PART I - DEFINITIONS & PRINCIPLES Date 11 May 2015 secretariat@robertcarrfund.org Fund Management Agent: Aids Fonds Keizersgracht 392 1016 GB Amsterdam +31 (0)206262669 secretariat@robertcarrfund.org www.robertcarrfund.org
Contents 1. Definitions and principles 3 1.1. Introduction 3 1.2. Definitions 3 1.3. Principles 4 1.4. Roles and responsibilities 6-2 -
1. DEFINITIONS AND PRINCIPLES 1.1. Introduction The Robert Carr civil society Networks Fund (RCNF) strives for effective responses that meet the needs of inadequately served populations (ISPs) through its support for global and regional civil society networks. The RCNF, uniquely, provides support through both core and program funding to these networks, strengthening civil society. Cases of corruption, fraud and/or mismanagement (CFM) undermine the work of existing and potential RCNF stakeholders including grantees, donors, and ultimately the communities that benefit from the programs and activities funded. Therefore, the RCNF is committed to working with stakeholders to prevent and detect acts of corruption, fraud and mismanagement, and to effectively take action when they occur. This RCNF CFM policy forms part of the RCNF governance policies. Since the Fund Management Agent (FMA) 1, the donors and the grantees of the RCNF each have their own organizational CFM policies, the purpose of this CFM policy is to state the position of the RCNF on the prevention and detection of corruption, fraud and mismanagement, to set out its strategy and to create clarity on the principles and the roles of the different stakeholders within the RCNF. Adherence to this policy is mandatory for all RCNF grantees and subgrantees. 1.2. Definitions Corruption and fraud are covert activities, undertaken by an individual or a group, to gain some form of benefit for the individual or the group. They are in conflict with the governance charter, aims, rules, procedures or culture of an organization, network or consortium of networks, or they are illegal. RCNF uses the following definitions of corruption, fraud and mismanagement: Definition of corruption Corruption is defined as the misuse of entrusted power for private gain. It hurts everyone who depends on the integrity of people in a position of authority. 2 Following the example of the UN, the RCNF identifies various forms of corrupt offences, including but not limited to: bribery (or the offering, giving, soliciting or acceptance of an inducement or a reward in order to (or to try to) improperly influence someone's actions); extortion; facilitation payment; collusion; fraud; obstruction of justice; embezzlement, misappropriation or other diversions of property by a public official; abuse of function; illicit enrichment; creating or exploiting conflicting interests; favouritism or nepotism; or the failure to disclose an interest in order to enjoy financial or other benefits or gains. 3 1 Aids Fonds is the Fund Management Agent of the Robert Carr civil society Networks Fund 2 The RCNF draws on the definition of corruption provided by Transparency International: Http://www.transparency.org/whatwedo?gclid=CI34t8yS4LICFaTJtAodRS0A2g 3 The RCNF draws on the definition of corruption provided by the UN: http://www.unodc.org/pdf/crime/corruption/handbook.pdf - 3 -
Definition of fraud The RCNF understands fraud to mean the acquisition or misuse of RCNF funds or property by deception. For the purposes of this policy, fraud affecting RCNFs interests shall consist of any intentional act or omission relating to: the failure to disclose an interest in order to enjoy financial or other benefits or gains, or cause a loss, to a person, program or organization in the process of distribution of RCNF funds; the misapplication of RCNF funds for purposes other than those agreed in the contractual arrangement; the use or presentation of false, incorrect or incomplete statements or documents, which has as its effect the misapplication, misappropriation or wrongful retention of RCNF funds; the non-disclosure of information in violation of a specific obligation, with the same effect. 4 Definition of mismanagement Management, or internal control, of a planned and funded program is the organization, policies and procedures used to: ensure that the planned and funded program activities achieve their intended results; guarantee that the resources used to deliver these programs are consistent with the stated aims and objectives of the organizations concerned and in accordance with the agreement with the funder; protect programs from waste, fraud and mismanagement; provide reliable and timely information that is obtained, maintained, reported and used for decision making. 5 Mismanagement is the failure to manage or control an approved programme according to the above definition. Mismanagement exists when a network or consortium of networks is not able to account for received funds. 1.3. Principles Openness and transparency Openness and integrity are essential elements of any process designed to identify, mitigate, and resolve issues of corruption, fraud and mismanagement. RCNF strives towards an atmosphere in which suspicions of corruption, fraud or mismanagement can be shared and reported, making sure that such reports are always followed up by careful investigation. RNCF works on establishing procedures and protocols that foster an environment of fairness and integrity that ensures grant funds are being used as they were intended, and that all parties involved in a CFM case are treated with respect. In order to counteract misinformation and misconceptions from threatening the goals and purpose of the RCNF grant, CFM policies, responsibilities, procedures and roles within the RCNF need to be specified and clear to all parties concerned. Stakeholders within RCNF shall follow all required procedures in an open and transparent manner to ensure all necessary information related to a CFM case are obtained. Consequences for failure to adhere to the CFM policies need to be clear to RCNF grantees and sub-grantees, FMA staff and ISC and PAP members. 4 The RCNF draws on the fraud definitions used by the OECD: http://stats.oecd.org/glossary/detail.asp?id=4781 5 The RCNF draws on the definitions used by the OECD: Http://stats.oecd.org/glossary/detail.asp?ID=4779-4 -
