Part I
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Scope of this policy
This policy applies to all relevant persons of HOSCA include staff, board members, volunteers, and short term contractors. Part I includes sections that are useful for and made available to all relevant persons, as well as being publicly available on the website. Part II includes sections that are used for the board and senior leadership team in responding to allegations and incidences of fraud, and building an anti-fraud culture.
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Definitions of corruption, fraud, bribery
Definitions of corruption, fraud and bribery are found in Appendix 1. It is also bribery to make unofficial payments (known as ‘grease’ or ‘facilitation’ payments) to a public official to secure or speed up a routine action to which you may be entitled – for example, you pay a public official a small “fee” to speed up the issuing of a visa. Some examples of fraud and bribery relevant to HOSCA are described in Appendix 2.
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Zero tolerance on fraud or bribery
HOSCA position to fraud and bribery is to take a zero tolerance approach and we are committed to pursuing this approach throughout its operational practices for the following reasons: HOSCA recognises the significant risk that fraud and bribery pose to the achievement of its aims and objectives. Any money that is lost to fraud or bribery is money that cannot be used to achieve our objectives. Corrupt behaviour also seriously damages our reputation. The eradication of fraud and bribery in the way we operate is of great importance to securing the trust and confidence of all our stakeholders. We owe it to the communities that we operate in not to condone fraud or bribery. Corruption creates unstable societies. It destroys public and business standards, and forces ordinary people to use resources that they can ill afford in their interactions with the government and other public bodies.
Requirements
- All members of staff and the board, together with volunteers and contractors are required to sign the zero-tolerance declaration form Appendix 3 during induction and annually thereafter on 1 July.
Support elements
- Direction and rules to clearly establish appropriate and expected behaviour
- Effective deterrents to inappropriate behaviour in the form of meaningful consequences
- Prevention measures to reduce the risk of fraud or bribery occurring
- Detection measures to identify fraud or bribery if it happens, including speaking up lines
- Response measures to ensure we react well to suspicions, allegations and proven incidents of fraud & bribery, including protection and fair treatment for accusers and accused
- Measurement processes to evaluate the impact and success of our anti-fraud & bribery policy and management of risk
- Deliberate proactive steps to embed anti-fraud & bribery thinking into our culture, including staff training and awareness
Consequences Anyone found guilty of fraud or bribery will be subject to disciplinary measures which will ordinarily include dismissal, prosecution and recovery of losses.
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Anti-bribery policy
HOSCA employs all legal and safe tactics to avoid and resist paying bribes to Public Officials, even if it results in denials, delays, inconvenience, and increased cost to our operations. No relevant person is authorised to pay a bribe on behalf of HOSCA or using HOSCA funds. In extreme situations, only the board may authorise payment of a bribe if all other options have been exhausted. In such a circumstance the meeting minutes must clearly document the circumstances and all steps taken before reaching this decision, as well as lessons learnt to avoid a similar situation arising in future. The payment must be properly and transparently recorded as such in the accounting system and appropriate parties (e.g. donors) informed. Individuals are not expected to resist bribery to the point of putting themselves or others at real risk of personal harm or injury. A payment under such circumstances is considered extortion rather than bribery.
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Conflicts of interest
A conflict of interest exists where an employee or a Board Member has an interest, relationship, or friendship which could, or could be seen to, interfere with their ability to decide an issue in the best interests of HOSCA. The purpose of this policy is to ensure that all conflicts of interest are declared, declared conflicts are managed to mitigate the associated risks and that decisions and actions are documented to ensure transparency and accountability.
Examples
- Relationships between members of the Senior Leadership Team, accounts staff, procurement staff, HR staff or board members and any other staff member
- Relationships between any person and their line manager
- Relationships between HOSCA staff or board members and suppliers, donors, grantees, beneficiaries or job applicants
Required declarations
- Board members, Senior Leadership Team members, Staff in finance (accounting), procurement and HR – annual declaration (Appendix 4)
- All staff – disclose as soon as they arise (Appendix 6)
- Recruitment conflict of interest declaration (Appendix 5)
- Procurement Committee declarations
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Gifts and entertainment
Gifts and entertainment should never be used or allowed to influence business decision making. When offers of gifts and entertainment are made or accepted in situations where they are not appropriate, they can look like, or may in fact be, bribes.
