system based audit of diakonia · 2014. 4. 8. · diakonia head office, diakonia‘s auditor,...

Final Report 2010-11-18

SYSTEM-BASED AUDIT

OF

DIAKONIA

Ms Cristina A. Rodriguez-Acosta

Ms Stina Waern

Ms Lina Lenefors

Mr Arne Svensson

System-based Audit of Diakonia

2

Table of Contents

1 Executive Summary ............................................................................................................. 6

1.1 Introduction .......................................................................................................................... 6

1.2 Observations and analysis .................................................................................................... 6

1.2.1 The organizational structure ................................................................................ 6

1.2.2 Management of operations ................................................................................... 2

1.2.3 Financial management and control ..................................................................... 3

1.2.4 Aid effectiveness ................................................................................................... 4

1.3 Overall conclusions .............................................................................................................. 4

1.4 Recommendations ................................................................................................................ 5

2 Introduction .......................................................................................................................... 7

2.1 Sida‘s support through the NGO-appropriation ................................................................... 7

2.2 Diakonia ............................................................................................................................... 7

2.3 The co-operation between Diakonia and Sida ...................................................................... 8

2.4 Purpose and scope of this system-based audit ...................................................................... 8

2.5 The Audit team ..................................................................................................................... 8

2.6 Methodology ........................................................................................................................ 8

2.6.1 General approach ................................................................................................. 8

2.6.2 Methodology ......................................................................................................... 9

2.6.3 Reviewed documents and persons interviewed .................................................. 11

2.7 Field visits .......................................................................................................................... 11

2.7.1 Visited regional offices and country offices ....................................................... 11

2.7.2 Visited partner organisations ............................................................................. 11

2.7.3 Core support or project support ......................................................................... 15

2.8 This report and how to read it ............................................................................................ 16

3 Organisational structure .................................................................................................... 16

3.1 Vision, mission statement, goals, policies and activity plans ............................................ 16

3.1.1 Steering documents ............................................................................................. 16

3.1.2 Observations and analysis .................................................................................. 18

3.1.3 Conclusions and recommendations .................................................................... 20

3.2 Mandate and the role of the governing board ..................................................................... 21



3.3 Organization and decision- making .................................................................................... 22




3

4 Management of operations ................................................................................................ 26

4.1 Results Based Management ................................................................................................ 26

4.1.1 Diakonia’s tools and methods for programme cycle management (PCM) ........ 27



4.2 Criteria and procedures for selection of partners and their project/programmes ............... 32



4.3 Involvement and ownership of partners and target groups in planning, monitoring and

evaluation of projects/programmes .................................................................................... 38



4.4 Systems for risk assessment and risk management (including corruption as a risk) ......... 40



4.5 Exit strategies with regard to sustainability of partner organisations as well as to projects and

programmes ........................................................................................................................ 42



5 Financial management and control .................................................................................. 44

5.1 Financial systems ............................................................................................................... 44



5.2 Compliance with Agreements ............................................................................................ 47



5.3 Transfers of funds and bank and cash holdings ................................................................. 50



5.4 Systems, rules and routines for procurement ..................................................................... 52



5.5 Audits ................................................................................................................................. 53



6 Aid effectiveness ................................................................................................................. 57



4


7 Sammanfattning (Executive Summary in Swedish) ........................................................ 61

7.1 Inledning ............................................................................................................................... 61

7.2 Observationer och analys ..................................................................................................... 61

7.2.1 Organisationsstruktur ............................................................................................... 61

7.2.2 Verksamhetsstyrning ................................................................................................. 62

7.2.3 Ekonomisk styrning och kontroll ............................................................................... 63

7.2.4 Biståndseffektivitet .................................................................................................... 63

7.3 Övergripande slutsatser ........................................................................................................ 64

7.4 Rekommendationer .............................................................................................................. 65

Annexes (Separate document)

Annex 1 Terms of Reference

Annex 2 Inception Report

Annex 3 Validation Matrix

Annex 4 Persons Interviewed and Consulted

Annex 5 Documentation of Materials Reviewed and Cited

Annex 6 Brief field visit reports from partner organisations

Annex 7 Notes on AWEPON

Annex 8 Notes on KEWWO

Annex 9 Diakonia‘s policy


5

Acronyms and Abbreviations

ACT Action by Churches Together

AWEPON African Women´s Economic Policy Network

CJPC Catholic Justice and Peace Commission

CO Country office

CSO Civil Society Organisations

EFK Evangeliska Frikyrkan

EPZ Export Processing Zones

ESA Eastern and Southern Africa

HAP Humanitarian Accountability Partnership

HO Head office

KEWWO Kenya Women Workers Organization

NGO Non-Governmental Organization

OVC Orphaned and Vulnerable Children

PCM Programme cycle management

PHS Project Handling System

PME Planning, Monitoring and Evaluation

PO Partner Organisation

RBM Results based Management

RFP Request for Proposal

RO Regional office

SA Svenska Alliansmissionen

Sida Swedish International Development Cooperation Agency

ToR Terms of Reference


6

1 Executive Summary1

1.1 Introduction

The base and board of Diakonia are presently five Swedish protestant churches: the Swedish Alliance

Mission, the Baptist Union of Sweden, Inter Act, the United Methodist Church and the Mission

Covenant Church of Sweden. Diakonia works for a fair and sustainable development characterised by

respect for all human rights, democracy, gender equality, economic and social justice, and peace and

reconciliation. Diakonia believes a strong and vigorous civil society is of fundamental importance for

any development to be sustainable. Diakonia seldom carry out development activities of its own in

the South, but supports local partner organisations. Together with members of the congregations

Diakonia works in Sweden with popular education, mobilisation, campaigning and fundraising.

1.2 Observations and analysis

The Audit Team has analyzed relevant documentation available at Diakonia and Sida. The Audit

Team has carried out field visits to the regional offices for Eastern and Southern Africa (ESA) and

Latin America and the country offices in Peru, Colombia and Kenya to study documentation and

interview key informants. To study the whole organisational chain the field visits have also included

visits to a sample of 15 Partner Organisations to review their systems and interview representatives of

the Partner Organisations. The Team has also conducted interviews with staff at Sida, staff at

Diakonia head office, Diakonia‘s auditor, Diakonia‘s Chair of the Board and a sample of four other

members of Diakonia‘s Board. In total some 135 persons have been interviewed.

In summary, the Audit Team‘s observations and analyses are the following using the structure of the

Audit questions per ToR:

1.2.1 The organizational structure

Vision, mission statement, goals, policies and activity plans:

Diakonia‘s task, overall objective and vision are shared by the Board and staff and all well rooted

throughout the organisation. Among the Partner Organisations Diakonia is appreciated not only for

the funds but also for the shared values and the added-value of the support to the capacity

development. However, the Team is of the opinion that changes in the membership structure of the

discussed magnitude may have the potential of jeopardising the business should the values, mission

& vision be significantly changed without having a consensus among the most important

stakeholders

Mandate and the role of the governing board:

The mandate and the role of the Board are clear. However, the changes in the membership structure

will influence the Board and create a significant risk for Diakonia that must be adequately addressed.

The consequences of the merge of three of the five member organisations into one and the risk that

1 En sammanfattning på svenska återfinns i kapitel 7. The Executive Summary is translated into Swedish in Chapter 7.


2

the remaining two member organisations will withdraw their membership should be carefully

analysed.

Organization and decision- making:

Diakonia is in the process of establishing a more decentralised structure facilitating flexibility and

ability to adapt to new circumstances and development needs. So far this process has proven to be

successful. Performance contracts and annual appraisals would increase the results orientation and

secure a good working environment with clear expectations and adequate feedback where good

results are acknowledged and rewarded.

The organisation and the decision-making mandate and delegation procedures are clear. The PHS is

well suited for Sida-funded programmes and projects. However, it is not flexible enough to handle

funding from EU and UN.

1.2.2 Management of operations

Results based management (RBM):

Diakonia at all levels as well as its Partner Organisations are making significant efforts to increase

the results orientation. The PME Handbook defines minimum standards for the PCM in a

comprehensive and adequate way. The PME Handbook and the PHS are used in practice at all levels.

The Management Reports provides a key information flow from the Country Programmes to the RO

and the HO. RBM is practiced but there is room for improvements when it comes to formulating

clear objectives and measurable results indicators.

Criteria and procedures for selection of partners and their project/programmes:

The criteria for selecting countries and building programmes are adequate and used in practice in the

ongoing restructuring and decentralisation process. However, it may not always be possible to get

funding to a comprehensive Country programme of the required size. The criteria for choosing

Partner Organisations and maintaining partnership are also adequate and used in practice.

Involvement and ownership of partners and target groups in planning, monitoring and

evaluation of projects/programmes:

Diakonia has a well developed view on the involvement and ownership of partners and target groups

in planning, monitoring and evaluation of projects/programmes with clear distinction between

Diakonias responsibility for its programmes and the Partner Organisations responsibility for their

programmes and projects. These fundamental principles for Diakonia‘s cooperation are adhered to at

all levels. However, baseline information is seldom gathered in a systematic way.

Systems for risk assessment and risk management (including corruption as a risk):

The decision memorandums made up in PHS include risk analysis. Diakonia has a Zero tolerance on

corruption. The format and instructions for reporting suspicions of corruption or misuse of funding

are comprehensive. In the studied Country programmes there are few incidents on suspected

corruption or misuse of funding. These incidents, however, indicate some weaknesses in Diakonia‘s

processes and division of responsibilities in case of suspicion of corruption or misuse of funding.

Exit strategies with regard to sustainability of partner organisations as well as to projects and

programmes:


3

Diakonia has routines for closing a programme and criteria for phasing out Partner Organisations.

However, there are no exit strategies with regard to sustainability of Partner Organisations. It seems

to be rare to phase out a partner because it is able to sustain of its own with other funding.

1.2.3 Financial management and control

Financial systems:

All financial information for Diakonia is registered in Visma (information from PHS, Hogia/Flex,

Mysoft and Local financial systems). However, the processes are inefficient due to the use of several

different systems at different levels. There are plans to further develop the financial system as well as

the PHS with the aim to design a comprehensive global system. This will have the potential to

increase the efficiency significantly as the present overlaps and duplications will be eliminated.

Compliance with Agreements:

Diakonia meets Sida‘s terms and conditions with a few exceptions as detailed in this report. The new

agreements with Partner Organizations and the close monitoring of the Partner Organisations internal

control system has the potential of securing that the Partner Organisations also comply with the

regulations. However, the monitoring of the Partner Organisations internal control system should be

done more systematically through more frequent visits to the partners. In order to avoid reporting

through several levels it might in some cases be possible to use tripartite contracts.

Transfers of funds and bank and cash holdings:

One of the tree visited Country offices requires only one signature for check payments, bank

transfers, and financial transactions. Cash payments have in a few Partner Organisations been done in

a way that opens up for misuse of funding and corruption. Diakonia has not always taken adequate

action not even in cases where this problem has been reported by the auditor in the management

letter.

Systems, rules and routines for procurement:

Diakonia has procurement guidelines in place. These should also be applied by the Partner

Organisations. However, in practice procurement is not even regulated in all contracts with Partner

Organisations. Some Partner Organisations have procurement regulations in place that are meeting

International standards. Other Partner Organisations are practicing procurement in a way that opens

up for corruption and misuse of funding.

Audits:

In member-based Partner Organisations it is stressed that the Auditor‘s report is directed to the

members. The Management letter should be available for the Board, the members and the donors

upon request. Some local auditors are reluctant to issue both specific Audit Certificates and Audit

reports arguing that their Audit opinion in the Audit report is what they are required to deliver

according to the International Accepted Standards they are using. The competence is high enough at

all levels of Diakonia to analyse audit reports and management letters. However, there is need to

improve the processes when it comes to how Diakonia act in practice on suspected irregularities.


4

1.2.4 Aid effectiveness

Diakonia respect the Partner Organisations‘ ownership and is actively supporting the further

development of their capacity. Diakonia try to align with the Partner Organisations‘ own systems and

procedures as far as possible. Diakonia also tries to coordinate reporting and harmonise requirements

with other donors to a particular Partner organisation. Diakonia has been active in the area of aid

effectiveness especially on the global level. Diakonia has declared its awareness of the need to

continue to work pro-active in this regard.

1.3 Overall conclusions

The aim of the System-based audit is in the ToR stated as quoted in the table below. The Audit Team

has for each aim summarized the overall conclusions in the table.

Aim of the System-based audit The Audit Team’s assessment

to examine the reliability and relevance of the

systems for operational and financial control that

exist in Diakonia, and to assess to what extent that

the systems are adhered to and implemented on all

levels within the organization

1. The systems for operational and financial control

at Diakonia are relevant and reliable. However, there

is a tendency not to act systematically and fast

enough when corruption or misuse of funding can be

suspected.

2. The systems are implemented on all levels within

the organization. The internal systems used by

Partner Organisations are in most cases meeting at

least an equivalent standard. However, some Partner

Organisations have weak internal control.

to determine, on the basis of the examination,

whether the documentation and reports received

by Sida under current agreements reflect the real

situation, and can therefore be considered to

function as reliable data for Sida in the assessment

processes

The documentation that is received by Sida under

current agreements reflects the real situation, and can

therefore be considered to function as reliable data

for Sida in the assessment processes.

to assess if Diakonia meets Sida‘s terms and

conditions, as well as assess if their control system

secure that the partners also comply with these

regulations

1. Diakonia meets Sida‘s terms and conditions with

few exceptions as detailed in the report.

2. Diakonia‘s control system secures that the

partners also comply with these regulations with few

exceptions as detailed in this report.

to provide inputs to the organization‘s processes

of change and systems development.

The Audit Team has in the report provided Diakonia

with concrete recommendations on how to further

develop the management systems.

The more detailed conclusions are summarized at the end of each section.


5

1.4 Recommendations

The recommendations are presented at the end of each section. The recommendations proposed

herein are consistent with the major findings and conclusions presented above. The Audit Team has

the following recommendations in order of priority2:

Highest priority (in the order they appear in the report):

Diakonia goes through a transparent institutional visioning process with the aim at reaching

consensus on the long-term direction and a shared vision within the framework of the new

membership architecture (section 3.1)

The impact of the changes regarding Diakonias member organisations should be carefully

analysed including a risk assessment (section 3.2)

Diakonia should introduce Performance contracts and annual appraisals (section 3.3)

PHS should be developed as intended to facilitate also the operations of projects funded by

the EU, the UN and other donors (section 3.3)

The PME Handbook should be further developed in order to increase the flexibility on RO

and CO levels especially when Programmes have support from others than Sida (section 4.1)

Objectives and results indicators for programmes and projects should be thoroughly

developed in order to provide necessary and valid information for the further development of

the programmes and projects (section 4.1).

Diakonia should assist its Partner Organisations in introducing Results Based Management

and the development of precise and measurable objectives and results indicators (section 4.1).

