Special report on anti-corruption efforts and financial irregularities

Digni takes anti-corruption seriously, and work systematically on both preventing, detecting, and handling cases of mismanagement and financial irregularities. Please refer to capacity development projects to see an example of how we work. In 2021 we also initiated a project aimed specifically on churches in our portfolio. In September we therefore gathered all our members cooperating with churches to analyse and discuss challenges and what can be done. This focus will continue.

Our members and partners also spend resources on anti-corruption; both to strengthen financial integrity and to encourage fighting corruption in the local contexts. One example is a member organisation that held a two-day workshop on anti-corruption for staff and volunteers in Burundi, including officers from the police and army.

Digni has at any time several ongoing cases of mismanagement and financial irregularities. We see this as a sign that both our mechanisms for whistleblowing and reporting are safe and used, and that internal control within either member or partner is strong enough to detect irregularities. Five cases of financial irregularities were concluded in 2021:

• Den Evangelisk Lutherske Frikirke (DELF) for a project implemented in Palestine where funds were used for purposes and activities outside the project. NOK 419.089 is repaid to the project.
• Det Norske Misjonsselskap (NMS) for a project in Cameroon where documentation at local partner was forged. NOK 26.622 is repaid to Norad.
• Misjonsalliansen (MA) for a project implemented in Liberia where there was a theft of cash from a safe with the local partner. NOK 5.309 is repaid to the project.
• Det Norske Misjonsselskap (NMS) for a project implemented in Cameroon where Norad funds were lent out to purposes outside the project. NOK 150.436 is repaid to Norad.
• Misjonsalliansen (MA) for a project implemented in Cambodia where costs were not satisfactorily accounted for. NOK 251 is repaid to the project.

In three of the five cases concluded with repayment of funds, the amount was paid to the project rather than to Norad. This is in accordance with the Norad guidelines as of December 2018, stating that repayment to project can be made when certain criteria are met, such as grant manager detecting the mismanagement, immediate reporting of the case, and documentation of well-functioning internal control systems.

At the end of 2021, 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 organisations and their partners. Our hope is that as we learn from the cases, we could spend more resources for preventive measures then for handling cases. Therefore, we started in 2021 to write learning notes from every ended case. These are short and gives a brief overview of what happened, why it did happen, how the case was handled by Digni, member and partner, and how Norad concluded the case.

Some cases display varying degrees of weaknesses in the financial management of the partner organisation. 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. Our new tool for partner assessment is the highlight in that way. Despite the Covid-19 pandemic, Digni has not seen a particular increase of financial mismanagement or irregularities. A few cases were added in 2021, especially on thefts, due to external factors such as lock down during the pandemic.

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.