Corruption is shown the red card

Greater openness and stronger effort to fight corruption.

Corruption threatens good governance, sustainable development, democratic processes and fair business.
Thus fighting corruption contributes to build civil society and eliminate social injustice, which is in accordance with DanChurchAid’s vision “To help and advocate for oppressed, neglected and marginalized people in poor countries and to strengthen their opportunity to live a life in dignity”.

The money has to reach the intended beneficiaries

DanChurchAid is entrusted with funds from a variety of donors and works to secure they are spent correctly and transparently. DanChurchAid holds a great responsibility to avoid corruption and secure that the funds are spent correctly towards donors, partners and beneficiaries.

More openness and transparency are the key words behind the latest initiative to fight corruption and fraud in DanChurchAid's work.

Below we have made a complete report of the corruption cases over the past five years – regardless of the extent.

The principles of our anti-corruption policy

Typically, we discover corruption

1. through our procedures, control mechanisms, evaluations and revision
2. through a tip from staff, partners or sister organisations

The methods often used to reveal corruption include:

1. Programme- and project evaluations
2. Monitoring visits and reports
3. Financial reporting and project audit

Clearly expressed attitude

DanChurchAid has developed central guidelines for partners and staff with a clearly expressed attitude to corruption:

• All partners sign a cooperation agreement for each project, including an anti-corruption clause;
• Purchases above a certain amount shall take place according to our procurement manual. All purchases require a signed agreement with an anti-corruption clause;
• The staff manual for expatriates and ”Staff Manual” for local staff clearly describe the tough disciplinary measures taken against an employee involved in corruption.

Tools to fight corruption

In addition to the central guidelines, our

• appointment policy
• accounting manual and programme and project manual
• evaluation- and monitoring tools and
• policy against sexual abuse

are bricks in the foundation for creating a reliable and anti-corrupt organisation.

Clear practice if suspicious

When there is a well-founded suspicion of corruption, we have a clear practice:

• The relevant donor (Ministry of Foreign Affairs, the EU, Danish/foreign partners or others) is immediately informed about the suspicion (normally within one or two days);
• An investigation is initiated and in most cases an audit is conducted;
• Steps are taken to make guidelines and procedures to stop and prevent future corruption.

Further steps

If the investigation confirms the suspicion, we take further steps:

• If it is a DanChurchAid employee, disciplinary steps are taken and the employee is requested to return the amount in question (if the theft of money is part of incident);
• If it is a partner organisation, the partner is requested to take the necessary steps to stop, reveal and improve the conditions that led to corruption. The partner is requested to return the amount in question;
• Corruption is reported to the police unless special conditions speak against it (security, health/life, weighing of the effectiveness of the judicial system, court costs);
• The relevant donor (Ministry of Foreign Affairs, the EU or others) will receive a complete account of the extend, course and steps taken – in addition we inform relevant sister organisations;
• The case is published. Exemption can be made if publication is in conflict with our non-disclosure policy describing the special situations when DanChurchAid does not want to publish concrete information, e.g. due to the security of our staff or partners.

Corruption or suspicion of corruption?

All cases of corruption must be reported to DanChurchAid

The procedure is to fill in a complaint form and sent it to complaints@dca.dk. This e-mail box is only accessible for three employees from the Human Resource Unit in Copenhagen. On basis of the complaint it will be considered if an investigation committee will be set down and an investigation will take place.

The complaint will be handled in confidentially and with great respect to the complainant and the persons/organizations the complaint is pointing at. No anonymous complaints are accepted.

Link to the complaint mechanism

Definitions

Corruption is defined by Transparency International DK as "misappropriation of entrusted authority for own gain”. This definition is in accordance with the World Bank and OECD.
Corruption includes bribe, greasing, embezzlement, fraud, blackmail, nepotism.

Fraud is economic crime including various forms of swindle, fraud or forgery. It is fraud when a civil servant cheats people or companies for his/her own profit, or if civil servants are operating in the black market or in criminal circles.

Embezzlement or peculation is theft of public money by civil servants. I.e. those entrusted the administration of public funds embezzle the money. It may be directly by digging into the till or indirectly by using public funds for own consumption.

In the report the term ’corruption’ is thus including both bribe, greasing and other forms of misappropriation (fraud and embezzlement) of funds administered by DanChurchAid.

HAP-certification

DanChurchAid has been certified by Humanitarian Accountability Partnership (HAP), which is an international organisation certifying the work and work methods of humanitarian organisations.

