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This Chapter Is Especially Useful For:
Guiding Principles
Governance refers to the manner in which public officials and institutions acquire and exercise the authority to shape public policy and provide goods and services. The mobilization and utilization of financial resources for the public good is an essential part of governance. In countries with “good governance,” citizens respect the government because, among other reasons, those in authority manage public resources effectively. Where governance systems are not working effectively and transparency and accountability mechanisms are weak or lacking, corruption in the use of public resources often increases. One of the predictable outcomes under these circumstances is that poor people’s needs are marginalized and development outcomes suffer.
During disaster recovery, citizens often perceive that public resources are not being managed well and that corruption is rampant. Corruption is the misuse of an entrusted position for private gain, by employing bribery, extortion, fraud, deception, collusion, or money laundering. Transparency International states that private gain should be interpreted broadly to include gains accruing to a person’s family members, political party, or institutions in which the person has an interest.[1] The World Bank defines corruption in terms of corrupt, fraudulent, collusive, coercive, and obstructive practices.[2] These activities are criminal offenses in most countries, although the institutional capacity to prevent and sanction corruption may be insufficient, or may be overwhelmed by the disaster. This chapter examines where corruption is found in recovery and housing and community reconstruction, particularly in public procurement, and discusses approaches to mitigate it.
Public Policies Related to the Mitigation of Corruption
The majority of the concepts and tools discussed in this chapter are best implemented well in advance of a disaster, through laws and policies, such as anticorruption laws, governance and anticorruption strategies, or integrity systems. National and international anticorruption organizations, including Transparency International, work with governments worldwide to promote legislative reform in this area, and can assist after a disaster. There are also a number of international conventions and agreements that address governance and anticorruption measures in public procurement that form the basis for international cooperation to improve transparency. To the extent international agencies are involved in reconstruction, these agreements serve as a framework for addressing corruption issues.[3]
The legal and policy framework at the national level for public financial management (PFM) is an important instrument for mitigating corruption and providing transparency and accountability in reconstruction. Although core fiduciary principles apply to reconstruction financial management, planning, budgeting, and project implementation often use special arrangements in the early years of reconstruction. Even under special modalities, however, PFM that conforms as closely as possible to the legal framework is critical. The Public Expenditure and Financial Accountability (PEFA) process is an international framework that is used to assess whether PFM arrangements are adequate. A PEFA analysis conducted in advance of a disaster can be used to identify weaknesses in PFM and areas for improvement and to monitor the effectiveness of reforms.[4] In a post-disaster situation, measures to assess corruption risk and to prevent and detect corruption are likely to be less systematic and more situational. Assessments and measures that can be implemented immediately are discussed in this chapter. Social accountability or participatory performance monitoring mechanisms such as social audits and complaint mechanisms are also useful for strengthening post-disaster governance and transparency. Countries with established integrity systems may have arrangements in place; others can establish them as part of the reconstruction strategy. See Chapter 18, Monitoring and Evaluation, for guidance on the use of participatory performance monitoring. The number of places where corruption can take place is as long as the list of potential corrupt practices, which follows in the next section. This implies that “everyone and no one” is responsible for preventing corruption. This dispersed responsibility creates an enormous challenge for all agencies involved, including government. Nevertheless, the leadership of government to establish an anticorruption culture throughout the entire reconstruction process is essential. A number of efforts can be made to establish common anticorruption standards among all agencies, but a monitoring system is needed to ensure that they remain effective over time. Beside the measures described in this chapter that government itself can take, such as requiring integrity pacts and financial disclosure by government officials or use of audits, other collaborative measures could include the following.
Where Corruption Can Occur in Reconstruction
A disaster creates fertile conditions for corruption, waste, and mismanagement including (1) the large quantities of aid inflows and of goods being procured; (2) the pressure to spend quickly; (3) institutions that have different administrative procedures; (4) agencies that are unfamiliar with contracting large projects; (5) competition among aid agencies; (6) poor staff communication, screening, and/or training; (7) weak administration and oversight systems; and (8) the economic desperation of the affected population. A wide range of actors can perpetrate corruption, including government officials; aid agency staff and officials; citizens, including the affected population and their representatives; contractors; and vendors.
