proactive integrity reviews (pirs) · pprr lessons built into. project preparation documents •...

H. Lorraine WangAdvisorOffice of Anticorruption and Integrity

ProactiveIntegrity Reviews(PIRs)

Mirela LascuInvestigatorEuropean Investment Bank

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OutlineWhat is a PIR?

Who does PIR?

Why do we conduct PIRs?

When are PIRs conducted, and how?

How do PIRs improve projects?

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What is a PIR?

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Internal Control Assessment

Findings and Recommendations

Financial Management

Asset Inspection

Procurement and

Consulting Services

- a.k.a. project procurement-related reviews- assess project integrity risks by identifying red

flags through the review of:

WHY WHEN HOWWHAT WHO

PIRs

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Identify red flags

Capture lessons learned

Ensure that ADB funds are used as

intended

ObjectivesWHY WHEN HOWWHAT WHO

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►“review to determine vulnerability to fraud and corruption”

►“intended to identify and control an existing but yet unreported occurrence of fraud”

►“examine whether funds were used for intended purposes”

►“make recommendations to prevent fraud in the future”

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Definition – Common ThemesWHY WHEN HOWWHAT WHO

What similar reviews do you perform?

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Who conducts PIRs?


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• OAI staff and consultants

• RD and SAI are often invited


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OAI and RD partnership

Tools

ExpertiseBudget


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OAI

Office of Anticorruption and Integrity

Initial contact for allegations of

integrity violations

ConductProcurement-

Related Reviews

Promote awareness of Anticorruption

Policy

Promote Respect at Work

Investigateallegations of fraud and corruption

Conduct Integrity Due Diligence


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Investigations

Respectful Workplace Unit

Outreach

Due Diligence

Policy

PIR


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Proactive Reviews/Investigations

European Investment Bank 1317 October 2017

The Office of Anticorruption and Integrity (OAI) at the Asian Development Bank

The Office of Institutional Integrity (OII) of Inter-American Development Bank

The Office of the Inspector General (OIG) at the Global Fund

The Office of Audit and Investigations (OAI) at the Untied Nations Development Programme

Fraud Investigations Division of Inspectorate General (IG) at the European Investment Bank

Office of Integrity and Anti-Corruption (PIAC) of the African Development Bank


How is your team organized?


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Why conduct PIRs?


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Cornerstone of an effective anticorruption: actively identify and address risks of fraud and corruption


Anticorruption Policy

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• PIRs help prevent and detect integrity violations.

• PIRs improve project resilience against fraud and corruption.


Objectives of PIRs

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ADB’s Anticorruption Policy & Guidelines

http://www.adb.org/site/integrity/publications

Applies to executing and implementing agencies, contractors, consultants, suppliers, ADB staff, and anyone connected to an ADB-

financed, -administered, or -supported activity.

ZeroTolerance

Highest Ethical

Standards


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Anticorruption embedded in ADB Policies

Procurement Guidelines (Para 1.14)

Guidelines on Use of

Consultants (Para 1.23)

Loan and Grant

Agreements

Standard Bidding

Documents (Section 1,

Clause 3, 4)

Contracts

Staff Instructions

Project Administration

Instructions


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- Article IV, Section 4.08 of the Loan Agreement

PIR Basis

Borrower shall enable ADB’s representatives to inspect the Project, the goods financed out of the proceeds of the Loan, and any relevant records and documents.


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Results of IRRs at EIB


14 PIRs7 PIRs – strong indications of

fraud

Accelerated pre-payment of 6 loans


What empowers you to conduct PIRs?


GROUP SHARING

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When and how to conduct PIRs?


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Project cycle

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Selection Criteria

1. DMCs where a PIR has not been conducted before

2. Projects:

• more than $20 million

• in a region and/or a sector preferably not covered by other PIRs within the last 3-4 years

• in progress or at least 2 years from loan closing dates

• concerns identified by ADB department head and/or senior staff

• tagged as relatively risky


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PIRs are not investigations.


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PIRs are preventive tools.


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PROCUREMENT AND

IMPLEMENTATIONCYCLE

Procurement Plan

Bidding Documents

Bid Evaluation

Bids/Proposals

Contract Negotiation and Award

Notification and Advertising


Execution and Supervision

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Preliminary Planning

Detailed Planning

Planning Mission

Fieldwork

Reporting

PPRR Process


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Fieldwork

Closely supervise consultant’s work

2 weeks of wrap-up mission for ADBConduct detailed review of consultant’s work

Discuss findings with the EA

Conduct

Training for EA/IAs

closing conference

3-4 weeks of fieldwork with consultants


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Communication Platforms

1. PPRR reports2. Training

• Accept invitations to CPRM• Train EAs at RD’s request• Conduct RETA funded training

