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USAID ANTI-FRAUD HOTLINE- FRAUD AWARENESS & PREVENTION

Presentation by Saad Rashid Executive Director Transparency International Pakistan. USAID ANTI-FRAUD HOTLINE- FRAUD AWARENESS & PREVENTION. Background.

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USAID ANTI-FRAUD HOTLINE- FRAUD AWARENESS & PREVENTION

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  1. Presentation by Saad Rashid Executive Director Transparency International Pakistan USAID ANTI-FRAUD HOTLINE-FRAUD AWARENESS & PREVENTION

  2. Background • USAID and TI-P signed a Cooperative Agreement No 391-A-00-10-01194-00 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 2011. 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, email, website, post or in person.

  3. 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. • Citizens engagement in oversight and watchdog actions. • Enhanced fraud awareness amongst citizens. • Better Utilization of Donor fundsby Implementing partners. • Recovery of funds due to anti-fraud reporting.

  4. Main AFH activities • Develop and Maintain Toll-Free Hotline for citizens to report cases of fraud from all over the country including virtual infrastructure for electronic complaint submission method (website, email, 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) has developed a strong relationships with the anti-corruption agencies, media, government authorities, ministries, local authorities, civil society organizations and international organizations.

  5. Achievements • As of Dec 31, 2012, the hotline has received approximately twenty three thousand calls. • Four thousand eight hundred and eighty (4880) of these calls have been converted to complaints. More than half concern the delivery of flood relief services.

  6. Out Comes of Anti Fraud Hotline Reporting • Funds Collected From Implementer for Fraud and Theft in FATA Program. • In April 2008, USAID’s primary implementer for the FATA Livelihood Development Program entered into a subcontract with Abt Associates Inc. to undertake a $6 million cash-for-work tree planting program in FATA to create job opportunities for youth and unemployed individuals in the area. Abt Associates, in turn, sought competitive bids from vendors to supply tree saplings. As a result of allegations made to USAID OIG, the primary implementer, the Cooperative Housing Foundation, conducted an audit of the program and determined that, of the 2.2 million trees contracted to be planted, only 1.2 million trees were documented as having been purchased. In addition, three of the five vendors that Abt Associates had selected to procure saplings were found to be owned and controlled by the same family. OIG’s investigation confirmed that USAID funds were lost as a result of theft, overpayment, fraud, and mismanagement by Abt Associates. In response to the investigative findings, USAID collected $336,603 in reimbursements from the Cooperative Housing Foundation.

  7. Out Comes of Anti Fraud Hotline Reporting • USAID Ends $20 Million Pakistan Children’s Television Project. • In late 2011, USAID OIG initiated an investigation into the Pakistan Children’s Television Project implemented by the Rafi Peer Theater Workshop, after receiving numerous complaints regarding the project through the Anti-Fraud Hotline. To date, the OIG investigation has revealed significant violations of USAID procurement policies and standards. In May 2012, OIG referred its initial findings to the USAID mission in Pakistan, and later that month, USAID agreed with the Rafi Peer Theater Workshop to end the $20 million cooperative agreement. OIG’s investigation is ongoing. The Rafi Peer Theatre Workshop had already received approximately $ 6.7 million at the time of the termination of the agreement • USAID Proposes Sindh Rural Support Organization for Debarment. • In February 2012, USAID OIG referred the Sindh Rural Support Organization to USAID for debarment based on a year-long investigation of alleged mismanagement, theft, and corruption associated with its participation in several USAID-funded projects. To date, the investigation has resulted in the termination of 23 of the organization’s personnel. Two individuals were terminated in April 2012 after the OIG investigation revealed that they had harassed a group of villagers who had filed complaints with the Anti-Fraud Hotline and ultimately had the villagers sign falsified documentation indicating that they had received payment under a USAID project when they had not. The investigation revealed that the organization’s CEO sent the employees to the village and that the falsified documents were submitted as an official response to the ongoing OIG investigation. USAID proposed the Sindh Rural Support Organization for debarment in early May 2012. Based on the findings of a related forensic audit conducted by WFP in conjunction with USAID OIG, WFP permanently suspended the organization from participation in future projects in late March 2012.

  8. Out Comes of Anti Fraud Hotline Reporting • OIG Investigation Results in Employee Termination and Referral for Debarment. • An OIG investigation related to the $50 million Small Grants and Ambassador’s Fund Program, implemented by the National Rural Support Program revealed that an NRSP employee conspired with a program grantee to falsify project-related financial documentation. The investigation revealed that the grantee, the Peshawar-based Khushal Welfare Organization (KWO), fabricated documentation indicating that workers had been paid as part of an $86,000 agricultural rehabilitation grant when, in fact, they had not. The falsified documentation was submitted to substantiate claims that KWO met its cost-sharing requirements under the grant. During the OIG investigation, an NRSP employee admitted to knowingly certifying the falsified documentation. NRSP terminated the employee involved in the misconduct in March 2012. USAID OIG referred the NRSP employee and KWO to USAID for possible suspension or debarment.

  9. 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.

  10. Thank You

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