Post-disaster construction projects are especially prone to corruption because of their scale and complexity. There are also difficulties in specifying the work ex-ante and nontransparent practices in the construction industry, and there may be limited government capacity to oversee numerous large-scale projects. Not all corruption, however, is related to procurement. For instance, deceptively attempting to qualify for post-disaster compensation is fraud. At the same time, not all appearances of corruption are, in fact, corruption. Some examples of questionable activities that may—or may not—entail corruption are listed in the following table. The ways in which people will try to use the reconstruction process for their own benefit will be specific to the situation and even the culture. Government and agencies involved in reconstruction can keep this list of activities in mind in developing the reconstruction program so that reconstruction policy and assistance mechanisms are designed to discourage and detect them. Questionable or Corrupt Practices in Reconstruction
Characteristics of Transparent Procurement Processes
The principal hallmarks of proficient public procurement are the economy, efficiency, fairness, transparency, accountability, and application of ethical standards.[5] Controls and sound, standardized procedures are the first line of defense against corruption in procurement. Transparency International promotes minimum standards for public contracting, including the following.
Assessing the Risk of Corruption
It may be necessary to conduct an assessment to evaluate whether the controls and procedures in place are adequate to prevent corruption in reconstruction procurement and which, if any, additional anticorruption measures need to be implemented. Two sources of information are the PEFA framework and corruption risk assessments.
Public expenditure and financial accountability framework. The PEFA framework identifies weaknesses in PFM, including procurement, and uses performance indicators to identify areas for reform and to monitor improvements.[7] (See Chapter 15, Mobilizing Financial Resources and Other Reconstruction Assistance.) The World Bank or other members of the PEFA partnership may have conducted a PEFA or similar analysis. If not, a rapid assessment of a country’s systems may be necessary, with special emphasis on procurement capacity. When weaknesses are detected, international agencies can play an important role by providing funds for technical assistance, along with their reconstruction funds, for improving PFM during the reconstruction period.[8] Even developed countries can have trouble controlling corruption in a post-disaster environment. The case study on Hurricanes Katrina and Rita, below, presents an example of where the systems used for post-disaster disbursements to households failed to prevent fraud.
Tools to Promote the Integrity of Public Officials
Two anticorruption tools that may be implementable as part of the reconstruction program, even in the absence of a broader public sector integrity system, are the code of conduct and the disclosure of assets. These measures should be accompanied by anticorruption training for all public officials involved in the reconstruction program.
Codes of conduct. Codes of conduct for public officials[12] can be used to establish general standards of behavior consistent with principles of integrity, transparency, accountability, and responsible use of organizational resources. They may also address standards applicable to specific groups of employees, such as those involved in the reconstruction program. The code should define procedures and sanctions to be applied in cases of noncompliance. Administration of the code should be done by an independent individual or body and should be readily accessible so that a public employee can enquire whether an activity would be in breach of the rules before engaging in it. Standards may include positive obligations, such as the requirement to disclose conflicts of interest, and prohibitions, such as those against disclosure of certain information or acceptance of gifts. Public sector codes of conduct usually apply not only to conduct inconsistent with the office but also to conduct that might give the perception of impropriety or damage the credibility of that office. Declaration of assets and income. The declaration of assets and income by public officials is a tool to deter illicit enrichment from bribery, kickbacks, etc.[13] It helps ensure that unlawful behavior is monitored, quickly identified, and dealt with. The disclosure of financial information by public servants raises privacy concerns, so it may not entail full public disclosure, except in cases where improper conduct is discovered or proven, but rather disclosure to specially established bodies that are trusted and empowered to take action if wrongdoing is suspected, such as inspectors or auditors general. It is generally not necessary or practicable to subject every public employee to a disclosure process, but instead to apply the policy to officials at or above a certain seniority or those in positions with a high risk of corruption, such as reconstruction procurement officials. While it is common for public officials subject to declarations of assets to report annually, the accelerated nature of reconstruction procurement may require more frequent reporting. Integrity Pacts Promote Transparency with the Private Sector
The Integrity Pact (IP) is promoted by Transparency International as a useful tool for fighting corruption in public contracting.[14] It consists of an agreement between government and bidders involved in public procurement and contracting that neither side will pay, offer, demand, or accept bribes. Nor will they collude with competitors in obtaining or carrying out the contract. It requires bidders to disclose all expenses paid in connection with the contract and to agree to be sanctioned if there are violations. Sanctions can include loss of the contract, forfeiture of the company’s performance bond, damage liability, blacklisting, and criminal or disciplinary action against government employees.