“Accountability” refers to good practice of administration and responsibility.

As a humanitarian organisation we are accountable for the beneficiaries who receive development and relief assistance. To be accountable toward beneficiaries DanChurchAid has among other things established a complaint system where beneficiaries can complain, and by having management systems which support this.

HAP is one of the tools for greater openness – and therefore also a tool to fight corruption.

Read more about certification

Transparency International

One of the key words in fighting corruption is transparency. As a part of our work with anti-corruption DanChurchAid is a member of Transparency International Denmark.

Transparency International is an international association founded in 1993 consisting of more than 90 national departments world wide. They all share the same purpose; to fight economic corruption and bribery.

Look into a case

List of unfinished cases

2010: July: A DCA employee is under suspicion for having acted in conflict with the Anti-Corruption Policy of DCA. The case is under further investigation and because of the sensitivity of the case, No further details will be published yet.

2010: Settlement made with organisation in Cambodia on USD 186

Content of the complaint and what we did:

In 2009 a partner of DanChurchAid reacted toward irregularities in a Provincial Advocacy Network in Battambong Province (NAND) in Cambodia. NAND had given funding to an inactive land sub-committee of USD 186.

A four day research was conducted and several meetings was held with NAND to improve transparency and financial management. The defrauded amount was finally paid back and the chair person of NAND resigned. The support to NAND is suspended until the organisation improves.

Lessons learnt:

DanChurchAid’s partners hold a great responsibility in detecting and investigating fraud. In this case, our partner handled the case and informed DanChurchAid.

2009

Content of the case: In the beginning of 2009 DCA and our sister organisation Norwegian Church Aid (NCA) reacted toward irregularities in a partner organisation in Southern Africa. The partner had not been able to submit a financial audit without qualifications.
What did we do: DCA is now in cooperation with other donor agencies further investigating the organisation. The managing director was fired, because of the first suspicion. Our back-donor Danida has been notified. (Internal reference 119)
Content of the case: A partner organisation in Africa is under investigation for mismanagement and fraud. The management in the partner organisation found irregularities in a sub-office. The partner contacted DCA immediately and the managers of the partners sub-office was dismissed. Weaknesses were found in four major areas (management performance aspect, compliance to administrative rules and procedures, financial and procurement procedures and store and property handling and management).
What did we do: A further investigation will reveal if there despite mismanagement has been corruption or fraud involved. The back donor Danida has been notified. (Internal reference 121)
Content of the case: A partner organisation in Central America has for the 2nd year not been able to perform financial audit without qualifications.
What did we do: This year special attention was paid to the partner as documentation is missing. The case is under further investigation. (Internal reference 122)
Content of the case: In June 2009 a DCA employee was faced with the dilemmas of 1) going to detention and get deported out of an African country or 2) to pay a facilitation payment of USD 300, due to problems with a visa. Managers agreed that it would under no circumstances be acceptable to take the security risk and therefore the facilitation payment was paid by DCA own funds. (Internal reference 125)
Content of the case: The complaint is about a missing amount of money and it involves two staff members in DCA. The case is ongoing and therefore we are not able report more details here. (Internal reference 126)
Content of the case: Procedures for travel statements, per diem and advances before travelling is being tightened due to possible cases of fraud in a regional office. The possible case is under investigation. (Internal reference 129)

2009, 13. februar: Investigaion of missing documentation for approxemately USD 15.000

An investigation is taking place based on irregularities in monthly cash books. Until these allegations have been investigated no other information will be published. USD 15.000 is at this time not accounted for; an investigation will confirm or reject that fact.

2009, 3 March: Suspicion of fraud rejected: An internal investigation committee in DanChurchAid investigated missing documentation for USD 15.000 on a Regional Office in DanChurchAid. The investigation showed that no fraud or corruption had taken place, but some mistakes in the accounting caused the difference of USD 15.000.

