Germany:The German branch of children's charity Unicef is facing a crisis of credibility after its honorary chairwoman resigned, complaining of lax spending controls.
Heide Simonis, a leading Social Democrat politician and former state premier, quit over a disagreement about a report by consultants KPMG that noted "very clear breaches" in how the organisation collects and uses donations, which came to €97.3 million in 2006.
Unicef Germany rejected Ms Simonis's criticisms and said it had already resolved some management issues raised by the report. In a press release last month, it added that KPMG found no breaches of the law in its German operations.
But in a sharply worded letter leaked to the media, KPMG warned Unicef that its press release was "contrary to the truth" and reiterated that its report "speaks very clearly of regulation breaches".
Last year Unicef Germany chief executive Dietrich Garlichs was accused in an anonymous letter to the media of squandering funds by awarding over-generous consultant and adviser contracts. Mr Garlichs clashed with Ms Simonis over how best to deal with these irregularities.
"There was dissent over whether to admit to mistakes," said Ms Simonis, explaining her resignation. "I am always for openness, so that all can see that lessons are learned from mistakes. There were breaches of rules covering signatures, dual control, written contracts. For a charity, rules are not just important but indispensable."
Ms Simonis's successor admitted on radio yesterday that Mr Garlichs had been "a little generous" in awarding contracts.
The KPMG report calls for tighter book-keeping and a reduction in administration costs, which swallowed 18 per cent of the €97 million budget in 2006.
The German operation of Unicef is under investigation by a state prosecutor.