Anti-Fraud and Corruption Policy


Table of Contents   

1.       Introduction

2.       Policy Statement  

3.       Fraud

3.1         Definition of Fraud  

3.2         Prevention

3.3         Obligations when reporting Fraud

3.4         Investigating Fraud suspicions

4.       Corruption

4.1         Definition of Corruption

4.2         Results of Corruption

4.3         Reasons to avoid any kind of corruption

4.4         Anti-corruption measures

Annex A – Corruption Risk Areas  

Annex B – Potential Indicators of Corruption

Annex C – Personal tips how to deal with corruption



1. Introduction

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.

2. Policy Statement

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.

3. Fraud

3.1 Definition of Fraud

  “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.” 

3.2 Prevention

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:

  • Immediately report your findings or suspicions to the Country Representative
  • If that is not possible, please report your findings or suspicions to another manager (e.g. Project Director, Office Manager, Finance Manager)
  • Do not talk about your suspicions with co-workers or the suspected fraudster
  • Save and provide as much evidence as possible

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:

  • Confirmation of whether a fraud has taken place
  • The amount of loss involved
  • The identity of the person(s) who appear to have committed the fraud, if known
  • Identification of any failures on the part of procedures or staff which enabled the fraud to take place
  • Identification of any staff who should face disciplinary action
  • Recommended lessons to learn for the future, and any procedures which need to change to prevent further fraud.

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.

3. Corruption

4.1 Definition of Corruption

“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] .”

4.2 Results of Corruption

  • Loss of goodwill from the local population.
  • Loss of honesty and trust in relationships between colleagues or organisations, and therefore loss of reliability of information when passed between them.
  • Pressure and stress on staff, often particularly national staff.

4.3 Reasons to avoid any kind of corruption

A list of Corruption Risk Areas is found in Annex A.

  • Corruption is usually against the law, and aid workers are bound by the law in the country in which they are working.
  • Corruption hurts the poor by denying them free and fair access to the services that they are entitled to.
  • Development and humanitarian organisations are bringing in support for people who need it, and it is morally wrong for persons to try to divert some of the resources intended for the needy.
  • Any corruption encourages more corruption.

4.4 Anti-corruption measures

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.

  • Clear, open, honest relationships with all local groups, with the local authorities and with other development and humanitarian organisations
  • Good financial procedures
  • Appropriate, transparent rules for procurement
  • Well-trained, experienced staff
  • Good management of staff and projects
  • Confidential, anonymous whistle-blowing channels (for the reporting of corruption)
  • A common position among development and humanitarian organisations, if possible, on what ‘informal fees’ should be paid, if any
  • A refusal to pay bribes at any time

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.


Annex A –  Corruption Risk Areas

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  

Annex B – Potential Indicators of Corruption

  • Abnormal cash payments
  • Pressure exerted for payments to be made urgently or ahead of schedule
  • Payments being made through 3rd party country (eg. goods or services supplied to country 'A' but payment is being made, usually to shell company in country 'B')
  • Abnormally high commission percentage being paid to a particular agency. This may be split into two accounts for the same agent, often in different jurisdictions
  • Private meetings with public contractors or companies hoping to tender for contracts
  • Lavish gifts being received
  • Individual never takes time off even if ill, or holidays, or insists on dealing with specific contractors him/herself
  • Making unexpected or illogical decisions accepting projects or contracts
  • Unusually smooth process of cases where individual does not have the expected level of knowledge or expertise
  • Abusing decision process or delegated powers in specific cases
  • Agreeing contracts not favourable to the organisation either with terms or time period
  • Unexplained preference for certain contractors during tendering period
  • Avoidance of independent checks on tendering or contracting processes
  • Raising barriers around specific roles or departments which are key in the tendering/contracting process
  • Bypassing normal tendering/contractors procedure
  • Invoices being agreed in excess of contract without reasonable cause
  • Missing documents or records regarding meetings or decisions
  • Company procedures or guidelines not being followed
  • The payment of, or making funds available for, high value expenses or school fees etc. on behalf of others

Source:  Anti-Bribery Principles and Guidance for NGOs  

Annex C – Personal tips how to deal with corruption

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:

  • In answer to the question: “Have you got a little present for me?” answer: “Yes – a smile” – and smile genuinely as you do so.
  • Good humour, the time to talk for a minute or two and have a joke together – these are sometimes quite sufficient to persuade a soldier at a checkpoint not to insist on a bribe. Often he is bored, and is grateful to be treated as a human being.
  • Explain why you are not able to pay the bribe. Have various simple phrases that do not sound like an accusation of corruption – for example: “My head office doesn’t allow me to pay any fee that isn’t official.”
  • If a soldier is insistent, say that you are not able to pay the bribe, but that you are willing to speak to his commander. (The soldier will often not want his commander involved.)
  • Be prepared to wait. Patience cures many problems, while impatience often increases the pressure to pay a bribe. At a checkpoint when you have reached an impasse, be prepared to wait an hour or two, while you keep negotiating politely, if it’s important to you to get through.    Otherwise, consider turning back, and trying again another day. In the meantime, you could inform the higher military or police authorities of the problem that you faced, and get them to do something about it.
  • The patience principle also applies to bureaucratic processes, such as NGO registration with the government authorities. In some countries this can take a year or more, leading to a temptation to try to hurry the process up.
  • Remain courteous, respectful and – if possible – friendly. Some officials who normally insist on a bribe seem flattered and pleased when treated kindly, and waive the bribe as a result.
  • Ensure that all your paperwork and documents are in order, and that you have copies of them with you at all times, so that if an official challenges you, the document is there to show. This may mean always having a bulky folder with you – a small price to pay to avoid the hassle that you might otherwise face.
  • Keep some picture postcards with you, and give one of them as a “present” of minimal value.
  • Some people like to keep a packet of cigarettes on them – even if they themselves don’t smoke – so that they can offer one (or two or five!) to the soldier at the checkpoint.
  • Ensure you or your driver knows the traffic rules and respects them.    Otherwise it is an open invitation to a policeman or traffic warden to threaten dire penalties – unless you offer a bribe.
  • Make sure that you and your colleagues respect the laws scrupulously, so that you are less likely to be accused of wrongdoing and therefore put in the power of law enforcement officials.



[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. 


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