Risks, Tools, Resources

FINANCIAL MANAGEMENT - ACCOUNTING

Including financial planning, accounting of all financial transactions, as well as handling cash and assets.

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GOVERNANCE -
CONTROLS

Including organization’s management activities and all internal regulations, as well as their enforcement and monitoring.

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HUMAN
RESOURCES

Including recruitment, promotion, working conditions, training, and disciplinary and functional leadership of employees.

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PROCUREMENT
(BIDDING)

Including contracting out a service or product to a bidder or applying for a tendered contract.

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PROJECT EXECUTION -
O&M

All activities to manage and maintain services, including managing contracts.

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USER/CUSTOMER RELATIONS – SERVICE DELIVERY

Delivery of products and services, handling payments, and managing communication with users.

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HOW IT WORKS

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See more details about the Integrity Management Toolbox methodology and how we support organizations to develop long-term change management processes for more integrity.

FACILITATOR TIPS

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Tips and tricks for facilitators on discussing integrity, managing multi-stakeholder workshops, and coaching for change.

FINANCIAL MANAGEMENT - ACCOUNTING

Water and Sanitation Service Provider

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Inefficient revenue generation

Insufficient billing and collection systems and outdated customer databases endanger utilities’ generation of revenues.

Water and Sanitation Service Provider

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Payments to contractors delayed, reduced or refused

Project officers might disturb the transfer of payments in order to make personal gain.

SME

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Loan scam

SMEs might be tempted to take dubious loan offers, when desperate.

SME

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Illicit practices regarding tax payments

SMEs might unintentionally report false tax statements or be victims of illicit behaviour of tax advisors and inspectors.

SME

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Payments from the project owner delayed, reduced, or refused

The project owner as an organization or the project officer as an individual might misuse their authority over payments at the expense of the contractor.

Water and Sanitation Service Provider

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Manipulation of documents

Manipulation of documents on procurement, staffing, billing, maintenance etc.

Water and Sanitation Service Provider

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Irregularities in auditing process

Audit results are corrupted when biased by personal interests.

Water and Sanitation Service Provider

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Error-prone accounting systems

Manual or inadequate electronic accounting systems making it easy to avoid procedures.

Water and Sanitation Service Provider

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Payroll fraud

Tampering with pay cheques, timesheets and curriculum vitae or creating ghost workers and other illicit practices.

Water and Sanitation Service Provider

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Systematic fraud

Staff or managers falsifying documents, issuing fictitious invoices or tampering with cheques.

Water and Sanitation Service Provider

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Weak financial management systems

Cash management, payment, accounting and controlling systems are insufficient.

Tool

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Tax compliance

Submitting correct tax return statements and paying due taxes in time.

Tool

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Financial planning

Planning the needed finances for activities, resources, equipment and materials that are needed to achieve the organization’s objectives.

Water and Sanitation Service Provider

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Standard operating procedures

Written instructions that document the “who”, “what”, “where” and “when” of an activity.

Water and Sanitation Service Provider

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Payment procedures

Effective control and authorisation of expenditures.

Water and Sanitation Service Provider

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Computerized accounting

A software-based budgeting and accounting system for the management of spending, payment processing, budgeting and reporting.

Water and Sanitation Service Provider

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Cash handling policy/guidelines

Formalisation of procedures that involve accepting, counting, tracking and dispensing of cash.

Water and Sanitation Service Provider

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Internal auditing

Formal examination of organisation’s records, procedures and activities by an internal auditor.

Water and Sanitation Service Provider

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External auditing

A periodic, independent examination of financial reporting, fiscal and internal control and risk management.

Water and Sanitation Service Provider

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Reconciliation of accounting records

A review mechanism for checking cash flows, accounts and bookings.

Water and Sanitation Service Provider

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Asset management

A guide to plan, acquire, maintain, operate, renew and dispose assets.

Water and Sanitation Service Provider

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Accounting training

Training on monetary transactions and compilation of financial statements.

Water and Sanitation Service Provider

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Accounting and finance manual

Standardization, guidance, control systems for accounting staff.

Water and Sanitation Service Provider

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Billing system

Clear rules and procedures for issuing, monitoring and documenting bills and payments.

Water and Sanitation Service Provider

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Transparent bills

Customers receive understandable bills with full information on the services that they are being charged for.