Confidentiality The RCNF advocates confidentiality with regard to suspicions of corruption, fraud and mismanagement. The ISC, PAP and FMA adhere to the RCNF confidentiality agreement in all matters relating to corruption, fraud and/or mismanagement. 6 If fraudulent or corrupt conduct or mismanagement is suspected within a network or consortium of networks, the FMA may cooperate with other donors who are working with this particular network or consortium of networks. In the event several other donors are involved with such a network or consortium of networks, the FMA, on behalf of RCNF, will strive after the formation of a donor alliance, to streamline the investigation and reduce redundancies. In addition, depending on the contractual agreement between the FMA and the RCNF donors, RCNF donors may also be included in this cooperation. RCNF will do its best to ensure that the ad-hoc teams of internal and external stakeholders established to investigate and resolve CFM cases adhere to this confidentiality policy. Capacity building and strengthening of networks The RCNF advocates sound program management to ensure that programmes achieve their intended results; that the resources used to deliver these programmes are consistent with the stated aims and objectives of the organizations concerned; that programmes are protected from waste, fraud and mismanagement; and that reliable and timely information is obtained, maintained, reported and used for decision making. A respectful, fair and ethical approach will be used in addressing suspected and actual cases of CFM. The RCNF will act upon such cases with the intention of strengthening a network or consortium of networks obligation to comply with all stated items in the RCNF CFM policy, any contractual agreements with the FMA, and contractual agreements with any sub-grantee organizations or networks receiving RCNF grant funds. However, failure by RCNF grantees or sub-grantees to take appropriate action when CFM is suspected, including resolving any governance and/or financial reporting obligations as outlined in the contractual agreements and RCNF CMF policies will not be tolerated. The RCNF promotes capacity building in financial management and accountability for grantees. A proactive approach to strengthening internal budget monitoring skills, tools and procedures should be a priority for all RCNF stakeholders. Sharing resources and strategies to support compliance with financial and grant obligations is a goal to ensure sustainable and effective use of funds throughout the duration of the granting period. Accountability The RCNF will always take necessary steps to recover any losses arising from fraud, theft or other misconduct, including legal action. Further grant funding support will only take place once an organization can demonstrate they have taken appropriate actions to ensure their financial reporting and monitoring structures are rigorous and have been improved to ensure that corruption, fraud or mismanagement will not re-occur. When corrupt or fraudulent conduct demonstrated by an ISC or PAP member of the RCNF has been confirmed following the outcomes of an investigation, that person(s) will be relieved of his or her position within the RCNF, and legal action against this person will be considered. FMA staff operates under its own fraud 7 and integrity 8 policies. When corrupt or fraudulent conduct has been demonstrated in an FMA staff member, the ISC will follow the provisions of the FMA integrity policy. Legal action against this person(s) will be considered. 6 See RCNF confidentiality agreement (under construction) 7 Will be published on the RCNF website shortly. 8 Will be published on the RCNF website shortly. - 5 -
1.4. Roles and responsibilities The RCNF strives towards an atmosphere in which suspicions of fraud, mismanagement and/or corruption can be shared and reported, making sure that such reports are always followed up by careful investigation. All RCNF grantee networks, ISC members, PAP members and FMA staff need to be familiar with, and follow all RCNF policies and procedures, and implement strategies to mitigate risks and consequences. The role of the ISC The ISC is the governing body of the RCNF. It oversees the work of the FMA with regard to its response to suspicions of corruption, fraud and mismanagement. The ISC is committed to ensuring that the FMA, PAP and the ISC itself adhere to the RCNF CFM policies and principles. The ISC has installed an Accountability Committee, consisting of one civil society and one donor representative, to provide guidance and oversight on the implementation of the CFM policy, and to serve as an information and feedback mechanism to facilitate improved communication between the ISC and FMA on cases of CFM. The role of the PAP The PAP plays a key role in the prevention of corruption, fraud and mismanagement by reviewing proposals, applying their skills and experience to carefully assess the quality of an organization and identify potential risks and opportunities. The FMA facilitates the sharing of financial and budget management history information submitted by RCNF applicants to assist the PAP in the review process. The role of the FMA The FMA plays a central part in the RCNF s response to (and prevention of) corruption, fraud and mismanagement. The FMA advises the ISC on possible improvements of RCNFs CFM policy, implements the policy and is responsible for the contracting of RCNF grantees and the on-going monitoring and reporting of grant expenditures for the duration of the funding cycle. 