Diakonia should continue its efforts to implement participatory monitoring and evaluation

systematically in cooperation with its Partner Organisation (section 4.1)

Diakonia HO should give RO systematic feed-back on the reports (section 4.1)

In targeted countries where it is difficult to finance a cost-effective programme through core

funding Diakonia should consider reviewing the design of the Country programmes in order

to facilitate having a project portfolio financed by different donors in addition to the core

programme (section 4.2)

Diakonia should implement a model for risk assessments and risk management (section 4.4)

Diakonia and its Partner Organisations should carefully follow up the misuse of funding that

has been reported in the past and continue to report any suspected misuse in the future.

(section 4.4)

Diakonia should implement a common process on how to handle reported incidents and mis-

use of funding (section 4.4)

Incident reports should always be written in PHS without delay (section 4.4)

When incidents of suspected misuse of funding has been reported in a partner organisation the

Regional manager should be responsible for the investigation and the investigation should be

carried out at the regional office (section 4.4)

Diakonia should intensify its efforts to increase the compliance with the agreements with Sida

(sections 5.2)

Diakonia should monitor the Partner Organisations‘ internal controls systems in a more

systematic way (section 5.2)

2 The recommendations with highest priority are marked (h) in the relevant section.


6

Diakonia should consider using tripartite contracts when activities are being coordinated by a

Partner Organisation but implemented by other organisations (section 5.2)

As a precaution all checks and financial transactions should be signed by two people (section

5.3)

Diakonia should require that cash payment in Partner organisations should not be allowed for

payment over for example 1 000 SEK (section 5.3)

Diakonia includes procurement regulations in all contracts with Partner Organisations (section

5.4)

Diakonia in its follow up of the Partner Organisations internal control secure compliance with

the procurement regulations (section 5.4)

Diakonia should establish routines and incentives that guarantee that audit reports, audit

certificates and management letters are submitted in time (section 5.5)

Lower priority (in the order they appear in the report):

Diakonia should develop a communication strategy for the organisation globally (section 3.1)

Diakonia should review its reporting system with the aim to avoid duplications and focus on

relevant information for different stakeholders (section 4.1)

Diakonia should in its dialog with Partner Organisations more explicit ask for risk

assessments and information on risk management (section 4.4)

Diakonia should clarify the criteria for different types of partnership with and without

financial support (section 4.5)

In the agreements with the Partner Organisations Diakonia should request them to conduct

baseline studies (section 4.5)

Diakonia continues its efforts to implement an efficient financial management system (section

5.1)

Diakonia should visit the Partner Organisations more frequently for monitoring their internal

control system (section 5.2)

Diakonia should agree on realistic deadlines particularly in the case of projects funded

through Partner Organisations head offices to lower organisational levels (section 5.2)

Diakonia should change the requirements when it comes to signing the contracts to comply

with the Partner Organisation‘s own regulations (section 5.3)

Diakonia should advice its Partner Organisations that the Management letter should be

available for the Board, the members and the donors upon request (section 5.5)

Diakonia should make efforts to have regular meetings with other organisations that support

partners in the same country (section 6)

Diakonia should always actively participate in meetings that the Partner Organisations are

organising for their funders (section 6)

Diakonia should discuss the added value of regional cooperation with regional churches and

networks (section 6)


7

2 Introduction

2.1 Sida’s support through the NGO-appropriation

The goal with Sida‘s support to civil society in development co-operation is to promote the

development of a vibrant and democratic civil society that improves the possibilities for poor people

to improve their living conditions3. This objective also encompasses support to and through Swedish

Civil Society Organisations (CSOs) via the appropriation for non-governmental organisations (NGO-

appropriation).

Sida gives high priority to efficiency and quality assurance in its development co-operation. Within

the framework of its responsibility to exercise controls, Sida has the assignment of following up that

development co-operation funds are used efficiently for intended purposes, regardless of how the

funds are channelled. Sida‘s basic approach in respect of ownership of contributions implies that its

development co-operation partners are responsible for the implementation of contributions, and thus

that partners also have the responsibility for exercising control of its operations.

To enable Sida to follow up whether the frame organisations are able to fulfil their contractual

obligations vis-à-vis Sida, Sida has decided to make regular system-based audits of the organisations

with which Sida has framework agreements on grants from the appropriation for CSOs.

2.2 Diakonia

Diakonia is a Christian organization that together with local partners works for sustainable change for

the most vulnerable and poor people in the world. Diakonia is formed by five Swedish churches that

initiated its work in 1966. Diakonia‘s member organisations are: The Swedish Covenant Church

(Svenska Missionskyrkan), Interact (Evangeliska Frikyrkan), The Baptist Union of Sweden (Svenska

Baptistsamfundet), Swedish Alliance Mission (Svenska Alliansmissionen), and The United Methodist

Church in Sweden (Metodistkyrkan). The aim of their work is for all people to be allowed to live under

dignified circumstances in a just and sustainable world, free from poverty. Its central work areas are

democratization, human rights, economic and social justice, and peace and reconciliation. The work

is carried out in partnership with approximately 400 local organisations, associations and popular-

based movements in more than 30 countries.

Diakonia's head office is situated in Sweden. The head office has about 36 employees working with

coordination of development work, information, education, opinion building, advocacy, fundraising,

marketing and administration.

Diakonia has regional offices in Africa, Asia, the Middle East and Latin America as well as local

offices in most of the 30 programme countries. The regional offices are responsible for the overall

work and decisions about the activities in the regions. In the regional office there is a manager,

executive officers and staff responsible for defined programmes. Their task is to closely follow and

support programmes and partners and also to monitor, evaluate and report results. This work is

carried out in close cooperation with the staff at the local offices and the partner organisations.

3 Policy for Sida‘s support to civil society in development cooperation, Sida, 2007


8

2.3 The co-operation between Diakonia and Sida

Diakonia has had a framework agreement with Sida since the early 1990‘s. Diakonia has received

330 400 000 SEK from Sida for its programme for 2008-2010. In 2010, Diakonia will submit a

funding proposal for a one-year transition period.

2.4 Purpose and scope of this system-based audit

The aim of the system-based audit is:

to examine the reliability and relevance of the systems for operational and financial control

that exist in Diakonia, and to assess to what extent that the systems are adhered to and

implemented on all levels within the organisation;

to determine, on the basis of the examination, whether the documentation and reports received

by Sida under current agreements reflect the real situation, and can therefore be considered to

function as reliable data for Sida in the assessment processes;

to assess if Diakonia meets Sida‘s terms and conditions, as well as assess if their control

system secure that the partners also comply with these regulations

to provide inputs to the organisation‘s processes of change and systems development.

2.5 The Audit team

Sida has commissioned the Swedish management consultancy company Professional Management

AB to carry out the system-based audit. The Audit Team consists of four consultants Ms. Cristina A.

Rodriguez-Acosta, Ms. Stina Waern, Ms. Lina Lenefors and Mr. Arne Svensson (team leader). Ms.

Barbro Svensson has assisted the team.

2.6 Methodology

2.6.1 General approach

Professional Management‘s audits are always conducted in accordance with internationally accepted

standards issued by INTOSAI and IFAC. These include international standards on auditing and

international standards on review engagements.

The Inception Report submitted to Sida 2010-05-26 is attached at Annex 2.

The ToR have provided a comprehensive set of areas to be studied where the Audit Team has

documented current status and identified the observations regarding validity/importance, compliance

and enforcement wherever appropriate. The Audit Team has applied a three-pronged approach in

order to collect data for meeting the objectives and ensuring that audit findings, analysis, conclusions

and recommendations are based on evidence. In order to ensure the full exploration of all the

elements underlying ToR and the Audit Questions, the Audit Team has devised a validation method

(matrix), which is attached to the report (Appendix 3). The Validation matrix details for each

assignment element the sources of information including the written documentation that is requested


9

and the verification method that has been used. This includes the choices of data collection and

sampling techniques. The validation matrix was attached to the Inception Report.

2.6.2 Methodology

The Audit Team has elaborated on the methodology in the Inception Report (Annex 2 to the Final

Report). After Sida‘s approval of the Inception Report the Audit Team carried out the detailed

planning of the study visits, interviews and review of documentation. The Audit Team has used a

variety of data-gathering techniques:

1. Analyzed relevant documentation available at Diakonia and Sida, and partners in the field;

2. Conducted interviews with Diakonia‘s Chair of the Board and a sample of four other

members of Diakonia‘s Board;

3. Conducted interviews with the Diakonia staff and Diakonia‘s auditor;

4. Conducted interviews with relevant staff at Sida;

5. Carried out field visits to study the whole organisational chain. The field visits has included

mapping and documentation of the management and financial systems and interviews with

relevant staff and stakeholders;

6. Assessed the management systems per ToR;

7. Provided recommendations on how to improve operational management and control at

Diakonia.

Furthermore, the Team has considered the key aspects of the aid effectiveness agenda, i.e. to what

extent Diakonia‘s systems for management and control provides for harmonisation with other CSO

donors, local ownership, alignment with local systems and core funding. In addition the Audit team

has described the view of Diakonia‘s auditor on the audit of framework grants from Sida.

The documentation and verification of findings and observations is detailed for each assignment

element in the Validation Matrix. In brief the major steps in the assessment of each of the assignment

elements per ToR are the following; however, as explained by the validation matrix it varies from one

Audit element to another:

1. Check whether Diakonia has a documented system (We can take as an example the system for

M&E that might include Guidelines, Handbook and/or other documents). Check how the

system was developed, how and by whom it was approved and how it was intended/planned

to be implemented.

2. Check if relevant staff at Diakonia is familiar with system and know how it should be used.

3. Check how the system is used in practice at Diakonia. Check reports against defined quality

standards.

4. Check how the system is used in practice at Diakonia‘s regional offices and country offices.

Check if relevant staff at the regional and country offices is familiar with the system and

know how it should be used. Check reports against defined quality standards.

5. Check if each one of the Partner Organisations has a documented system. Check if the system

meets at least the Diakonia requirements. Check if staff at the Partner Organisations HQ is

familiar with the system and Diakonia‘s requirements. Check reports against defined quality

standards.

6. Check reports from the Partner Organisations local branches and programmes/projects against

defined quality standards.


10

The final stage in the analysis of data consists in combining results from different types of sources.

As is detailed in the validation matrix the data-collecting techniques – studies of written documents,

observations, interviews etc - that are used varies from one audit element to another. Thus, the

evidence is a combination of documentary, physical, testimonial and analytical. In this way the Team

has provided reasonable assurance that audit evidence is competent (valid and reliable) and actually

represents what it purports to represent. The audit criteria representing the normative standards

against which the audit evidence is judged varies also; however, in many cases there is establish

international best practice or good practice to compare with.

The system-based audit includes the whole organisational chain within Diakonia as well as the

Partner Organisations. Thus, the relationship, communication, reporting etc has been studied at all

levels; (1) HO in relation to the regional offices, (2) the regional offices in relation to the country

offices, (3) the country offices in relation to the Partner Organisations. The Team has assessed the

role of the regional office in relation to the HO as well as its relation to the country

offices/programmes.

The selection of Partner Organisations to visit has been made in the Inception Phase. Initially we

have aimed at identifying specific risks in connection to individual Partner Organisations or groups of

Partner Organisations. In addition, in the Tender the Team proposed criteria for the selection of

Partner Organisations. Our understanding of Diakonia‘s way of working was that the following

aspects should be taken into consideration:

Diakonia supports partners that work nation wide, as well as in specific regions of the country

with a focus on marginalised areas. Diakonia also works with partner organisations on various

levels in the region. Some partners have the characteristics of grass root movements; others

are NGOs working on national and international level. A significant number of the partners

are membership organisations or networks. Thus, the sample of Partner Organisations was

made to be representative in these regards.

The partner organisations have focus on diverse issues, capturing all of Diakonia‘s thematic

areas in different combinations. Their work reaches out to marginalised and vulnerable groups

such as women, children, youth at risk and workers. Thus, the sample of partner organisations

also intended to cover all thematic areas and target groups.

Data-collection is always a compromise between the ideal and the reality. It is seldom economically

possible to interview all stakeholders and visit all locations and partners. Thus, sampling is in reality

necessary in most cases. The sample size can be determined by the application of a statistically-based

formula or through the exercise of professional judgement objectively applied to the circumstances.

As stated in the International Standards the auditor‘s judgement should be used regarding the most

efficient manner to obtain sufficient appropriate audit evidence in the particular circumstances. Thus,

the sample size is determined by the auditor and the final selection of Partner Organisations and

country offices were risk-based and based on the criteria as stated above. Even if the sample of

Partner Organisations and country offices is representative for Diakonia this is not a guarantee for

compliance at all other Partner Organisations and country offices. However, obtaining evidence from


11

all Partner Organisations and country offices would be too expensive relative the benefits. The

sampling is done objectively by the Auditor and is not influenced by Diakonia or Sida.

Available data may be inaccurate, incomplete or conflicting. Thus, the Audit Team has not drawn any

conclusion that is not permitted by the quality of the data. Audit evidence is all the information used

by the Audit Team in arriving at the conclusions. The Team has combined physical evidence, oral

evidence, documentary evidence and analytical evidence in the evidential process. Corroboration of

evidence is the most powerful technique for increasing reliability. In order to ensure that evidence is

competent (valid and reliable) the Team has used the validation matrix (Appendix 3). However, the

sources of evidence are to large extent information generated within the auditee including its Partner

Organisations. Internal information is viewed as less reliable that sources of evidence from outside

the audited entity. However, conclusions and recommendations in this report are never based on

evidence from a single source.

2.6.3 Reviewed documents and persons interviewed

A list of persons contacted and interviewed is attached (Annex 4). The list contains approximately

135 persons. The interviews were semi-structured. Based on the verification matrix a number of pre-

defined questions for each target group were formulated. Departing from these rather broad questions

follow-up questions were formulated individually dependent on the respondents‘ answers.

It is always the responsibility of the audited organization to make sure that all important and relevant

information has been brought to the auditors‘ attention. The Audit Team has studied all relevant

documents that we have been provided with by Sida, Diakonia and the Partner Organisations studied

in the field. A list of documents reviewed is attached (Annex 5).

2.7 Field visits

2.7.1 Visited regional offices and country offices

The Audit Team has conducted the following visits to Diakonia´s regional offices and country

offices:

The regional office for Latin America and the Country Office for Colombia were visited

August 15 – 20, 2010. Peru Country office was visited August 23 – 27, 2010.

The regional office for Eastern and Southern Africa and the country office for Kenya were

visited August 15-20, 2010.

The field visits included studies of partner organisations (please refer to sub-section 2.7.2 and

Appendix 6).

2.7.2 Visited partner organisations

The Audit Team has studied 15 Partner Organisations. These are briefly described in this sub-section.

A brief summary of the main findings at each visit is attached at Appendix 6.

Colombia

The main right holders reached by the Colombia programme are victims of violence, women, afro

descendents and indigenous people. This is done mainly through partner organisations, of which


12

some they self are main target groups. Other target groups are local and national authorities, the

international community as well as public opinion in Sweden and Europe.