Water and Sanitation Service Provider

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Budget transparency: publication of budget information

Providing understandable information on resource allocation to the public.

Water and Sanitation Service Provider

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Accountability for expenditures

Legal or ethical duty to account for the use of funds, equipment and authority.

GOVERNANCE - CONTROLS

Water and Sanitation Service Provider

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Over-extraction and pollution of water sources

Utilities can over-extract or pollute water sources as a result of weak management.

Water and Sanitation Service Provider

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Biased composition of Board of Directors

The appointment of Board of Directors (BoD) members does not follow the correct procedure due to political interference.

Water and Sanitation Service Provider

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Board of Directors affected by personal interests

Board of Directors (BoD) members might illicitly use their influence for personal gain and at the expense of the organization’s performance.

Water and Sanitation Service Provider

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Poor performance of contractors/partners

Contractors provide services and products with delays or poor quality.

Water and Sanitation Service Provider

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Misuse of key positions of authority

Discretionary power can be misused for personal gain.

SME

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Unethical practices to gain access to or to speed up public services

Unethical practices to gain access to or to speed up public services.

SME

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Illicit practices by legal representation

SMEs can be victims of illicit practices by their legal representation.

SME

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Illicit practices regarding tax payments

SMEs might unintentionally report false tax statements or be victims of illicit behaviour of tax advisors and inspectors.

Water and Sanitation Service Provider

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Manipulation of documents

Manipulation of documents on procurement, staffing, billing, maintenance etc.

Water and Sanitation Service Provider

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Irregularities in auditing process

Audit results are corrupted when biased by personal interests.

Water and Sanitation Service Provider

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Improper reporting

Organizations report false or incomplete data to cover up bad performance and illicit practices.

Water and Sanitation Service Provider

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Unclear roles, responsibilities and processes

A lack of clearly defined roles, responsibilities and processes points to gaps in the organization’s governance system.

Water and Sanitation Service Provider

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Use of staff and assets for private purposes

Authority over staff and granted access to assets can be misused for personal gain.

Water and Sanitation Service Provider

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Theft and vandalism by external people

Assets and material of the organization are stolen, damaged or destroyed.

Water and Sanitation Service Provider

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Water safety plan

A comprehensive risk assessment and risk management approach from water catchment to consumption.

Tool

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Tax compliance

Submitting correct tax return statements and paying due taxes in time.

Water and Sanitation Service Provider

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Standard operating procedures

Written instructions that document the “who”, “what”, “where” and “when” of an activity.

Water and Sanitation Service Provider

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Sanctions catalogue for unethical behaviour

A collection of penalties for disobeying ethical conduct.

Water and Sanitation Service Provider

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Whistle-blower incentives and protection

Encouraging and protecting individuals that reveal acts of non-integrity.

Water and Sanitation Service Provider

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Delegated authority document

Procedures for delegating decision making power to the subordinate.

Water and Sanitation Service Provider

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Integrity training

Providing conceptual background, an overview of available instruments and tools as well as examples of good practice.

Water Stewardship Initiative

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Due diligence investigation of partners/contractors

Systematic collection and analysis of information on potential partner.

Water and Sanitation Service Provider

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Compliance management

A mix of policies, procedures, documentation, internal auditing, security controls, and technological enforcement.

Water and Sanitation Service Provider

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Corporate governance structure

A system by which an organization is directed and controlled.

Water and Sanitation Service Provider

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Code of conduct, behaviour standards

Statement of principles and values to establish a set of standards on behaviour within an organization.

Water and Sanitation Service Provider

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Internal auditing

Formal examination of organisation’s records, procedures and activities by an internal auditor.

Water and Sanitation Service Provider

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External auditing

A periodic, independent examination of financial reporting, fiscal and internal control and risk management.

Water and Sanitation Service Provider

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Anti-corruption policy

A set of measures for internal operations, external relationships and corruption in the wider sector.

Water and Sanitation Service Provider

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Dispute resolution mechanism

Alternatives to litigation through the judiciary system can be incorporated in contracts.

Water and Sanitation Service Provider

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Independent/third-party oversight

Independent monitoring and investigation of operations and activities by a third party.

Water and Sanitation Service Provider

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Lobbying

Lobbying is about legitimately advocating for a certain change in policies or practices, often in collaboration with similar or like-minded actors.

