USAID ANTI-FRAUD HOTLINE- FRAUD AWARENESS & PREVENTION

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1 USAID ANTI-FRAUD HOTLINE- FRAUD AWARENESS & PREVENTION

2 INTRODUCTION TO TRANSPARENCY INTERNATIONAL It is a non-political, non-partisan and a non-profit organization. It works with Public and Private Sector to fight corruption in a non-confrontational approach. It assists in developing systemic reforms for Transparency and Good Governance.

3 GOVERNANCE STRUCTURE Registered as a Trust in 2001 Board of Trustees 9 trustees Membership 55 members Advisory Committee Secretariat

4 Corruption Undermines Authority of Governments Distorts Government Decision Making Leads to Misallocation of Resources Undermines Public and Private Sector Developments Creates Mafias Aggravates Poverty Risks attainment of MDGs

5 Present Projects of TI-P Advocacy & Legal Advice Centre USAID Anti-Fraud Hotline Project Fredkorpset South to South Exchange

6 Focus of TI-P Monitoring of Public Procurement Legal Advice to Victims of Corruption Operation of Anti-Fraud Hotline Collaboration with Regulatory Bodies, Government Collaboration with CSOs, CBOs Capacity Building & Training Workshops Private Sector Enhancement of Awareness against Corruption Participation in National & International fora

7 NOTABLE ACHIEVEMENTS Suo Moto action taken by Supreme Court of Pakistan on information provided by TI-P resulting in savings of billions of rupees. MOU signed between Sindh Revenue Board & TI-P TI-Pakistan to be observer in World Bank loan of $ 176 million to SIDA Sindh & Punjab adopts PPRA rules for all its procurement. TI-Pakistan nominated a member of the Sindh PPRA Board. Considerable savings effected by public organizations by following advice of TI-P in its tendering procedures

8 NOTABLE ACHIEVEMENTS CDGK replicates complaint centers in all 18 towns after the success of the complaint centers set up by TI-P in two towns UNCAC ratified in 2007 PPRA and SPPRA rules TI-P sought by domestic and International media, public organizations, government officials and general public on anti corruption issues.

9 Challenges Resistance from Affected Corrupt Officials. Political Will of the Government. Apathy of general public. Capacity of Procurement Officials. Poor Governance Insecurity in the Country. Threats to TI Pakistan

10 BACKGROUND USAID and TI-P signed a Cooperative Agreement No 391-A on September21, 2010 for the implementation of an anti-fraud hotline. The agreement is for a 5 year period. Anti-fraud Hotline was made operational in January Anti-Fraud Hotline is aimed to monitor and report fraud, wastage and abuse in USAID funded projects in Pakistan. TI-P will evaluate complaints received by the hotline while only USAID Office of Inspector General (OIG) in Washington will investigate the cases. Citizens can now report cases of fraud, waste or abuse in USAID funded projects in Pakistan through a variety of mediums; via phone, , website, post or in person.

11 OBJECTIVES Encourage citizens to report fraud, wastage and abuse in USAID funded projects; Make fraud a high risk low return activity. Prevent fraud during the tendering process. Recovery of funds due to anti-fraud reporting. Citizens engagement in oversight and watchdog actions. Enhanced fraud awareness amongst citizens. Better Utilization of Donor funds by Implementing partners.

12 MAIN AFH ACTIVITIES Develop and Maintain Toll-Free Hotline to report cases of fraud from all over the country including virtual infrastructure for electronic complaint submission method (website, , etc.) Raising Awareness campaigns to educate the public by promoting hotline for fraud detection and prevention. Analyzing and Reporting of data collected. In addition the AFH project team (Transparency International Pakistan and OIG) will develop a variety of strong relationships with the media, government authorities, ministries, local authorities, civil society organizations and international organizations.

13 ACHIEVEMENTS As of Dec 31, 2011, the hotline has received over fifteen thousand plus calls. Two thousand five hundred (2857) plus of these calls have been converted to complaints. More than half concern the delivery of flood relief services.

