Home 
Publications Catalog Online Publications ADB Review Article
Combating Corruption
|
The Asian Development Bank’s Integrity Division (OAGI), located in the Office of the Auditor General, is the initial point of contact for allegations of fraud and corruption among ADB-financed projects or staff.
OAGI performs three critical functions to support ADB’s accountability goals. Under ADB’s Anticorruption Policy, OAGI’s mission is to screen allegations of fraud or corruption and investigate credible complaints; conduct project procurementrelated audits (PPRAs) to help prevent and detect fraud or corruption; and collaborate with ADB’s Budget, Personnel and Management Systems Department (BPMSD) to provide fraud and corruption awareness training for ADB staff.
Through these investigations, PPRAs, and education, “OAGI helps foster a culture of compliance to deter fraud and corruption,” according to OAGI Director A. Michael Stevens.
Education and awareness are fundamental to establishing accountability. Awareness of the Anticorruption Policy, its impact on operational activities, as well as punitive measures for failing to comply with the highest of ethical standards, are essential to deterring fraud and corruption, according to OAGI’s Integrity Division 2005 Annual Report.
OAGI reaches out to staff, contractors, government officials, executing agencies (EAs), nongovernment organizations, industry groups, and civil society with educational programs.
“The better educated people are about the Anticorruption Policy, the more we increase awareness of the policy. The more people are aware of the policy, the better able they are to help detect and deter fraud and corruption, and to make OAGI aware of allegations of fraud or corruption,” Mr. Stevens says.
To ensure that all new staff are aware of the Anticorruption Policy and OAGI’s work from the start of their careers with ADB, OAGI provides an overview of the policy at all orientation sessions for professional staff, national officers, and administrative staff. OAGI reinforces its message with an overview of how OAGI works at induction programs for staff who have been working at ADB for 6–12 months.
Staff at resident missions are also included in this educational outreach. In the past year, staff in Cambodia, People’s Republic of China (PRC), Mongolia, and Viet Nam were provided an overview of the Anticorruption Policy and procedures. In a discussion with eight staff in the Indonesia Resident Mission in September 2005, OAGI offered guidance derived from successful investigations to enhance the ability of staff to identify fraud and corruption issues.
In addition, OAGI participates in halfday training workshops organized by ADB’s Human Resources Division that target staff of operational departments. These workshops present the policy, approved by the Board in 1998, the mission and function of OAGI, how to report allegations or concerns, and case studies.
Through seminars organized by ADB’s Consulting Services Division, OAGI explained the Anticorruption Policy and discussed due process under ADB’s Integrity Guidelines and Procedures to EA officials in Bangladesh, Cambodia, PRC, Indonesia, and Mongolia.
OAGI also meets with individual EAs responsible for administering ADB projects. Approximately 90 government officials involved with two ADB road rehabilitation projects attended seminars in Indonesia that sought to raise awareness of the policy by sharing examples of procurement-related fraud and explaining the consequences of failing to comply with the policy.
Furthering its preventive efforts, OAGI also conducts PPRAs as a way to increase accountability in ADB-financed projects. In addition to assessing procedural compliance, PPRAs are designed to detect and substantiate fraudulent or corrupt practices relating to procurement of goods and services through a review of a project’s procurement and financial management practices.
In this way, OAGI can help identify and address potential internal control weaknesses that allow fraud or corruption in ADB-financed projects. This effort is so important to OAGI’s mission, that one professional staff member has been assigned to primarily work on PPRAs in 2006.
“This specialization will enable OAGI to conduct PPRAs more efficiently, refine its planning and procedures for such audits, and enhance OAGI capacity through the development of OAGI staff with specialized skills,” according to OAGI’s Integrity Division 2005 Annual Report.
In just one such audit in 2005, OAGI documented bid splitting, bid rigging, fictitious bidders, misappropriation of funds, false supporting documents, nonexistent assets, and kickbacks.
OAGI determined the irregularities resulted from a lack of internal controls and inadequate supervision. In addition, project personnel exhibited a lack of ownership in the project. As a result of preliminary recommendations, the developing member country ministry concerned has created a project management unit to establish effective internal controls and provide better supervision.
Unfortunately, these preventative efforts have not kept investigations from being the bulk of OAGI’s work. Since the policy was adopted in 1998, OAGI has opened a total of 565 investigations. Nearly 75% of those investigations centered on ADB-financed projects and technical assistance; only 17% involved ADB staff, and 9% dealt with other ADB-financed issues.
“ OAGI helps foster a culture of compliance to deter fraud and corruption "
- A. Michael Stevens, Director, Integrity DivisionOAGI investigations cover a wide range of issues. Among the results of its significant cases in 2005, OAGI found collusion among bidders, sometimes seeming to involve EAs; misrepresented experience among firms and individuals, as well as unauthorized use of some experts’ curriculum vitae; false documents, including receipts and performance bonds; and, in a first-of-its-kind case, submission of false information in a firm’s appeal of its debarment.
OAGI makes recommendations based on these investigations to ADB’s Integrity Oversight Committee. The committee determines if the Anticorruption Policy has been violated and may impose sanctions that range from reprimands to debarment of firms and individuals.
“Despite what anyone might think, OAGI is not ‘out to get’ anyone. Our job is to gather and analyze evidence,” Mr. Stevens points out. That is particularly important to staff cases that OAGI investigates.
Most staff cases concern abuse of ADB benefits, such as improper rental subsidy or false insurance claims. Other cases involving staff have addressed unauthorized possession of ADB property, improper travel expense claims, and violations of Code of Conduct provisions.
Sanctions of staff can range from immediate termination to reprimands. With staff cases, OAGI investigates while BPMSD is solely responsible for disciplinary action.
In one case in 2005, a staff member increased a spouse’s life insurance coverage immediately prior to filing a claim. An investigation revealed the spouse was alive (albeit not living with the staff member). ADB summarily dismissed the staff member. In another case, a staff member received a $100 cash stipend from a conference organizer to cover incidental expenses, duplicating the miscellaneous (“lump sum”) expenses that ADB paid to the staff member.
ADB recovered the $100 and BPMSD concluded a nondisciplinary written reprimand was appropriate.
Not all staff-related cases are as straightforward. OAGI received an allegation of a conflict of interest involving a staff member and found evidence of violations of the Code of Conduct, including that the staff member solicited financial support from ADB on behalf of a prospective employer, disclosed internal ADB documents, disclosed an ADB password to a proprietary internet database to unauthorized persons outside ADB, performed extensive work on personal matters during office hours, and misused the ADB diplomatic pouch.
ADB found the staff member’s actions constituted serious and blatant misconduct that warranted summary dismissal.
OAGI works hard to ensure that allegations of fraud and corruption are easy to report and will be kept confidential. Whistleblower protection is critical to allowing OAGI to perform its mission, and is incorporated into ADB’s rules and procedures. For guidance of reporting concerns, and to learn more about OAGI, check www.adb.org/Integrity.
Go back to current issue
© 2009 Asian Development Bank Privacy | Terms of Use |
 Top of page |