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| Friday, 25 July 2003 |
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10 to 30 percent loss on WB financed projects due to corruption, frauds By Channa Kasturisinghe Corruption and frauds in World Bank financed projects lead to an annual loss of 10 to 30 percent of funds allocated mainly for poverty alleviation projects internationally, Christina Ashton-Lewis, Senior Institutional Intergrity Officer of the World Bank said. The visiting senior WB official made an awareness presentation on how the WB investigates allegations of fraud and corruption in the Bank Group projects at the World Bank Conference Room, Colombo on Wednesday. She said that the World Bank Group strives to ensure that its funds allocated mainly for poverty alleviation projects are used for their intended purposes. She also said that the WB is concerned over the mounting evidence of cost of corruption in WB financed projects in an environment where the WB disburses about US$ 20 billion annually among poverty affected nations. Her observations should be taken seriously in the back-drop of the WB increasing its total commitment to one billion US dollars in the next four years, some of the participants said. Ashton-Lewis said that the public could make complaints to the Department of Institutional Integrity (INT) on incidents of corruption or fraud in contract procurement and implementation of WB financed projects. "INT is the internal unit designated by the World Bank Group to investigate allegations of fraud and corruption in Bank Group operations and allegations of staff misconduct. We also assist in prevention by supporting training for Bank staff to identify ways to detect and deter fraud and corruption in Bank Group operations. Our staff includes investigators and former prosecutors, forensic accountants, and procurement specialists. They receive allegations of fraud and corruption in Bank Group operations and conduct preliminary inquiries to determine whether the allegations may have merit. INT then conducts full investigations of those cases that warrant a more in depth review of the allegations. The results of our investigations are submitted to the Bank's senior management," Ashton-Lewis said. She said that among the types of suspected problems in contract procurement or implementation investigated by INT are bid rigging, collusion or coercion by bidders, fraudulent bids, fraud in contract performance, fraud in an audit inquiry, product substitution, defective pricing or parts, bribery and acceptance of gratuities, misuse of Bank Group funds, travel fraud, theft and embezzlement. "Once the results of INT's investigations are submitted to the senior management of the World Bank for further action there are a number of different outcomes that can result from our findings. They include declaring firms ineligible to be awarded Bank-financed Contracts in the future. If INT's findings demonstrate that a firm or individual involved in a Bank-financed contract has committed fraudulent or corrupt practices, INT submits its findings to the Bank's Sanctions Committee. This Committee makes recommendations to the President of the Bank whether firms or individuals should be declared ineligible to be awarded future Bank-financed contracts, either indefinitely or for a defined period of time," Ashton-Lewis said. She said that if INT's findings indicate that a firm or individual may have violated the laws of a member government, the Bank submits its findings to the appropriate authorities of the member government for a determination of whether a criminal investigation is appropriate. "As a result of some of our referrals, the Bank's member governments have pursued criminal charges and obtained convictions against bribe recipients and bribe payers. Where appropriate, the Bank may also suspend or cancel its projects if INT's findings demonstrate significant problems in the implementation of a particular project. The Bank may also declare mis-procurement in some cases, which means that the borrower of Bank funds is required to return the money spent on a particular contract which was affected by fraud or corruption. Finally, the Bank can take appropriate personnel action in cases where staff members are involved in wrongdoing," Ashton-Lewis said. |
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