Table of Contents
3.3 Obligations when reporting Fraud
3.4 Investigating Fraud suspicions
4.3 Reasons to avoid any kind of corruption
Annex A – Corruption Risk Areas
Annex B – Potential Indicators of Corruption
Annex C – Personal tips how to deal with corruption
Fraud and corruption can threaten the organisation in all its aspects. This is obvious in the case of theft or fraud. It is just as true, though sometimes less obvious, in the case of other kinds of corruption, such as bribery and faciliat.
People may use numerous confidence tricks and fraudulent actions to “get a piece of the cake”. Goods and funds of the programme can be misappropriated or abused, both by staff and by outsiders. Documents can be forged or “forgotten”. Suppliers may deliver goods of inferior quality, or in less quantity, than ordered and paid for. Staff may steal from the stores, etc.
Also at a personal level, one may be cheated out of money by a variety of false stories and promises. In many cultures, this is officially illegal, but in practice it is not considered wrong, just smart.
Procedures to account for funds and goods, as found in the Finance Part of this manual, must be enforced in order to deter fraud and to detect it when it occurs.
Fear of insulting staff can never be a reason for failing to properly implement financial procedures. Often staff will welcome them as they provide protection against pressure from family and against malevolent colleagues. Unwillingness to co-operate with the implementation of the procedures may well be an indication that something is wrong.
MAAN strongly discourages all facets of fraud and corruption. If fraud has been established and MAAN has suffered damages, then the persons who committed the fraud should not obtain any kind of benefit. MAAN will recover any losses from all persons that committed the fraud, whether they are MAAN employees or not, through a court of law with the appropriate jurisdiction.
The following paragraphs define and describe specific policies, measures and actions to prevent and react on fraud and corruption.
“A dishonest or deceitful activity, or misuse of MAAN property or systems for financial benefit or any other kind of benefit for the person committing the fraud or any other person. For examples the counterfeiting of documents and/or the evasion of rules.”
MAAN is committed to creating an internal structure (management structure, administrative and financial procedures, internal auditing, and quality structure) that prevents fraud. For each new recruit in a management position the references are checked. However, situations may occur in which preventive measures are not possible and in these situations, the investigation afterwards will play an important role. This investigation can be carried out by both the internal and the external auditor. If fraud has been established, please always follow the steps that are outlined in this document.
3.3 Obligations when reporting Fraud
Please take the following steps when you discover or suspect Fraud:
3.4 Investigating Fraud suspicions
MAAN employs a standard procedure when investigating Fraud. This ensures that staff does not act prematurely in circumstances they do not fully know.
It is the responsibiltity of the Country Representative to file a written report to the CEO including the following information:
The CEO or another senior manager should then ensure that any necessary disciplinary and other action is taken swiftly.
The implementation of adequate fraud policy guidelines and investigation procedures deserves special attention, as it will facilitate the early stages of a fraud investigation and ensure that any further investigation will not be hampered or obstructed. Members of staff are not allowed to start their own investigation into a suspected fraud case without prior permission from Country Representative.
“A dishonest activity in which a member of the board, a member of staff, a manager, or a contractor acts against MAAN interests and misuses his or her position of trust to obtain any kind of benefit for himself/herself or any other person. This also includes offering and receiving bribes and facilitation payments [1] .”
4.3 Reasons to avoid any kind of corruption
A list of Corruption Risk Areas is found in Annex A.
Even the perception of corruption, or false accusations of corruption, can cause the same negative effects as real corruption. Great care should therefore be taken not to allow any perception of corruption to arise in connection with development and humanitarian organisations.
In some countries the state has virtually ceased to function, and officials such as border police have received no salaries for months, sometimes years. In these cases a system of charges provides them with an income. Aid agencies will sometimes regard this as necessary and understandable. In this case they may discuss the issue together, and agree on a joint position that ensures that everyone pays the same charges for the same services, and gets a receipt for any money paid. This compromise approach at least ensures that there is some accountability and transparency.
Annex B shows a list of potential indicators of Corruption.
More elaborate tips on a personal level how to deal with corruption can be found in Annex C.
Managers should lead by example in preventing and avoiding corruption, and should ensure that all staff follows this lead.
External Risk factors
Geographical Risks may be higher in certain countries or regions within countries. Activities in urban areas may pose different risks to activities in rural areas.
Cultural In certain cultures and work environments, bribes may be seen as “business as usual”.
Emergency relief The time pressure and security context may increase risk.
Sector The nature of the sector in which MAAN works may pose specific risks (eg. construction, healthcare, water, forestry).
Partners MAAN usually works through partners. Factors that may impact bribery risk include: size/structure/governance of partners; adequacy of partners’ control systems; partner selection processes; partnership contracts and agreements; and partners’ monitoring and support processes; political involvement or connections of partners.
Procurement Increased risk where processes are not fair or transparent. Procurement is a high risk area for bribery.
Transactions Certain transactions may carry higher risk e.g. payments to government officials, major contracts and payments through third parties.
Recruitment Bribes can be offered or sought as part of recruitment processes.
New activities There may be increased risk MAAN starts new activities in which it has limited experience, such as humanitarian relief in a new country, or commercial operations.
Organisational risk factors
Existing procedures Risk that existing policies and procedures are not adequate or effective.
Legal/prosecution Risks of non-compliance international or local legislation, and subsequent prosecution.
Reputation Risk of reputational damage following a corruption scandal.
Source: Anti-Bribery Principles and Guidance for NGOs
Source: Anti-Bribery Principles and Guidance for NGOs
Many experienced humanitarians have found it possible to work for years in countries that have serious corruption, without ever paying a bribe. There are respectful and courteous ways of doing this. Consider the following, if appropriate to your personality, to the context and the culture:
[1] Facilitation payments are a form of corruption and are usually small unofficial payments made to secure or expedite the performance of a routine or necessary action to which the payer of the facilitation payment has legal or other entitlement.
