Fraud Prevention in Commodity Management
FRAUD PREVENTION IN COMMODITY MANAGEMENT
Monday, 18 November, 2013
Presenters: Hassan Ben Baha, Regional Technical Advisor, Commodity, Catholic Relief Services; Syon Niyogi, Deputy Regional Director for Management Quality, Catholic Relief Services
Each year, thousands of metric tons of food commodities, donated by the United States Government, are programmed all over the world. Food aid is usually distributed to the recipient beneficiaries through national or international cooperating partner NGOs with heavy reliance on local infrastructure and local capacity which varies from one country to another or one agency to another. Adequate capacity, or lack thereof, determines the quantity of food that reaches the intended beneficiaries. Most of the countries, where food aid programs are implemented have to deal with local challenges on a daily basis; it could be with security or governance or shortage of qualified staff or lack of appropriate supervision. Challenges could be both internal as well as external. Food is as good as cash. It can be very tempting to misappropriate in situations where controls are lax.
Yet the responsible agency will have to pay to the US government the value of such commodities lost, damaged or misused, unless USAID determines that such improper distribution or use or loss or damage could not have been prevented by the agency under reasonable circumstances. Senior Managers should not only ensure adequate checks and balances but also should have close oversight of food aid programs. In this session, participants gained an understanding of risks and potential loopholes in food commodity management. The session assisted them to be mindful about fraud prevention in designing and staffing food aid programs, developing control mechanisms and closely monitoring and oversight of food aid programs.
The moderator began the session by giving a knowledge management quiz to participants to test their understanding of fraud and to compare their perceptions about fraud with evidence from the field. Then the presenter discussed the definition of fraud, its various aspects and the steps that can be taken to manage residual risk with fraud. The participants ended the session by engaging in case study exercise in small groups.