The Colombia programme is composed of 19 Partner Organisations. Most of them are located in

Bogotá. Eleven of the Partner Organisations are given institutional support. The programme has a

large number of partners in Bogotá and gives additional priority to the regions of Chocó, Magdalena

Medio and Antioquia. The program is composed of seven NGO:s, three CBO:s, six networks and

three partners with special characteristics ( Dial a network of international cooperation agencies,

Peace Brigades International – PBI and the Fond for Strengthening and Protection – FFP). The

support to several networks (the Alianza, CCEEU and Plataforma Colombiana) covers a large

number of partners and stimulates political coordination and joint actions at national and local level.

Based on the analysis in the Inception Phase the following six Partner Organisations in Colombia has

been studied:

PLATAFORMA COLOMBIANA - A network with around 80 member organizations. Its

main activities are to promote and strengthen economic, social and cultural rights, focusing on

the right to land, the right to education and the right to health.

ILSA – A NGO specialized in ESC rights. One important aspect of its work is the economical

justice within Free Trade Agreements. ILSA‘s main objective is to contribute to democracy

through the redistribution of goods and extensive social services for all people, as an

important matter of justice.

FFP – A joint initiative of Diakonia and its partners aimed at strengthening the security and

protection of social leaders and sectors vulnerable to the internal armed conflict. The work is

based on human rights and International Humanitarian Law and has a strong component of

capacity-building for self-protection.

CINEP/Banco de Datos - Cinep is a Jesuit organization, one of the most recognized human

rights organizations in the country, with wide range of publications and activities on both

civil, political rights and ESC-rights. The overall objectives are to transform the society into

one with social justice and equity. Banco de Datos is part of Cinep and is one of the most

important references regarding information on political violence in Colombia.

AVRE - An NGO specialized in psycho-social work with a human rights perspective,

articulated with actions of prevention, rehabilitation and reconstruction. AVRE supports

individuals and organizations of victims of socio-political violence, with the purpose of

strengthening their capacities, through different social dynamics, psycho-social attention and

organizational processes.

APSCP-NATIONAL – A national peace network whose most important objective is to make

contributions, from a perspective of citizenship, in peace processes between the Colombian

government and illegal armed groups.

Peru

According to Diakonia Strategy Plan 2008-2010 the Peru programme ―is well suited in the regional

programme fulfilling most criteria for choice of country‖. Among the existing partners, two are

networks, 12 are NGOs and one is coordination between three organisations. Seven of the partner

organisations receive institutional support and eight partners‘ project support. The programme

composition takes into account all levels of society where many partners work at several levels at the

same time. The geographical focus is Lima with surroundings and the southern Andean region. The


13

main thematic areas continue to be human rights, democracy and participation in turn corresponds to

the actual context and problem analysis. The main focus on rights holders is on the local and regional

level, reaching out to populations and organisations in rural and marginalised urban areas;

communities, CBOs, unions, associations, universities, opinion leaders; journalists, parliamentarians,

communicators, businessmen, judges, human rights defenders, and authorities at communal,

municipal, regional and State levels with a special emphasis on women.

Based on the analysis in the Inception Phase the following seven Partner Organisations in Peru has

been studied:

APRODEH: Association for Human Rights is a collective dedicated to the defence and

promotion of the HR. Since its foundation in 1983, it has taken on the fight against impunity

and look for truth and justice for all victims of the period of political violence between 1980

and 2000. Aprodeh also make campaigns on the violations on economic, social and cultural

rights.

FLORA TRISTAN: The Centre of Peruvian Women is a feminist organization, with the

interest to support changes in the conditions of Peruvian women and to promote actions that

strengthen their organization and presence in the society. Flora Tristan works both with

women‘s and youth organisations in urban and rural areas and with state institutions and local

and regional governments.

SER: The Association of Rural Educational Service is a development NGO. It supports

efforts accomplished by organized peasants and local promotion teams, defending their rights

and the rural development.

CEPES: Peruvian Center for Social Studies. The main aim is the work for rural development

and the organisation is one of the biggest and most important within this area in Peru. The

work includes peasant and indigenous communities, international trade, rural conditions,

territorial development and environment.

CNDDHH: National Coordinator for Human Rights. It is a network of 65 human rights

organizations all over Peru and one of the most important HR-organisation. They work with

defence, promotion and education of the HR and with the strengthening of democracy.

CNDDHH has a special consultative status at the ECOSOC as well as within OAS.

IDL: It is dedicated to the defence and promotion of HR, peace, democratic values and the

State of Law in Peru. The overall objective is to promote the democratic transition and

thereby avoid that the country lives a similar period of violence as the years 1980-2000 again.

IDL participate and promotes forums debate and coordination, among state institutions as

well as within civil society.

Also, CALANDRIA, the Peruvian Association of Social Communications was visited by the Team.

Calandria is a women‘s right based organization promoting social, economic and cultural rights of

women. Calandria was added to the sample proposed in the Inception report as it turned out that there

was room for one more organisation in the schedule and it was of interest to increase the number of

organisations with project support in the sample.

Kenya


14

The Kenya programme consists of 12 Partner Organisations drawn mainly from National and Local

NGOs, a Women‘s network, FBOs and an economic and development policy analysis think tank. The

partners have focus on diverse issues of concern capturing all of Diakonia‘s thematic areas and an

outreach on marginalised and vulnerable groups such as women, children, youth at risk and workers

especially those in exploitative employment in the horticultural and floriculture industries and in

Export Processing Zones (EPZ). There has also been a focus on marginalised areas especially in the

North Western Kenya where the focus has been work to promote peace and development amongst the

pastoralist communities as well as supporting women‘s involvement amongst the pastoralist

communities. In addition part of the Lake Victoria Livelihoods Programme which is a regional

programme incorporating the three East Africa Countries (Kenya, Uganda and Tanzania) is partly

implemented with partners in Kenya who to an extent are seen to complement the Kenyan

programme especially in the areas of HIV and AIDS awareness, social justice concerns for people

living with or affected by HIV and AIDS and economic empowerment of fisher folks around the lake

region. A significant number of the partners are membership organisations or networks with a (Inter)

national outreach.

Diakonia partners in Kenya especially the FBOs also have a regional and international network and

linkages which they use especially for advocacy purposes. In the Strategic Plan Diakonia‘s

programme compositions has been summarised as follows:

Based on the analysis in the Inception Phase the following Partner Organisations in Kenya has been

studied:

CJPC: The Catholic Secretariat is the Administrative Centre through which the KEC

implements and co-ordinates various pastoral programs. The Secretariat is composed of 14

Commissions. One of these is the Catholic Justice and Peace Commission (CJPC). The

project contributes to results under two themes in the Diakonia Kenya programme

strategic plan: (1) Peace and conflict management and (2) Democracy.


15

MCF: MCF offer support and rehabilitation to girls so as to enable them a dignified life. They

undertake education and vocational training for the children, promote awareness of

HIV/AIDS amongst their children and surrounding communities, offer better health care and

nutrition to their beneficiaries and offer psychosocial support.

2.7.3 Core support or project support

Needless to say, there are a few differences in the way the management systems are practised

when it comes to Partner Organisations that receives core support (budget support) compared to

those who have project support. Thus, it is important that the sample of Partner Organisations for

the field visits include both Partner Organisations with core support and Partner Organisations

with project support.

From the Strategic Plan it is not always clear if a Partner Organisation has core funding or project

funding. For the sample of Partner Organisations above we have checked this in consultation with

Diakonia. Six of the selected Partner Organisations have project support and nine have core funding.

Thus, the Team is in a position also to assess differences in the management systems related to type

of funding.

Colombia

Partner Core funding or Project funding

Plataforma Colombiana Core

ILSA Core

CINEP Core

AVRE Core

FFP Core (administrated by Justapaz)

APS-C Project (administrated by Justapaz)

Peru


APRODEH Core

Flora Tristan Core

SER Project

CEPES Project

CNDDH Core

IDL Core

CALANDRIA Project

Kenya


MCF Project

CJPC Project

Currently, all partner organizations in the Kenya programme receive project support. Their

agreements come to an end this year. Diakonia will get into core funding in the next phase.


16

2.8 This report and how to read it

This Report is divided into six sections as follows:

The Executive Summary in section ONE contains the overall conclusions and the

recommendations.

Section TWO is introductory.

Section THREE focuses on the organisational structure.

Section FOUR is concerned with the management and control of activities.

Section FIVE reviews the financial management systems and internal control.

Section SIX analyses aid effectiveness.

The various sections of the report answer the audit questions pertinent to the overall purpose of the

system-based audit and the elements stipulated therein. At the end of each section the Audit Team has

summarized the conclusions. Based on the conclusions the Audit Team has finally submitted concrete

recommendations in each sub-section. The recommendations with highest priority are marked (h).

These recommendations are summarized and prioritized in the Executive Summary.

3 Organisational structure

3.1 Vision, mission statement, goals, policies and activity plans

In this section we will first identify the vision, mission, goals and policies as formulated in the

steering documents. In sub-section 3.1.2 we will then analyse to what extent these are known and

practiced within Diakonia.

3.1.1 Steering documents

The mission statement is formulated in the statutes as follows:

Diakonias’s task

Diakonias‘s task is to seek God‘s will and based on fundamental Christian values perform its mission

by4:

Working for the freedom and redemption of mankind and to ensure that just and fair

structures are created or restored.

Analysing for forces behind injustice and conflicts from both a theological and social

perspective as well as seeking alternative solutions.

Tackling distribution of wealth issues by exposing unjust structures and working for greater

fairness in the distribution of resources.

Overall Objective

4 Statutes for Diakonia, revised and adopted in June 2

nd, 2007


17

The overall objective of Diakonia‘s work is ―to change unfair political, economical, social and cultural

structures that hinder women and men from living their lives in dignified circumstances”.

Vision

Diakonia has a vision of a world where all women and men can live their lives in dignified circumstances, in a

fair and sustainable world, free from poverty. Diakonia‘s vision is based both on a theological foundation and

on respect for the universally recognised Human Rights.

Diakonia states that to create a fair and sustainable world all people have a shared but differentiated

responsibility. Diakonia therefore works to empower the poor and to challenge the privileged. Qualitative

participation is the key through which women and men can become involved in the process of change.

Everybody must contribute their share, but the rich and powerful have a special responsibility to act. Each

individual has a personal responsibility to the larger social or societal community. A life lived in dignity

presupposes that society as a whole is functioning, that it is characterised by trust between people, by

solidarity and by the sharing of mutual responsibilities and common resources.

Steering documents

The main steering documents are the following:

The Diakonia Policy

The Strategy Plan

The Gender Policy

The HIV and Aids Policy

Position Papers (debt and PRSPs, trade…)

Handbooks

Diakonia’s Policy

The following five themes form the basis of Diakonia‘s policy:

1. Democratisation

2. Human Rights

3. Social and Economic Justice

4. Gender Equality

5. Peace and reconciliation

For a more detailed description of the Policy please refer to Appendix 9.

Diakonia Strategy Plan 2008-2010

The Strategy Plan constitutes the overall steering document for all Diakonia operations for the period

of 2008-2010.

The Strategy Plan for 2008-2010 is divided into following five general parts:

Section A: General Framework briefly explains Diakonia‘s identity, ideological fundament, view of the world,

policy, theory of change, work methods, and organization. In Section B the regional strategy plans for the

period are outlined, one region at the time, including per region one regional part and one part for each

programme. At the end of each regional chapter is the budget. Section C explains the information and

advocacy work implemented in Sweden, the European Union and internationally, including descriptions and


18

strategies for each target group and chosen thematic agendas and positions to be promoted. The section

concludes with a budget.

Section D describes Diakonia‘s organisational development during the period. The section summarises all

internal processes, sets up results and lists main activities to be carried out during the period. Finally, Section

E summarises the budgets from sections B, C and D. In the annex preliminary lists of partners and amounts

for each programme per financing source is presented.

Other policies and strategies

Global Fundraising Policy and Guidelines provides a regulating framework for Diakonia‘s

international fundraising, including ethical, political, technical and administrative principles and

considerations, as well as to set up global fundraising objectives and strategies for how to reach them.

Environmental guidelines for Diakonia‘s head office were adopted 2008-11-13. Diakonia continues

to develop the environment policy.

Guidelines for Diakonia‘s work on HIV&Aids contains a short analysis on how HIV&Aids relate to

Diakonia‘s themes and policy, definition of mainstreaming in the Diakonia context, strategies for

how to mainstream HIV&Aids related issues into the work and a mainstreaming matrix with

instructions and suggested activities for the implementation of the guidelines and how to mainstream.

The Gender manual is a tool to monitor how a gender perspective has been incorporated into the

structures and everyday work of an organisation, looking at the institutional, project and rights

holders‘ levels.

Diakonia has no global communication strategy. However, a strategy document on how to make Diakonia

more known among the Swedish public. It closely defines target groups and how to work to reach out to

these groups. The brand strategy is to be integrated in all communication efforts to present a clear and

persistent image of Diakonia. The long-term plan to reach out to new donor groups and involve them as

Change Sponsors is closely integrated with the brand strategy. Diakonia bases external communication

work largely on stories and accounts collected at partner and project visits, and written material from

partners and staff. The graphic profile helps to maintain a joint basic graphic presentation of Diakonia all

over the world. Campaigning as a working method has shown positive results and Diakonia plans to

develop it even further.

3.1.2 Observations and analysis

The task and the vision are well rooted within Diakonia. The five member organisations are satisfied

with the policies and goals. Staff at Diakonia adheres to the policies and goals. During the field visits,

staff interviewed as well as the partner organisations state that they share the vision and goals of

Diakonia.

Diakonia emphasises that it is primarily lead by its historical identity and the set of values linked to

it. Participation by the constituencies in policy discussions, public awareness campaigns and

advocacy activities is fundamental for Diakonia‘s legitimacy and ultimately its strength in promoting

agendas in Sweden and internationally.


19

There have been discussions on adding environmental protection and/or climate change to the five

themes that form the basis of Diakonia‘s policy5. However, key informants state that other

organisations have more knowledge and experience and are more professional in this area. This leads

them to the conclusion that Diakonia should focus on areas where it has competitive advantages.

On the other hand, Diakonia has indicated that it would phase out some aspects of their Social and Economic

Justice theme. This would negatively affect the work of some counterparts who have concentrated on

economic justice rights under the Free Trade Agreements.

Diakonia has expanded rapidly over the last few years. The size has almost doubled in 12 years6. The

principles are satisfied with the present size of the organisation and the ambition is to consolidate the

activities at this level. The goals and plans are based on that view. However, some of the informants

at the regional and country level are of the opinion that Diakonia should continue to expand as long

as there is a need for support and Diakonia has the capacity to further improve the quality of its

services.

Interviewees are satisfied with the communication strategy for the work in Sweden. However, it is

emphasised that there is a need also for a comprehensive communication strategy for the

organisation globally.

The informants supported by documentation have indicated that there are some important features

defining Diakonia as a development organization:

Diakonia is working close to the partner organisations on the policy processes as well as the

practices on grassroots level

The participatory approach has created trust among partner organisations and the general

public in the countries where Diakonia operates

Diakonia has established a proactive agenda to alter structures that generate and maintain

poverty

In Diakonia‘s long-term work for change focus is put on changing the structures that generate and

maintain poverty. The programmes are intended to not merely deliver direct benefits to poor and

discriminated women and men, but also address the root causes of the problems experienced.

