Principles for preventing and managing corruption

07 Jan 2016
See also the Reporting procedures for illegal or uancceptable circumstances

The Atlas Alliance has a zero tolerance for corruption. This also applies to breaches of Atlas Alliance ethical guidelines and any type of financial irregularity. Combating corruption effectively and sustainably is a long-term process. The Atlas Alliance seeks to be an advocate and partner for discussion in all stages of these efforts. We view our anti-corruption activities as a means of strengthening our own as well as our partners’ organisations. These efforts are an integral part of promoting a healthy organisational culture, transparent financial management and trustworthy leadership.
Atlas Alliance’s anti-corruption efforts address and emphasise principles, prevention and procedures.

Defining “corruption”

The Atlas Alliance is a member of the Norwegian Development Network’s (NDN) anti-corruption working group and applies the definition drawn up by the group:
“Corruption undermines development. It is an abuse of power that prevents the efficient use of national resources, inhibits economic growth and contributes to the unequal distribution of resources in society. A widely accepted definition of corruption is the one used by the World Bank: the abuse of (public) power for private benefit. Corruption may be found at all levels.”
This definition is closely based on the Ministry of Foregin Affairs’ definition of corruption.

A concerted effort to combat corruption must be based on a common understanding of the meaning of the term “corruption” in the various countries and cultures where we carry out our work. A broad definition is needed so as not to overlook important aspects of corruption as a phenomenon.
The term “corruption” encompasses bribery, embezzlement, theft, fraud, extortion, misappropriation of public funds or others’ funds, favouritism/nepotism and the abuse of power for private benefit.

“Corruption” encompasses any interaction between volunteer or public stakeholders whereby in an illegitimate or dishonest way public goods are illegally converted into private benefits (cf the Norwegian Agency for Development Cooperation (Norad) definition of corruption ).

The Atlas Alliance emphasises that corruption is not limited to financial irregularities but also extends to sexual harassment and other forms of abuse of power.
The Atlas Alliance requires that all of its partners and other actors receiving project funding via the Atlas Alliance, whether directly or via intermediaries, adhere to a consistent practice of permitting no form of corruption. The Atlas Alliance actively advocates that any organisation which receives funding must fulfil its reporting obligations and manage the allocated funding in accordance with applicable agreements and legislation.

Actions to be taken in connection with suspected corruption

When corruption or misappropriation of funds is suspected, the Atlas Alliance requires the following actions to be taken:

1. Immediate notification of the circumstances: from the local recipient entity (either via an individual or organisation) to the Norwegian organisation, and relayed without delay to the general manager and head of the Atlas Alliance programme team. The Atlas Alliance will report cases of suspected corruption to the appropriate donor.

2. Submission of a written report from the Norwegian organisation and partner organisation involved that explains the reason for the suspicion / details of the situation.

3. Implementation of specific measures:

  • Cancel (halt) the transfer of funds to the recipient and place the project/programme in question on hold until further explanation has been provided.
  • Conduct a review of the financial, administrative and management routines of the suspected/reported party and assess the need for changes to reduce the risk of further irregularities.

4. Documentation is required, not only regarding the circumstances but also the extent to which Norwegian funds may have been misappropriated. Documentation must be obtained by the party involved, with the help of partner organisations where appropriate.

In confirmed cases of corruption:

1. Confirmed instances of corruption must be reported to the police in the country where the irregularity was committed.
2. Misappropriated funds must be repaid to the Atlas Alliance, which will then return them to the donor.
3. If cooperation with the offending partner entity continues, measures must be taken to reduce the risk of recurrence.

Building greater awareness, shaping attitudes and increasing knowledge

It is essential that the Atlas Alliance stance on corruption is openly conveyed and understood. Guidelines play a vital role in combating corruption but must also be accompanied by activities to promote ethical behaviour as well as clear-cut attitudes among the management team. Employees need to have access to courses, training and presentations by the Atlas Alliance in the relevant ethical guidelines and anti-corruption efforts, with an emphasis on prevention (see below).
Individual employees and managers must be able to read situations correctly and find workable solutions. This requires the knowledge and skills pertinent to recognising what is taking place and the capability to uphold the organisation’s policy in a professional manner.

Monitoring and control systems

Effectively combating corruption requires sound, stringent financial management. However, a successful strategy can rarely rely on control and sanctions alone. The principle of recipient responsibility is based on trust and the recipient’s doing its utmost to carry out its projects and programmes in accordance with plans, agreements and applicable regulations.

Donor control must therefore strike a balance between efficiency, local ownership and adequate follow-up. Successful practices depend on the ability of employees and management to analyse situations in terms of regulations, the organisation’s philosophy and relevant external requirements. A variety of instruments is needed to ensure balance between control, sanctions, training and dialogue.

Transparency and access to information are essential instruments.
Transparency and access to information are key components in the planning and execution of projects and programmes. Financial personnel and those in charge of projects and programmes must keep an eye out for any misappropriation of funds in budgeting and accounting reports. During project visits, financial management and anti-corruption measures must be discussed.

Organisations receiving Atlas Alliance funding are expected to conduct annual reviews of administrative routines and financial management procedures in connection with project visits (cf attached appendices Financial Management Tools and Financial Management Manual). These reviews should also include spot checks of expenditures and vouchers. Meetings with the local auditor must be arranged annually.

Requirements and guidelines

– Zero tolerance means no tolerance whatsoever. Even small amounts should be investigated and suspicions reported.

– The organisation involved must immediately notify the Atlas Alliance of any suspicions (even when the suspicions are not confirmed). The Atlas Alliance will notify the donor.

– Until it has been established that Norwegian/Norad funds are involved, the report will be characterised as preliminary. Norad’s reporting form is to be used (by the Atlas Alliance secretariat).

– A case will be opened upon confirmation that Norwegian funds may have been misappropriated, and the Ministry of Foreign Affairs will then be notified.

– Payments to the project in question will be frozen until the case is resolved and necessary control measures have been implemented.

– The amount in question must be documented and repaid to the donor (Norad, Ministry of Foreign Affairs, Operation Day’s Work).

– Those who attempt to cover up corruption or financial irregularities run the risk of having to repay all funding to the project, not just the funds confirmed as misappropriated.

– No case will be made public until it has been resolved.

– Actors from Norwegian civil society are required to publish information about resolved cases on their websites. The Atlas Alliance is responsible for publication of this information on our joint website. In particularly wide-ranging and/or complicated cases, publication by the Atlas Alliance’s relevant Norwegian partner organisation may be needed.

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