Corruption is found in all countries, but the extent and scope varies. Fragile and conflict affected states are in particular exposed to corruption. Transparency International's corruption index ranks countries based on how their public sector is perceived. Not surprisingly, many countries where NRC works are ranked as the most corrupt countries in the world. Hence understanding and fighting corruption in the different contexts in the countries we work, require extra attention and efforts.
NRC defines corruption as "the abuse of power for illegitimate individual or group benefits". This involves financial and non-financial benefits. We have zero tolerance against corruption, and NRC employees are not allowed to provide for, request or receive anything that can be defined as corruption.
To help and support staff and management in avoiding and handling corruption cases, we have a detailed Code of Conduct, an Anti-corruption handbook and strict Human Resource, Logistics and Financial procedures. This is coupled with whistle blowing procedures and Monitoring & Evaluation and Risk Management systems put in place. NRC's Anti-corruption handbook describes how our anti-corruption policy should be implemented and helps NRC's managers and staff to better understand the overall corruption threats and how to apply appropriate control measures throughout the organisation. Our procedures and control mechanisms are constantly strengthened and adjusted to further improve our global and country specific prevention measures.
Support and program functions in humanitarian operations and acute emergencies are in particular exposed to corruption. However, our experience is that regular monitoring, including unannounced spot checks, and segregation of duties generally serve as effective prevention measures.
In 2016, awareness raising and context specific anti-corruption trainings were done in the programme countries. In addition staff and implementing partners have been strongly encouraged to take Transparency International's and IFRC's e-learning course Preventing corruption in humanitarian aid, launched in September 2015. By year end, 985 staff members around the world had taken the e-learning course.
We also continued to arrange investigation trainings of key staff in cooperation with external investigation experts. Assessing and investigating alleged corruption and proving evidence is important, but can be resource demanding, difficult, and even dangerous. In criminal cases we alert the police and take legal action, if appropriate. In some countries however, the police and prosecutors can be part of the crime or otherwise corrupt, thus in certain cases/countries extra care and discretion must be used before taking legal action.
During 2016, 23 cases of possible corruption were investigated. All cases were detected as a result of NRC's internal control measures or through whistle blowing. In each of the cases where irregularities or misconduct were found we have learned from the incidents. Proper prevention measures were applied accordingly and appropriate level of disciplinary actions taken in each case according to NRC policy and local law. Affected donors have been informed along the way and where money has been lost the loss has been covered by NRC and where possible by the the staff in question (the so called subjects).
One of the cases was investigated by external experts, the rest by internal investigation teams, following NRC's investigation procedures. One case is (pr early June 2017) pending conclusion. 11 cases were found to be either groundless, not substantiated or related to negligence and bad performance, rather than of a Code of Conduct nature. In the 11 cases presented below, the investigations concluded that misconduct had taken place:
Case 1) Alleged theft of teacher salaries and cash incentives
In October some staff members reported their concerns that one of their colleagues had stolen some teacher salaries and cash incentives related to NRC's education activities. The internal investigation concludes that the staff in question had collected salaries for two months belonging to four incentive teachers (refugee workers) who had returned to Pakistan. It also found indications of fraud committed by the same staff member related to a parent meeting held by NRC where 26 out of 70 participants allegedly were not given their lunch incentives.
Total loss is 859 USD.
Case 2) Financial mismanagement, potential misappropriation of funds
Mid October the management detected some financial transactions which seemed to be duplicated, related to NRC's Information Counselling and Legal assistance (ICLA) programme. The investigation revealed that 4 vouchers and beneficiary lists in connection with some ICLA trainings were forged, 3 vouchers were lacking supporting documentation and the vouchers were missing. In addition there was clearance documentation for advance taken, but this amount was not cleared against the respective person, which indicates that the same amount was taken from the cash box, while it was recorded as uncleared.
Total loss is USD 7108.
