Corruption and fraud

1. Corruption and fraud Bistandstorget 19. april 2012 Marianne Jorddal

2. Agenda • Requirement from Norad • Definitions • Role play • Whistle-blowing • Reporting corruption and sanctions

3. Requirement from Norad • NORAD’s guiding principle is “zero tolerance” for corruption. • NORAD’s follow-up of corruption cases will include requiring reimbursement of money when the recipient is unable to account satisfactorily for the use of the funds – in accordance with what is stated in the agreements.

4. Definitions(source: BTs Promising practices) “Corruption is the abuse of power for illegitimate individual or group benefit.”

5. Definitions(source: BTs Promising practices) • Corruption may occur in many forms: • Bribery(bestikkelser/smøring) means that a person, organisation or institution improperly provide something goods or services against some form of improper remuneration. Bribery involves (at least) two parties. • Embezzlement (underslag) is the theft of resources for own use. It may involve only one person. • Fraud (svindel/bedrageri) is a criminal deception or the use of false representations to gain an unjust advantage. It covers both bribery and embezzlement.

6. Definitions…. • Favouritism is the unfair favouring of one person or a group with something at the expense of others. • Nepotism is favouritism shown to relatives in conferring offices or privileges. • Extortion(utpressing) is the act of obtaining something by force, threats or undue demands.

7. Definitions…. • In some development contexts, distinctions are made between so-called corruption of greedand corruption of needor to grand and petty corruption. • What do you think? • Experience shows that organizations with a clearly stated zero-tolerance principle regarding corruption, find it easier to reduce corruption internally and in partnerships than organisations without such an explicit policy.

8. Beneficiaries’ definition: Source: Corruption perceptions and risks in humanitarian assistance: an Afghanistan case study by Kevin Savage, Lorenzo Delesgues, Ellen Martin and Gul Pacha Ulfat • “corruption is spending money on overheads and luxuries for the NGO office” • “corruption is wasted effort due to bad management and poor preparedness” • “not using [aid] money to prevent emergencies is corrupt” • “flying inappropriate goods thousands of miles on planes costing many thousand of dollars, that could have been used to buy the right stuff locally, just so the NGO can be on television is corrupt”

9. NEXT: Role play… • Then: Whistle-blowing • Back to this ppp later

10. Necessary routines and guidelines • Authorisation and approval routines • Segregation of duties surrounding payment • Discipline on contracts and agreements • Project visits (operational and partner) • Documentation of project visits • Evaluations • Budget monitoring • Functions focusing on control (finance management, financial control, internal audit) • External audit • Monitoring and checking all partners’ audited accounts • Monitoring and review of all external audit reports (eg management letters) • FAT (handout)