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Contents:
Scope of Red Flags Program Methodology Deviations Prevention Reporting Case Studies
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Analysis of the most common Corrupt and Fraudulent Practices in Project Procurement. Development of a system to help identify and prevent such practices.
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Sources of Information:
Analysis based on a Sample of:
52 substantiated cases of fraud and corruption investigated by OII between 2004 and 2007
Review of Existing Systems in comparator institutions (I.e. ADB, UN, WB, OECD) Interviews with officers from comparator institutions Review of documents and literature published by IOs.
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II. Methodology:
Classification of Cases according to the different stages of the procurement process; Identification of Types of Corrupt Practices (Deviations) at each stage of the process; Analysis and Comparison of existing Red Flags systems in International Organizations and Best Practices Creation of a Red Flags Matrix.
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Procurement Process
* Preparing corresponding bidding documents and procurement notices; * Publicizing the procurement notices and issuing the bidding documents or requests for proposals
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2%2 %
Ex e c u t i o n P h a s e 4 1% Execution Phase
B id/ P ro po s a l
41%
39%
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Deviations
Deviations
Misrepresentation
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4) Conflict of Interest:
Example: Family and Friends. Fraudulent Hiring of Consultants. Member of Selection Committee participating as bidder.
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6) Misrepresentation:
Example: Lack of consent of the consultants included in the bid. Exaggeration of previous experience.
7) Breach of Confidentiality:
Example: Disclosure of results before publication
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Prevention
Technical Materials
Prevention
Monitoring
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1) Training
The Bank is developing a training program on how to identify and prevent fraud and corruption in procurement related activities.
The program will be addressed to all officials who have responsibilities in the procurement process. (Staff and Ex. Agencies) Training will focus on how to identify risk and corruption at the different stages of the procurement process. Training will be based on the lessons learned though a practical approach based on the analysis of cases of VPC/PFP and PRE/OII and the elements regularly added in the Red Flags Matrix.
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#N/A
#N/A
#N/A
Breach of Confidentiality: Disclosure of privileged information to third parties in undue circumstances and/or timing
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Risk Assessment
# 1 2 Questions Is this activity financed by the Bank Group? Answ ers Answ ers Answ ers Answ ers Answ ers Yes Yes Yes Yes No Yes No No No
If the facts in the red flag w ere true, w ould they constitute a violation Yes of the Banks prohibition against fraudulent and corrupt practices? Is any of the parties included in the sanctioned list of the IDB, the WB or other international organizations or debarred by national Yes authorities? High Level of Risk: Where to subm it the concern for Revision: OII
No High OII
No Low PFP
No N/A N/A
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V. Reporting
Allegations and Fraud can be reported confidentially and securely at: www.iadb.org/oii What happens next: All allegations are reviewed by OII, keeping specific details and complainant identities confidential. OII conducts a preliminary review answering the following 3 questions:
Is project financed by the Bank? Does it constitutes a violation of the Banks Procurement Policies? Does it provide sufficient credible information for investigation?
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Contacts
VPC/PFP Procurement, Financial Management and Portfolio Monitoring Division. PRE/OII Office of Institutional Integrity
Thank You!
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