IPs cover all phases of a project, from planning to operation, and can be used for any kind of reconstruction contract. IPs enable companies to abstain from bribing by assuring them that their competitors will do the same, and that government and its officials will take the necessary precautions to prevent corruption. IPs reduce the costs of corruption in public procurement, strengthen trust in the public sector and its procurement activities, and improve the overall investment climate. In addition, IPs are flexible and adaptable to many legal settings, with conflict resolution and sanction imposition generally handled through arbitration mechanisms rather than the judicial system. Independent monitoring of the pacts is required and can be carried out by a civil society organization (CSO) or other independent and accountable entity. Although IPs should be mandatory in reconstruction, not all governments require them. Integrity Pacts With and Among Nongovernmental and International Organizations
The humanitarian sector has been concerned with the integrity of its activities for many years. Government may want to require that, along with public sector codes of conduct and private sector IPs, local and international agencies involved in reconstruction be asked to subscribe to a common set of standards regarding transparency and accountability. These rules could cover, among other topics, agency procurement, codes of conduct and disclosure of assets by agency staff, and communications with the affected community and the public regarding their activities. Government agreements with international and bilateral agencies may provide the basis for these agreements. One example of integrity guidelines for the nongovernmental sector is the “Code of Ethics & Conduct for NGOs”[15] promoted by the World Association of Non-Governmental Organizations (WANGO). The Web site of One World Trust provides extensive resources on nongovernmental organization (NGO) accountability initiatives.[16] See also Chapter 14, International, National, and Local Partnerships in Reconstruction, for a discussion of registration procedures for NGOs.
Audits Improve Project Transparency
Audits work primarily through transparency. They make corruption riskier and more difficult by determining and exposing whether project funds were handled in accordance with laws, regulations, contracts (such as loan contracts), and accounting rules. They also examine the efficiency (measured against accepted financial procedures and practices) and the effectiveness (compared to the agreed-upon purposes) of the use of project funds. See Chapter 18, Monitoring and Evaluation, for a comparison of monitoring, evaluation, and auditing.
Some auditors can act on their own findings, but they are usually restricted to investigation, reporting, making recommendations, and referring findings to another body for action. Auditors generally report to a body inside the organization, but outside of management, such as a board of directors or the legislature. Auditing should generally be carried out by an entity independent from the organization under audit, based on standards that are defined before the audit begins.[17] A large measure of an auditor’s power resides in the fact that audit reports are generally made public, especially in the public sector. Even entities in possession of confidential information, such as national security matters or sensitive commercial information, should not be exempt from being audited. The generic categories for audits are “financial audits” and “performance audits.” Audits may have a combination of financial and performance audit objectives or may have objectives limited to only some specific aspect of one audit type.
Options for Conducting Audits
Audits may be conducted at different times in the project or budget cycle, or carried out by different agencies, including the public or the affected community. Below are some of the options.
World Bank audits. The World Bank regularly conducts audits to review the procurement, contracting, and implementation processes in Bank-financed projects. These audits verify whether procurement and contracting were carried out according to the loan agreement and whether the expected economy and efficiency were achieved, evaluate the Bank’s oversight of the project, and identify ways to improve procurement and contracting.[19] Complaint Mechanisms
Complaint mechanisms allow corruption to be reported by social actors, including public employees, in a confidential manner. (Grievance processes related to housing assistance are a special use of complaint mechanisms. Grievance redressal is discussed in Chapter 15, Mobilizing Financial Resources and Other Reconstruction Assistance.) Ideally, complaint mechanisms are formalized in a larger “integrity system,” but they can also be employed on a situational basis during post-disaster recovery. Just a few of the potential instruments available are described below.
