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IRD Business Ethics and Compliance
A Commitment to Business Integrity
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Sebastian is a representative of an insurance company serving manufacturers. He frequently drives clients to view work sites in his company car. The insurance company reimburses him for up to 4 carwashes each month because they want to maintain a favorable impression. If the company car isn’t dirty, Sebastian uses one or two of the carwashes for his family car. He figures, “What’s the difference how I use the carwashes as long as the company car is clean?”
Did Sebastian behave ethically?
1. Yes2. No3. Maybe
Scenario #1
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What is Compliance?
• By “compliance” we mean making sure that we follow IRD’s internal policies and procedures
and• the terms and conditions of the award agreements• The award agreement includes information such as;
– Program description or scope of work– Beneficiaries, targets and metrics– Period of performance– Budget– Standard provision, terms and conditions, and
clauses
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Compliance versus ethics
• How would you define ethics?• What does the word ethics mean to
you?
• What is the difference?
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Julio is an employee of Gofair, Inc. He applies for a prestigious training opportunity for leadership development. The course is two weeks long and requires travel and a hotel stay. He is approved for the training. Gofair Inc. will be covering the cost of Julio’s travel expenses. One week before the course begins, he receives a job offer from Hepme Corp. He accepts the job offer and gives them a start date following the leadership training course. He returns from the training course and submits his two week resignation notice to Gofair.
1. Yes2. No3. Maybe
Scenario #2
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Beware of the Power of …..• Rationalization – justifying action or inaction– “I did it because….”
• Denial – “Its not my problem”– “Its not a big deal”
• Group Think– “Everybody does it”– Marginalizing the “good guy”
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Accountability - upholding ethical conduct
It is your duty to be sure you are clear on your role, and responsibility within IRD.
Every IRD employee and consultant is responsible for following:
•IRD Code of Business Ethics and Conduct•IRD standards and policy•All specifications, terms, and conditions within award agreements and modifications•Donor government and UN regulations•Applicable laws and regulations in the country of operation
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Accountability
Failure to comply with IRD policies and procedures or the Code can result in severe penalties such as:
•Termination of employment
•Civil or criminal charges
•Financial penalties
•Loss of donors, participants or funding
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IRD Code of Business Ethics & Conduct
IRD Code of Business Ethics & Conduct must be read and signed by all employees, interns and consultants.
It applies to all IRD’s work regardless of funding source.
Let’s review some sections of the code that apply to your work.
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IRD Code of Business Ethics & Conduct – Section D, work responsibly
• Conflicts of Interest: When an employee has a direct or indirect, personal or professional interest in a business transaction, organization, or other matter, such that it might reasonably appear to affect judgment, impede decision-making, compromise objectivity, or lead to neglect or disregard of IRD interests, standards or policy.
• Employees must disclose conflicts of interest to IRD’s Chief of Compliance and recuse themselves from transactions or situations where personal interests may conflict, or appear to conflict, with IRD interests.
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Components of a Mitigation Plan
• What is the CoI? Describe it.
• Why the situation may be seen as a CoI by others.
• Strategy to be taken to ensure the CoI does not affect your work
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Example
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Maria works at Sunshine Company as an accounts payable clerk. Her son, Carlos just landed a job as an account representative for a paper company. Coincidently, this is the same paper company that supplies products to Sunshine Company. When she receives invoices from her son’s company, she expedites the payments.
Is this ok?
1. Yes2. No
Scenario #3
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Jane works as a Financial Manager for IRD on a project. Her job responsibilities include reviewing grant applications for financial sufficiency. Jane also works as an accountant for a Hammer and Nails, a local training organization that is in the process of submitting an application to IRD for funding.
There is no secret that Jane works for Hammer and Nails.
What should Jane do…?
1. Do nothing. 2. Report the conflict of interest to her supervisor.3. Resign from Hammer and Nails4. Resign from IRD5. Disclose the conflict and recuse herself from reviewing
Hammer and Nails grant application.
Scenario #4
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Case Study 3 - COI
• Dev. Inc is managing a program to provide training and capacity building to local community leaders.
• A selection committee has identified 3 hotels that are capable of providing accommodations hosting the training sessions. Each hotel invites the committee to their facilities and dine with hotel management to discuss the features of their hotel and their ability to host the training sessions.
• Are there any issues or concerns with making a hotel
selection in this manner?
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IRD Code of Business Ethics & Conduct – Section D, work responsibly
• Outside Activities: Employees’ outside activities may not interfere with fulfillment of duties, commitment to superlative performance, compromise IRD’s reputation, or imply IRD support.
• Gifts: Employees may not offer or accept gifts. Even if the gift is not meant to influence or obtain favorable treatment or benefits, it may be perceived as such.
*** In cases where an employee receives a gift of more than a nominal value and returning the gift may be offensive to the giver, employees must report the gift to his/her supervisor to determine what action should be taken.
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Safe Social Services (SSS) provides counseling, assistance, and training to refugees from Rondondo. The refugees are very grateful for the assistance and routinely bring baked goods, flowers, and other items to their caseworkers to express their gratitude and appreciation. What should SSS caseworkers do with the gifts?