However, the active work among the most vulnerable has showed that there are practical solutions to

these problems and these practices have had more impact on policies than pure advocacy work. Also,

in the advocacy work Diakonia does not merely react on others agendas and proposals, but

proactively tries to influence the agenda and propose alternative solutions based on the organisation‘s

own experience. This is believed to create more trust among policy makers.

There is an uncertainty how the ongoing discussions on major changes on the principal level and the

governance structure will affect the future direction of Diakonia. The process is described as semi-

5 See for example general Assembly 2010

6 The annual turnover was 382 MSEK in 2009 compared to 192 MSEK in 1997.


20

transparent where stakeholders have bits and pieces but few have the full picture of what is being

discussed (please refer to section 3.2 for more details).

3.1.3 Conclusions and recommendations

Diakonia‘s mission statement is its task as formulated in the Statutes. The task, overall objective and

vision are well known within Diakonia and shared by the Board and staff. Among the Partner

Organisations Diakonia is appreciated not only for the funds but also for the shared values.

In addition to the Statues the Diakonia Policy is an important steering document. The Diakonia

Policy sets five basic themes that permeate all work for development and justice. By and large the

principles and other key informants agree on these priorities even if there from time to time have

been discussions on adding themes or focus on fewer themes.

Diakonia has a communication strategy for the work in Sweden but not a comprehensive

communication strategy for the organisation globally. Diakonia is working world wide with an

ambition to increase the support from the Swedish Embassies, the EU, the UN and other funders.

Thus, there is a need to develop such a strategy.

Most Diakonia‘s staff works in the countries where the Partner Organisations operate. Diakonia‘s

decentralised organization facilitates a partnership characterised by trust, needs-based capacity

building, activities to link the Partner Organisations, linking between the work in South and

information work in Sweden, as well as planning, monitoring and evaluation of programmes and

projects.

It may be tempting to conclude that in this highly decentralised structure it is not of significant

importance if there are some changes on the principles level. However, Diakonia has in its steering

documents emphasised that participation by the constituencies in policy discussions, public awareness

campaigns and advocacy activities is fundamental for Diakonia‘s legitimacy and ultimately its

strength in promoting agendas in Sweden and internationally. Thus, the Team is of the opinion that

changes in the membership structure of the discussed magnitude may have the potential of

jeopardising the business should the values, mission & vision be significantly changed without having

a consensus among the most important stakeholders. Thus, the risk may be overcome by a transparent

institutional visioning process with the aim at reaching consensus on the long-term direction and a

shared vision within the framework of the new membership architecture.

The Audit Team recommends that

Diakonia goes through a transparent institutional visioning process with the aim at reaching

consensus on the long-term direction and a shared vision within the framework of the new

membership architecture (h)

Diakonia should develop a communication strategy for the organisation globally (l)


21

3.2 Mandate and the role of the governing board


Diakonia‘s highest decision-making level is the Council of Representatives (representantskapsmötet),

where the five communions (Diakonia‘s member organisations) are represented. Diakonia‘s member

organisations are: The Swedish Covenant Church (Svenska Missionskyrkan), Interact (Evangeliska

Frikyrkan), The Baptist Union of Sweden (Svenska Baptistsamfundet), Swedish Alliance Mission

(Svenska Alliansmissionen), and The United Methodist Church in Sweden (Metodistkyrkan).

The Board is appointed by the General Assembly and is responsible for the financial management

and makes decisions on operational and budget planning based on guidelines established by the

Council of Representatives.

According to the interviews the mandate and the role of the Board has been clear. However, ongoing

changes in the member organisation structure will have significant impact on how Diakonia will be

governed in the future.

Three of the five churches that are members of Diakonia will merge into one. These are the Swedish

Covenant Church, the Baptist Union of Sweden and the United Methodist Church in Sweden. The

preparations have been ongoing for more than a year and the new congregation will be established 1st

of January 2012.

The consequences of this merge for Diakonia has been discussed at several meetings. In addition to

the new huge member organisation there will be only two smaller congregations left among the

present members. The Board of one of these smaller congregations - Interact (Evangeliska Frikyrkan,

EFK) - has 2009 taken a preliminary decision to leave Diakonia. The final decision will be taken

within a year and be coordinated with the other changes of Diakonia due to the merge of the three

organisations. The reason for the preliminary decision to leave Diakonia is that Diakonia‘s profile

was more clearly separated from EFK‘s before. Now there is more of a competition on resources.

When EFK is leaving its membership it calls for a review of the membership also by the remaining

smaller church namely the Swedish Alliance Mission (Svenska Alliansmissionen, SA). This has been

discussed in SA´s Executive Committee (Verkställande utskott) and will be further discussed in its

Board.

There have also been discussions on how to find other member organisations willing to replace the

ones leaving. However, all like-minded organisations are already involved in international

development cooperation in other organisational structures and it is difficult to find other

organisations that share the same basic values. There have been discussions with SMR on the future

cooperation between the two frame organisations.

One idea that has been discussed is to have also the member congregations youth organisations as

member organisations of Diakonia. The Swedish Covenant Church, the Baptist Union of Sweden and the

United Methodist Church in Sweden have established Ekumenia as their joint Youth organisation.


22

A working group has been established to review the statutes of Diakonia. The proposal will be presented

at the Council of Representatives meeting in January 2011 and the decision made at the General

Assembly in June 2011.

Diakonia is administrating the Sida-supported development cooperation of the Baptist Union of Sweden.

The other congregations manage their own international development cooperation. According to the

informants the international work of the congregations sometimes are rather close to what Diakonia is

doing but there is no formal cooperation between Diakonia and its member organisations in the field7.

Diakonia wants to have strong partner organisations with adequate capacity for development

cooperation and the Swedish congregations often support weak churches that do not have the

required capacity for development cooperation.

As indicated above the cooperation between Diakonia and its member organisations has been in

different forms and has been changing over time. A few examples:

The Methodist Church globally is active in all countries where Diakonia is supporting partner

organisations. These partners also sometimes have some kind of connection or cooperation with

the United Methodist Church in Sweden.

The Swedish Alliance Mission and Diakonia had earlier cooperation in South Africa before

Diakonia phased out.

The Swedish Covenant Church (Svenska Missionskyrkan) has discussed to hand over the Sida-

financed projects to Diakonia after the merge.


The mandate and the role of the Board are clear.

The consequences of the merge of three of the five member organisations are, however, not clear and

has not been analysed and discussed enough in a transparent way. In addition too the consequences of

the merge itself, it is possible that the remaining two member organisations will withdraw their

membership. The reduction of the number of member organisations to maybe only one is a

significant change in the governance structure of Diakonia. It will probably have an impact on not

only the governance but also the fundraising from churches and individuals and the relationship with

other stakeholders. It may also influence how Diakonia is organised; one of the alternatives that have

been discussed is to integrate Diakonia as a department of the merged church.


The impact of the changes regarding Diakonia‘s member organisations should be carefully

analysed including a risk assessment

3.3 Organization and decision- making

In this section the Audit Team will cover the following audit questions per ToR:

Decision-making mandate and delegation procedures through the whole organization chain

Authorisations

7 Diakonia shares office in Kinshasa/DRC with the Swedish Covenant Church and the Baptist Union of Sweden


23

Promotion of good administration, transparency in the administration of funds, and

counteraction of corruption

Existence of (and adherence to) office manuals/working orders which stipulate rules for e.g.

decision mandate for travels, rules for per diems, travel reports, segregation of duties etc.


The organisation

On 8 March 2007, Diakonia‘s Board adopted a Decision of Intention regarding an organisational

change. According to the decision, delegation shall be transferred from the head office to the regional

offices, and onward from the regional offices to the country offices. This decentralisation involves a

change in the division of responsibilities and to some extent new roles. More decisions are delegated

to regional offices and program planning and monitoring is decentralised.

The purpose of the change is to conform to Diakonia‘s policy, strategy plans and to meet changed

terms regarding development work as effectively as possible. It is estimated that the decision will be

fully implemented by 2011.

As part of the organisational development process a new structure at the HO has been introduced

with the following departments: Financial and Administrative, International, Human Resources,

Fundraising and Communication, and Policy and Advocacy. The five heads of these departments, the

Deputy General Secretary and the General Secretary forms a Senior Management Group for

coordination of Diakonia. The Group has no decision making power.

The figure below illustrates the new Diakonia organisation:

Sri Lanka

India

Bangladesh

Burma

Thailand

Cambodia

Palestine/Israel

Egypt

Lebanon

Iraq/Kurdistan

General Secretary

Human Resources Dept

Deputy General Secretary

Financial and Administrative

Dept

International Dept

Fundraising and Communication

Dept

Policy and Advocacy Dept

Africa Latin America Asia Middle East

Guatemala

El Salvador

Honduras

Nicaragua

Colombia

Peru

Bolivia

Paraguay Somalia

Kenya

Uganda

Zambia

Zimbabwe

Moçambique

Congo-Kinshasa

Mali

Senegal

Burkina Faso


24

There is an ongoing process at the HO on the manning of the new organisational structure. Some

changes will be made in September and later during the autumn.

During 2010 the process of integrating the regional office for West and Central Africa with the

regional office for Southern and Eastern Africa has began with the aim to create only one Africa

region with its regional office in Kenya. The regional director for West and Central Africa left office

1st of June 2010 and some staff has already been transferred to Kenya. According to the interviews at

the RO in Nairobi the decentralisation process is following the plan. The country office for Kenya

will shortly be separated from the regional office in terms of staff and office space.

South Africa has already been phased out and the CO was closed 1st of May 2010. In addition

Iraq/Kurdistan, El Salvador, Ghana, Senegal and India will be phased out during the period.

During the field visit to Latin America, the process of decentralization was perceived as mostly

successful and useful, but it is understood as an unfinished process. Some interviewees underlined the

importance for allowing for flexibility in the handling of projects and programs.

The Regional managers are meeting each other and the Senior Management Group at the HO twice a year in

Sweden. The formal vertical organisational structure is also supplemented by networks horizontally. Some of

these are clearly defined and others are more ad hoc. For example Diakonia has established three internal

networks relating to global political and economic structures, HIV and aids and Gender equality. The networks

consist of Policy Officers at the HO and appointed focal persons in each region (sometimes staff at the RO,

sometimes at CO).

Order of delegation

Diakonia‘s Order of Delegation8 is intended to clarify the responsibilities and competences for the

following:

To make decisions concerning development of activities.

To make decisions concerning finance and administration.

To make decisions concerning personnel and supervision of work.

To employ personnel.

To be Signing Officers.

To represent Diakonia with representatives, organisations, authorities, the mass media and the

general public.

To be responsible for satisfactory, safe working environment.

8 Order of Delegation dated 15-09-2005; DELEGATION OF DECISION MAKING FOR

FINANCE – PERSONNEL - AND ACTIVITIES


25

The Order of Delegation also includes ―guidelines concerning methods of working within the

regions‖.

In addition Diakonia has decided on a new ―Diakonia Order of Delegation, In accordance with

decision of intent, 2011‖. This document contains transitional rules until 2011. In order to be able to

implement the organisational change progressively in accordance with the Decision of intent 2011,

Diakonia need to work with both the ―new‖ Order of Delegation and the ―old‖ Order of Delegation.

The transitional rules apply in agreement with each region‘s organisational development plan which

has been approved by the Head Office. If things are unclear in the Order of Delegation, the issue is

passed on to the immediate head. The interviewees state that there has been no problems working

with the ―old‖ and ―new‖ Order of Delegation simultaneously.

The Board decides on signatories for bank accounts and money transfers at the HO. The decisions

can be found in the Minutes from the Board meetings. Different types of authorisations are given for

different kinds of transactions. Most common is the right to sign jointly for two signatories (f. e.

payments). A new decision always has to be taken in case of change of staff.

The right to sign bank accounts on regional level is decided by the Regional Manager. The right to

sign bank accounts at country level is also decided by the Regional Manager. In many countries a

particular Power of Attorney from HO is needed in order to be able to sign a bank account in

accordance with local legislation.

Diakonia has established guidelines regarding how to organise and systematise the offices and

workplaces so that important information easily can be found by anyone in the organization9. The

guidelines also regulate how working material shall be treated when a project or a specific activity is

finished, and the material passes on from being active working material to stored archives, or gets

thrown away. The rules apply for all Diakonia workplaces.

The Project Handling System (PHS)

All that is done along the annual cycles of the PME Handbook is registered and – if implying

documentation of some kind – filed in Diakonia‘s computerised project handling system (PHS),

through which also payments to partners and regional and country offices are made and controlled.

Through the PHS the Project Cycle Management (PCM)10

is controlled in terms of confirming that

tasks are being done and done in the right order (e.g. that a contract is preceded by a decision

memorandum). All essential project documentation, such as partner‘s applications, contracts, reports,

etc, is also filed in the PHS. Through the PHS it can be controlled that the quality is in line with the

PME Handbook11

.

There is a manual on how to use the Project Handling System (PHS). However, documents are often

uploaded in the PHS very late12

.

9 Diakonia Archive Rules, Regional and Country Offices, Final version 2009-02-19

10 For details on PCM please refer to sub-section 4.1.1

11 For details on the Handbook please refer to sub-section 4.1.1

12 For example contract for the period starting 1 Jan 2009 uploaded in Nov 2009. For older documents sometimes several

years.


26

Diakonia is in a process preparation for purchasing a new PHS that is better adapted to a multi donor

situation and improved grant management.

It is stated that strengthening partners‘ administrative capacity shall be considered when:

the partner organisation has a deficient financial management, administration or

administrative routines

the narrative and/or financial reporting from partner organisation is deficient

the partner organisation has deficient routines for internal control


Diakonia is in the process of establishing a more decentralised structure facilitating flexibility and

ability to adapt to new circumstances and development needs. So far this process has proven to be

successful.

Not a few Partner organisations use Performance contracts for each staff member with annual

performance appraisals. It is well known that this kind of instruments increase the results orientation.

It is also a useful tool to secure a good working environment with clear expectations and adequate

feedback where good results are acknowledged and rewarded. Diakonia has so far not used

Performance contracts and annual performance appraisals.

The PHS is well suited for Sida-funded programmes and projects. However, it is not flexible enough

to handle funding from the EU and the UN.

The organisation and the decision-making mandate and delegation procedures are clear. However, the

Team proposes some clarifications when it comes to suspected corruption or misuse of funding. This

issue will be dealt with more in detail in sub-section 5.2.


PHS should be developed as intended to facilitate also the operations of projects funded by

the EU, the UN and other donors(h)

Diakonia should introduce Performance contracts and annual appraisals (h)

4 Management of operations

4.1 Results Based Management

In this section we will answer the following audit questions per ToR:

Results based management including the use of the activity plan; and results reports as a

guiding instruments;

Formulation of goals

Systems for planning, monitoring, evaluation and measuring of results


27

Systems for reporting progress and results, and for reporting on deviation from plans

(narrative as well as financial) in a timely manner

Budgeting processes

Firstly, the systems, methods and tools are presented briefly in sub-section 4.1.1. Secondly, the Team has

in sub-section 4.1.2 summarised its observations and analysis. The conclusions and recommendations are

to be found in sub-section 4.1.3.

