• Overview
• Transfer of funds
• Carrying cash
• Storing cash
• Bank accounts
• Developing controls and security
• Reducing risk
  • Dealing with fraud
  • Dealing with theft
• Programme manager's role

• Case studies
• Resources

Reducing risk

Small-scale theft and fraud is common to all offices everywhere (e.g. minor personal use of the phone, stationery, computer, vehicle) and can be tolerated. Significant fraud cannot. Apart from the financial loss, it can be highly damaging for programme beneficiaries, to team morale (innocent people under suspicion, mistrust among colleagues) and to the organisation (its reputation with the host government, with its supporters and with donors is at risk).

If a programme offers opportunities for significant misappropriation and fraud, inevitably there will be people who will attempt to exploit them. Significant fraud by team members, often in collusion with suppliers, bankers, couriers, partners or government officials, has been documented in emergency operations on numerous occasions.

Probably the most important internal management factors in deterring fraud in emergency programmes are:

• Programme manager take ownership of the fraud risk; they don't just see it as an accountant's problem. They lead on financial control by personally making key document and reality checks.
• Programme, finance, logistics and human resources managers work as a team.
• Roles and responsibilities are clear and understood, and there is adequate separation of duties.
• Appropriate, simple financial policies and procedures are understood, accepted and enforced.
• There is good documentation and reporting.
• There is an effective 'whistle-blowing' mechanism.

There are many other factors affecting fraud risk, for example the transparency and acceptability to local people of your organisation's programme, and in particular of any distribution arrangements. This is beyond the scope of this manual.