In accordance with Digni’s cooperation agreement with Norad, Digni shall make public a description of our effort to combat financial irregularities during the previous year, including summaries of cases of financial irregularities that were closed in the reporting year.
Four fraud cases were concluded in 2018:
Idrettskontakt (KRIK) for projects implemented in East Africa
The case was registered in September 2016. Forensic audits were carried out in Kenya; Uganda and Tanzania. Staff were found to have embezzled funds, costs lacked proper documentation. Low awareness among staff of project targets and double reporting with other donors. NOK 2,546,365 were claimed from KRIK and repaid to Norad. The projects were discontinued.
(HP) for project implemented in China
The case was registered in February 2016. A forensic audit was undertaken. Unauthorized loans from project funds were made. NOK 222,461 were claimed from HP and repaid to Norad. The project was discontinued.
(MA) for project implemented in Ecuador
The case was registered in March 2017. A forensic audit was carried out. A staff member in Ecuador was found to have embezzled funds. NOK 18,385 were claimed from MA and repaid to Norad.
Muslimmisjon (KMM) for project implemented in Senegal
The case was registered in August 2017. An organizational and financial review was carried out. Pre-payments were made for mechanical equipment that was not delivered. NOK 464,065 were claimed from KMM and repaid to Norad. The funding from Digni was later discontinued due to internal challenges in the partner organization.
2018 saw the conclusions of cases that were largely investigated in 2017. Fraud cases registered in Norad that were not finalized by the end of 2018 will be reported on when the cases have been concluded.
Some of the fraud cases closed in 2018 took a long time to investigate, for different reasons. Staff turnover and sick leaves was a particular challenge in the Digni secretariat, where capacity was stretched for extended periods of time. In one case (KRIK-East Africa), the sheer complexity and scope of the case, with a number of donors involved and different forensic audits in three countries, translated into a lengthy follow-up period. Tendering processes and quality assurance of forensic audit reports required sustained input from the Norwegian donors, coordinated by Digni.
The cases varied in regard to findings, as detailed above. However, all the cases displayed varying degrees of weaknesses with regard to the control environments of local partners and the Norwegian member organization the partners were supported through and Digni’s secretariat. Also, a lack of awareness of the contractual obligations was detected. Measures have been put in place to address critical capacity gaps at all levels and to raise awareness about the terms of the agreements. For example, in Digni, a Finance Manager was hired in September 2018 to strengthen the financial management in the secretariat. A review of the organizational capacity of members and due diligence processes of partners were commissioned in December 2018. A plan to carry out organizational reviews of all members during the agreement period was developed, and reviews were carried out for 3 members in 2018. Regional network meetings and member meetings have been used to build competence. Digni also assumed leadership of the civil society anti-corruption forum (formerly hosted by Bistandstorget).
A detailed overview of learning points from fraud cases and a plan of action was developed in Spring 2018 (focusing particularly on KRIK-East Africa). We are pleased to note that most of the proposed mitigation efforts in the plan of action have been implemented by 31st December 2018.
Digni will continue to prioritize capacity and systems development related to financial management and anti-corruption measures in the secretariat and in relation to members and the implementing partners. \