4.1.1 Diakonia’s tools and methods for programme cycle management (PCM)

The Planning, Monitoring and Evaluation (PME) Handbook

The Planning, Monitoring and Evaluation (PME) Handbook defines minimum standards for the

project and programme cycle management (PCM). This includes manuals and criteria for programme

and project planning, monitoring tools and formats and guidelines for in depth evaluations.

The PME Handbook consists of the following parts:

1. Introduction: Status of the PME Handbook, mechanisms for handbook developments and

exceptions, implementation and future development of the PME Handbook.

2. Programme and Project Management: Hub of the PME Handbook. Checklists for programme

and project cycle management and links to corresponding formats. Who does what and in what order.

3. Planning Manual: Manual for the planning of a strategy plan through six phases, including

Diakonia‘s basic LFA structure and associated concepts, such as indicators, outcomes and impacts.

4. Monitoring Manual: Includes tools, formats and requirements for narrative and financial

monitoring of both programmes and individual projects.

5. Evaluation Manual: Orientation and guidelines for different kinds of evaluations, but also a

manual in terms of what is required from all programmes and projects in terms of evaluations.

6. Phasing Out: Steps to take and issues to consider before and when ending cooperation with a

partner or closing a whole programme.

7. Programme Building: Criteria for choice of country, criteria for programme building, criteria for

choice of partners, giving an added value to the programmes and Diakonia‘s different roles.

8. General Conditions for Partners: Information for potential partners regarding under what

conditions a partnership may be established, including application format to use first time support is

given. The only chapter in the PME Handbook intended for partners.

9. Toolkit: The following tools are briefly explained and accessible through links: the PHS Manual,

the Gender Manual, Guidelines for HIV&Aids Mainstreaming, Directions for SMC‘s work with

evaluations, Looking Back Moving Forward: Sida‘s evaluation manual, and the Octagon.

10. Abbreviations and list of formats: Which formats are minimum formats and which cannot be

changed?

Monitoring

Diakonia states that monitoring of projects and programs have the following purposes:

to make sure that the financial contributions to partners‘ projects or capacity building are

spent in accordance with approved work plans and budgets

to estimate the outcomes and impacts, expected or not, that the projects have lead to

to estimate partners‘ changed capacity due to the capacity building activities Diakonia

supports


28

to estimate Diakonias added value to the programmes in terms of facilitating synergies

between partners and complementing partners‘ work with advocacy work towards Swedish

and European institutions

A central purpose for Diakonia‘s monitoring permeating all the above mentioned, is to learn from

experience in order to become an effective development organisation and a strategic partner and

donor to partner organisations. This means bringing the lessons learned from one cycle into the next

one, but it also means being sensitive to the need for adjustments during a cycle when reality so

requires.

A minimum of monitoring routines and tools have been standardised for the whole organization in

the Monitoring Manual of the PME Handbook. The system rests upon a simplified logical framework

approach (LFA). It has been pointed out that where the EU more elaborate logical framework has

been applied and this is considered a benchmarking tool which could be useful for the development

of the Sida financed developing cooperation work as well. Monitoring of partners‘ projects is

primarily done through visits at the office or at places where the project is being implemented.

Information is also gathered through email and phone conversations with staff at the partner

organisations and the beneficiaries.

Diakonia‘s observations are often documented in PHS. The RO may decide on a using a different

format as long as that format permits to capture the same information as the template in PHS. The

purposes of the log in the PHS are:

to always remember what is important

a space for making notes on advances and difficulties of the project, e.g. individual examples

of change

a space for taking note of short reflections, analysis and lessons learned

to systematise qualitative follow up of each partner

to facilitate communication within the programme team

to provide material for the annual and final reports

the idea is to have a kind of checklist, a reminder of what is important, a guide for

conversation, reflection and analysis, but also for control.

Reporting

From the PHS it is possible to print out pre-defined reports, for example:

Financial programme report with a summary of the budget per financing source, allocations

and expenditure for each programme.

Annual financial report including the budget with financing source for each programme and

the allocations for each project and expenditures.

A list with documents connected to a project for a specific cost centre.

Requisition report with information about payments, which have been done in PHS

Contact person report - a list with the partner addresses, telephone and contact person.

Stakeholders bank information with information about partners‘ bank and bank account.


29


Diakonia at all levels as well as its Partner Organisations are making significant efforts to increase

the results orientation. The PME Handbook defines minimum standards for the PCM in a

comprehensive way. It provides tools, guidance and basic requirements. The Handbook also

establishes who does what and when, although the division of responsibilities is today somewhat

generally expressed as Diakonia is in the midst of a process of reorganisation. In the case of the Latin

American region, some sections of the PME have been changed to adapt to local rules and

regulations. The need for a new PME was also noted. Among others the interviewees requested more

flexibility for the ROs and COs. Some of the interviewees also stated that the Handbook was too

Sida-oriented which made it sometimes difficult to use it when the funding was from other sources

for example the EU or the UN. Interviewees also underlined the need to make the Handbook more

applicable for the Swedish programme.

Some of the Partner Organisations the Team has visited have practiced RBM for many years and are

quite advanced. These organisations are sometimes used by Diakonia as good examples that are

presented at meetings with the Diakonia network.

On the other hand, there are also Partner Organisations that need a lot of support in order to be able to

use RBM. Objectives are sometimes not measurable and results indicators are missing. Sometimes

there are results indicators in place but in the absence of base line studies it is still impossible to

establish evidence on progress. According to the interviews there is demand for assistance in

introducing and further developing RBM in practice in several countries. Based on the successful

activities in the Diakonia networks in some countries this support could be systematised.

The PME Handbook and the PHS are used in practice at all levels as described in sub-section 4.1.1.

However, some of the interviewees at the ROs and the COs stated that the PHS is too much tailor—

made for Sida-supported projects and programmes and not flexible enough to be used for EU-

funding.

In addition to these more general observations the Team has studied the following three

documents/processes more in detail:

1. The assessments of reports from partner organisations and the feed-back to them

Diakonia makes three kinds of assessments of the reporting from partners using specific assessment

forms:

For reading, assessing and approving partners‘ narrative reports a specific format is used.

There is also an assessment form for partners‘ financial reports.

Assessment form for partners‘ audit reports.

Based on the assessments of partners‘ narrative, financial and audit reports feedback is always given

to the Partner Organisations. The feedback includes both positive and negative aspects and

challenges. The feedback is often made in writing. It is also discussed at the meetings with the

Partner Organisations. Partner's audit report must be approved by Diakonia before any further

payment is done.


30

The Partner Organisation is always contacted in the following cases:

1. The partner has not fulfilled Diakonia‘s reporting requirements regarding dates, form and content

2. The narrative report do not relate to the approved application, has low quality, is not in accordance

with the observations made during the field visits, is not in accordance with the financial report‘s

content and/or does not include explanations to budget balances higher than 10%.

3. If the grants from Diakonia are not reported or are incorrect and/or the financial report has low

quality, is based on a completely incorrect exchange rate, is overlapping between two consecutive

reports, open balance does not correspond to the previous report's closing balance, the period's

balance is over 10% of Diakonia's contribution (unless deviation is duly reported), the expense items

do not match with budget items and/or the reported expenditures do not correspond with the reported

activities in the narrative report.

4. The audit: the grants from Diakonia are not reported or appear incorrect, no original audit has been

signed, no separate specification of costs and revenues of the project is distinguishable in the audited

annual accounts, no audit certificate and/or management letter is included, financial statements

(Balance, Incomes and expenditures, etc) are not included, the auditor's opinion contains remarks, the

closing balance do not match with the closing balance in the financial report.

The assessments of reporting from the Partner Organisations have been done in accordance with the

above mentioned guidelines in the Partner Organisations studied by the Team during the field visits.

The Partner Organisations appreciate the feed-back. Approximately every second Partner

Organisation would like to have either more feed-back especially on the narrative reporting and/or

more oral feed-back in addition to the written.

2. Management Reports within Diakonia

The Management Reports are at two levels: from the CO to the RO and from the RO to the HO.

Diakonia has written instructions and formats for the Management Reports from CO to RO as well as

for from RO to HO. Responsible for the first level is the County Manager or Country Representative

and the Regional Manager at the second. The Management Report is a tool for monitoring of the

overall implementation of operations, which includes both programmatic and non programmatic

work. It provides overall and selected information and analysis to show major deviations from plans

as well as main threats and opportunities.

The process of reporting from the CO to the RO is followed in practice. Also, the process of reporting

from the RO to the HO is adhered to. It is sometimes not clear how results on country level are

aggregated on higher organisational levels. The results should also be analysed more in-depth in

relation to the objectives for Sida‘s support to civil society. Feedback on the reports and discussions

over key issues are stated as compulsory in the system. However, according to the interviews during

the field visits there is not enough feed back from HO on the reports.

3. Evaluation plans

It is stated that an evaluation plan should be elaborated and agreed upon with Partner Organisations

for each programme. The plan should include the following content:

The main reason, purpose and scope of each evaluation.

A tentative budget for each evaluation (unless the evaluation is integrated in partners‘ strategy

plan and budget).


31

If an evaluation is part of the Partner Organisations own planning this is also included in the plan,

even though it doesn‘t require that Diakonia plays an active part in the process.

The evaluation plans should be registered and uploaded in PHS. They should be revised and updated

annually. The Team has been provided with evaluation plans for the Partner Organisations in the

sample. There are evaluation plans in place; some of which comprehensive and others more

rudimentary. The quality could in most cases be further improved and it is not clear how it is

followed up that the evaluations really are carried out in accordance with the plans.

Normally there is a small M&E component included in all agreements between Diakonia and the

Partner Organisations. Diakonia has emphasised the importance of the right holders‘ perspective in

M&E. Therefore, Diakonia has in cooperation with the Partner Organisations organised trainings in

LFA and M&E in order to move from a primarily activity-based reporting to results oriented.

Reviewing the annual reports 2008 and 2009 from Partner Organisations in Kenya it is obvious that

the trainings have had effect


The PME Handbook defines minimum standards for the PCM in a comprehensive and adequate way.

However, there is a need to further develop the Handbook to increase the flexibility on RO and CO

levels especially when Programmes have support from others than Sida. Its usefulness for the

Swedish programme could also be increased.

The PME Handbook and the PHS are used in practice at all levels. The Management Reports

provides a key information flow from the Country Programmes to the RO and the HO.

When it comes to the three in-depth studies the Team has come to the following conclusions:

1. The assessments of reports from partner organisations and the feed-back to them is very much

appreciated and are of good quality;

2. Management Reports within Diakonia are comprehensive but the feed-back is less

comprehensive;

3. There are evaluation plans in place; however, the quality of the Evaluation plans could be

further improved as well as the follow up that the evaluations really are carried out in

accordance with the plans.

There is room for improvement when it comes to formulating clear objectives and measurable results

indicators. Without these elements it is not possible to evaluate the truthful outcome and impact of

the efforts undertaken within each project. Thus, objectives and results indicators ought to be more

precise and measurable, which will improve the possibility to evaluate results in short, medium and

long term. The demands of the EU in the form of the Logical Framework Approach for individual

projects, are well known and many organizations are already working to improve their objectives and

indicators in accordance with these. However, this approach to certain projects should be balanced

with the general approach of supporting the Partner Organisations in their own efforts to develop the

use of RBM. There seems to be an awareness that it will be necessary to go through this process.


32

Diakonia has comprehensive plans and reports that are lengthy and sometimes contains overlapping

information. It is sometimes also difficult to know if statements in reports are referring to validated

results, work in progress or expected results.


The PME Handbook should be further developed in order to increase the flexibility on RO

and CO levels especially when Programmes have support from others than Sida (h)

Objectives and results indicators for programmes and projects should be thoroughly

developed in order to provide necessary and valid information for the further development of

the programmes and projects (h)

Diakonia should assist its Partner Organisations in introducing Results Based Management

and the development of precise and measurable objectives and results indicators (h)

Diakonia should continue its efforts to implement participatory monitoring and evaluation

systematically in cooperation with its Partner Organisation (h)

Diakonia HO should give RO systematic feed-back on the reports (h)

Diakonia should review its reporting system with the aim to avoid duplications and focus on

relevant information for different stakeholders (l)

4.2 Criteria and procedures for selection of partners and their project/programmes

In this section we will answer the following audit questions per ToR:

Criteria and procedures for selection of partners and their project/programmes

Criteria for assessment and selection of member organisations and partner organisations and

their projects/programmes


The theoretical process includes the following steps where criteria for selection are required:

1. Choice of country or context for long-term commitment

2. Programme building

3. Choice of partner organisations

4. Maintaining or phasing out partnerships

These for steps are presented in turn in this sub-section, followed by a paragraph on the information

needed for selection of partners and the specific criteria for advocacy.

1. Criteria for choosing country or context for long-term commitment

Diakonia considers the following criteria when assessing the possibility of opening a new programme

for long-term commitment. The criteria are likewise used for considering the closure of a programme.

Criteria 1: Not in Europe

Although Diakonia collaborates with many actors and target groups in Sweden and Europe, the main

rights-holders that Diakonia exists for are found on all continents except Europe, North America and

Oceania.


33

Criteria 2: Poor, oppressed and exposed to violence

All Diakonia‘s work aims ultimately at changing the conditions for the poor, oppressed and people

exposed to violence or affected by unfair political, social, economical or cultural structures, in order

for them to change their own reality to a life in dignity.

Criteria 3: Degree of organization

Diakonia theory of change is that civil society is a vehicle for changing the people‘s conditions for

living a life in dignity. The efficiency of Diakonia‘s support therefore depends on the degree of

organization at hand. If an organised civil society is completely or almost completely lacking, very

strong arguments in line with other criteria is needed. With the civil society at hand it must also be

possible to find partners according to the criteria for selection of partners mentioned under A.5.5.

These criteria must also be carefully weighed against the second criteria, between which a paradox

may lie.

Criteria 4: Thematic focus

For Diakonia to build a new programme it is necessary that Diakonia‘s thematic focus and policy is

considered relevant for the contextual analysis made and likewise partners can be found who share

that analysis and focus.

Criteria 5: A long term perspective

Applied reversely, all criteria obviously work also the other way around, as criteria for ending a

programme. If the criteria thus points at the conclusion that funding would be more strategic if

reallocated to another programme, Diakonia‘s history in the context in question must be taken into

due account before making such a decision. Over time Diakonia may have built important

relationships and accumulated much knowledge. This gives Diakonia a considerable credibility in its

relations with other actors, enough strategic to reconsider a continuation of the programme.

Criteria 6: The need for Diakonia

Even though all other criteria points at building a new programme an inventory and analysis of other

similar actors must be made. Diakonia‘s approach may be already well represented by other donors. If

the potential partners are already on the verge of saturation of funds, Diakonia‘s contribution is not

likely to make much difference or even have a negative effect.