Water and Sanitation Service Provider

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Self-evaluation of Board of Directors

The Board of Directors (BoD) sets objectives and evaluates its own performance.

Water and Sanitation Service Provider

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Selection procedure for Board of Directors

The process of selecting the members of the Board of Directors (BoD) follows transparent criteria and allows for participation.

Water and Sanitation Service Provider

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Documentation of Board of Director meetings (minutes/proceedings)

Board of Directors’ (BoD) meetings are documented and key decisions are publically communicated.

Water and Sanitation Service Provider

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Corporate governance training for Board of Directors

Enhancing the Board of Directors’ (BoD) understanding of the organization’s corporate governance structure and their role within it.

Water and Sanitation Service Provider

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Field inspections

Regular monitoring of field staff and contractor performance by dedicated field inspectors or supervisors.

Water and Sanitation Service Provider

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Budget transparency: publication of budget information

Providing understandable information on resource allocation to the public.

Water and Sanitation Service Provider

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Accountability for expenditures

Legal or ethical duty to account for the use of funds, equipment and authority.

HUMAN RESOURCES

SME

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Staff transferring knowledge to competition

Theft of intellectual property, such as technological inventions, creative expressions, brands or corporate identity can be as damaging as physical theft.

Water and Sanitation Service Provider

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Rules and regulations not known to staff

Lack of awareness on rules, regulations, internal processes and procedures.

Water and Sanitation Service Provider

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Low staff competence

Staff is lacking awareness on internal processes and procedures or technical knowledge.

Water and Sanitation Service Provider

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Low staff motivation

Staff is not motivated to perform well and does not identify with the organization.

Water and Sanitation Service Provider

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Unsatisfying employment conditions

Insufficient reward systems for good performance and low salaries.

Water and Sanitation Service Provider

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Non-transparent remuneration

A lack of a transparent and enforced payment scheme enables discretionary payment to staff or management.

Water and Sanitation Service Provider

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Non-transparent recruitment and promotion

Jobs are awarded not based on merit but personal relationships.

Water and Sanitation Service Provider

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Unclear roles, responsibilities and processes

A lack of clearly defined roles, responsibilities and processes points to gaps in the organization’s governance system.

Water and Sanitation Service Provider

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Use of staff and assets for private purposes

Authority over staff and granted access to assets can be misused for personal gain.

Water and Sanitation Service Provider

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Payroll fraud

Tampering with pay cheques, timesheets and curriculum vitae or creating ghost workers and other illicit practices.

Water and Sanitation Service Provider

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Standard operating procedures

Written instructions that document the “who”, “what”, “where” and “when” of an activity.

Water and Sanitation Service Provider

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Staff supervision and inspection

Quality control of staff’s performance by line managers or personnel who are not direct superiors.

Water and Sanitation Service Provider

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Staff rotation

Employees are shifted between assignments and jobs at regular intervals.

Water and Sanitation Service Provider

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Satisfactory work environment and conditions

Location, working hours, stress, safety and benefits associated with an employment are satisfactory.

Water and Sanitation Service Provider

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Sanctions catalogue for unethical behaviour

A collection of penalties for disobeying ethical conduct.

Water and Sanitation Service Provider

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Salary policy

Guidelines that set the framework for remuneration of staff.

Water and Sanitation Service Provider

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Recruitment and promotion policy

Rules for merit-based recruitment and career development.

Water and Sanitation Service Provider

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Job descriptions

Written statements that describe the duties, responsibilities, qualifications and reporting relationships of a job.

Water and Sanitation Service Provider

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Integrity training

Providing conceptual background, an overview of available instruments and tools as well as examples of good practice.

Water and Sanitation Service Provider

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Staff performance and satisfaction monitoring

Periodic, structured and planned monitoring of staff performance and satisfaction.

Water and Sanitation Service Provider

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Code of conduct, behaviour standards

Statement of principles and values to establish a set of standards on behaviour within an organization.

Water and Sanitation Service Provider

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Procurement training

Training and sensitisation on public procurement legislation.

Water and Sanitation Service Provider

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Field inspections

Regular monitoring of field staff and contractor performance by dedicated field inspectors or supervisors.

PROCUREMENT

Water and Sanitation Service Provider

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Manipulation of bids

In the procurement process, bidders can manipulate bids by false statements in order to win the contract or increase (personal) profits.

