Special report on anti-corruption efforts and financial irregularities
Three cases of financial irregularities were concluded in 2020:
1.Stefanusalliansen (SAI) for a project implemented in Myanmar. Due diligence and financial reports in 2018 revealed inadequate financial management for this year, as well as prior years. Comprehensive forensic audits concluded that there was grave misconduct and weak internal controls with the local partner. The fraud case concluded with NOK 1 521 865 being repaid to Norad.
2. In February 2019, petty cash was stolen in a theft from the office of the local partner of Norsk Pinsemisjon (NPM) in DRC. NOK 2 458 was repaid to the project.
3. In April 2019, nepotism and breaches of internal routines were discovered with a local partner of Misjonsalliansen (MA) in Cambodia. NOK 533 was repaid to the project.
In two of the three cases concluded with repayment, the amount was paid to the project rather than to Norad. This is in accordance with the new Norad guidelines as of December 2018, stating that repayment to project can be made when certain criteria are met, such as immediate reporting of the case and documentation of well-functioning internal control systems.
At the end of 2020, several cases of financial irregularities were still under investigation. The remaining cases vary in scope and complexity. These will be reported on when the cases have been concluded.
Handling of financial irregularities cases has, through the year, been quite time consuming both for Digni and for the member organizations and their partners. Some cases display varying degrees of weaknesses in the financial management of the partner organization. Cases on safeguarding teach us the importance of having internal routines and codes of conduct in the organizations – and complying with these.
Also, a lack of awareness of the contractual obligations was observed for some members and partners. Measures have been put in place to address critical capacity gaps and to raise awareness about the terms of the agreements. Despite the Covid-19 pandemic, Digni has not seen a particular increase of financial mismanagement or irregularities. A few cases were added in 2020, especially on thefts, due to external factors such as lock down during the pandemic. As these cases will not be concluded before 2021, they are not reported above.
Overall, the level of irregularities we believe is related to adequate internal control within the partners and in the projects.
Digni will continue to prioritize capacity and system development related to financial management and anti-corruption measures in the secretariat and in relation to members and the implementing partners.