Criteria 7: Diakonia’s own capacity

If Diakonia intends to open a new programme the organisations capacity in terms of human and

financial resources must obviously be sufficient in order to expand, unless it is a matter of reallocation

of resources from a programme about to close.

Criteria 8: Fundraising and information in Sweden

Some countries and regions have a stronger relation to Diakonia‘s constituencies, the public and to

back donors, all of which Diakonia depends financially. The effect a new programme will have on

Diakonia‘s profile and ability to raise funds is essential when deciding on new programmes if

Diakonia‘s operations around the world are to be financially sustainable.

Criteria 9: Regional links

Diakonia is a fairly small organization and must consider as to what extent synergies to and from a

new programme would be possible in order to stay focused and concentrate the limited resources

available enough to be able to make difference. It is generally more effective to concentrate

operations to a smaller amount of programmes than to distribute resources in a scattered way.

Criteria 10: Advocacy in Sweden, EU and on the International level

Some partners are strategic in analysing the situation of the poor and vulnerable rights-holders in

respect to the effects of larger global structures. These kinds of partners are important in order to


34

make full use of the potential of Diakonia‘s programmes in developing countries, by facilitating

linkages to advocacy work on the Swedish, European and international level.

Diakonia states that it is important to note that the criteria are not absolute. Programmes can be

justified even though all criteria are not equally fulfilled. All are nevertheless always taken into

account. This has been the case in the three countries the Team visited. The choice of these three

countries for Country programmes are relevant and meeting the criteria.

2. Criteria for programme building

For opening a new programme a Decision memorandum has to be approved by Diakonia's Board of

Directors and uploaded in PHS. Diakonia states that an effective programme composition must be

based on understanding the context and adequate problem analyses. Diakonia makes this analysis

with active participation of local actors. Even though such analysis should be done continuously it is

mainly done in relation to the planning process following Diakonia‘s Planning manual.

Diakonia states that a programme should be designed to be as powerful and strategic as possible. The

base of a programme should be grassroots‘ organisations of different kinds. The role of NGOs should

be complementing and facilitating. The reason for this distinction is that without the support and

leadership of member based organisations civil society will pose no challenge for power holders, nor

will the agendas hold any legitimacy or sustainability if they address problems and suggest solutions

for people that never participated in their elaboration. At the same time, NGOs are often much better

equipped in terms of analysis and tools than are grassroots‘ organisations.

Related to this is the idea to construct a programme where Diakonia‘s added value is maximised. By

constituting a platform and meeting point for partner organisations the programme builder should

consider the ―supply and demand‖ of knowledge and skill within the partner group. In a well

constructed programme they are both met within the programme.

A country programme should:

Be designed in complete accordance with Diakonia‘s basic values and policy.

Be strategically elaborated and grounded in each context respectively on the basis of an

updated contextual analysis in which a variety of national actors have participated.

Be based upon an analysis of the existing civil society, its problem analysis, its chosen

priorities, and the ongoing processes in which they intervene.

Be concentrated geographically as to facilitate the possibility for partners within the

programme to meet and exchange ideas.

Be composed with the ‗supply‘ and ‗demand‘ sides in mind within the partner group. In a

well constructed programme they are both met (important for mainstreaming).

Include cross cutting issues around which partners gather, qualitative participation being the

strongest one.

Be primarily designed to strengthen grassroots‘ organisations and facilitate the achievement

of their objectives, be it via or in collaboration with NGOs.

Take into consideration all levels of society in accordance with figure 5.


35

For cost-effective administration and follow-up as well as for maximising Diakonia‘s added

value a programme should contain 12–16 partner organisations or aim at developing the

programme until this level is reached.

Contain components of advocacy work on national level.

Have, or strive towards, a clear gender perspective and include at least one organization who

primarily works for equality between women and men.

Give an added value in relation to the priorities of other donor agencies; be complementary to

other programmes.

Should not become a burden to partners or even saturate them with extra activities. Other

donors‘ may for example already be requiring time and effort from partners.

The Team has found that the planning process has included analysis meeting the requirements as

stated in the criteria. The Planning manual has been adequately used and followed. The

documentation contains descriptions of the context and adequate problem analyses. Key informants

outside Diakonia; read Partner Organisations and the Swedish Embassy in Nairobi, are of the opinion

that the Country programmes in the visited countries are built up with relevant partners.

3. Criteria for choosing partners and for maintaining partnerships

All partner organisations in the programme are assessed regarding the criteria below. The criteria are

absolute and should be fulfilled by all partners. The partner organization should:

Share Diakonia‘s values as expressed in the policy.

Sympathise with Diakonia‘s vision, general problem analysis and overall objective to change

unjust structures.

Fit well in to how Diakonia envisions the programme in the near future.

Be clearly oriented towards reaching outcomes and impacts beyond the activities

Possess administrative skills, or willingness to possess such skills, in order to fulfil

Diakonia‘s requirements.

Be willing to participate with other partners and networks that emerge or may emerge as a

result of the partner group and Diakonia coming together.

Have or be willing to adjust to formal and actual structures in order to exercise transparency,

accountability, participation, influence, non-discrimination.

Fulfil or be willing to fulfil Diakonia‘s gender indicators during the programme period.

This regards the organization‘s internal structure and culture as well as the projects

themselves.

Where relevant - have an intercultural perspective and an inclusive view of indigenous

peoples and ethnic groups.

In HIV/AIDS affected regions, be willing to analyse the socioeconomic consequences of

HIV/AIDS for the rights holders and adjust the work accordingly.

The criteria are assessed not only when a partnership is established the first time. Also when contracts

are renewed the criteria are considered and assessed. Partner Organisations that are not longer

meeting the criteria are phased out in a dialogue with the partner. Thus, the criteria above are also

used for phasing out Partner Organisations. However, in addition Partner Organisations may be

phased out due to non-compliance with agreements. Please refer to chapter 5 for details.


36

In the Kenya Programme two partners were phased out 2008 after an assessment based on these sets

of criteria respectively:

TWCC (Turkana Women Conference Centre) were phased out due to capacity limitations and

resistance to build up necessary organisational capacity to deliver and report on results.

The 2007 audit report from CREDO (Constitution & Reform Education Consortium) had a

qualified opinion with respect to a banking fraud. The management letter submitted did not

include management response. Seeking clarifications, Diakonia received no response and

subsequently a decision was taken not to renew the partnership with the organisation.

In Peru, Diakonia is trying to find new ways of still supporting its Partner Organisations and

maintaining partnership. It has proposed the introduction of platform models (grouping partners with

similar themes/goals/objectives) to raise funds together. Two Requests for Proposals (RFPs) to the EU

have been awarded for human rights and local economic development and democracy. A third RFP on

gender issues is hoped to be awarded. Administrative/logistical issues (narrative and financial reports)

are being discussed with the Regional Office. The platform model will be discussed more in detail in

sub-section 4.5 Exit strategies.

Required information on Partner Organisations

The Team has found that the requested information is adequate and comprehensive and, thus, is

meeting the needs for the assessment. Partner‘s proposal template includes 1) Contact information, 2)

Short summary of project/action plan, 3) Description of applying organization, 4) Problem analysis

(regarding project/action plan), 5) Goal analysis 6) Geographic area and target group, 7) Gender

analysis of project/action plan, 8) HIV and Aids analysis of project/activity plan, 9) Monitoring

system, 10) Risk analysis, 11) Analysis of social and financial sustainability; and 12) Budget and

financing.

The following documents must be attached for new partner organisations: 1) Institutional information

2) Organisational chart 3) Copy of last years audit report 4) Copy of last year‘s narrative and

financial report 5) Copy of registration document; and 6) Copy of last institutional evaluation (if

existing).

Criteria for prioritising themes/issues for advocacy To make strategic choices of themes and issues for public awareness and advocacy work in Sweden and

internationally Diakonia has elaborated a set of criteria to serve as a checklist and guidance. They serve both on a

more general level, such as for choosing between geographic areas, and on a more specific level when choosing

what to focus on within that area.

The criteria capture three aspects; (1) if the theme is well founded in Diakonia‘s policy and constituency; (2) if the

theme is in line with the work and priorities made by rights-holders and partners in the regions and (3) if it is

considered feasible to have an impact on agendas and behaviour in Sweden and internationally. The criteria are as

follows:

Criteria 1 The theme is in line with Diakonia‘s global analysis, policy and main themes.

2 Possibility to stimulate debate, commitment, mobilisation (incl. popular education) among Diakonia‘s


37

constituency, congregations and new target groups.

3 Potential for fundraising.

4 The theme reflects the priorities of partners and civil society in relation to Diakonia‘s over all regional

analysis.

5 Existence of strategic partners in the developing countries with a profound work within the theme and

that can feed into Diakonia‘s advocacy work in Sweden, the EU and internationally through

consequence analyses and ideological discussions.

6 Possibility to network in Sweden.

7 Existence of relevant networks in Europe and internationally to connect to.

8 Accumulated competence and experience within advocacy, popular education, mobilisation

and fundraising on the theme.

9 Sweden and/or the EU plays or is considered able to play an important role on the theme.

10 Possibility to wake interest for the theme in media.

11 Possibility for Diakonia to offer something unique relative other Swedish organisations.

On the basis of these criteria the issues and areas listed below were chosen for the period 2008-2010.

Global political and economic structures

Focus on a more equal distribution of resources and more resources transferred for poverty

eradication.

Focus on increased policy space for developing countries.

Focus on democratisation of global financial institutions and organisations.

Focus on increased qualitative participation by civil society organisations in processes of

crucial importance for development

Focus on how these structures affect women and men in different ways

Focus on shared but differentiated responsibility of rich and poor.

Peace and justice

Focus on the conflict in Israel/Palestine and its driving forces (main priority).

Focus on the conflict in the Democratic Republic of Congo and its driving forces (second

priority).

Other conflict areas such as Colombia, Burma, Zimbabwe, Somalia (lesser extent)

When it comes to Global political and economic structures the interviewees state that the criteria are

used in practice. In the area of Peace and justice Colombia is the only of the mentioned countries that

the Team visited. In Colombia some of the interviewees highlighted concerns related to Diakonias

ability to achieve the goals. One of the goals of the Swedish Government for cooperation with

Colombia is to strive towards a solution to the armed internal conflict by means of negotiations.

Towards this end, Diakonia arranged a seminar that took part a few months ago, involving several

actors in Colombia. A few of the interviewees doubt that Daikonia has the experience and

professional capacity to act adequately in the conflict. However, the dialogue should continue and a

wide range of actors should be invited to workshops allowing for open and imaginative ideas for

constructive cooperation. Among the parties it should be considered to include the Swedish Foreign

Office, Sida Head Office, the Swedish Embassy in Bogotá, several among the counterparts of

Diakonia (CINEP, Justapaz,…) and other donors.


38


The Team‘s assessment is that the criteria for selecting countries and building programmes are

adequate and used in practice in the ongoing restructuring and decentralisation process. The present

work on scaling up in prioritised countries and phasing out in others is clearly guided by the criteria

referred to in sub-section 4.2.1.

Also, building up the programmes is clearly guided by the criteria. A programme is composed by

grassroots‘ organisations, social and popular movements, indigenous organisations, churches and

ecumenical organisations, research institutes, and networks and umbrella organisations. To be cost-

effective it is supposed to contain 12-16 partner organisations. The Country programmes in the three

visited countries include 19, 15 and 12 Partner Organisations respectively. Based on the experience

from these countries the estimated number of Partner Organisations for cost-effectiveness seems

relevant. Also the size and capacity of the organisations, the size and character of the partners‘

programmes/projects and other factors are important. One weak Partner Organisation with suspected

misuse of funding can create more work for the CO than a handful well-functioning Partner

Organisations do.

The Programmatic approach is commendable. However, it may not always be possible to get funding

to a comprehensive programme of the required size. In order to attract more funding in some of the

selected countries it may be necessary to design the programme differently for example by having a

smaller core country programme combined with individual projects financed by different donors.


In targeted countries where it is difficult to finance a cost-effective programme through core

funding Diakonia should consider reviewing the design of the Country programmes in order

to facilitate having a project portfolio financed by different donors in addition to the core

programme (h)

4.3 Involvement and ownership of partners and target groups in planning, monitoring and evaluation of projects/programmes


Diakonia states that socially sustainable development is a bottom-up process where the activities

should be based on local initiatives. The Partner Organisations and Diakonia view the cooperation as

long term change processes where Diakonia and its partners contribute with skills and resources in

order to reach a common goal. The concept of cooperation has precedence over the concept of

assistance. However, it is also emphasised that there must be a clear division of roles and

responsibilities between Diakonia and its partners in the work to reach the shared goal. The

cooperation between Diakonia and its Partner Organisations is focused on capacity building and

organisational development. Regardless of activity, the guiding principles are to support partners‘ and


39

the rights holders‘ needs and efforts to develop knowledge and skills in order to effectively address

their own situation.

The interviewees at the visited COs and ROs told the Team that they have a horizontal working

relationship with the Partner Organisations based on trust, cooperation and coordination. Examples of

participatory planning include the assembly of partner organisations, especially when tri-annual plans

were being developed. In addition meetings are held with the network regularly and trainings are

offered in areas where the Partner Organisations have expressed shared needs.

In for example Kenya Diakonia gathers all Partner Organisations twice a year. In February an

―annual reflection‖ is organised to review the last years work, share results, review the relationship

between Diakonia and the partners, discuss the coming year‘s priorities and identify generic capacity

building needs. In September/October a ―capacity building meeting‖ is held on the topic (-s)

identified in February.

The Partner Organisations that the Team has visited have stated that Diakonia‘s requirements are fair.

They have stressed the importance of showing members and the general public that the Partner

Organisations are reliable and accountable. Diakanonia‘s requirements have facilitated the

development of transparent procedures and increased cost-effectiveness.

The rights holders‘ qualitative participation is at the core of the organisations and projects Diakonia

supports. Partners also participate in Diakonia‘s planning and monitoring when possible; however, not

primarily for the sake of ownership but for increasing the quality of Diakonias‘s programmes. The

programmes are owned by Diakonia and the analysis and the objectives set in the strategic plan are

Diakonia‘s. However, on the one hand the dialogue with the Partner Organisations influences

Diakonia‘s priorities, but on the other hand Diakonia emphasises that it is primarily lead by its

historical identity and the set of values linked to it. Participation by the constituencies in policy

discussions, public awareness campaigns and advocacy activities is fundamental for Diakonia‘s

legitimacy and ultimately its strength in promoting agendas in Sweden and internationally. With all

partners a certain match between identities is required in the sense that values and priorities are

shared, but beyond that the relation is in reality very much characterised by giving and taking and

mutual influence and learning. It is emphasised that Diakonia‘s opinions and analyses should

contribute to partners‘ and rights holders‘ perspectives on the work, rather than jeopardising their

sense of ownership over the projects.


Diakonia has a well developed view on the involvement and ownership of partners and target groups

in planning, monitoring and evaluation of projects/programmes with clear distinction between

Diakonias responsibility for its programmes and the Partner Organisations responsibility for their

programmes and projects. These fundamental principles for Diakonia‘s cooperation are adhered to at

all levels.