Whistleblower laws. In establishing laws or other legal instruments to protect whistleblowers, a balance should be sought between protection of the whistleblower and accountability of the whistleblower, to minimize fraudulent complaints. Telephone hotlines. A hotline should be introduced as part of the larger anticorruption strategy and be well publicized. This publicity can be incorporated into the communication strategy of the reconstruction program. See Chapter 3, Communication in Post-Disaster Reconstruction. A hotline must be staffed by trained operators and have a secure phone line. The information gathered in these conversations must be collected systematically and treated with confidentiality. Civil society monitoring. CSOs can provide advice and counsel to whistleblowers or can conduct social audits. The same rules of confidentially and accountability apply. See Chapter 14, International, National, and Local Partnerships in Reconstruction, for information on how government can work effectively with these institutions. Ombudsmen. Ombudsmen receive and consider a wide range of complaints that fall outside the jurisdiction of courts or administrative bodies. Their specific roles depend on whether other similar official bodies exist and how effective they are. Ombudsmen require a clear and relatively broad mandate, independence, public accessibility, transparency, integrity, and sufficient resources to carry out their duties. They can provide the following services:
Redundancy of complaint mechanisms. Whistleblowers should always have at least two complaint mechanisms available to them: the first, an entity within the “offending” organization, such as a supervisor or internal oversight body, and the second, to provide backup if the first body fails to investigate, complete the investigation, take appropriate action, or report back in a timely fashion. Within the public sector, the first may be the general auditor, for example. The second mechanism also provides the whistleblower protection against retribution or a cover-up.
Recommendations
2005 Hurricanes Katrina and Rita, Gulf Coast, United States
Extensive Fraud in Post-Katrina Audit
After Hurricanes Katrina and Rita devastated the U.S. Gulf Coast in 2005, the Federal Emergency Management Agency (FEMA) began a process for registering the people affected by the storms and providing them with “expedited assistance” (EA) payments. Using both Internet and telephone registration systems, FEMA registered 2.5 million households in the three months following the disaster. By December 2005, FEMA had disbursed US$2.3 billion (officially, US$2,000 per household). Those registered for EA were also potentially eligible for further assistance of up to US$26,200. In December 2005, the General Accountability Office (GAO), the investigative arm of the United States Congress, began an audit of the process. GAO identified significant flaws in procedures for preventing, detecting, and deterring fraud, including limited controls to verify the identity and residence of those registering. Registrants using bogus social security numbers and property addresses were able to register, some multiple times, and were not screened out of the registration lists. FEMA’s lack of controls also meant that many legitimately registered recipients erroneously received multiple payments. FEMA later estimated that as many as 900,000 of the 2.5 million people registered were duplicates. Using data-mining techniques, GAO estimated in 2006 that as much as US$1.5 billion of FEMA’s EA payments were fraudulent. Source: U.S. GAO, 2006, “Hurricanes Katrina and Rita Disaster Relief: Improper and Potentially Fraudulent Individual Assistance Payments Estimated to be between $600 Million and $1.4 Billion” (Washington, DC: GAO), http://www.gao.gov/new.items/d06844t.pdf. 2004 Indian Ocean Tsunami, Malaysia
Preventing Corruption through Existing Systems
On December 26, 2004, when the Indian Ocean tsunami struck the states of Penang, Perlis, Kedah, and Perak in Malaysia, a solid framework for preventing corruption was already in place. In 1961, the Malaysian government had established an independent Anti-Corruption Agency (ACA) to enforce the Prevention of Corruption Act. The ACA now has branches in each of Malaysia’s 14 states and sub-branches throughout the country. In 1998, Integrity Management Committees (IMCs) were established in all federal and state agencies. When the National Disaster Aid Fund was set up in the aftermath of the tsunami to manage the RM 90 million (US$24 million) for disaster relief, ACA Penang took action to head off the corruption threat. The national Practices, Systems and Procedure Examination Unit, deployed to analyze procedures in the disbursing and executing agencies, determined that the measures already in place were adequate. The assistance process for the population affected by the tsunami began with a police report detailing each affected person’s loss and property damage. Three separate state committees, each with elected and local community representatives, then reviewed these reports, as did other government entities, before they were sent to the National Disaster Aid Fund Management Committee for approval. Other anticorruption measures included announcing assistance amounts for affected populations in the media, publicly displaying information on the assistance at the time of disbursement, and requiring that the government official and the recipient sign a form that warned of consequences of false claims and false information. Fewer than 15 complaints were received from the four affected states. Source: Abu Kassim Bin Mohamad, 2005, “Effective Anti-Corruption Enforcement and Complaint-Handling Mechanisms: The Malaysian Experience,” in “Curbing Corruption in Tsunami Relief Operations” (proceedings of the Jakarta Expert Meeting, Jakarta, April 7–8), http://www.u4.no/document/literature/adb-ti-2005-curbing-corruption-tsunami-relief-operations.pdf. Asian Development Bank. 2005. “Expert Meeting on Corruption Prevention in Tsunami Relief.” http://www.adb.org/documents/events/2005/Tsunami-Relief/default.asp#purpose.