9 The FMA makes sure that all grantees are familiar with the grant regulations 10, including the anti-corruption, fraud and mismanagement clauses as well as whistle-blowing procedures. An important part of the contracting of grantees is a due diligence research process resulting in a risk profile that will be monitored and adapted throughout the funding cycle. CFM indicators are incorporated in the FMAs monitoring and quarterly reporting tools. 11 The FMA also has a responsibility to inform the ISC of any suspicions of corruption, fraud and/or mismanagement in a timely manner. To guarantee confidentiality, suspicions and cases of corruption, fraud and mismanagement are shared with the Accountability Committee. Together with FMA, the Accountability Committee will decide when and how the ISC will be informed. The FMA will inform the RCNF s donors of suspicions of corruption, fraud or financial mismanagement as per the agreements stipulated in their respective contractual obligations. Together with the FMA, the Accountability Committee will agree on how all relevant stakeholders can be alerted and informed on potential and on-going cases of CFM. The FMA, the ISC and the members of the Accountability Committee will pledge confidentiality until a case is either substantiated or renounced. 12 The FMA adheres to the corruption, fraud and mismanagement clauses in the contracts between FMA and individual RCNF donors. RCNF donors strive towards aligning the contractual obligations as much as possible, supported by the FMA. The FMA will monitor contracts and inform donors if a clause deviates from 9 For more information, see the RCNF Due Diligence and Risk Management Policy 10 Http://www.robertcarrfund.org/wp-content/uploads/2013/12/Grant-Regulations-Agreement-2012-RCNF.pdf?c866de 11 See the RCNF Due diligence & risk management policy 12 See the RCNF confidentiality agreement (under construction) - 6 -
this policy. Deviations between this policy and an individual donor contract, particularly regarding the CFM policy, will be reported to the ISC by the FMA. The RCNF encourages mechanisms through which information or concerns about suspected cases of corruption, fraud and mismanagement by any of the RCNF stakeholders (ISC or PAP members, grantees and sub-grantees) can be identified and addressed. The FMA manages the whistle-blowers mailbox for the RCNF and conducts the initial follow up on suspicions of CFM submitted. The role of RCNF grantee networks, consortium of networks and sub-grantee networks In funding and contracting, the RCNF propagates a lead organization based model, where one partner in the network or consortium represents the consortium on behalf of the partners if a grantee network or consortium of networks does not have a secretariat itself. The RCNF provides budget for management and internal accountability of consortia to allow for consortia management by consortia lead organizations. Eligible costs will be stipulated in each RCNF RfP. The Fund Management Agent, Aids Fonds, contracts the lead organization or secretariat on behalf of the network or consortia. The lead organization reports to Aids Fonds on behalf of the network or consortium. The RCNF holds the lead organization responsible and accountable for the (financial) management and control, the implementation, and the monitoring & evaluation of the proposed project and/or activities. The lead organization is expected to engage into contracts with sub-grantee networks where funding is sub-granted. The lead organization is also responsible for ensuring that any contracts and agreements between lead organization and sub-grantee adhere to the RCNF CFM policy. The RCNF expects a network or consortium of networks to have or adopt a functioning system of internal accountability, guaranteeing joint and transparent decision-making processes. Each grantee lead organization is made familiar with the FMA s grant regulations and is expected to ensure the compliance of their network and/or consortium partners. Grantee networks are expected to all be knowledgeable of the corruption, fraud and mismanagement clauses in the contract, throughout the network or consortium of networks, and have their own CFM policies and procedures in place. All individual and collective contractual grant administration obligations and polices amongst RCNF, FMA, donors, and RCNF grantees should be aligned to ensure compliance amongst all stakeholders. Sub-grantees are expected to immediately inform the lead organization of a network or consortium of networks when financial or other irregularities occur in their networks or when a suspicion of CFM arises. When CFM occurs within a network or organization, the lead organization of the network or consortium of networks is held responsible by the RCNF and is expected to execute the networks or consortium anti-corruption, fraud and mismanagement clauses. A lead organization is required to immediately contact the FMA if financial or other irregularities occur in the network or consortium, or a suspicion of corruption, fraud or mismanagement arises. In a situation where there is a suspicion of CFM within a lead organization, sub-grantees can contact the FMA immediately for further investigations. - 7 -