Water and Sanitation Service Provider

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Collusion among bidders

Collusion among bidders can corrupt the procurement process and leave the project owner with poor value for money.

Water and Sanitation Service Provider

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Collusion between project officer and bidder

Clientelism and favouritism can corrupt the procurement process and leave the project owner with poor value for money.

SME

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Manipulation of bids

In the bidding process competitors can manipulate bids by false statements on qualifications in order to win the bid or increase (personal) profits.

SME

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Corrupt bidding process

Competitors might collude with project owners or among each other in the bidding process resulting in the dismissal of the SME’s bid.

Water and Sanitation Service Provider

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Transparent prices/fees/charges, pricing policy

Providing access to information on price structure and setting.

Water and Sanitation Service Provider

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Standards in contracts

Particular work standards and essential characteristics which the contractor has to fulfil.

Water Stewardship Initiative

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Due diligence investigation of partners/contractors

Systematic collection and analysis of information on potential partner.

Water and Sanitation Service Provider

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Black and white listing

Categorising potential partners as (un-)acceptable and (un-)trustworthy.

Water and Sanitation Service Provider

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Anti-corruption commitments in contracts

Contractual commitments to implement anti-corruption measures against the main types of corruption.

Water and Sanitation Service Provider

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Procurement training

Training and sensitisation on public procurement legislation.

Water and Sanitation Service Provider

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Procurement guidelines

Setup of internal and adherence to public procurement regulations.

Water and Sanitation Service Provider

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Integrity pacts

Agreements between project owners, bidders/contractors and civil society organizations to abstain from illicit practices.

Water and Sanitation Service Provider

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Independent procurement committee

Independent observers and social witnesses in the procurement committee review the organization’s compliance with procurement regulation.

Water and Sanitation Service Provider

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Sensitization of contractors/partners

Familiarise contractors with integrity issues and the project owner’s values and norms.

PROJECT EXECUTION AND O&M

Water and Sanitation Service Provider

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Collusion of staff with informal and private water providers

Utility staff members may collude with informal water providers, enabling them to conduct illegal business in exchange for a share in profits.

Water and Sanitation Service Provider

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Operation and maintenance not carried out properly

Operations and maintenance might be neglected by staff and contractors.

Water and Sanitation Service Provider

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Payments to contractors delayed, reduced or refused

Project officers might disturb the transfer of payments in order to make personal gain.

Water and Sanitation Service Provider

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Poor quality control

Insufficient control mechanisms on delivered goods and services as well as invoices issued by contractors.

Water and Sanitation Service Provider

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Overcharging for services and materials

The project owner may be overcharged for work and materials during the project execution.

Water and Sanitation Service Provider

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Poor performance of contractors/partners

Contractors provide services and products with delays or poor quality.

SME

Read

Illicit practices by legal representation

SMEs can be victims of illicit practices by their legal representation.

SME

Read

Payments from the project owner delayed, reduced, or refused

The project owner as an organization or the project officer as an individual might misuse their authority over payments at the expense of the contractor.

Water and Sanitation Service Provider

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(Semi-)automatic water meters

(Semi-)automatic water meters measure and communicate consumption for monitoring and billing and make manual reading obsolete.

Water and Sanitation Service Provider

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Meter reading procedures

Specifications on regular and manual checks on consumers’ water meters.

Water and Sanitation Service Provider

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Illegal connection control

Proactive, effective and comprehensive identification and investigation of illegal connections.

Water and Sanitation Service Provider

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Disconnection and reconnection procedures

Specifications for the conditions of terminations and renewal of water provision.

Water and Sanitation Service Provider

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Connection procedures

Specifications for the conditions regarding water connections.

Tool

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Project management procedures/processes

A carefully planned effort to accomplish a specific objective of a project.

Water and Sanitation Service Provider

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Standard operating procedures

Written instructions that document the “who”, “what”, “where” and “when” of an activity.

Water and Sanitation Service Provider

Read

Staff supervision and inspection

Quality control of staff’s performance by line managers or personnel who are not direct superiors.

Water and Sanitation Service Provider

Read

Standards in contracts

Particular work standards and essential characteristics which the contractor has to fulfil.

Water and Sanitation Service Provider

Read

Payment procedures

Effective control and authorisation of expenditures.

