Strategic Partnership: The Canadian Centre of Excellence for Anti-Corruption (CCEAC) of the University of Ottawa

PRESS RELEASE

Tempe, June 9, 2017

On April 25, 2017, The AACI and the Canadian Centre of Excellence for Anti-Corruption (CCEAC) of the University of Ottawa signed a general agreement to cooperate and innovate in pursuing their respective missions globally. It is a long-term strategic professional and business relationship that will focus on both developed and developing countries. 

Click here to read the press release. 

Al Jazeera expose on Maldives wins One World award

A documentary exposing wrongdoings of the Maldives' government wins a prestigious award at the One World Media ceremony.

For more details, click here.

Corruption Prevention, Deterrence, and Detection — Nonprofit Organizations — Part 2

Tempe, May 31, 2017

Technical Staff

Significant Fraud Schemes in Nonprofits

1. Skimming
2. Check tampering
3. Expense reimbursements
4. Payroll schemes

As we will discuss what nonprofits can do to assess and evaluate fraud risks, we will list efficient and affordable anti-corruption practices nonprofits may use to prevent, deter, and detect fraud and corruption.

1. Skimming

When an entity receives cash, it must record (recognize) it in its accounting system. Skimming occurs when an employee steals cash or checks BEFORE recording it in the entity’s accounting system. Skimming schemes are usually called “off-books” schemes. Because cash theft happens before cash is recorded in the accounting records, it is tough to detect such a scheme: there is no audit trail. (Read more)

2. Check Tampering

A check tampering scheme occurs when a fraudster (usually an employee) takes a physical control of one or more than one check of an entity where the employee-fraudster benefits from controlling who the payee would be by forging the signature of the check maker and/or make certain alteration on the face of the check (financial instrument).

A check tampering scheme requires a physical control of the entity’s check. If the employee-fraudster cannot access a check or a check book, he just cannot complete any check tampering scheme.

Most forgery schemes are committed by accounts payable clerks (Read more)

3. Expense Reimbursements

Nonprofit organizations like for profits reimburses its officers and directors for “legitimate” business expenses. Qualified expenses for reimbursement varies from one entity to another. However, such expenses should be known to the nonprofit employees, management, and directors. As long as these expenditures are for agreed on business purposes and incurred in compliance with the nonprofit policies and procedures, they are reimbursed to the employee or manager who incurred them. Airline tickets, transportation, and lodging are examples of reimbursable expenses.

Under normal reimbursement procedures, …..

Expense reimbursement fraudulent scheme occurs through one of the following classifications:

1. Mischaracterization expense reimbursement — listing expenses that are not for legitimate business purposes where they are correctly classified to look authentic. (Read more)

4. Payroll Schemes

In a payroll scheme, the perpetrator usually falsifies a timecard or alters information in the payroll records. The most common payroll frauds are ghost employee(s), falsified hours and salary schemes, and commission schemes. We will briefly discuss the ghost employee scheme.

In a typical ghost employee scheme, the fraudster should do all the following: (Read more)

A ghost employee is not necessarily a fictitious person. It could be a real person who is conspiring with the fraudster to defraud the company. For example, (Read more)

Fraud and Corruption Risk Assessment

Those charged with governance and executive management of nonprofits should be aware of the nature and type of fraud and corruption risks their organizations face. It would be impossible to address such risks unless they are identified and quantified. (Read more)

The Minimum a Nonprofit Can Do to Prevent and Deter Fraud and Corruption

Recognizing that small charities and nonprofits do not have sufficient resource to segregate duties, too many identified fraud and corruption cases suggest that they could have been avoided with low cost and efficient controls and without a need for sophisticated financial expertise. It is common sense and a questioning mind.(Read more)

END

Note: Members will find the complete text of this paper at the membership portal

Launching The CACM Exam Path in the U.S., Canada, and Other Countries

The CACM Exam Path

The American Anti-Corruption Institute (AACI) will stop the CACM grandfathering provision of the Certified Anti-Corruption Manager (CACM) management credential in the following countries effectively from January 1, 2018. 

1. The United States of America (U.S.A.)
2. Canada
3. Netherlands
4. Malaysia
5. Jordan 
6. Palestine
7. Qatar
8. The United Arab Emirates

For more information, visit the CACM Exam Path web page.

Certified Anti-Corruption Manager (CACM)

Developing effective Corruption Prevention Policy: CHECKLIST

Tempe, March 29, 2017

Technical Staff

This document is a part of The AACI series of anti-corruption resources. The contents of this document constitute an integral part of the CACM Review textbook that would be available in countries where the CACM will only be offered by exam. 

Definition: A fraud and corruption prevention policy is a formal, written statement recording the entity's attitude and response to fraud and corruption. 

The policy could be standalone or included within the code of ethics. It should state clearly what the organization expects from its employees regarding fraud and corruption. 

A successful policy is one that:

1. Embeds in it the “Perception of Detection” AND
2. Implements a swift and consistent action when fraud or corruption is suspected or detected

Corruption Prevention Policy Benefits

The following is a "partial" list:

1. Absence of confusion to what is fraud, corruption or misappropriation of assets
2. Clear consequences for engaging in fraud and corruption
3. Commitment of board of directors and management - the entity is not an easy target to fraud and corruption

Corruption Prevention Policy Benefits

Elements of Corruption Prevention Policy 

Pre-requites for Effective Corruption Prevention Strategies, Plans, and Programs

You may download the entire document when visiting The AACI Anti-Corruption Library: Free Resource

Part 1(D): Fraud and Corruption Detection - Government Entities

What is the resilience of an entity in preventing, deterring, and detecting fraud and corruption?

Tempe, March 29, 2017
Technical Staff

Proper Anti-Corruption Competencies of Senior Civil Servants, Elected Public Officials, and Employees

The prevalence of adequate anti-corruption education in government entities always determines to a large degree the effectiveness of internal control and corruption prevention policy in detecting fraud and corruption.

Each governmental and / or management level requires a different set of anti-corruption competencies. For example, the internal department head anti-corruption skills differ from those of the deputy minister of a government entity. Each employee should possess the necessary anti-corruption knowledge and skills to meet what management expects her to do in detecting fraud and corruption.

Surprisingly, central banks all over the world require their local banks to ensure that their employees obtain annual anti-money laundering training. Though money laundering is a very tiny and small part of corruption, central banks do not require their local banks to (a) have a corruption prevention policy, and (b) ensure that their employees obtain anti-corruption training annually. There are too many banks that do not have a corruption prevention policy, especially in developing countries.

This is extremely odd as financial institutions are regarded more regulated and disciplined than other business sectors. This is a red flag that regulatory agencies should note due to its severe consequences on not only detecting fraud and corruption but also on financing terrorism.

The AACI believes that the adequacy of anti-corruption competencies of senior public officials and those charged with governance should be quantitatively measured annually. Last year, we launched a certification program called Organizations Anti-Corruption Certification Program to support organizations of all types to quantify their anti-corruption competencies, among other things.

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We will start rolling over the CACM via exam in selected countries and regions. CACM candidates of these countries will find the CACM Review material helpful