Centre for Good Governance. 2005. Social Audit: A Toolkit. A Guide for Performance Improvement and Outcome Measurement. Hyderabad: Centre for Good Governance. http://unpan1.un.org/intradoc/groups/public/documents/cgg/unpan023752.pdf. Kaufmann, Daniel, Aart Kraay, and Massimo Mastruzzi. 2009. “Governance Matters VIII: Aggregate and Individual Governance Indicators, 1996–2008.” Washington, DC: World Bank. Kostyo, Kenneth, ed. 2006. Handbook for Curbing Corruption in Public Procurement. Berlin: Transparency International. http://www.transparency.org/publications/publications/other/procurement_handbook. Stansbury, Catherine, and Neill Stansbury. 2008. Anti-Corruption Training Manual (Infrastructure, Construction and Engineering Sectors), international version. Transparency International. http://www.transparency.org/global_priorities/public_contracting/projects_public_contracting/preventing_corruption_in_construction. Transparency International. 2009. “Contracting: Preventing Corruption on Construction Projects.” Tools. http://www.transparency.org/tools/contracting/construction_projects. Transparency International. 2009. “Public Contracting: The Integrity Pacts.” Global Priorities. http://www.transparency.org/global_priorities/public_contracting/integrity_pacts. UNODC. 2004. The Global Programme Against Corruption: UN Anti-Corruption Toolkit, 3rd ed. (Vienna: UNODC). http://www.unodc.org/documents/corruption/publications_toolkit_sep04.pdf. World Bank. Governance and Anticorruption Web site and related resources. http://www.worldbank.org/wbi/governance. World Bank. 2004. Guidelines: Procurement under IBRD Loans and IDA Credits, rev. 2006. Washington, DC: World Bank. http://go.worldbank.org/RPHUY0RFI0. World Bank. 2009. “Governance Matters, 2009: Worldwide Governance Indicators, 1996–2008.” http://info.worldbank.org/governance/wgi/index.asp. World Bank. n.d. “Chapter 3, Methods and Tools” in “Social Accountability Sourcebook.” http://www.worldbank.org/socialaccountability_sourcebook.
Strengthening World Bank Group Engagement on Governance and Anticorruption[20]
In 2007, the Board of Directors of the World Bank Group (WBG) approved the Governance and Anticorruption (GAC) strategy and Implementation Plan, whose purpose is to help countries improve their systems of governance in a manner that is effective and sustainable over the long term. The strategy involves working at the country, operational, and global levels.
The behavior of government and other key stakeholders, such as the private and financial sectors, shapes the quality of governance and affects development outcomes. Therefore, the WBG’s GAC work aims to help government develop the capability to devise and implement sound policies, provide public services, set the rules governing markets, and combat corruption, thereby helping reduce poverty. At the project and sector levels, the Bank can help government:
Developing a Project Governance and Accountability Action Plan[21]
An effective anticorruption program can be developed by selecting the elements appropriate for a specific project situation, and integrating them in a manner designed to have the maximum impact. Below are the steps to develop a GAAP.[22]
Step 1: Understand and prioritize corruption risks by corruption mapping and analyzing incentives and disincentives.
Outputs
Step 2: Empower recipients and communities through smart project designs, involvement of recipients in the procurement process, and construction of simple works through communities.
Outputs
Step 3: Build partnership for civil society oversight and feedback by initiating consultation with representatives of civil society.
Outputs
Step 4: Establish proven procurement policies to mitigate collusion.
Outputs
Step 5: Build strong task teams with the means of paying increased attention to fiduciary risks.[23]
Outputs
Step 6: Clearly define remedies to ensure compliance with corruption prevention measures and remedies to deal with cases of fraud or corruption.
Outputs
Step 7: Consult stakeholders to finalize the GAAP.
Outputs
Availability of Technical Assistance
World Bank project teams can assist governments in accessing the technical resources available under the GAC implementation effort. Extensive information on this initiative is available at the Bank Web site, “Governance and Anti-Corruption,” http://go.worldbank.org/CI3TOJK4I0.