Diakonia is mainly focussing on increasing the capacity that already exists locally. The Team is of

the opinion that Diakonia has a good balance between building capacity on the systems level (the

enabling environment), the organisational level and the individual level. Diakonia also seems to have


40

a good grasp of the linkages between the three levels; thus, facilitating the involvement of target

groups in an adequate way.

As is already discussed earlier in the report there is room for improvement of the monitoring and

evaluation practises in the entire organisational chain. The Partner Organisations‘ evaluation plans in

connection to the Diakonia funding are mainly focused on measuring the results of the interventions.

Often the need for baseline studies is neglected. Target groups are often involved in the Partner

Organisation‘s planning of programmes and projects; however, baseline information is seldom

gathered in a systematic way.


In the agreements with the Partner Organisations Diakonia should request them to conduct

baseline studies (l)

4.4 Systems for risk assessment and risk management (including corruption as a risk)


The decision memorandum made up in PHS constitutes the formal basis for decisions. It contains all

important information on what grounds decisions are/were taken and includes risk analysis in the

form of

Explanations on how external and/or internal factors may jeopardise the fulfilment of the

project‘s objectives.

Explanations on how coping strategies deal with these external and/or internal factors.

Diakonia tries to include when relevant findings in conflict impact assessment, feasibility-, and

climate impact assessment.

Risks can be identified through many different perspectives and on a more or less detailed level

depending on the context. It is within the scope of this system-based to assess certain types of risks.

These assessments are reported in the relevant sub-sections. One such example is that Diakonia Peru

Country office requires only one signature for check payments, bank transfers, and financial

transactions. Please refer to section 5.3 for details. The Team considers this a serious risk and has in

sub-section 5.3 recommended that as a precaution all checks and financial transactions should be

signed by two people.

Regarding corruption as a risk and procedures for acting on suspicions of corruption, Diakonia has

developed practical routines for how regional managers, programme officers and head of departments

and administrators shall report when financial or administrative irregularities are discovered13

.

Diakonia has a zero-tolerance level for misuse of funds or abuse of entrusted powers. The routines

when acting on suspicions of corruption including the division of responsibilities are described in the

Diakonia PME Handbook and the PHS manual. The routines were enforced in two instances in Latin

13

There is a special format for the report available at the Intranet and in the PHS and instructions on how to fill in the

report dated 2009-06-05


41

America (Guatemala, 2009 and Colombia, 2010). In both instances incident reports were filed and

procedures followed. Staff with long experience of the region was not able to recall any other

instances of serious deviations from the routines for the last five years.

In section 5.5 the Team has summarised the findings related to the audits of three Partner

Organisations in Kenya. Two of these are also reviewed more in detail in Appendix 7 and 8. When it

comes to one of these - KEWWO - the Country Programme Manager submitted an Incident, alert and

non conformity report on the PHS on the 5th

May 2010. The misuse of funding in the other Partner

Organisation - AWEPON - has not been reported in the PHS.

In summary the risks in these two cases have been managed as follows:

In the management letter for 2007 for the African Women´s Economic Policy Network

(AWEPON) the Auditor has noted ―irregular funds virement‖. It is stated in the management

letter that Diakonia funding of USD 37,518 was not used for the agreed Project and that the

transfer was done without the donor‘s consent. In June 2010 Diakonia requested AWEPON to

pay back USD 37,518 as refunding of mis-applied funds in order to facilitate repayment to

Sida14

. AWEPON had not replied as per the Team‘s field visit mid-August 2010. In addition

to this the Auditor also in the management letter for 2007 noted a bunch of ―irregular

procurements payments‖. This has, however, not led to any action from Diakonia. Please refer

to Appendix 7 for more details. The partnership with the organisation has not been renewed.

The review of the audit report and management letter revealed that the Kenya Women

Workers Organization (KEWWO) financial records contained significant inconsistencies that

may impact on the accountability of funds given by Diakonia in 2008. However, the extent is

unknown as KEWWO refused to cooperate for the in-depth audit in August 2009. Diakonia

wrote to KEWWO in November 2009 to restart the in-depth audit. However, the office was

closed. None of the donors have been able to contact KEWWO at any level. Diakonia has

now engaged a firm to confirm the legal status of KEWWO and conduct a due diligence test.

Please refer to Appendix 8 for more details.

The Incident Report are normally not uploaded in PHS; it is saved on the Intranet, with limited access

for a smaller number of staff at management level, due to confidentiality. The Incident reports are

discussed at the Senior Management Team meetings at the HO.


The decision memorandums made up in PHS include risk analysis. However, Diakonia has not

decided on a specific model for risk assessments and how this model should be used. Thus, also risk

management is an area that should be further developed15

.

Diakonia has a Zero tolerance on corruption. If there are suspicions on corruption this shall be

reported to the nearest management at once. HO shall also be informed as soon as a suspected case is

14

Letter from the Regional manager to the Chairperson, 9 June 2010 15

In the comments to the draft report Diakonia asked us to clearly define the two concepts ―Risk Assessment and Risk

Management‖; what does these two concepts include. Thus, we have separated from this report submitted two examples

of models that we have developed as assignments for Sida and another Swedish agency. Hopefully, these two examples

can inspire Diakonia in its efforts to develop its own concept.


42

discovered. The format and instructions for reporting the suspicions are comprehensive. However, the

process on how to handle the case is not clear and also the division of responsibilities for the actions

needed is unclear.

Management at CO and RO is aware that issues surrounding Diakonia‘s partnership with AWEPON

and KEWWO need to be addressed and resolved promptly. Diakonia has contacted the partner

organisations several times and directed them to facilitate completion of audit processes or refund the

funding in question according to Diakonia‘s funding guidelines. The Country Programme Manager is

still closely following up to ensure that adequate actions are taken.

These incidents, however, indicate some general problems in Diakonia‘s processes and division of

responsibilities in case of suspicion of corruption or misuse of funding. There is no evidence of any

action from the HO regarding these incidents. The division of responsibilities between HO, RO and

CO needs to be clarified as well as the process of handling the incident. A few examples of questions

that must have an answer: How long is it acceptable to wait with reporting the incident? How long is

it acceptable to wait for the partner organisation‘s action? Who should lead the investigation? What

kind of action should be taken by Diakonia? When should legal actions be considered? What kind of

legal actions should be considered?

The relationship between Diakonia and its partners is built on trust and shared values. Thus, it is

natural that programme managers at Diakonia make friends with their counterparts. Taken this into

account it doesn‘t seem right to give the programme manager the responsibility for investigating

suspected corruption and misuse of funding. In some circumstances it is also a security issue. When

an incident is reported the head of next level of the organisation should take over and lead the

process. The programme manager and the partner organisation still needs to be involved in the

process but the process leader should be for example the Regional manager.


Diakonia should implement a model for risk assessments and risk management (h)

Diakonia should in its dialog with Partner Organisations more explicit ask for risk

assessments and information on risk management (l)

Diakonia and its Partner Organisations should carefully follow up the misuse of funding that

has been reported in the past and continue to report any suspected misuse in the future (h)

Diakonia should implement a common process on how to handle reported incidents and mis-

use of funding (h)

Incident reports should always be written in PHS without delay (h)

When incidents of suspected misuse of funding has been reported in a Partner Organisation

the Regional manager should be responsible for the investigation and the investigation should

be carried out at the regional office (h)

4.5 Exit strategies with regard to sustainability of partner organisations as well as to projects and programmes


43


Evaluations were carried out of all country programmes 2009 as basis for decision on phasing out

activities in the following countries: North Iraqi, El Salvador, Ghana, Senegal, South Africa and

India.

If Partner Organisations cannot live up to the criteria mentioned in sub-section 4.3 they must be

phased out and leave room for others16

. The possible reasons for phasing out a Partner Organisation

are all found in the ―Assessment form of partner‖, which is to be filled out every time a contract is to

be signed. Unless the reason for no longer meeting these criteria is financial irregularities, a phase out

plan is drawn up to make it possible for partners to adapt to the situation and equip itself adequately,

including for example initiatives on Diakonia‘s part to assist in finding alternative donors (see

below). A special memo explaining the reasons for phasing out is drafted and approved.

According to the interviewees few Partner Organisations have been phased out besides where the

Programme is closed. The main reasons for phasing out have been problems with the accountability

and sometimes the performance or resistance to build necessary capacity.

The closing of a programme must be preceded by the following actions/documents17

1. A programme evaluation focusing both on results, lessons learned and analysis of the criteria

2. A time table not exceeding three years

3. Decision memorandum

4. Decision by the Board of Directors

5. Responsible finalisation of all partnerships including phase out plans

6. Closing of all projects in PHS

7. Documentation of the whole process (electronic filing under programme).

8. Closure of programme in PHS

As already been mentioned in sub-section 3.3 the CO in South Africa closed 1st of May 2010 and five

more Country programmes are to be phased out. These processes have been carried out in accordance

with the stated procedure.

In many of the countries where Diakonia is working, there have been significant reductions in the

support from Sida. Diakonia has tried to maintain its relations with the Partner Organizations in

various ways. In Peru, where the reductions are about 50 %, the concept is to group the Partner

Organizations in clusters (―platforms‖), in which the members could develop new concepts and

applications in common. However, these platforms could also be used for cost-saving and increased

cost-effectiveness by working closer together and for example share some staff resources.

There seems to have been no discussion in Peru concerning the relevance of continuing supporting all

the Partner Organizations. The relations with most of them have been very long, for some several

decades, which indicate a high degree of loyalty in Diakonia. On the other hand, it might also

indicate the most comfortable way for Diakonia, just letting the cooperation continue.

16

The PME Handbook 17

The PME Handbook


44

A third aspect involves core funding v. project funding: Funding for projects is time-limited, for the

period the project is running, which might be two-three years. Core funding does not have the

regulating time dimension, and the possibility for this type of support to continue ―for ever‖ is

considerable. There is also a risk for the Partner Organisations to become dependent on the support.

The Partner Organizations that Diakonia works with in the studied countries differ in strength and in

degree of support from other donors. Some are very big, very well organized, like CINEP in

Colombia, certified according to ISO 9001:2008, and with a long history. Others are quite small,

newer and with Diakonia as the major, or the only, donor. For the bigger ones, the contribution from

Diakonia is about 4-5% of their total budget, compared with 70-80% for the smaller and weaker ones.

According to key informants it has been rare to phase out Partners Organisations because they are

able to sustain on their own with other funding. One would think that the very big reduction of

support from Sida would be an opportunity for Diakonia to work through the options with an open

mind. It would seem a natural step to take to cease supporting the big, well established Partner

Organisations, in favour of the weaker ones. New roles could be discussed, where the big Partner

Organisations could act as mentors or coaches for the smaller ones at workshops or seminars. This

has also been practised to some extent but not explored systematically. In this way, relations would

still be maintained with all of them, while the support is utilised as usefully as possible.


Diakonia has routines for closing a programme and criteria for phasing out Partner Organisations.

However, there are no exit strategies with regard to sustainability of Partner Organisations. It has

been rare to phase out Partners Organisations because they are able sustain on their own with other

funding.

As mentioned earlier in the report (section 4.3) Diakonia emphasises that the concept of cooperation

has precedence over the concept of assistance. Thus, it is a little bit surprising not to find elaborated

concepts of cooperation based on other forms than funding. Phasing out a Partner Organisation seems

to be synonym with not funding the Partner Organisation any more. Thus, the Team‘s conclusion is

that Diakonia should elaborate on when and how partnerships can be maintained within the Country

programme structure also without continued funding.


Diakonia should clarify the criteria for different types of partnership with and without

financial support (l)

If the Platform model is to be applied by Diakonia in the rest of Latin America or globally,

cost-saving aspects and considerations ought to be taken into account (l)

5 Financial management and control

5.1 Financial systems

In this section we will present our findings in the following areas:


45

Financial reporting system

Project management systems and chart of accounts


The administrative systems in Diakonia are at present the following18

:

VISMA – Financial system (bookkeeping, accounting, payments etc) – is the core part of Diakonia‘s

administrative systems. All other administrative systems are connected to Visma and deliver financial

information. The HO updates the book-keeping to enable overall financial reports and follow-up.

Twice a month reports are automatically sent by a report generator to all ROs with an updated

financial lists. The ROs work independently with financial systems of their own. Each month the ROs

have to present a monthly accounting report to the HO. This report, after being checked, is booked in

Visma. The monthly report is presented according to a standardised format that facilitates checking

the information and also facilitates informative demands concerning the general audit of Diakonia.

PHS – Project Handling System – is a system used for handling projects worldwide. All projects

connected to Diakonia‘s programmes are registered in the PHS. PHS enables planning, monitoring

and reporting of all projects connected to Diakonia‘s programmes. All financial information about the

projects can be found in PHS. Allocations and payments are registered and payments to partners are

transferred within the system. The programmes and their budgets are also registered in PHS. This

enables HO and RO to do financial monitoring by using reports found in PHS. All payments that are

being done through PHS are transferred to Visma and all information related to a project created by

another system is imported from Visma into PHS.

HOGIA Salary system is used at HO by all staff. The system keeps track of leaves, holidays and

also produces salary slips. At the ROs only the expatriates with Swedish employment agreements use

the system for time registration. Their time reporting (vacation, over-time etc.) is done in this system,

but they do not use the system for travel reporting. Hogia also records contracts, courses and so on.

All financial information is linked to Visma. FLEX Travel expenses system is used only at the HO,

so far. All financial information is linked to Hogia. Booking information from Hogia regarding

salaries is transferred automatically to Visma.

MYSOFT fundraising system is a register program that keep track on all individuals and

churches/congregations that donates funds to Diakonia. This enables Diakonia to work professionally

with fundraising. Through the system is it possible to evaluate different campaigns and keep track on

money donated to certain projects or areas. All financial information is linked to Visma. The Mysoft

system is handled by the Department of Fundraising and Communication.

The figure below shows the administrative and financial IT systems Diakonia is using and how they

interact. The most central parts are the financial system at HO, Visma, and the PHS system. While

PHS contains information on projects and programmes, Visma contains information regarding

financial transactions made by Diakonia in all parts of the world. Visma is handled by the Financial

Department at the HO.

18

Strategy Plan 2008-2010


46

All RO and CO have Local financial systems for accounting. For example SIIGO accounting system is used

by Colombia National Office and Latin America Regional Office, as well as some Colombian counterparts.

Every other Latin American country uses their respective national accounting system as required by national

law. Office costs are booked as well as some project related costs. The book keeping at the local offices is

audited annually by a local auditor in the country.

To get the accounting from the RO and CO booked at HO in Visma these offices prepare the monthly

reports with the compiled information from the transactions in the local book keeping system. HO

books the information manually in Visma. All information regarding costs on projects in the monthly

report is transferred automatically to PHS.

The interviewees state that the diverse systems create a lot of extra work and are highly inefficient.

They wish that in the future Visma, or another financial system, could be used through the whole

organisation. Pilot studies have been carried out on a very initial level with test on internet speed and

possibilities to register information in a Visma system at all RO.

The PHS system has been functioning well; however, it is not adjusted to a situation with several

back-donors with different reporting requirements. Thus, the system will be changed in order to have

more efficient internal control and reporting. The goal is to have a new system in place in January

2012.

