Per diem fraud is one of the most common issues that the OIG has examined to date, with 22 investigations in 20 countries. Sometimes, such as in training events, per diem fraud forms part of a larger scheme to embezzle larger amounts of money.
This leads to training, outreach and other programmatic activities not being undertaken, meaning money is diverted from saving lives to personal gain.
Perhaps in proportion to the high number of training events run in Global Fund grants, fraud in training-related per diems is the most commonly detected.
However, we also see fraud within the framework of conducting data surveys and in meeting and advocacy-related per diems.
Proportion of wrongdoing dected by OIG in relation to per diem types
Prohibited Practices in relation to Per Diems
- 48% - Misrepresentation
- 8% - Falsified
- 4% - Manipulation – data and documents
- 12% - Embezzlement
- 4% - Misappropriation
- 4% - Conflict of Interest
The most commonly found prohibited practice during our investigations into per diem fraud is misrepresentation. This is because a scheme can produce many dozens of fabricated receipts and other financial documents in an attempt to cover-up the fraud.
Embezzlement is classified as an abusive practice, and is often the outcome of the fabricated documents designed to hide it, which is also a prohibited practice in Global Fund grants.
During one investigation, the OIG found that more than USD 3.8 million had been embezzled by a group of staff working together at an implementer to defraud the Global Fund by:
- Misrepresenting or inflating the amounts paid to hotels for meetings and rooms;
- Inflating daily allowances, transport, stationery and fuel expenses;
- Claiming for travel not taken;
- Inflating the number of attendees at meetings.
In other investigations, the OIG has found that per diem fraud is linked to wider fraudulent travel-related costs schemes. These regularly include the forgery of supporting documents for other types of travel claims (such as airline tickets and fuel receipts) to give the false impression that travel was undertaken.
Often, a lack of control measures or oversight facilitate per diem fraud. Good practice in control measures to prevent per diem fraud include the following:
- Strict segregation of duties between finance and operational staff.
- Use of professional computer-based accounting systems.
- Ensuring all people who receive per diems sign and confirm receipt
- Including people’s contact details on attendee sheets and other paper-based documents supporting per diem claims
- Robust and regular oversight visits by managing implementers or assurance providers, which includes contacting a sample of people who have claimed per diems
- Avoiding making payments for per diem claims by cash, and instead through direct bank or mobile phone transfers.