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News, 3/11/2016

Some 30 suspicions of misuse of development cooperation funds every year

In 2015, a total of 30 suspicions of misuse of development cooperation funds were reported to the Ministry for Foreign Affairs: five via an external whistle-blower system and 25 via internal channels. The Ministry takes all suspicions of misuse very seriously and alleged cases of misuse are always examined.

The Ministry for Foreign Affairs administers an important share of Finland's development cooperation funds. The funds are used, for example, to implement bilateral development cooperation, support the work of the UN, development banks and Finnish NGOs, and provide humanitarian aid.

The number of suspicions of misuse has increased since 2010, when the number was 13. In recent years, the number has remained at around 30 per year.

Reports on irregularities received via both external and internal channels

In June 2014, the Ministry for Foreign Affairs established an online whistle-blower system for reports of suspicions of misuse of development cooperation funds. In 2014, a total of twelve allegations were reported, whereas in 2015 there were only five reports.

www.vaarinkaytosilmoitus.fi

Suspected cases of misuse can be reported at www.vaarinkayttoilmoitus.fi in Finnish, Swedish and English. By means of the service, we seek to address cases of misuse more effectively and improve risk management. Information on the service is available for example on the websites of the Finnish embassies based in the partner countries of Finland's development cooperation.

The majority of the suspicions of misuse are, however, still detected in the course of the routine oversight activities and internal monitoring of spending. In 2015, the number of reports received via internal channels was 25. In 2014, the corresponding number was 27.

Monitoring of development cooperation

Monitoring is performed by MFA officials responsible for development cooperation and by contracting parties who carry out projects and programmes, including international organisations and development banks, NGOs and private consulting companies.

The implementation of development cooperation is monitored, for example, through field visits, audits of supporting documents, and mid-term and final reviews. Regular audits by external auditing companies are also an integral part of this oversight.

Suspicions of misuse are taken seriously

In relation to the total volume of development cooperation, there are very few financial irregularities or cases of misuse reported, only an estimated 1–2 per mille of all development cooperation.

The Ministry for Foreign Affairs takes all suspicions of misuse seriously. All reports are handled at the Ministry or, when necessary, referred to other public authorities.

The cases vary in terms of their nature and seriousness

Some of the cases are caused by carelessness or lack of professional skills, while some of them are intentional. Cases may concern, for example, accounting errors, neglected monitoring of spending, unduly paid fees or unfounded acquisitions, inadequate or misleading reporting, document forgery, or bribery. The magnitude of the cases varies as well.

The amount of misappropriated funds in most of the suspected cases reported in 2015 is estimated to be between EUR 5,000 and 30,000. In a few cases, the amount is estimated to be higher than this. Examination is still under way in many of the cases. Only after an examination it can be determined whether any misuse has taken place and how large a sum the misuse concerns.

Measures to be taken due to a verified case of misuse vary depending on the nature and seriousness of the case. At the moment, Finland is recovering EUR 289,000 due to verified cases of misuse.

The table below illustrates the reported suspicions of misuse in 2014 and 2015 and their handling.

2014

2015

External reports

Internal reports

External reports

Internal reports

Received

12

27

5

25

Suspicions that have not led to an examination*

6

2

1

Transferred to other public authorities

1

0

Examination is ** under way

2

11

1

14

The matter has been resolved; the suspicion was unfounded

1

0

3

2

The matter has been resolved – The suspicion has led to measures***

1

2

2

The measures have been completed

1

14

7

* The cases do not apply to the misuse of Finland's development cooperation funds or the report does not provide sufficiently detailed information for the launch of an examination.

** For example, a special audit

*** For example, a claim of recovery

Nora Klami

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