CORRECTIVE ACTION PLAN
YEAR ENDED DECEMBER 31, 2024
Identifying Number(s): Finding No. 2024-002
Finding:
TechnoServe’s controls failed to prevent overpayments for seven equipment procurements due to a fraud scheme involving local companies who submitted inflated invoices. Collusion among multip...
CORRECTIVE ACTION PLAN
YEAR ENDED DECEMBER 31, 2024
Identifying Number(s): Finding No. 2024-002
Finding:
TechnoServe’s controls failed to prevent overpayments for seven equipment procurements due to a fraud scheme involving local companies who submitted inflated invoices. Collusion among multiple TechnoServe employees at one field office location to bypass the organization’s standard procurement controls.
Corrective Actions Taken or Planned:
Responsible Official: Smitha Allapat, Sr. Director Finance, Global Controller
Anticipated Completion Date: June 1, 2025
View of Responsible Individuals:
TechnoServe’s internal audit team uncovered potential bid rigging in a procurement purchase leading to overcharge of costs related to the purchase. The team found the vendor proposal was suspicious, the vendor site visit report lacked detail and several of the country staff were involved with the vendor making the process rigged. TechnoServe promptly ensured all overage costs were reported to the donor and moved them to unallowable costs. All the staff directly involved with the procurement was terminated.
TechnoServe will implement following additional measures:
1. Enhance in-country leadership oversight - Country Directors will directly participate in bid analysis committees for procurements worth $50,000 and above. This is the only feasible means by which to prevent fraud when multiple staff are colluding to rig the bidding process.
2. Enhance regional/HQ oversight - The HQ/Regional team will increase oversight for procurements worth $50,000 and above through a thorough review of backup documentation, including non-shortlisted bids, and, as warranted, direct participation in the bid analysis committee. Additionally, the regional procurement managers will be empowered with a veto over procurement decisions that seem suspect.
3. Mandatory public advertisement - Procurements worth $50,000 and above, that go through a formal solicitation will be required to be publicly advertised for a reasonable period of time (not less than 7 days). Further, proof of advertisement, such as a copy of the web or newspaper posting will be required to be attached to the audit record.
4. Provide In-country procurement training: TechnoServe will ensure that the country team receives additional training relating to procurement to ensure their understanding both of their responsibilities when participating in a procurement exercise and the ethical requirements generally.
These actions, taken together, will help TechnoServe to prevent or rapidly detect similar schemes going forward.