The rules of providing anti-corruption and anti-fraud actions

The Objective of these Rules is to establish the rules of anti-corruption activity for the governing bodies, staff and members of KHPG.

1. The Problem

Corruption has been a fact of life for centuries, but recent years have seen an increase of recognizing the harmfulness of this phenomenon and unacceptability of this its facts. KHPG defines corruption as an abuse of trust, power, or position which gives rise to improper gain1. Anyone can call the following most common manifestations of corruptions:

• Bribery – receiving by the citizen or giving to him a bribe in order to obtain specific benefits through illegal way. It must be clearly understand the difference between the bribe and there gift. The gift is given unconditionally, openly and does not impose any obligations.
• Extortion – Engagement in threatening any person, his family, property, interests in order to influence his choice.
• Fraud – Engagement in the misrepresentation of data, factors or qualifications to meet the terms of contract during the selection or execution of a project, or during the distribution of funds.
A particular type of fraud connected with employees is a «conflict of interest» between personal interests and the interests of KHPG. This happens when an employee improperly fulfils its obligations for his/her own career and personal enrichment at the expense of the organization, influences on politics and finances of the organization.
• Collusion – Actions directed to stakeholders of any choice with intention to influence the selection process in order to prevent his honesty, openness and transparency.

2. KHPG principles combating corruption

The main principles of HPG in the scope of the prevention of the corruption:
– Awareness;
– Transparency;
– Publicity;
– Confidence; and
– Disciplinary measures.

Awareness

Elective governing bodies of KHPG and its administration are responsible for developing and implementing management systems KHPG to prevent any corrupt practices. Administration and Council of KHPG develop methods through which members of the KHPG and its volunteers should identify the corruption risks, be aware of their negative effects and be able to cope with the risk of corruption and its negative consequences.

Transparency

Financial processes, procedures of conclusion of contracts, selection of counterparties, the activities of the Audit Commission, the external audit should be available to all members of the KHRG. KHRG has no practice of shadow accounting.

Publicity

All cases on suspicion of corruption should be urgently investigated. Institution of the proceeding, investigation process and the results of investigations should be available for all members of the KHPG, considered by the Council and submitted for exploring to the General Meeting.

Confidence

Policy concerning volunteers, members and employees of KHPG as individuals with formed social responsibility lies in the credibility of each person in the care of her personal and civil liberty, faith in their ability to act in accordance with their own conscience.
Combating corruption in KHPG begins with personal control of responsible persons for their decisions. In the case of appearance of difficult ethical problems the persons should apply for the Council of KHPG.

Disciplinary Measures

The following measures can be taken regarding persons who made fraud or corruption actions:
– Reproof;
– Penalties of administrative or financial manner;
– Dismissal.

3. The system of the prevention of corruption actions in KHPG.

There is elaborated system of the prevention of the corruption actions in KHPG:
– election and rotation of the governing and managerial bodies;
– internal control in respect of persons responsible for the finances as outlined in the Manual "Financial policies and procedures" with the distribution of their duties;
– procurements laid down in "Regulations on the policy of procurement of goods, works and services";
– selection and attestation of the personnel.

The system of internal and external audit and procedures of responding for audit are directed on this.

The Manual "Financial policies and procedures" regulates activity of the responsible persons associated with the adoption of financial solutions and related to cash flows. Wages, salaries, expenses for business trips and expenses for events are limited by budget amounts and must not exceed the norms established by the government or accepted in KHPG. In addition, costs for events must be limited by the adopted business practice. It is prohibited to purchase alcohol, tobacco and luxury goods at the expense KHPG as well as other personal goods not deemed necessary for specific project purposes.

All expenses for travel and events under any circumstances should not reach such proportions that they could or would be able to influence the impartial judgment or influence decision-making process.

All responsible for making financial decisions should refrain from further action in the case of self-doubt in the results of their own actions and ask help from the Head of the KHPG Department, the Director of KHPG, the President of the Council of KHPG, the member of the Council of KHPG, Audit Commission of KHPG, or other temporary supervisory body established in KHPG in order to fight corruption.

Established in KHPG "Regulations on policy procurement of goods, works and services" should help the responsible persons to make motivated and economic contracts when purchase the expensive hardware, software and services avoiding any suspicions of corruption.

Process of selection of counterparties from the number of vendors of goods and services should include their time to time monitoring. Administration of KHPG should always assess the reliability of the counterparties and in the case of appearance of any uncertainty in their reputation or defaults no longer contact them. All contracts must be documented in writing.

Risks connected with corruption must be taken into consideration in all regulations and instructions relating to the possibility of these risks.

Selection and control for consultants and experts and for recruitment of staff

Specificity of KHPG's activity as a non-governmental human rights organisation in Ukraine consists in the fact that the choice of experts and consultants from legal, sociological and other studies, various monitoring and other services is very limited. Therefore, the director and project managers are responsible for conducting of the continuous quality control the quality their research results (services). The responsible persons must respond quickly to the deteriorating of the quality of services, delays of terms. Director and project managers should conduct ongoing work on widening range of consultants and experts.

KHPG seeks to avoid situations that cause a conflict of interest. At the conclusion of any agreement employees, members of KHPG's, members, and volunteers should inform responsible persons, donors and other parties about the existence of relations that can bring personal benefit to them or their relatives. In addition, any person related KHPG has to make self-reporting on possible conflict of interests. The Audit Commission has to consider all potential conflict of interests and recommend measures for its disappearance. Head of the Audit Commission informs Director and KHPG Council about this case, The KHPG Council considers conflict of interest at their meeting if it is necessary.

For the persons recruited to the staff of KHPG there is established rule of "probation period." Further, the staff employees should undergo recertification, as one aspect of the consideration of the risks of corruption.

Staff should be recruited on their merits, not on their relationship with existing staff, members of Board etc. It is necessary to avoid situations of conflict of interests. Deputy Director on human resources is responsible for these situations in the process of recruitments.

4. Investigation of Fraud or Corruption

All suspicions of corruption should be immediately reported to Head of the Audit Commission of KHPG (or to any manager if Head of the Audit Commission is absent) in order to take immediately appropriate measures for minimizing of the potential damage and ensuring rapid investigation into suspicions of corruption. Once he (or she) has received such an alarm, he (or she) should undertake a list of specific actions to discover the truth of the matter. By these Rules KHPG guarantees confidentiality and security of the informers. Anonymous messages are not taken into account and considerate.

If necessary, there is created the group or determined authorized controller by the decision of the Director or the Chair of the Council of the KHPG for an immediate investigation into suspicions of corruption. In special cases, the responsible persons should contact the external auditor. The results of the investigation must be communicated to staff and all members of KHPG by the Director.

The Director has to inform personal and KHPG members after end of investigation about the following facts:
– details of what taken place, the loss to KHPG (if any), how it was detected;
– measurers taken, if any, dealing the persons involved;
– measurers taken to recover lost assets and funds;
– actions taken in order to prevent the same situations.