14 Out Comes of Anti Fraud Hotline Reporting Ten NGO Personnel Terminated for Misconduct in Flood Relief Efforts. During spring 2011, the hotline received more than 100 complaints regarding problems with service delivery or criminal misconduct by employees of a Pakistani NGO. The NGO is involved in the distribution of USAID-funded food items for the WFP in Sindh Province. Internal controls over the issuance of tokens used to obtain relief goods were lacking and that NGO personnel failed to follow procedures, distributed food items in undesignated areas, and collected and damaged the national identity cards of some recipients. As a result of the investigation, the NGO has terminated ten personnel to date.

15 Out Comes of Anti Fraud Hotline Reporting Ten NGO Personnel Terminated for Misconduct in a USAID-Funded Agricultural Program. During spring 2011, the hotline received more than 80 complaints regarding problems with service delivery and criminal misconduct by employees of a Pakistani NGO implementing a USAID-funded agricultural project in Sindh Province. Agricultural inputs were provided to individuals who did not meet program eligibility guidelines. Poor internal controls and mismanagement resulted in a several-month delay in the delivery of tens of thousands of checks to program recipients.

16 Out Comes of Anti Fraud Hotline Reporting Personnel Terminations Related to Corruption in Pakistan Disaster Relief Projects. During the spring and summer of 2011, the USAID OIG Pakistan Anti-Fraud Hotline received over 200 complaints regarding problems with service delivery and criminal misconduct by employees of the Sindh Rural Support Organization (SRSO). SRSO is a recipient of subcontracts from USAID implementing partners carrying out flood relief efforts for USAID/Pakistan, for USAID s Office of Foreign Disaster Assistance, and for USAID s Food for Peace Program. Significant problems with controls over the distribution of cash, food, and other relief goods to undesignated areas. As a result of the investigation, SRSO has terminated 21 employees.

17 Out Comes of Anti Fraud Hotline Reporting Nine Education Officials Suspended for Theft and Diversion of Commodities From Food for Education Program in Sindh Province. WFP s Food for Education Program gives parents an incentive for their children, especially girls, to attend school by providing one can of fortified cooking oil to each student who meets monthly attendance requirements. The Anti-Fraud Hotline received 17 complaints regarding alleged theft or diversion of fortified edible oil intended for primary school students under the program in Sindh Province. After coordinating with USAID OIG, WFP dispatched a monitoring team to the location, reviewed documentation, conducted interviews with the students and community members and then took appropriate action to address the situation. Through follow-up on an Anti-Fraud Hotline allegation, WFP field monitoring personnel also learned that one school participating in the program was, in fact, a private residence. WFP was able to recover the amount spent on cooking oil for this location from a participating organization.

18 Out Comes of Anti Fraud Hotline Reporting USAID Contractor Employees Terminated in FATA. During the fall of 2010 and spring of 2011, USAID OIG and the Pakistan Anti-Fraud Hotline received information regarding alleged construction fraud on a USAID project in FATA. USAID paid more than $33,000 for a wall that was not built to specifications and more than $36,000 for a separate wall of which only 7 percent was completed. In addition to falsifying documentation regarding the walls specifications, all three employees lied about the matter when questioned by OIG. The contractor s team leader in charge of the project has since been terminated, as has the site engineer who certified that the incomplete wall was built to specifications. The head engineer, who certified completion to specification of the first wall, has been disciplined but is still employed on the project. USAID s contracting officer determined that USAID would pay the full amount for the first wall but that the contractor should credit USAID $36,719 for the cost of the incomplete wall.

19 RECOMMENDATIONS All NGO s should have a standard procedural procurement guide available on their websites. All large procurement results should be made transparent to show integrity of the NGO. USAID Anti Fraud Hotline should propagate the hotline amongst the implementing partners, civil society and community based organizations, youth and the general public to compliment the advertising efficacy. The objective would be to enhance awareness of the hotline and encourage the citizens to report any fraud, wastage and abuse that they witness.

20 Thank You

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