Case 3) Theft of cash through forged cheques
End October it was detected that two cheques had been forged and cashed by a staff member. The investigation concludes that the signatures of the bank signatories had been forged; 7 cheques were missing from the NRC chequebooks, only 2 of which have been cashed before the case was detected. CCTV footage from the bank clearly shows the staff member cashing the two cheques. It was confirmed that he was not there in NRC official business and when called for an interview with the investigation team he immediately resigned and left the office.
Total loss is USD 11,450.
Case 4) Manipulated payments / fraud
End October irregularities were detected related to some 2016 R&R claims. Fake supporting documents, belonging to 3 international employees were identified. These employees confirmed that four R&R vouchers were not received by the actual payee and that their signatures had been forged on these vouchers. In addition 2 vouchers belonging to an international staff who had left the mission were confirmed forged. The forged R&R vouchers were not paid twice, as these R&Rs had not been utilized by the entitled international staff members due to the workload in country office.
Total loss is USD 8,337.
Case 1) Embezzlement
In June findings from a controller visit to an area office and a subsequent internal investigation revealed that unconditional cash transfers supposedly distributed in January were subject to fraud and not given to the intended 140 beneficiaries. The cash embezzled by two staff members was related to additional funds (currency gains) arranged at short-notice before the end of the project. NRC's standard operating procedures for cash distribution had not been followed as the money was withdrawn from the bank and supposedly handed to the beneficiaries instead of being sent through M-Pesa (mobile banking services).
Total loss is 10,478 USD.
Case 2) Fuel theft
In September a possible fuel theft was detected and the case investigated. The investigation proved that 7 fuel vouchers were altered to increase quantity supplied without countersignature, leading to over invoicing and supply of large quantities of fuel, using irregularly approved fuel vouchers. Two staff members were directly involved in the theft and two staff members implicated for negligence in their role in the procurement process.
Total loss is USD 3,383.
Possible fraud within water trucking
In May examination of paper records and subsequent beneficiary interviews within a WASH project discovered that water had only been delivered to 3 informal tented settlements when the contract was for 11. It further showed that the supplier was not using the authorised borehole to refill the tankers, but was supplying water from his own borehole. Hence NRC initiated a full investigation, but it was hampered due to concerns about the security of NRC staff involved in the investigation. A total of 17,927 USD has been paid to this supplier, but it was not possible to verify how much water was delivered by tankers in accordance with the contract, whether water was provided by the supplier using other means or if the refugees did receive any of the water NRC had paid for.
Total loss USD 17,927.
In March NRC questioned the quality of the first receipts and documents provided by a local implementing partner within the education programme. Verification visits in the field were conducted and revealed that parts of the contractual works had not been completed. As a result the case was investigated and the investigation confirmed that the activities done on the ground did not match the financial documents. According to the receipts submitted, 20 temporary learning spaces had been built and equipped, but in reality only 10 had been completed and none were equipped. There was conclusive evidence that the partner had embezzled 17,000 USD through this incomplete delivery. Receipts had been submitted for works that had not been carried out and the person in charge of the project in the partner organisation had forged the signature of the NRC staff on the documents. In December 2016 the case was finally solved as the partner's director finally managed to reimburse the money. Before then, NRC had taken over parts of the activities and the remaining project activities were completed in line with original plan.
Total loss is 0.
Possible embezzlement detected and avoided
In April 2016, during preparations of a cash transfer of USD 150,000 to a field office the Finance Manager detected that the beneficiary account on the cash transfer was not the intended NRC account number, but belonged to the employee tasked to prepare the cash transfer. The subject claimed it was a mistake and immediately resigned.
Total loss is 0.
In May NRC Oslo was subject to a so-called CEO fraud. The case has been reported to the police, but was dropped by due to lack of investigation capacity.
Total loss is USD 23,564.
Disappearance of chicken from a Youth Education Project
In May it was detected that 175 chicken had disappeared from the poultry training at a vocational training centre. The case was reported to the police and the contracts of the two skills instructors terminated due to loose control and supervision. To date there is no news from the police investigation.
Total loss is USD 705