Objectives of the Corruption Risk Assessment
Agencies involved in reconstruction or government itself may need to (1) assess whether an organization being considered as an executor for a post-disaster reconstruction project has the capacity to execute the project without an unacceptable risk of fraud or corruption or (2) identify specific weaknesses in the organization’s project management that would have to be addressed before or during project execution.
Methodology for Preparing a Corruption Risk Assessment
Much of the international technical advisory work done in recent years to analyze and propose interventions for reducing corruption in the public sector has taken a system-wide (or occasionally sector-wide) look at corruption and at the institutional reforms needed to mitigate it. The Public Expenditure and Financial Accountability (PEFA) framework[24] and much of the work on integrity systems by Transparency International[25] are good examples of work that takes this type of approach.
At a more micro level, a number of very targeted anticorruption tools have been developed for use in organizations (e.g., integrity pacts and policies to require disclosure of assets and liabilities by public officials), as discussed in this chapter. Indicators called “corruption warning signs” are also very useful for making an initial assessment of organizational corruption risk.[26] However, a corruption risk assessment should analyze and attempt to predict whether an individual organization will be prone to corruption and fraud in a systematic manner and to identify the specific weak points in its management that should be strengthened. Some possible options for carrying out a corruption risk assessment of an individual organization are shown in the following table. Options for Assessing Corruption Risk
Scope of the Corruption Risk Assessment
The focus of the corruption risk assessment of an organization should not be simply on financial management practices, but on the broader framework called “internal control.” In promoting the improvement of internal control, the COSO framework defines internal control broadly as activities that create, protect, and enhance “stakeholder value” by managing the uncertainties that could influence the achievement of an organization’s objectives. Internal controls are effected across the organization by its board of directors (or legislature or city council), management, and other personnel.
The internal control process should provide reasonable assurance to stakeholders that the organization is meeting or is capable of meeting the three objectives shown below (reinterpreted for the public sector environment). The corruption risk assessment should evaluate whether the organization under consideration has measures in place to ensure accomplishment of these objectives. Objectives of an Internal Control System
Identifying evidence of deficiencies in internal control and of fraud.[32] The scope of work for the corruption risk assessment should require that the following control deficiencies and indicators of fraud risk be looked for and analyzed. The depth of this analysis will vary depending on the size and complexity of the organization being assessed. Unless the assessment is intended to produce only a “go/no-go” decision on the use of a particular organization, the consultant’s scope of work should require that the consultant describe the specific measures that need to be taken to correct the deficiencies identified.
Qualifications of Consultants
Assessments of internal control are generally conducted by auditors with experience in the subject matter. Depending on the country, these specialists may be called one or more of the following: accountants, auditors, internal auditors, management accountants, certified fraud examiners, or certified public accountants. It is important to establish that the consultant has experience in the type of assessment being requested. The accounting profession is increasingly oriented toward the evaluation of internal controls, so this expertise should exist in most countries. However, there may be less experience in applying this expertise to nongovernmental organizations or the public sector. While COSO was developed in the United States, there is international experience with the framework. Another auditing framework that provides similar guidance with which auditors may be familiar is that of the IAASB.[33]
Annex 3: Conducting a Construction Audit The construction audit is used to verify the procedures for procuring post-disaster construction services, the consistency of the construction with contract terms, and the use of the funds budgeted for the project.[37] Construction audits may be conducted on an ex-post basis or carried out concurrently in parallel with the construction project in situations where there is judged to be a high risk for corruption in the management of the project. The methodology described here combines elements of a financial audit and a performance audit; however, it could be limited to one of these elements.
The nature of the construction project will determine the details of the auditor’s scope of work. The focus of this guidance is on audit procedures for a single capital improvement project, although a construction audit may be ordered for an entire program consisting of multiple sites or projects, with minor adjustments in scope. Construction Audit Objectives
Selection of Auditor and Audit Cost
The audit should be carried out by qualified accountants or auditors experienced in management and accounting procedures related to public sector capital construction and should be based on procurement rules and accounting standards of the public sector and/or of the agency funding the capital project. It may be advisable to use a competitive process for the selection of the auditor, with the selection based principally on qualifications and experience with similar types of audits. The selection process should ensure the avoidance of conflicts of interest, including any familial relationships, between staff of the audited agency and that of the auditing firm.