1. Accept 2. Decline 3. Accept the gift but inform the appropriate people at SSS4. Accept the gift but inform the giver that this has no bearing
on receiving assistance
Scenario #5
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DRI won an award for a new project. Margo goes set up the new office. She hires a car service for 3 months until the project can purchase vehicles. Johan: Thank you for using my service. We will provide you with the best cars and drivers. Here is $20 for you. I know it’s not much but I want to express my appreciation. Margo: Oh, no, I can’t accept the money. Johan: Please, I insist. It’s a small amount after all. I want you to have it
Johan’s offer is a… 1. Kickback2. Bribe3. Gift4. Gratuity
Scenario #6
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IRD Code of Business Ethics & Conduct – Section B, obey the law
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A community officer working on an outreach building program is responsible for determining the location of a new well which will serve three different villages in consultation with local village chiefs. After their first meeting one of the Chiefs offered to pay the CO a commission if the CO decided to build the well near his village.
1. Take the money and build the well at the requested location2. Bring the issue to his supervisor in order to split the commission3. Use the opportunity to educate local villagers on IRD’s Code of
business Ethics and Conduct4. Disclose it to project managers
Scenario #7
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Your security director asks you to procure three heavy duty flashlights for emergency kits. The local vendor offers you three brand new Maglites for $55 USD. You purchase the tools with the petty cash you’ve brought with you. You pass him $60 cash. He passes back $5 and the receipt which clearly states that the three flashlights were $60 USD and says, “keep the change”. What do you do?
1. Pocket the 5 bucks. It’s such a small amount. 2. Take the 5 and thank the vendor for your change. At the office, put the
5 back in petty cash and change the receipt total to $55.3. Ask the vendor to change the receipt to reflect the $55 he originally
said.4. Make sure that you only buy from him in the future
Scenario #8
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An IRD employee is responsible for obtaining antibiotics from a state owned pharmacy. The posted price is $20.00 per mg. The pharmacist tells you that at the $20.00 price it will take two weeks for it to become available. The pharmacist tells you for an additional $10.00 per mg he can have the antibiotics ready in two days. What do you do?
1. The time saving is worth the additional cost. You pay the additional $10.00 per mg
2. You haggle the price down to an additional $5.00 per mg3. You pay the posted official price4. You lie, tell him that you’ve recorded this entire conversation, and
threaten to report him unless he sells the medicine to you for $15.00 per mg.
Scenario #9
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How to handle facilitation requests?
• Say NO
• Tell them that IRD policies do not permit such payments (i.e. IRD only pays for approved fees
• Tell them that you need a receipt for the payment
• Act dumb – repeat the request and act confused
IF THERE IS NO CHOICE OR YOUR SAFETY IS AT RISK, PAY, REPORT, and DOCUMENT
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Protect company reputation and assets IRD Code of Business Ethics & Conduct – Section E,
• Theft and Misuse of Property: Employees are prohibited from theft, destruction or misuse of IRD property, including the use of computers or email to view or send pornography, gamble or conduct outside business.
• Protecting IRD assets and those of our clients: Using IRD assets for gambling, violating copyright or trademarks, conducting outside businesses or activities that are not related to your duties, or for any other purposes other than your work for IRD is prohibited.
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Work Responsibly - IRD Code of Business Ethics and Conduct –, section D• Reporting Inaccurate Data or Information: Employees
and IRD subcontractors may not report any data or information that is intentionally or carelessly inaccurate, incomplete or misleading.
This includes falsifying timesheets, expense reports and proposal pricing. If timesheets, receipts or other supporting information are incomplete, missing or can’t be located, the donor will disallow the cost in an audit.
This also applies to our performance reports: We must ensure that all performance reports are accurate and complete.
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Eduardo was recently hired by IRD to oversee agriculture projects. He enjoys his work and wants to do well at IRD. He is sharing an office with Marguerite, who has worked on AG projects for IRD over the last several years.
At the end of a pay period, Marguerite jokes:
Marguerite – “I like to flip a coin to determine which projects I should charge my time to. I haven’t kept track.” Eduardo “I thought we were supposed to record our work time on projects each day.” Marguerite “Believe me. It doesn’t matter what you record.” Eduardo “What do you mean?” Marguerite “Well, I used to think it mattered, but I goofed one day and entered 2 days of vacation as work days. Paul, my boss, never said anything about it. Trust me – it really doesn’t matter how you record your time.”
Eduardo is uncomfortable with the attitude expressed by Marguerite but doesn’t want to confront her or anyone else since he needs her help with his work.
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What should Eduardo do?
1. Express his concerns to Marguerite despite his discomfort.
2. Ask for a transfer 3. Discuss the issue with his boss4. Do nothing
Scenario #10
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You are the Chief of Party for a project to construct clinics. The project calls for two to be built each quarter. Your first report is due and the team has only been able to complete one, but expects to complete three in quarter two. Since you will meet your target by the end of the second quarter, your first quarterly report should:
1. Attribute the extra clinic expected to be complete in quarter two to quarter one.
2. Explain why you were unable to meet the target along with your projection of completing three by the end of the second quarter.
