HomeResourcesAudit Database Project Compliance RecommendationsPotential Corruption Went Unreported - USAID’s Handbook on Fighting Corruption

Potential Corruption Went Unreported - USAID’s Handbook on Fighting Corruption

USAID’s Handbook on Fighting Corruption states that improving accountability entails efforts to improve the detection of corrupt acts and strengthen sanctions. The audit disclosed several instances of potential program corruption that were not reported to the mission or to the implementing partner. Specifically, according to the program partner responsible for constructing and repairing classrooms, its subpartner was subjected to illegal checkpoints, theft, and extortion of construction materials.

Neither the program partner nor its subpartner maintained adequate documentation of these incidents; therefore, it is unclear how much was incurred in losses and whether those losses were charged to or reimbursed with program funds.

Reported examples included the following:

  • Workers removed from the worksite, and claimed as their own, tools and other materials provided during construction.
  • Armed individuals set up barriers along various points in the roads and forced passersby to pay a fee. The subpartner usually paid this fee by providing materials such as a bucket of paint, a bag of cement, or cash.
  • Local government officials felt they were entitled to materials brought into their communities, and such materials often disappeared from worksites. For example, a missing generator used to supply electricity to the worksite was found at a local government official’s residence.
  • The program partner gave the auditors one incident report, that showed six separate occurrences of loss, theft, or extortion of materials in 9 days. Even though the total monetary amount of these incidents was marginal, the report highlights the fact that these incidents were occurring regularly. Furthermore, the implementing partner and the mission were unaware of these incidents.

General Recommendations

  • Mandate that all agreements and contracts have a clause requiring partners and subpartners to report all suspicion or allegation of waste, fraud, abuse, or corruption through appropriate channels including USAID’s Office of Inspector General.

Source: AUDIT REPORT NO. 5-492-10-013-P SEPTEMBER 23, 2010

The recommendations are derived from audit reports of the Office of the Inspector General. The source refers to the audit report, which is available on this site as part of the Audit Database Project: an educational tool for compliance with USAID regulations.  Please see the disclaimer of this site before using recommendations.

Tags: Internal Control Anti-Corruption

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