[1]. Kenneth Kostyo, ed., 2006, Handbook for Curbing Corruption in Public Procurement: Experiences from Indonesia, Malaysia and Pakistan (Berlin: Transparency International), http://www.transparency.org/publications/publications/other/procurement_handbook. [2]. World Bank, 2004 [revised 2006], “Guidelines: Procurement under IBRD Loans and IDA Credits,” Section 1.14 (Washington, DC: World Bank), http://go.worldbank.org/RPHUY0RFI0. [3]. Transparency International, “TI Anti-Corruption Handbook: National Integrity System in Practice: Introduction,” http://www.transparency.org/policy_research/ach/introduction. [4]. World Bank, “Financial Management,” http://go.worldbank.org/0HI4LODL60. [5]. Kenneth Kostyo, ed., 2006 Handbook for Curbing Corruption in Public Procurement: Experiences from Indonesia, Malaysia and Pakistan (Berlin: Transparency International), http://www.transparency.org/publications/publications/other/procurement_handbook. [6]. United Nations (UN) Office on Drugs and Crime (ODC), 2004, “Tool #8, UN Model Code of Conduct for Public Servants” and “Tool #13, Disclosure of Assets and Liabilities by Public Officials,” The Global Programme Against Corruption: UN Anti-Corruption Toolkit, 3rd ed. (Vienna: UNODC), http://www.unodc.org/documents/corruption/publications_toolkit_sep04.pdf. [7]. World Bank, “Financial Management,” http://go.worldbank.org/0HI4LODL60. [8]. The key benchmarks that PFM systems can significantly influence are (1) credibility of information, (2) timeliness and equitability of implementation, and (3) control of corruption. For information on performance measurement indicators for post-disaster PFM, see PEFA Web site, http://www.pefa.org/pfm_performance_frameworkmn.php. [9]. UNODC, 2004, “Tool #2: Assessment of Institutional Capabilities and Responses to Corruption,” The Global Programme Against Corruption: UN Anti-Corruption Toolkit, 3rd ed. (Vienna: UNODC), http://www.unodc.org/documents/corruption/publications_toolkit_sep04.pdf. [10]. Pete Ewins et al, 2006, Mapping the Risks of Corruption in Humanitarian Action (London: Overseas Development Institute and MANGO). [11]. U4 Anti-Corruption Resource Centre, http://www.u4.no/helpdesk/helpdesk/queries/query85.cfm#1. [12]. UNODC, 2004, “Tool #8, UN Model Code of Conduct for Public Servants,” The Global Programme Against Corruption: UN Anti-Corruption Toolkit, 3rd ed. (Vienna: UNODC), http://www.unodc.org/documents/corruption/publications_toolkit_sep04.pdf. [13]. UNODC, 2004, “Tool #13, Disclosure of Assets and Liabilities by Public Officials,” The Global Programme Against Corruption: UN Anti-Corruption Toolkit, 3rd ed. (Vienna: UNODC), http://www.unodc.org/documents/corruption/publications_toolkit_sep04.pdf. [14]. Transparency International, 2009, Global Priorities: Public Contracting, http://www.transparency.org/global_priorities/public_contracting/integrity_pacts. [15]. WANGO, “Code of Ethics & Conduct for NGOs,” http://www.wango.org/codeofethics/ComplianceManual.pdf. [16]. One World Trust, “NGO Initiatives,” http://www.oneworldtrust.org/. [17]. UNODC, 2004, The Global Programme Against Corruption: UN Anti-Corruption Toolkit, 3rd ed. (Vienna: UNODC), http://www.unodc.org/documents/corruption/publications_toolkit_sep04.pdf. [18]. UNODC, 2004, “Tool #14: Authority to Monitor Public Sector Contracts,” The Global Programme Against Corruption: UN Anti-Corruption Toolkit, 3rd ed. (Vienna: UNODC), http://www.unodc.org/documents/corruption/publications_toolkit_sep04.pdf. [19]. World Bank, 2001, Procurement Policy and Services Group, Operations Policy and Country Services VPU, “Bank-Financed Procurement Manual,” http://siteresources.worldbank.org/PROCUREMENT/Resources/pm7-3-01.pdf. [20]. World Bank, Operations Policy and Country Services, 2007, “Implementation Plan for Strengthening World Bank Group Engagement on Governance and Anticorruption,” http://siteresources.worldbank.org/PUBLICSECTORANDGOVERNANCE/Resources/GACIP.pdf. [21]. World Bank, n.d., “Preparing Your Project Governance and Accountability Action Plan, Reducing Fiduciary Risk through Increased Transparency and Accountability: A Guidance Note for New Projects in India.” [22]. For alternative approaches for organizing