Countering NGO corruption: rethinking the conventional approaches

All donor agencies are likely to have heard anecdotal evidence of NGO corruption. This paper lays out the key issues that should be considered by donors in reviewing their NGO accountability regimes.

The paper indicates that there are indications of important deficiencies in donors’ existing accountability systems. However, there are no ‘one size fits all’ solutions for accountability measures: the size and level of capacity of an NGO matters greatly.

The document illustrates that the first consideration for donors in selecting partners is the existence and efficacy of NGO internal accountability mechanisms, institutionalised through their internal governance structure. Secondly, the other concern is the existence of a sound financial management system.

Recommendations are as follows:

• NGOs need to develop effective internal standards to ensure that they operate with the highest levels of integrity
• external monitoring approaches that function as an add-on to the limited internal system allow stakeholders and programme beneficiaries to ensure that the funds are being used as intended
• in this context, enlarging the range of persons who have an interest in a programme being carried out as intended and providing them with the means to react if they detect a problem should be addressed
• investments in accountability systems and in NGOs’ capacities to implement them should be regarded as essential and integral programme activities rather than administrative expenses
• still, investments should be made in the development and expansion of downward accountability measures in dialogue with NGO partners not only to reduce risks of corruption, but to optimise development outcomes
• it is important to settle the unintended negative consequences of donor practices if there is a wish to tackle NGO corruption without hurting the society