November 2009: Suspicion of having misused project funds

Former employees in a partner organisation that DCA supports are under suspicion for having misused project funds for private purpose. The case is under further investigation and because of the sensitivity of the case, no further details will be published. DCA’s back donor has been informed. (internal reference 1.17)

2009: Fraud with travel statements, per diem and advances
Procedures for travel statements, per diem and advances before travelling is being tightened due to cases of fraud in a regional office. No funds were lost. (Internal reference 1.14)

2009: Investigation of missing money
The complaint is about a missing amount of money and it involves two staff members in DCA. The case is ongoing and therefore we are not able report more details here. (Internal reference 1.8)

June 2009: Personal Risk

In June 2009 a DCA employee was faced with the dilemmas of 1) going to detention and get deported out of an African country or 2) to pay USD 300 to the officials, due to problems with a visa. Managers agreed that it would under no circumstances be acceptable to take the security risk and therefore USD 300 was paid by DCA own funds. (Internal reference 1.13)

2009: Violation of terms of contract
A partner organization in Central America has for the 2nd year not been able to perform financial audit without qualifications.
What did we do: This year special attention was paid to the partner as documentation is missing. The case is under further investigation. (Internal reference 1.12)

2009; Partner under investigation for mismanagement
A partner organisation in Africa is under investigation for mismanagement and fraud. The management in the partner organisation found irregularities in a sub-office. The partner contacted DCA immediately and the managers of the partners sub-office was dismissed. Weaknesses were found in four major areas (management performance aspect, compliance to administrative rules and procedures, financial and procurement procedures and store and property handling and management).
What did we do: A further investigation will reveal if there despite mismanagement has been corruption or fraud involved. The back donor Danida has been notified. (Internal reference 1.21)

2009; Partner Audit report with qualifications

In the beginning of 2009 DCA and our sister organization Norwegian Church Aid (NCA) reacted toward irregularities in a partner organization in Southern Africa. The partner had not been able to submit a financial audit without qualifications.
What did we do: DCA is now in cooperation with other donor agencies further investigating the organisation. The managing director was fired, because of the first suspicion. Our back-donor Danida has been notified. (Internal reference 1.10).

2008: Tanzania. The name of the partner cannot be published as the case is under investigation; probably an amount of EUR 6.000, approx. DKK 45,000

One of DanChurchAid’s partners in Tanzania is implementing micro-credit activities in five parishes (so-called sub-partners). In October 2007, an internal review revealed minor irregularities at one of the sub-partners.

The case is investigated further, and an estimated amount of DKK 45,000 cannot be documented. Among others, there is a very low rate of repayment of the loans in one of the parishes. In March/April, certain problems are discovered concerning identification of some of the borrowers who have not paid back.
On that basis, transfers to the micro-credit project are withheld. Steps are taken to solve the problems, among others a letter from DCA and the management of the partner organisation to the sub-partner in question as well as tightening of procedures. In May 2008, the sub-partner is instructed to take the necessary steps towards the employees and three of them are dismissed.
In June 2008, the cooperation with the sub-partner is terminated. Based on the ongoing investigation, DCA will assess if a lawsuit should be filed and how to collect the lost funds. The project is financed by DCA’s own funds.

2008: Tanzania. The name of the partner cannot be published as the case is under investigation; a possible loss has not been computed.

This is about a possible case of swindle in a project in Tanzania with one of DanChurchAid’s partners.
However, DCA does not support this project financially, but opted to participate in this extraordinary external audit, as we support a different project administered by the same partner. The partner organisation has prepared the financial statement to DCA, and a local auditor, whose competence we are now questioning, has certified it. To be on the safe side, DCA has decided to find out if there are problems in the project financed by DCA/Danida.
DCA has opted to continue the ongoing project activities until the result of the extraordinary audit is available. The report is expected to be ready at the beginning of 2009. Danida is financing the project and has been informed about the case.

2006: Sudan. The name of the partner cannot be published as the case is under investigation; the result is not yet known and a possible loss has not been computed.

A sub-partner’s financial accounts for 2006 have been questioned. Based on the present information available, DanChurchAid has no specific reason to believe that misappropriation has taken place, but we cannot exclude the possibility. The situation becomes more complicated as it has proven extremely difficult to retrieve documentation from 2006 in order to reconstruct the accounts. DCA has initiated an investigation to clarify if the funds have been used according to the objectives. An external investigation team is now in the process of verifying if the planned activities have taken place. The course of the case will depend on the result of the investigation.
Danida is financing the project and has been informed accordingly.

Reports from previous years

Here you can download previous reports in which DCA accounts for the corruption cases there has been and what happened in the specific cases.

Contacts

International Director Christian Friis Bach, cfb@dca.dk

Secretariat Director Peter Bo Larsen, pbl@dca.dk

Anti-corruption Adviser Maja Bjørnskov Gram, mga@dca.dk