HDF takes a zero-tolerance approach to fraud and HDF management requires all its fund recipients (i.e. HDF grantee, sub grantees, contractors and agents acting on behalf of HDF) to take action against any fraud regardless of its size or nature.

HDF requires its fund recipients to adopt a zero-tolerance approach to fraud and to provide adequate training to all its staff to ensure fraud risks are effectively managed and fraud prevention measures implemented in a timely manner.

Any actual or attempted act of fraud or corruption by HDF fund recipients should be thoroughly investigated by the designated parties in this policy. HDF fund recipients found to be involved in actual or attempted fraud or corruption of any kind will be subject to disciplinary action up to and including contract termination, and may be reported to law enforcement authorities for criminal prosecution as appropriate. HDF will endeavour to recover, by any and all legal means, any funds or property lost through fraud from those responsible.

Fraud includes any intentional or deliberate act to deprive another of property or money by guile, deception or other unfair means.

The principal categories of fraud include but are not limited to:

• Misrepresentation of material facts – the deliberate making of false statements to induce the intended victim to part with money or property.
• Concealment of material facts – where the material facts were known by the organisation, and where the organisation had a duty to disclose those facts and failed to disclose them in order to mislead or deceive the other party.
• Bribery – a form of corruption defined as the offering, giving, receiving or soliciting of anything of value to influence an act or a decision.
• Extortion – the obtaining of property from another with the other party’s ‘’consent’’ having been induced by wrongful use of actual or threatened force or fear.
• Conflict of interest – when an employee, agent or someone who is authorised to act on behalf of a principal, has an undisclosed personal or economic interest in a matter that could influence his professional role.
• Forgery – when a party fraudulently makes or alters a false writing or instrument that has apparent legal or financial significance with the intent to defraud.
• Theft – includes misappropriation and misuse of funds, assets and data.
• Breach of contract – when a party to a contract fails to perform, or announces that it does not intend to perform his contractual obligations without just cause.
• Breach of fiduciary duty – when people in a position of trust including directors and high-level employees, fail to act with care and in the best interest of their organisation.

HDF is committed to preventing and combatting fraud and corruption and to the development of an anti-fraud and anti-corruption culture within all the organisations it funds.

To achieve this, HDF will:

• Ensure effective controls are developed and maintained, within the organisations it funds, to prevent fraud and corruption at all levels
• Ensure that if fraud or corruption is suspected in relation to a grant funded by HDF, a vigorous and prompt investigation will take place, either conducted by the grantee or by HDF or agents acting on behalf of HDF where applicable
• Where justified, take appropriate disciplinary and legal action in cases of fraud and corruption affecting its grantees and/or grants it funds
• Take all appropriate and reasonable steps to recover any financial losses
• Where applicable and in partnership with grantees, review systems and procedures to prevent similar frauds or acts of corruption happening again and
• Ensure fraud and corruption risks are identified and monitored in all its grants

HDF fund recipients are responsible for the day-to-day prevention, detection and, where applicable, resolution of fraud and corruption within their organisation.

Prevention

HDF fund recipients are responsible for:

• Acting with propriety in the use of HDF funded assets and resources
• Setting the tone at the top of the organisation to encourage a zero-tolerance approach to fraud
• Designing and implementing a fraud risk management system and anti-fraud policy
• Ensuring that employees and third parties are made aware of the organisation’s anti-fraud policy and, where applicable, HDF’s anti-fraud policy, and their responsibilities hereunder
• Training all employees with regard to the fraud risk management system and policy
• Identifying the risks of fraud within their organisations including operations, programmes, projects, etc.
• Designing and implementing effective controls to prevent and detect fraud and corruption

Detection

HDF fund recipients are responsible for:

• Ensuring that controls are being implemented by the relevant employees within the organisation
• Providing the appropriate reporting channels to employees and relevant third parties to report any suspicious acts
• Providing an appropriate investigative response where suspicions acts are reported to the organisation
• Ensuring evidence of wrongdoing is appropriately collected and safeguarded
• Preparing or commissioning the preparation of an investigation report
• Responding to recommendations made in the investigation report.

Resolution

HDF fund recipients are responsible for:

• Declaring at the earliest opportunity any actual or apparent conflict of interest having a bearing on their responsibilities
• Alerting HDF of any allegation of fraud before the start of an internally initiated investigation
• Reporting to HDF any suspected or actual fraud or corruption or any suspicious acts or events which might give rise to a suspicion of fraud or corruption
• Reporting the fraud incidents affecting its organisation to all relevant parties including the organisation’s donors and board members
• Providing HDF with the final fraud investigation report
• Referring to the local authorities where applicable

In cases where the organisation is not in a position or has failed to investigate allegations of frauds or wrongdoing, HDF will conduct or commission an investigation. Under these scenarios, HDF fund recipients will be responsible for:

• Assisting in any investigations by making available all relevant information and by cooperating in interviews with HDF or agents acting on behalf of HDF

All grantees, sub grantees, contractors and agents acting on behalf of HDF, their employees and relevant third parties should refer to the HDF Whistleblowing policy for guidance on how to report suspected and actual acts of fraud and corruption.