The international NGO Save the Children says the UN’s prestigious, multi-million dollar Central Emergency Response Fund (CERF) is “clumsy and inefficient” and the UN is “wasting time and money” in the way it administers the money.

Under the fund’s current system, only UN agencies and governments can apply for money from the CERF, which is meant to provide flexible and timely funding for emergencies and situations neglected by traditional donor mechanisms. Most project implementation is however done by NGOs, who receive CERF cash from UN agencies.

But in a strongly-worded report released last week, Save the Children demanded that NGOs be able to directly apply for money, citing its own research which it said revealed that 7 cents in every donated dollar is being wasted because administrative costs are being duplicated by UN agencies and then NGOs, and that donor money is too slow reaching the agencies that will use it.

“The fundamental flaw of the CERF mechanism is that non-UN agencies, like Save the Children, are not allowed to receive direct funding, despite the fact that they are usually first on the ground and deliver more than half of all emergency relief,” the NGO said in its report, released in London, which recommends channelling at least half of CERF money directly to NGOs.

The CERF has so far disbursed over US $261 million to 331 projects in five long-neglected countries including Central African Republic, Democratic Republic of Congo, and Cote d’Ivoire. A third major tranche of CERF funds totalling more than US $50m is expected to be announced by the UN this week.

Save the Children believes the fund’s administration needs to be revamped, even though the fund has been operating for less than a year, because the current system is too “slow, bureaucratic, and wasteful” and money takes too long to reach emergency projects. The NGO cited its own experience trying to get money through the CERF for projects in Zimbabwe as an example of the fund’s problems.

Several other international NGOs have questioned the CERF’s dependence on UN agencies since its structure was announced last year and some have complained of feeling “alienated” from the funding process, but none has launched such a strongly-worded public attack on the fund.

The UN Office for the Coordination of Humanitarian Affairs (OCHA) manages the fund with the guidance of an advisory group which includes NGOs. OCHA spokesperson Stephanie Bunker told IRIN from New York that the CERF is governed by regulations laid down by the UN General Assembly, which includes all UN member states.

“Any modification would therefore have to be approved by the General Assembly,” she said, adding that OCHA - which will make its own review of CERF in May 2007 - “believes that CERF needs to evolve as time passes”.

Responding to Save the Children’s criticism that NGOs are losing money because of the CERF, Bunker said the CERF is “additional” to other humanitarian funding and “does not detract" from overall funding levels.