and presenting GAC project strategies, see World Bank, 2007, “Project Appraisal Document, La Guajira Water and Sanitation Infrastructure and Service Management Project,” pp. 136–142, http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2007/02/27/000020439_20070227093741/Rendered/PDF/38508.pdf and World Bank, 2005,“Project Appraisal Document, Multi Donor Trust Fund For Aceh And North Sumatra For A Community Recovery through the Kecamatan Development Project,” http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2005/09/27/000012009_20050927123517/Rendered/PDF/332030rev.pdf. [23]. See World Bank, n.d., “Preparing Your Project Governance and Accountability Action Plan, Reducing Fiduciary Risk through Increased Transparency and Accountability: A Guidance Note for New Projects in India, Appendix 6: Fiduciary Checklist.” [24]. PEFA, http://www.pefa.org/index.php. [25]. Transparency International, “Corruption Fighters Tool Kit,” http://www.transparency.org/tools/e_toolkit. [26]. World Bank, Latin America and Caribbean Region, 2007, Corruption Warning Signs: Is Your Project at Risk? (Washington, DC: World Bank), http://siteresources.worldbank.org/INTFIDFOR/Resources/4659186-1204641017785/2ProjectAtRisk.pdf. [27]. PEFA, 2005, “Public Financial Management Performance Measurement Framework,” http://www.pefa.org/pfm_performance_file/the_framework_English_1193152901.pdf. [28]. Transparency International, http://www.transparency.org/tools/e_toolkit. [29]. Transparency International, n.d., “Project Anti-Corruption System (PACS) (Construction Projects),” http://www.transparency.org/tools/contracting/construction_projects/section_a_pacs. The PACS uses a variety of measures that affect all project phases and all major participants at a number of contractual levels. [30]. COSO, “Internal Control–Integrated Framework,” http://www.coso.org/IC-IntegratedFramework-summary.htm. COSO was established in 1985 by five financial professional associations to improve the quality of financial reporting by focusing on corporate governance, ethical practices, and internal control. COSO has since broadened its scope to a framework for “Enterprise Risk Management”; however, the internal control framework is still widely used and is sufficient for anticorruption assessment purposes. [31]. IFAC, http://www.ifac.org/About/; IPSASB, http://www.ifac.org/PublicSector/; and IAASB, http://www.ifac.org/IAASB/. [32]. Comptroller General of the United States, 2007, “Government Auditing Standards, Appendix I: Supplemental Guidance,” http://www.gao.gov/govaud/govaudhtml/d07731g-11.html#pgfId-1035039. [33]. IAASB, http://www.ifac.org/IAASB/. [34]. Comptroller General of the United States, 2007, “Government Auditing Standards, Chapter 6: General, Field Work, and Reporting Standards for Attestation Engagements,” http://www.gao.gov/govaud/govaudhtml/d07731g-8.html#pgfId-1034320. [35]. For example, see The American Institute of Certified Public Accountants, “Attestation Standards,” http://www.aicpa.org/Professional+Resources/Accounting+and+Auditing/Authoritative+Standards/attestation_standards.htm. [36]. Comptroller General of the United States, 2007, “Government Auditing Standards, Chapter 2: Ethical Principles in Government Auditing,” http://www.gao.gov/govaud/govaudhtml/d07731g-4.html#pgfId-1034318, and “Government Auditing Standards, Chapter 3: General Standards,” http://www.gao.gov/govaud/govaudhtml/d07731g-5.html#pgfId-1034319. [37]. For the components of a sample construction audit, see City of Tampa, Internal Audit Department, “Audit Programs, Capital Construction Projects,” http://www.tampagov.net/dept_Internal_Audit/information_resources/audit_programs.asp. [38]. AuditNet, “Construction Auditing,” http://www.auditnet.org/construction_auditing.htm. [39]. “As-built” drawings are important because they represent the best record of the constructed facility and are needed for operations, maintenance, and repair throughout the facility’s life. The cost for preparing as-built drawings should be included in the construction contract. The auditor should confirm that final as-built drawings have been secured, filed, and protected.
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