Cases of corruption
2020
November 2020: Irregularities at Kenyan partner organisation
What happened:
DFPA was notified by the International Planned Parenthood Federation (IPPF), of which both the Kenyan partner organisation and DFPA are member associations, that allegations of irregularities had been made, which led to an in-depth audit. The audit concluded that cases of among other things embezzlement and fraud had taken place. Due to the results of the audit IPPF suspended the Kenyan partner organisation.
What we did:
DFPA immediately informed the Ministry of Foreign Affairs of the suspicions and disbursements to the Kenyan partner organisation was instantly stopped. The contract with the Kenyan partner has since then been terminated and unspent funds returned. DFPA collaborated with other IPPF member associations, who also funded the Kenyan organisation, to investigate the scope of financial mismanagement and/or misappropriation of funds. DFPA subsequently conducted a closer investigation to clarify, whether there was any mismanagement of Danish funds. The investigation showed minor irregularities in the management of Danish funds.
What we learned:
Besides previous learnings of how difficult it can be to detect fraud and misconduct in partner organisations, particularly when management is involved and DFPA is not permanently present on the ground, we have learned that team efforts within donor groups can make the handling of a corruption case smoother. Coordination with our Federation and sister organisations has been very useful in terms of sharing insights and strategies for engaging with staff, management and the board. Additionally, respective audits were coordinated – partly to reduce costs and to reduce the burden on the organisation.
May 2020: Mismanagement of funds in Kenyan partner organisation
What happened:
DFPA received a message from another funding organization, that a common implementing partner organization was in a financial crisis that could possibly end in bankruptcy. A group of donors took initiative to look into possible solutions for budget reallocation and further funding to save the organization. In the process different financial analyses were carried out, which pointed in the direction of financial mismanagement and/or misappropriation of funds.
What we did:
Meetings were carried out between donors and the management and board of the organization in question. DFPA was closely involved in upholding communication and information sharing among the donor group, and carried out a monitoring visit at the partner organization to get a better understanding of the present situation. It became clear that staff had not received their salaries for several months and there was a lot of mistrust towards the management. Together with another donor organization, DFPA decided to carry out an additional full project audit. The audit found reason to uphold the allegation of misappropriation of funds. This resulted in an immediate termination of the contract with the organization.
What we learned:
This case shows us how difficult it can be to detect fraud and misconduct despite having followed this organization very closely for a number of years with solid monitoring processes. This becomes even more complicated when top management is involved. In addition, as we are not permanently present on the ground, it can be very challenging to navigate in the political context and the various accusations made. We will continue to be vigilant in the financial monitoring of our partners, increase our financial unannounced samplings from our office in Copenhagen.