Never allowed
- Cash of any amount
- Any gift with a value exceeding $50 (or equivalent in local currency)
- Any entertainment worth more than $100 (or equivalent in local currency)
- Any gifts or loans from existing suppliers or prospective suppliers while a tender process is underway
- Any gifts or loans to staff involved in supplier selection decisions
- Entertainment involving gambling, anything of a sexual nature or exploitation of others
Appropriate circumstances
- The giving and receiving of the gift or entertainment strengthens a genuine business relationship
- The gift or entertainment does not constitute an attempt to apply undue influence, and does not create an undue obligation
- The gift or entertainment is given or accepted in the open rather than in secret
- The gift or entertainment is given to celebrate a recognised cultural event such as Christmas or New Year
- The gift or entertainment is given to the organisation or a group of people rather than an individual
- The gift or entertainment is branded marketing materials
- The value of the gift or entertainment is not excessive or abnormal in social context
- The timing of the gift or entertainment is not suspicious
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Speaking Up
HOSCA’s policy on speaking up is designed to build confidence of relevant persons to report genuine concerns about fraud, bribery or other types of misconduct. A genuine concern is sincerely felt and based on information the reporting person believes to be true or trustworthy. HOSCA has zero tolerance to anyone who is found to have wilfully and deliberately abused a speaking up line to knowingly make false accusations.
Reportable areas
- Fraud or bribery
- Sexual misconduct
- Harassment
- Any illegal act
Reporting methods
- Person A
- Person B
- Email, phone number, web link
Availability
- On the website
- Within the partner grant application form
- On a poster displayed in the office
- Within this policy
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Supporting reporting persons
HOSCA has zero tolerance to any form of retaliation against reporting persons (also known as ‘whistleblowers’). All relevant persons who report genuine concerns will be properly protected and supported. Details of any allegations or suspicions raised should be recorded on a fraud; bribery & misconduct report form Appendix 7 and submitted to the Executive Director.
Part II
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Fraud Response Team
Once a concern has been reported or otherwise identified, the responsibility to respond to that allegation will fall to the Fraud Response Team. The Fraud Response Team will be convened by the Executive Director, or a board member in the event that the Executive Director is involved. The Fraud Response Team should comprise 3 individuals from the Senior Leadership Team or Board of Directors.
Roles
- Update the Fraud & Bribery Register in Appendix 9
- Document meetings, decisions and learning
- Maintain confidentiality, especially with respect to the reporting person and the person accused of alleged misconduct
- Ensure the reporting person is supported and protected from harm
- Take urgent steps to protect assets or information as needed
- Communicate with donors and manage other internal and external communications as appropriate
- Make preliminary investigations
- Decide whether or not to conduct a full investigation
- Set up the Terms of reference and/or contract for the investigation
- Act on the findings of the investigation
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Reporting fraud & bribery to donors
HOSCA takes its contractual and fiduciary responsibility to report fraud and bribery to donors very seriously. The Fraud Response Team’s duty for communicating with donors should include appointing a donor contact person, consulting the donor agreement, protecting the identity of the suspect and reporting person, reassuring the donor, confirming verbal communications in writing, and keeping the donor updated with progress.
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Conducting investigations
The purpose of conducting an investigation is to gather evidence and facts to establish whether suspicions or allegations are true, and whether any proven incidents are isolated or more widespread. All investigations should be impartial, thorough, timely and confidential. Any relevant persons investigated will be considered innocent until proven guilty.
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Reporting and acting on findings of investigations
The Fraud Response Team will agree on the appropriate actions to be taken in light of the findings of an investigation. Where fraud is collusive and involves more than one staff member, junior employees should never be used as a scapegoat to protect more senior employees.
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Induction, training and awareness
All relevant persons should receive training in definitions of fraud & bribery, relevant sections of this policy, reporting suspicions, confidentiality and protection, signing declarations, fraud triangle & Zero tolerance principle. Refresher training will be organised for all staff at least every 2 years.
