Publications

Executive Summary

Introduction

The Integrity Division, Office of the Auditor General (OAGI), is the focal point of the Asian Development Bank's (ADB) drive against corruption. At the forefront of all OAGI's efforts is to contribute to ADB's declared mission to improve the welfare of the people in the Asia and Pacific region, particularly those who live on less than $2 a day. Corruption has a strong adverse impact on development efforts; hence, the more successful ADB's anticorruption drive is, the more the burden of poverty is reduced.

Since the anticorruption policy was approved in July 1998, ADB's anticorruption drive has grown from strength to strength, and continues to surge forward. This Annual Report summarizes how OAGI accomplished ADB's mission in 2007 and identifies the challenges ahead.

During 2007, OAGI continued both its approaches of being reactive (receiving complaints, conducting investigations, acting as resource, and providing support on anticorruption issues) and proactive (preventive efforts that involve audits, education, training, capacity building, collaboration, and cooperation).

Complaints and Investigations

OAGI closed 2007 with a tenfold increase in complaints received compared with 1998. This indicates that preventing corruption is making inroads among stakeholders who see that ADB will act on allegations received and that ADB is serious in its anticorruption stance.

In 2007, OAGI received 211 complaints. Ninety-five investigations were opened during the year, and at year's end, 66 are ongoing. Also in 2007, ADB sanctioned a total of 61 firms and 48 individuals, and reprimanded one firm and seven individuals.

Twelve percent of all allegations received involved ADB staff-4% less than the previous year. Such cases require sensitive handling, and the highest levels of propriety, confidentiality, and impartiality. These cases also require significant resources and are often a strain on OAGI's staff resources.

In 2008, OAGI will continue to

• Screen allegations of fraud or corruption and assess the need for further investigation,
• Investigate cases as appropriate, and
• Conduct project procurement-related audits (PPRAs) to help prevent and detect fraud or corruption.

Additionally, in an effort to sustain the highest standards of integrity, in the latter half of 2007, OAGI commenced a review of its internal procedures and processes, which will continue into 2008. It is anticipated that in 2008, new guidelines will be introduced as appropriate. For example, OAGI anticipates submitting for approval Guidelines for Interviews and the Use of Electronic Equipment for Interviews in the first quarter of 2008. OAGI will also introduce new forms and office procedures covering a range of its operations in 2008. For instance, OAGI is reviewing its IT systems capabilities and related IT processes and subprocesses in order to enhance efficiencies and intelligence data gathering and reporting.

Given the enhanced level of awareness of the impacts of fraud and corruption on ADB projects, OAGI received higher levels of requests for data and specific case information in 2007. OAGI anticipates that the demand for specific data on incidences of fraud and corruption from other ADB departments will continue to grow. Consequently, in 2008, in step with initiatives commenced in 2007, OAGI will review and introduce systems to generate a wide range of data for use by other ADB departments.

Project Procurement-Related Audits

Five PPRAs were conducted in 2007. Significantly, these were conducted jointly with relevant developing member countries' (DMCs) supreme audit institutions (SAIs), thereby further consolidating the SAIs' skills and capacity. To date, OAGI has completed and issued four of these PPRA reports, with the fifth report due in early 2008. In 2008, a total of six PPRAs-each with the participation of the country's SAI-have been planned.

Performance and Financial Audits

On an exceptional basis, at the request of the Central and West Asia Department and the Office of the President, OAGI carried out a performance and financial audit of four related Technical Assistance projects. OAGI continues to be responsive to requests from ADB divisions where these involve issues anticorruption and integrity.

Capacity Building

During 2007, OAGI was responsible for the administration and implementation of a regional technical assistance (RETA) project to provide regional seminars on anticorruption and was involved in another RETA designed to strengthen the capacity of SAIs. OAGI will continue to work closely with and DMCs to assist with capacity building and skills enhancement. In 2008, OAGI intends to introduce two new RETA projects on anticorruption to build on the milestones achieved to date.

OAGI will continue to work closely with SAIs and DMCs to assist with capacity building and skills enhancement. In 2008, OAGI intends to introduce two new RETETA projects on anticorruption to build on the milestones achieved to date.

Anticorruption Awareness

OAGI continued to provide training workshops and seminars to staff, both at Headquarters and at Resident Missions, on fraud and corruption detection, and prevention. Advisories are regularly published in ADB Today on internal news bulletin topical anticorruption issues. Additionally, in 2007, OAGI provided briefings on its role and activities to business trade delegations from Canada, France, the Netherlands, and Sweden.

OAGI recognizes that its website (www.adb.org/Integrity) provides a valuable resource to stakeholders; thus, in the latter half of 2007, the website was revamped, updated, and expanded. It will continue to be regularly updated to ensure that the content remains accessible, topical, timely, and useful.

As part of its outreach activities, OAGI will also publish translations of the anticorruption policy, and the Integrity Principles and Guidelines, in Bahasa Indonesia, Khmer, Chinese, and Russian languages. In 2008, OAGI will release a quick reference guide on anticorruption, conflict of interest, and integrity issues for staff.

Interagency Cooperation

During the year, OAGI continued to strengthen relationships with other international multilateral development banks (MDBs) by participating in integrity forums and targeted international conferences. Similar collaboration and dialogue toward a harmonized approach against corruption will continue in 2008. OAGI continues to collaborate with the other MDBs in developing unified approaches to cases of international relevance.