3. Tool kits• Skills transfer through joint reviews• Discuss checklist during PDM training


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EA Assessment

Procurement• PQ, ICB, NCB,

DP, QCBS

• OCB, LCB, DC

Financial Management

Asset Verification

• PQ – prequalification• ICB – international

competitive bidding• NCB – national

competitive bidding• DP – direct purchase• QCBS – quality- and

cost-based selection

Fraud and corruption indicators are built-in

Tools – Customized Checklists


• OCB – open competitive bidding

• LCB – limited competitive bidding

• DC – direct contracting

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Data collected directly from EIB Data

Warehouse

Dynamic assignment of weights for criteria

Potentially useful for other purposes (including

investigations)

Selection of projects based on:

• location• project type • IRFA score

Internal and external ratings

Risk identified by Services

Existing results of analysis

Reported delays and breaches

Abnormal events or ratios

Internal

Sources of data:

Final selection of project for PIR

First step: “PIR light” desktop-type review

External:

Corruption Perception Index (CPI) by Transparency International

Corruption Risk Indicator (CRI) derived from EU public procurement database

Implemented set of criteria for Integrity Red Flags scoring model

30 criteria

Integrity Red Flags Assessment Dashboard


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EIB Projects Integrity Reviews


How do you select your sample?

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How do PIRs improve ADB

projects?


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PIR’s Goal

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PPRR Lessons Built Into

Project preparation Documents• RRPs• Country Profolio Review

Mission• Country Partnership StrategyOperations Procedures• PAI• Staff Instructions

UpcomingPlan

Knowledge products• Integrity Risk Briefs by

Country/Sector• Inputs to Governance Risk

Assessment to Country Risk Assessment

E-learning programPIR framework & toolkits


Benefits of PIR

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Intensified project oversight


Benefits of PIR

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PIR recovered funds that had been released without adequate substantiation


Benefits of PIR

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PIR team provided integrity training for the executing and implementing agency project officers.


Benefits of PIR

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Year PIR/Follow-up Country # of Loans Covered

# of Grants Covered Total Amount

2018 61 TIM (Follow-up), 1 MON (Follow-up), 1 VIE, 2 PNG (Follow-up), 1 SRI (Follow-

up) 21 1 1,236,006,007.35

2017 5 1 IND (Follow-up), 1 BAN, 2 MYA, 1 CAM (Follow-up) 7 1 570,400,000.00

2016 7 1 MON, 1 IND, 1 GEO, 1 INO, 1 VIE (Follow-up), 2 PNG 13 1 1,884,264,242.93

2015 6 1 PAK (Follow-up), 1 UZB, 1 CAM, 1 SRI, 1 TIM, 1 PHI (Follow-up) 15 3 1,981,230,000.00

2014 4 1 TAJ, 1 SAM (Follow-up), 2 PHI 3 1 225,910,000.00

2013 7 1 AZE, 1 PAK, 2 NEP, 2 LAO, 1 PRC 8 6 784,300,000.00

2012 5 1 PHI, 1 MON, 1 SRI, 1 BAN, 1 CAM 6 4 228,940,000.00

2011 4 1 VIE, 1 BHU, 1 KGZ, 1 SAM 4 1 1,177,210,000.00

2010 5 1 PRC, 1 BAN, 1 INO, 1 KAZ, 1 NEP 6 0 637,640,000.00

2009 9 3 MON, 1 ARM, 1 PHI, 1 PNG, 1 CAM, 1 SRI, 1 IND 8 1 471,505,000.00

2008 4 1 MON, 1 AFG, 1 VIE, 1 KGZ 4 0 255,000,000.00

2007 5 1 INO, 1 PRC, 1 LAO, 1 PAK, 1 NEP 5 0 347,000,000.00

2006 5 1 VIE, 1 PHI, 1 UZB, 1 FIJ, 1 CAM 5 0 304,200,000.00

2005 4 1 PNG, 1 MON, 1 BAN, 1 INO 4 0 187,900,000.00

2004 2 1 VIE, 1 IND 2 0 275,000,000.00

2003 1 1 SRI 1 0 80,000,000.00

Total 79 112 19 10,646,505,250.28

ADB Projects and Number of PIRs


• 79 conducted PIRs since 2003• 5 PIRs per year (average)• 26 countries covered

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► Relatively new process for most of the organisations

► No organisation has conducted more than 10 IRRs a year


Start date No. conducted

ADB 2003 70

EIB 2010 14

UNDP 2014 24

IDB 2015 3

Global Fund 2016 20 (opened)

AfDB 2017 1 (pilot)

Integrity Risk Reviews


If not yet done, would your organization consider conducting PIRs?

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Thank You

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Questions?