INT Knows the Problems

The World Bank’s INT list below includes 23 Issues of Fraud and Corruption, which should be reported for further review. In 2004, the Armenian Parliamentary Commission reported problems to the World Bank Armenia Country Manager, which implied that up to 20 of those issues could have been violated under the Municipal Development Project.

Suspected contract irregularities - Yes

Violations of the Bank's procurement guidelines - Yes

Bid manipulation - Yes

Bid collusion - Yes

Coercive practices - Yes

Fraudulent bids - ?

Fraud in contract performance - Yes

Fraud in an audit inquiry - Yes

Product substitution - Yes

Price manipulation - Yes

Substandard or inferior parts or materials - Yes

Cost or labor mischarges - Yes

Kickbacks - Yes

Bribery or acceptance of gratuities - ?

Abuse of authority - Yes

Misuse of Bank Group funds or funds entrusted to the Bank Group - Yes

Travel-related fraud - Yes

Theft and embezzlement - Yes

Benefits and allowance fraud - ?

Conflict of interest - Yes

Misrepresentation - Yes

Forgery - Yes

Involvement of Bank Group staff in any of the afore-mentioned. - Yes

A thought for Juan ...............?

The Bank’s Fiduciary Responsibility

Under Article III, Section 5(b) of the Articles of Agreement of the International Bank for Reconstruction and Development (IBRD), the Bank is required to make arrangements to ensure that the proceeds of any loan are used only for the purposes for which the loan was granted, with due attention to considerations of economy and efficiency and without regard to political or other noneconomic influences or considerations. Similar requirements are specified in Article V, Section 1(g) of the Articles of Agreement of the International Development Agency (IDA).

Fraud and corruption can divert loans and credits to purposes other than those for which these were granted. Inevitably, such diversion would also seriously affect the efficiency and effectiveness of the concerned projects. As such, the Bank and its staff have a fiduciary responsibility to prevent fraud and corruption in projects financed by it.