PVO Accountability & Fraud Prevention in Food Aid Commodity Management

1. PVO Accountability & Fraud Prevention in Food Aid Commodity Management

2. Corruption in Humanitarian Assistance • During the Liberia - Sierra Leone refugee crisis 2001-2002, there were numerous examples of corruption in the humanitarian assistance • On different occasion beneficiaries have been told that their names were not in the list, and the computer swallowed their cards, unless they gave sexual favor • “I sleep mostly with NGO workers: I have to eat and feed my child,” reported a Liberian refugee during the UNHCR-Save the Children investigation in Guinea

3. Effect of Corruption • Corruption in humanitarian aid deprives the most vulnerable people of essential life-saving resources • Humanitarian assistance aims to save lives and alleviate the suffering of people in times of crisis Yet these noble ambitions do not immunize humanitarian agencies and their activities (emergency responses) from corrupt abuse

4. What is Corruption? ‘the abuse of entrusted power for private gain’ - Transparency International

5. Corruption Risk Mapping(Developed by ODI & MANGO) Group discussion (5 mts) & rate your project as: “ Corruption Less Likely” or “Corruption More Likely” by using the “Corruption Risk Mapping” tool

6. Implementation of Food Assistance Program: An OIG Lessons learned report – Major Systemic Issues • Management & Oversight Controls • Inability to obtain Appropriate data • Diversion of funds and other illicit acts • Recovering losses once they are discovered

7. Where does Corruption Start?? • Proposal Stage? • Registration of Beneficiary? • Internal Transportation of Commodity? • Storage of Commodity? • Distribution of Commodity?

8. Preventing Corruption inHumanitarian Operations The Handbook of Good Practices Created by Transparency International and a Consortium of International Humanitarian NGOs

9. How is the Book Structured The book has been divided into 3 major parts: • Institutional Policies and guidelines (Section I) • Includes overall discussion on Risk Analysis, Management Leadership, Emergency Preparedness, Internal controls and quality assurance, transparency and accountability, dealing with the external environment, building a comprehensive anti – corruption strategy • Corruption in Program Support Functions (Section II) • Procurement, transport, Asset Management, Human Resource and Finance • Corruption in the program cycle(Section III) • Needs Assessment, Partners and Local Intermediaries, Targeting and registering Beneficiaries, Distribution and Post Distribution, Program Monitoring and Evaluation, Commodities

10. Section III – Red Flags Issues with Partners or local Intermediaries: • Potential partners lacking physical offices or clear governance structures • Partners with staff who appear to come from the same family • Partners unwilling to be fully transparent about activities, staff and experience • Unexplained fees or payments by partners to third parties • Partner activities with expenses higher than market prices • Reports of sexual exploitation or extortion of staff or beneficiaries

11. Section III – Red Flags Targeting and registering beneficiaries: • Criteria that are too general or vague • Criteria not verifiable • Registration cards without means of identification • Beneficiaries appearing well – dressed and fed than expected • Altered and fake registration cards or identity documents

12. Section III – Red Flags Distribution and Post Distribution: • Large Quantities of relief goods on sale in local markets • Altered or rewritten distribution records • Discrepancies between cash entitlements in the needs assessments and disbursements. • Similar signatures in distribution list • Fingerprints where people are mostly literate • “Perfect” distribution list never mentioning implementation problems • Inconsistent Narrative and Financial reports

13. Section III – Red Flags Commodities: • Packages appearing tampered with • Food packages arriving underweight • Large quantities of relief food on sale in local markets • Altered or rewritten distribution records • Beneficiaries still malnourished after distribution • Staff living above their means

14. Section II – Red Flags Transport & Asset Management: • Shipments arriving with lower weight, or fewer or poorer quality than at origin • Packages tampered with • Unusually high mileage on the delivery trucks • Relief goods for sale at the local markets • Documents altered without reason and not original • Staff accessing Storage facility at odd hours • Variances in cost per km between different vehicles of similar type and age

15. Section III – Red Flags Resource Allocation: • Assessment staff pushing for a particular region or group • Assessees or interviewees resisting your efforts to consult with other resources • Beneficiary numbers close to or exceeding the total population • Local elites reluctance to allow independent verification of needs assessment

16. Dilemmas & Trade-Offs There is no magic formula! • Too many vs. too few controls • Urgency/need for speed vs. Prudence • Pressure to spend vs. getting things right • Transparency vs. staff and beneficiary security • Information sharing and joint action vs. legal issues