in this guest post, Najwa Whistler offers some insights into preventing and detecting fraud in beneficiary distribution lists. Experiences have been anonymised. Images are used for illustration only, and there is no suggestion that the events shown involved any of the issues discussed in Najwa’s article.
A common form of evidence that a distribution of food or Non-Food Items (NFIs, such as hygiene kits), a training event, or any other service actually took place is a list of named recipients. This might be either pre-printed or handwritten, and featuring the signature or fingerprint of the recipients. In principle this should work – but does it work in practice?
From the experience of my colleagues and I in different NGOs, in both emergency and non-emergency contexts, here are some real-life examples.
One organisation was distributing NFIs in a very insecure location to the most vulnerable population. The organisation relied on its local staff for the distribution, beneficiaries were asked for a fingerprint as the unique identifier of receipt, and the senior managers were satisfied upon receipt of all the distribution lists. But when an audit was conducted by the donor, the auditors became concerned about the lists and sent them to a forensic laboratory. The results came back that all the prints belonging to just five individuals, and not all were finger prints. I couldn’t remove the image from my head of someone dipping their toes in ink!
While the organisation went the extra mile to reach the unreachable and ensure no beneficiary was left behind, five people were going the extra mile to spend hours faking records to steal from them.
Another example is when these records come back crisp, clean and as good as new. You can be almost sure that the papers have never left the desk of the supervisor. Other things to watch out for closely are signatures that are easily recognised as being signed by the same person, signatures with repetitive recipient names, or family names that alternate with first names.
Of course, these red flags do not necessarily mean fraud has taken place. Sometimes, for example, one person signs on behalf of other beneficiaries because they couldn’t all travel to the point of distribution. Or maybe the supervisor signs on behalf of the beneficiaries because it is not practical to collect a signature or fingerprint during the distribution. These situations are different to the creation of phantom beneficiaries, or falsely confirming that a service or item has been delivered.
What can we do about it?
In acute emergencies, the efforts should be focused on reaching people, eliminating their suffering, and treating them with dignity and respect. Collecting recipients’ confirmation can be impractical at times.
In these situations, organisations can rely on alternative evidence of the delivery, such as the evidence of the supplies’ transport to, and arrival at, the point of distribution. Distributions can also be recorded with modern technologies such as biometrics, body cameras on the distributors, or even mini-drones which can be deployed to record at a set altitude above a person wearing a transmitter.
Organisations can also consider:
- Conducting individual interviews with the staff involved in the distribution. Don’t exclude drivers and guards. They can be good witnesses, giving their experience of the distribution to enable organisations to compare stories for any inconsistencies or reasons for suspicion;
- Keeping photographs and videos from cell phones if no other technology is available;
- Ensuring that the delivery team is from different departments in the organisation, where possible;
- Ensuring that emergency response personnel are trained on the counter-fraud, anti-corruption and whistleblowing policies that the organisation has in place.
In non-emergency activities such as training, incorporating fraud detection into post-event monitoring and evaluation is key. Organisations can randomly select a sample of recipients, contact them for feedback, and verify receipt of the items or service.
Monitoring questions of a training delivery might be:
- Your name?
- Did you receive any training in the last 6 months?
- Who was the provider?
- Where was the training?
- What was the subject of the training?
- What session did you find most useful?
- How did the training that you’ve received helped you improve in your daily work?
- Who else attended the training?
- How do you rate the trainer’s skills?
- Give one recommendation to improve future trainings, what can be done differently?
- What is your feedback on the venue? Was lunch provided? Did you receive a per-diem or transport cost? How much did you receive?
- Any comments/other feedback?
In summary, these days technology has made monitoring and evaluation much easier and more efficient. But even so, we must be careful not to exchange one set of risks for another. The key to successful prevention and detection of fraud in beneficiary lists is to think creatively, both about how we apply controls in difficult circumstances – and how we catch those who collude to overcome them.
Najwa Whistler is a finance director with 18 years of experience working for several international NGOs around the world. Growing up in a small village in Lebanon in poverty during the civil war built her resilience and determination to work in international development. She enjoys cooking and dancing. You can reach her via firstname.lastname@example.org
Cover photo: During the crisis in Yemen, ECHO funded a second phase of a cash distribution programme to help 4,000 families meet their basic needs during the pre-harvest lean season between July and December 2012. Close monitoring ensured that money was spent on essential items (ECHO/T. Bertouille, 2012).