3. Don’t offer the donor any information about construction. Instead, describe your excellent project team, negotiated subcontracts with local contractors and the building supplies already ordered.
Scenario #11
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Respect - IRD Code of Business Ethics & Conduct – Section F
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Allison’s daughter’s soccer team is looking for a coach. She suggests to her father, George, that he would be a perfect candidate. He agrees and begins coaching. He is an excellent coach, and provides support and encouragement to the girls. On a few occasions, he has driven them home when parents were working late. One day he receives a call from the league director. He tells George that he received allegations regarding George’s inappropriate conduct with the players. He will be replaced immediately. George says he never did anything wrong and wants to know who made the allegations. The director says he can’t tell him, but he can’t take the risk of having him as a coach. George repeats that he never did anything wrong. The director replies, “Well, yeah, that may be but the allegations are serious. I can’t ignore them.”
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Did the Director take the right action?
1. Yes2. No
Scenario #12
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Scenario #13
• You are visiting an IRD subcontractor’s office• A subcontractor employee arrives holding a
stack of passports, opens the safe, and puts in the passports
• You ask about it and are told that the staff routinely lose their passports, so they are now stored in the safe
• What should you do?
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IRD Code of Business Ethics & Conduct
• Reporting suspected issues: IRD requires all employees to report any suspected violations promptly and will not tolerate any kind of retaliation against an employee for reports or complaints regarding misconduct that are made in good faith or for cooperation with an investigation.
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Guidance on the Code
• We recognize the difficulty of working in countries where customary business practices may involve corruption, favoritism, bribery or kickbacks.
• However, all of these are in violation of IRD’s Code of Business Ethics and Conduct.
• While we cannot change local practices, it is important that we not condone them through participation or disregard.
• When in doubt, seek timely guidance from IRD resources.
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Fraud
• When following the IRD Code of Business Ethics and Conduct, it’s important to understand the distinction between negligence and fraud. Fraud is intentional.
• Warning signs of fraud include: – Destruction of documents– Excessive cash transactions– Employees who do not allow colleague to learn their
tasks– Employees who avoid following procedure– Unusual interaction with a contractor or supplier– Billing that is false or inadequate
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John works in procurement for an IRD program. His boss Jean comes to him and mentions it’s unnecessary to go through the normal competing process for procuring a generator. Jean says she knows the guys at ABC generators and they can be trusted. What should John do?
1. John should listen to his boss.2. John should continue to compete the procurement.3. John should mention to Jean that he doesn’t feel comfortable
foregoing IRD procedure4. John should send out an email to the Hotline calling Jean corrupt.
Scenario #14
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IRD has a contract with Generators R’ Us for all generator repair work excluding the purchase of parts. Generators R’ US was to IRD’s office several times to repair the relatively new generator however the generator continues to need new parts. What should be done?
1. This generator is a lemon, procure a new one.2. Continue to have Generators R’ Us conduct the repairs.3. Hire another generator repair company to look at the generator.4. Convert to solar power.
Scenario #15
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Reporting Concerns or Violations of the Code
• IRD requires employees to report any suspected violations promptly and will not tolerate any retaliation against employees for reports or complaints. Allegations will be reviewed immediately. You may report concerns to:
• Your supervisor (or your supervisor’s supervisor)
• IRD’s Chief of Compliance
• Confidentially and Anonymously to the IRD hotline: calling 703-957-1500 or by emailing [email protected].
• Whistleblower Protection
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For Additional Information
Jean M. HackenChief of ComplianceE-mail: [email protected]
Office of ComplianceE-mail: [email protected]
Internal Audit Email: [email protected]
IRD Hotline (Confidential and Anonymous)Telephone: (703) 957-1500Email: [email protected]
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Scenario #16:
You are a senior manager working on a project that requires the purchase and maintenance of 4 vehicles for project related site visits. Your brother sells cars and has offered to sell and service the vehicles at a deep discount. He offers you a “commission” for the sale. What do you do?
1.Advise the procurement office to place the order with your brother-in-law because the discount would save money but refuse to accept the “commission” because that would violate the Code.
2.Ensure the procurement for the four vehicles and maintenance is in accordance with established policies/procedures by sitting on the selection committee.
3.Disclose that you have an apparent conflict of interest because of your relationship with potential vendor, disclose the offer that he made you, and recuse yourself from anything associated with the procurement.
4.Contact several other sources for the vehicles and service and tell them if they can beat your brother’s discount, the lowest one will be awarded the contract. If no one can beat your brother’s price, the award can legitimately go to your brother.
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You are working to improve literacy among youths. The program uses computers to strengthen their skills. After working late one evening, you observe Billy, a fellow employee parked in the alley loading boxes with computer equipment into his car. The next day, what do you do?
1. Call the local police to report the theft.2. Tell the employee you saw him stealing. 3. Nothing. It is none of your business.4. Casually mention to the employee what you saw. If the response you received doesn’t make
sense, report your concerns to your supervisor.5. Report your concerns to your supervisor or the IRD Hotline.
Scenario #17