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Disciplinary process
Where evidence of fraud or bribery is discovered, HOSCA’s disciplinary policy should be followed. In accordance with HOSCA’s zero tolerance policy, the usual outcome for committing, or attempting to commit fraud or bribery, or deliberate abuse of the speaking up lines, will be dismissal.
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Grievance process
If staff feels they have been unfairly treated during a fraud or bribery response, they may take recourse in line with the Grievance Policy.
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Contracts
All standard staff contracts should include a clause which allows HOSCA to terminate the agreement with immediate effect if the employee commits any act of gross misconduct, including fraud, bribery or theft. Supplier and sub-grantee contracts include specific anti-fraud and anti-bribery clauses.
Appendices
Glossary
Terms
Attempted fraud or bribery An unsuccessful effort to commit fraud or bribery.
Bribery The unlawful act of offering or receiving any gift, loan, fee, reward or other advantage (taxes, services, donations etc.) to or from any person as an inducement to do something which is dishonest, illegal or a breach of trust, in the conduct of one’s duties.
Corruption The abuse of entrusted power for private gain
Embezzlement To steal money that people trust you to look after as part of your work.
Entertainment Invitations to attend events with a social aspect, such as meals & conferences, as well as entertainment events such as shows or games, which are offered free of charge or at reduced rates.
Error An accidental mistake, for example in a calculation or a decision
Extortion Act of utilizing one’s access to a position of power or knowledge, either directly or indirectly, to demand unmerited cooperation or compensation as a result of coercive threats.
Fraud The act of intentionally deceiving someone in order to gain an unfair or illegal advantage (financial, political or otherwise)
Gift Goods, services or cash offered to or by staff or board members, or their friends or family or associates, at free or preferential rates. Unpaid loans are considered gifts for the purposes of this policy.
Money Laundering The concealment of the origins of illegally obtained money, typically by means of transfers involving foreign banks or legitimate businesses.
Negligence Failure to give care or attention, especially when this causes harm or damage.
Nepotism Form of favoritism based on familiar relationships whereby someone in an official position exploits his or her power or authority to provide a job or favor to a family member, even though he or she may not be qualified or deserving.
Public Official Any person holding any legislative, executive, administrative or judicial office, whether he/she is appointed or elected, permanent or temporary, paid or unpaid.
Robbery The crime of taking money or property illegally, often by using threats or violence.
Theft The crime of stealing.
Examples of fraud and bribery
Examples
- A grant officer requires or accepts kick-backs from partners for grant awards or payment remittances
- A staff member submits fake receipts in an expense claim
- A manager requires a payment for authorising an expense claim
- A staff or board member fails to disclose a conflict of interest with a partner, supplier or other staff member
- A staff member bribes an auditor to ignore or fail to report an audit finding
- A staff member colludes with a supplier to get a kickback on overpriced goods or services
- An accounts staff member records transactions in the accounting records they know to be false
- An accounts staff member knowingly posts entries to incorrect codes in order to conceal fraudulent payments
- A staff member driving on HOSCA business makes an unreceipted cash payment to a traffic officer to avoid a traffic offence fine
- An unofficial payment is made to a Government Officer to be allowed access to work in a particular District
- An unofficial payment is made to the police or judiciary to facilitate the release from detention or dropping of charges against a HOSCA employee or board member
Zero tolerance declaration form
Form to be completed by new employees when they join the organisation and by all employees before 1 July each year.
Annual Conflict of Interest Declaration Form
Form to be completed before 1 July each year by all board members, senior leadership team members, and staff members with roles in finance, procurement and HR.
Recruitment Conflict of Interest Declaration Form
Form to be completed by anyone involved with access to the relevant recruitment selection tools or involved in the selection process.
Declaration of Conflict of Interest Form
Form to be completed by any staff or board member who becomes aware of a conflict of interest arising during the year.
Fraud, bribery & misconduct report form
Highly confidential form to be completed by a line manager, Senior Leadership Team member or Board member who has received a report about a suspicion of fraud, bribery or misconduct.
Allegation or concern response checklist
Aide memoir for the Fraud Response Team when responding to an allegation of misconduct.
Fraud & Bribery Register
Register for tracking fraud and bribery incidents.
Source: HOSCA organizational documents. Refer to the approved internal version where a current or signed copy is required.