Water and Sanitation Service Provider

Read

Asset management

A guide to plan, acquire, maintain, operate, renew and dispose assets.

Water and Sanitation Service Provider

Read

Anti-corruption commitments in contracts

Contractual commitments to implement anti-corruption measures against the main types of corruption.

Water and Sanitation Service Provider

Read

Dispute resolution mechanism

Alternatives to litigation through the judiciary system can be incorporated in contracts.

Water and Sanitation Service Provider

Read

Integrity pacts

Agreements between project owners, bidders/contractors and civil society organizations to abstain from illicit practices.

Water and Sanitation Service Provider

Read

Field inspections

Regular monitoring of field staff and contractor performance by dedicated field inspectors or supervisors.

Water and Sanitation Service Provider

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Sensitization of contractors/partners

Familiarise contractors with integrity issues and the project owner’s values and norms.

USER / CUSTOMER RELATIONS - SERVICE DELIVERY

Water and Sanitation Service Provider

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Manipulation of meters and meter readings

Customers and meter readers might collude to reduce water bills.

Water and Sanitation Service Provider

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Bribes for speedy connections or repair work

Customers voluntarily or involuntarily make illegal payments to secure or expedite services.

Water and Sanitation Service Provider

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Bribes for illegal (re-)connections

Staff might use knowledge and equipment to set up illegal connections in exchange for bribes.

Water and Sanitation Service Provider

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Bribes to postpone disconnections

In order to avoid disconnections, customers may collude with field staff and administrative staff or be extorted by field staff to pay bribes.

User & Customer Relations - Service Delivery

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Extortion in service and product provision

Staff abuses its authority to extort bribes and favours.

User & Customer Relations - Service Delivery

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Collusion in service or product provision

Customers bribe SME staff in exchange for favours at the SME’s expense.

Water and Sanitation Service Provider

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Non-cooperative customers

Customers may not assume their responsibilities such as paying bills on time and cooperating with field staff.

Water and Sanitation Service Provider

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Insufficient customer orientation

Organizations fail to focus on who they are supposed to serve.

Water and Sanitation Service Provider

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Insufficient responsiveness to complaints

An insufficient customer complaint management negatively affects the organization’s reputation and legitimacy.

Water and Sanitation Service Provider

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Water development pact

A Memorandum of Understanding on a collaborative approach improving service delivery by utilities and users.

Water and Sanitation Service Provider

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Service charter

A social contract between utility and customers that informs about practices, services, rights and obligations.

Water and Sanitation Service Provider

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(Semi-)automatic water meters

(Semi-)automatic water meters measure and communicate consumption for monitoring and billing and make manual reading obsolete.

Water and Sanitation Service Provider

Read

Meter reading procedures

Specifications on regular and manual checks on consumers’ water meters.

Water and Sanitation Service Provider

Read

Illegal connection control

Proactive, effective and comprehensive identification and investigation of illegal connections.

Water and Sanitation Service Provider

Read

Disconnection and reconnection procedures

Specifications for the conditions of terminations and renewal of water provision.

Water and Sanitation Service Provider

Read

Connection procedures

Specifications for the conditions regarding water connections.

Water and Sanitation Service Provider

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Civil society/user engagement and participation

A process that involves the participation of ordinary people that are affected by the utility’s activities and decisions.

Water and Sanitation Service Provider

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Transparent prices/fees/charges, pricing policy

Providing access to information on price structure and setting.

Water and Sanitation Service Provider

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Complaint management system

A system that allows customers to register their dissatisfaction with the organization.

Water and Sanitation Service Provider

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Transparent customer communication

Provision of all required information to customers.

Water and Sanitation Service Provider

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Billing system

Clear rules and procedures for issuing, monitoring and documenting bills and payments.

Water and Sanitation Service Provider

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Transparent bills

Customers receive understandable bills with full information on the services that they are being charged for.

POLICY - REGULATION

Water and Sanitation Service Provider

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Confusing regulatory framework

Lack of clarity, regulatory gaps and frequent changes in the regulatory framework.

Water and Sanitation Service Provider

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Poorly enforced integrity regulations

Many legal and regulatory provisions are either not enforced or adherence to them not supervised in practice.

Water and Sanitation Service Provider

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Lobbying

Lobbying is about legitimately advocating for a certain change in policies or practices, often in collaboration with similar or like-minded actors.