2018 to fiscal 2023, a figure that does not include mandatory contributions, which are shared among countries.

In one case, a government body failed to make public that funds appropriated to purchase COVID-19 vaccines for domestic use were diverted.

Given the situation, the board requested that the government ministries and agencies improve their practices.

The audit found that in 44 cases, government bodies failed to regularly receive financial reports from international institutions and, as a result, were not aware of their revenues and expenditures. In 58 cases, the government bodies were not aware of the amount of unused funds that the institutions carried forward to the next accounting period, while in 43 cases, government bodies failed to confirm how the leftover funds were used.

The audit also learned that in 123 of the 145 cases, additional voluntary funds were provided to international institutions upon request without an examination being made as to whether the requested amount was appropriate.

The audit noted that such practices could lead to excessive spending and funds being kept for a long period.

In October 2020, the Health, Labor and Welfare Ministry provided ¥17.2 billion to COVAX Facility, or COVID-19 Vaccine Global Access Facility, a global procurement and distribution mechanism for COVID vaccines, to cover costs related to procuring vaccines for domestic use.

However, most of the contributions went unused when it became clear that securing enough vaccines from manufacturers would be possible. In March 2022, the ministry diverted the remaining funds, ¥16.6 billion in total, to developing countries.

That, however, was not recorded in a government report.

The health ministry maintains that the widespread use of vaccines in developing countries helps prevent infections in Japan, and the diversion did not therefore deviate largely from the original objective.

The board, however, expressed dissatisfaction.

“The problem is the fact that the ministry failed to make it public,” said a senior official of the audit.