What happened: A financial review conducted by the donor to a consortium partner revealed that misappropriation of funds and/or fraud had been taking place. DCA did not have the direct contract with the partner, but had the role as consortium lead. The partner under suspicion was contracted by another member in the consortium.
What we did: A forensic audit was conducted by the organization who had the contract with the partner under suspicion of fraud. DCA was closely involved with the process and contributed with recommendations as well as the formulating the terms of Reference and providing input on the draft audit report. The audit found reason to uphold the allegation of misappropriation of funds and fraud. This resulted in an immediate termination of the contract with the organization and exclusion of future consortium projects. The loss incurred was covered by the consortium member that had the direct contract, who claimed it back from the partner that had been found to commit fraud.
What we learned: The complexity of this case was that the partner-organization was not directly contracted by DCA and hence we were one step removed from the process and decisions to be made. However, it proved valuable that DCA could contribute learnings from previous processes.
What happened: DCA head office received a message that members of staff in a DCA country office were suspecting fraud or embezzlement committed by a middle-manager.
What we did: DCA head office looked in to the finance system to identify the alleged fraudulent activities that were related to travel expenses and conducted two interviews to further investigate the complaint. None of these initiatives substantiated any suspicion. The case was referred to management for proper follow-up and conflict resolution among the relevant staffs.
What we learned: Complaints can be motivated by many things and it is therefore always important to follow due process when receiving and doing the initial analysis of them without jumping to rash actions or conclusions.
What happened: Suspicion was raised about the conduct of a (now former) employee in one of DCAs programs. The suspicion was raised by a driver who thought to have seen suspicious behaviour.
What we did: The suspicion and concern was immediately brought to HQ – still unsubstantiated. Further interviews with potential witnesses were conducted. There were no findings to substantiate further action based on a suspicion of fraudulent activities, however, due to other difficulties in the working relationship, the contract with the employee in question was not continued.
What we learned: The core challenge associated with the case was the lack of access to legal support in the country in question. Since then, DCA has asked all country directors to ensure that they have access to a legal advisor with knowledge about the relevant local labour laws and regulations.
What happened: A whistle-blower among DCAs frontline staff on the programme reported his concern about financial misconduct and corruption to both the Complaints Mechanism in Head Office and to the management in the Country Office. The suspicion was collusion between key members of staff and some of the vendors on the programme for personal financial gain.
What we did: Because of the report from the whistle-blower an immediate internal investigation was done which gave rise to more questions and resulted in a fact-finding mission done by DCA Head Office staff. The findings from interviews, observations and data-analysis substantiated the suspicion and hence an external forensic audit was procured and carried out. The conclusion was, that corruption had indeed been taking place. The fraud had involved transactions made on non-distributed cards registered to non-existing beneficiaries. Though it was hard to place responsibility, a number of the implicated members of staff are no longer in DCA and the vendors have been blacklisted from any future collaboration.
What we learned: The case has produced a lot of learning for DCA, both in the country programme in question, but also globally. The guidelines and standard operating procedures around cash transfer programming and eVoucher programmes have been strengthened and DCA is now looking in to possibilities for introducing biometric registration of beneficiaries to minimize opportunities for fraud. However, there are personal data-protection challenges in these approaches, which are still being analysed.