Interviews supplemented by review of documentation at the ROs and COs indicate that manuals and

procedures are followed and known by administrators in charge of PHS, payments and procurement.

Petty cash, archives management, bank accounts, are being correctly handled.


All financial information for Diakonia is registered in Visma (information from PHS, Hogia/Flex,

Mysoft and Local financial systems). However, the processes are inefficient due to the use of several

different systems at different levels. There are plans to further develop the financial system as well as

the PHS with the aim to design a comprehensive global system. This will have the potential to

increase the efficiency significantly as the present overlaps and duplications will be eliminated.

Diakonia continues the work of developing a uniform IT infrastructure for the entire organisation.


47


Diakonia continues its efforts to implement an efficient financial management system (l)

5.2 Compliance with Agreements


Sida‘s grants to Diakonia are regulated in agreements and the General Conditions for Sida‘s Grants to

Swedish Non-Governmental Organisations.

Diakonia‘s grants to partners are regulated in the following documents:

Co-operation agreements with partners

General conditions for Diakonia‘s co-operation with partner

The Team has examined both Diakonia‘s own compliance with the general conditions and Diakonia‘s

internal control of the compliance in the Partner Organisations.

Assessment of compliance with Sida’s General Conditions

In this sub-section the Audit Team presents the assessment of Diakonia‘s compliance with the

―General Conditions for Sida’s Grants to Swedish Non-Governmental Organisations (2003)‖.

Conditions reviewed Yes No Comments

Agreements (Section 5)

The organization enters into agreements with

organisations at the next level. x

The organization‘s agreements with next-level

organisations come into effect before funds are

disbursed.

x

The organization‘s agreements with next-level

organisations include applicable conditions

from the General Conditions, sections 6, 8, 9, 10,

and 11.

x Agreements with partner organisations do not

always include regulations regarding

procurement.

Requisition and disbursement of funds (Section 6)

Sida funds are only disbursed from the organization

to a next-level organization when the latter has

submitted the stipulated reports.

x

Administration of funds (Section 7)

The organization keeps Sida funds in a separate bank

account. x

Two persons in the organization are to sign jointly

for the separate bank account for Sida funds. x Colombia country office representative is, at the

moment, the only person with authority to sign

checks and approve bank financial transactions.

The organization ensures that next-level

organisations keep Sida funds in a bank account. x Please note the comments on the situation in

Somalia in section 5.3. Taken into account the

context in which Diakonia operates in Somalia


48

Diakonia is acting appropriate that should be

regarded as in compliance with Sida‘s

intensions.

Repayment of funds (Section 8)

The organization repays Sida funds that have not

been used. x

Results reports and financial accounts (Section 9)

The organization applies generally accepted

accounting principles. x

Financial audit (Section 10)

The organization is audited in accordance with

Sida‘s audit instruction 1. x

A certified auditor audits the organization. x

The organization submits an audit certificate to Sida,

in accordance with audit instruction 1. x

The organization submits an audit report to Sida in

accordance with the Audit Guide. x

In agreements with next-level organisations, the

organization has included conditions related

to financial audit in accordance with the Audit

Guide.

x

The organization reviews the financial audit in

organisations at the next level, in accordance with

the Audit Guide.

x

Assessment of compliance with Diakonia’s framework agreements with Sida

In this sub-section the Audit Team presents the assessment of Diakonia‘s compliance with relevant

parts of the agreements with Sida.

Conditions reviewed Yes No Observations

4.6 Obligations of Information x

6.2.2 Budget Diakonia shall describe the calculation of own

contribution as well as their control system regarding

the origin of their own contributions.

x

8.3 Administration of funds Diakonia should keep Sida funds in a separate bank

account. This account should be signed by at least

two persons in the organization. Diakonia should

ensure that local NGOs at next level keep Sida funds

in a bank account.

x The CO in Peru does not keep a separate bank

account for Diakonia funds.

Colombia CO representative is, at the moment,

the only person with authority to sign checks

and approve bank financial transactions.

8.5 Financial audit

There should be an unbroken chain of audit

certificates / audit reports with audit memorandum /

x Several partner organisations has not submitted

audit certificates and/or management letters


49

management letter for Sida funds down to the final

beneficiary organization.

8.5.1 Diakonia is responsible for the control of the

financial audit in organizations at all levels. x In the absence of management letters Diakonia

is not in a position to control and act on issues

identified by the auditor

8.6 Procurement regulations x Agreements with partner organisations do not

always include regulations regarding

procurement.

8.7 Misuse of funds and inappropriate behaviour x Please refer to section 4.4

9.5 Administration grant x

11 Repayment of funds x


Diakonia meets Sida‘s terms and conditions with a few exceptions as detailed in this report. The new

agreements with Partner Organizations and the close monitoring of the Partner Organisations internal

control system has the potential of securing that the Partner Organisations also comply with the

regulations. However, the tables above show that there are still a few parts of the internal control

system that Diakonia should develop further to better meet Sida‘s regulations. The Team is also of

the opinion that the monitoring of the Partner Organisations internal control system should be done

more systematically through more frequent visits to the partners. Diakonia could for example develop

a checklist or a questionnaire for internal control and monitoring, to be used at the start of the

cooperation with a new Partner Organisation and follow-up meetings the all others.

Diakonia comply with the agreement that Sida funds are only disbursed from the organization to a

next-level organization when the latter has submitted the stipulated reports. The consequence is that

disbursement of funds are sometimes late in relation to what is agreed in the contract with the Partner

Organisation and also late in relation to Diakonia‘s own internal reporting requirements. In order to

avoid reporting through several levels it might in some cases be possible to use tripartite contracts.

This means an agreement between for example Diakonia, the coordinating Partner Organisation and

the implementing organisation. Such an agreement should be based on a ToR or a Programme/project

document that clearly outlines the division of responsibilities between the parties.


Diakonia should intensify its efforts to increase the compliance with the agreements with Sida

(h)

Diakonia should monitor the Partner Organisations‘ internal controls systems in a more

systematic way (h)

Diakonia should visit the Partner Organisations more frequently for monitoring their internal

control system (l)

Diakonia should consider using tripartite contracts when activities are being coordinated by a

Partner Organisation but implemented by other organisations (h)


50

Diakonia should agree on realistic deadlines particularly in the case of projects funded

through Partner Organisations head offices to lower organisational levels (l)

5.3 Transfers of funds and bank and cash holdings


At the HO the right to sign Diakonia is regulated by the Boards decision per capsulam of the 21

September 2009. Also, the rights to sign at RO and CO levels are clearly regulated.

The right to sign the Partner Organisations is decided by each Partner Organisation.

The Partner Organisations are to keep funds granted by Diakonia in a bank account whose holder

should be, if possible, the Partner Organisation itself. The information about the bank account is

included in appendix 1 to the contract, which should be signed jointly by two persons authorised by

the organisation.

The General conditions for the support to the Partner Organisations are available through the PME

handbook. It is stated that agreements take precedence over General Conditions. Diakonia states that

the contract shall be signed respectively by the authorised representative of Diakonia and a board

member and the financial manager of the partner. However, in practice the agreement must be signed

by the Partner Organisation in accordance with its own regulations. The signatory partner is solely

responsible for the implementation of the project.

In Somalia lacking a bank system the Partner Organisations have accounts with financial brokers.

The ―Amal brokerage‖ keeps accounts and issues check books and operates in the same way as

banks.

Under the contract with the Partner Organisation, Diakonia may decide to withhold the disbursement,

wholly or in part:

i) if substantial deviations from the presented Work Plan and budget occur;

ii) if reports are not delivered as agreed on;

iii) if the main programme objectives are endangered;

iv) if the programme develops unfavourably in terms of the sub-goals or in any unfavourable manner.

v) if improper implementation as described in the contract is detected or suspected

Before taking such a decision, Diakonia shall initiate discussions with the Partner Organisation.

During the period in which the contract is valid, the plan/project supported may not be transferred to

another organisation without prior agreement in writing between both parties.

Diakonia states that the payments to the Partner Organisation shall be stopped when:

the partner has not reported to Diakonia in spite of reminders

the partner organisation has not remitted the receipt of the previous payment

the partner organisation has not presented satisfactory answers to Diakonia‘s inquiries

there are substantial deviations from the partner organisation‘s Work Plan and budget


51

the partner organisation‘s main programme objectives are endangered

the partner organisation‘s programme develops unfavourably in terms of the sub-goals or in

any unfavourable manner

the partner organisation‘s implementing and administrative capacity is too weak despite

organisational strengthening

there are is reason to believe that there has been embezzlement

One of the three visited Country offices - Diakonia Peru Country office - requires only one signature

(the CO representative) for check payments, bank transfers, and financial transactions. At the

moment no alternative plans are in place. The Team considers this a serious risk that makes the

procedures vulnerable. According to key informants this is not a unique example; this has also been

practiced in for example Mozambique.

After reviewing the audit memorandum for Latin America and ESA the Team has found no major

internal control mechanisms or financial report problems. However, some bank reconciliations in the

beginning of 2009 at the RO for ESA were done late due to the fact that posting entries in the year

2009 was done upon finalisation of the 2008 annual audit. The Auditor also noted that cash count for

US Dollars in the month of May 2009 indicated a balance of zero while the cash book reflected a

negative balance of USD 6,099.93. No reconciliation was done to explain the discrepancy.

The Team has noted cash transfers in Partner Organisations that constitutes major risks. One example

is mentioned in section 4.4 and Appendix 7. A total of six payments were made on 12 Nov 2007 in

cash to the same vendor for printing and binding reports for invoices made on 2 Nov 2007. The cash

payment amounted to more than 110.000 SEK without any purchase order, payment vouchers or

quotations from other vendors. In this case there were no reason at all for cash payments, no reason at

all for non-compliance with procurement regulations and no reasons at all for using the vendor that

were paid and no evidence that the goods were delivered. No actions have been taken by Diakonia in

regard to this obvious case of suspected misuse of funding. However, Diakonia has initiated actions

on other problems related to the same Partner Organisation as referred to in section 4.4.


Diakonia states that the contract shall be signed by a board member and the financial manager of the

partner. However, each Partner Organisation has the responsibility for the decision on who should be

authorised to sign for the organisation.

One of the tree visited Country offices requires only one signature for check payments, bank

transfers, and financial transactions19

. The Team considers this a serious risk that makes the

procedures vulnerable.

19

In Latin America checks are signed by only one authorized person but the procedure applied in the preparation phase

requires at least one or two prepared and revised signatures. Diakonia states that it is difficult to have two signatures for

checks, as it will cause delays and stop in processes (due to small structures with few staff, travelling, etc)


52

Cash payments have been done in away that opens up for misuse of funding and corruption. Diakonia

has not always taken adequate action not even in cases where this problem has been reported by the

auditor in the management letter.


Diakonia should change the requirements when it comes to signing the contracts to comply

with the Partner Organisation‘s own regulations (l)

Diakonia should require that cash payment in Partner organisations should not be allowed for

payment over for example 1 000 SEK (h)

As a precaution all checks and financial transactions should be signed by two people (h)

5.4 Systems, rules and routines for procurement


In all work carried out by Diakonia transparency, good governance, anti-corruption, environmental

protection, non discrimination and respect for Human Rights are core values20

. Diakonia states that it

is important to ensure that procurements are carried out transparently, efficiently, in accordance to

general law, in a commercial way with competition and in accordance with Diakonia‘s policy and

goals in all purchases of goods or services, independently of the items value. It also involves

documenting the procedures so that controls and audits can take place.

Thus, Diakonia‘s contracts with Partner Organisations shall always have a paragraph on procurement.

However, in practice agreements with Partner Organisations do not always include regulations

regarding procurement.

Diakonia‘s Procurement guidelines are to be used by all Diakonia offices when buying goods or

services. These Guidelines also apply to Partner Organistaions when they procure with grants from

Diakonia. Partner Organisations need to apply the procurement rules set out in the contract Diakonia

has with the back-donor financing the programme in question. Partners may use their own

procurement procedures and rules if considered meeting Diakonia standards. Diakonia assists Partner

Organisations regarding procurement guidelines in case they have no rules. This has been done by

assisting the Partner Organisation to developing its own guidelines and also in helping Partner

Organisations to implement and apply Diakonia‘s. Partner Organisations must document the

procurement processes so they can be followed up in reports and audits.

Diakonia states that the procurement guidelines are tools that give guidance when buying goods or

services. When using the guidelines they also serve as a form of ―protection‖ or insurance for

avoiding unethical or corrupt actions when negotiating or buying things from different suppliers. The

rules are also to help the procuring employee in the comparison of different quotes from suppliers.

The Team has visited Partner Organisations with more rigorous regulations of procurement than

those presented in Diakonia‘s guidelines. One example is MCF in Kenya that seems handle

20

Procurement Guidelines for Diakonia, 2009-03-20


53

procurement policies and practices in a way that could serve as a learning example for Diakonia‘s

Partner Organisations. On the other hand there are Partner Organisations that neither in theory or in

practice are even close to what Sida is requiring. One example has been mentioned in section 5.3.


Diakonia has procurement guidelines in place. These should also be applied by the Partner

Organisations. However, in practice procurement is not even regulated in all contracts with Partner

Organisations. Some Partner Organisations have procurement regulations in place that are meeting

International standards. Other Partner Organisations are practicing procurement in a way that opens

up for corruption and misuse of funding.


Diakonia includes procurement regulations in all contracts with Partner Organisations (h)

Diakonia in its follow up of the Partner Organisations internal control secure compliance with

the procurement regulations (h)

5.5 Audits

In this section we will cover the following audit questions per ToR:

Audits in all parts of the organization, quality of audit certificates including an assessment of

whether audits comply with Sida‘s audit requirements for Diakonia

Competence and routines at Diakonia for analysing and acting on audit issues and suspected

irregularities

The view of Diakonia‘s auditor on the audit of framework grants from Sida.


The Diakonia Audit guide is to be applied to all projects and programmes21

. It is therefore necessary

that Diakonia HO secure that all Ro and CO use and apply the updated Audit guide. The two major

changes to the earlier version of the Diakonia Audit guide are: 1) Sida is demanding that the

International Standard on Auditing (ISA) shall be used instead of General Accepted Auditing

Standards. ISA should therefore be used in all cases where it is possible. 2) Diakonia only has one

instruction for all grants instead of two as before. In the old version there was one instruction for

grants above 200 000 SEK, and one for grants below 200 000 SEK. The other adjustments which

have been made are regarding: 1) Appointment of auditor, 2) Risk of corruption, 3) Subsequent links,

4) Format for audit certificate, 5) Format for audit memorandum and 6) Comments on audit for

Humanitarian projects 2006 and 2007. The partner organisations‘ auditors seem to have been

informed on these changes by the partner organisations to a varying degree.

The Team has found the Diakonia Audit guide to be well known at the ROs and COs visited.

21

Diakonia Audit Guide 2009-11-10


54

Diakonia has also informed the Partner Organisations on the need to adhere to the Diakonia Audit

guide. In for example Kenya the Diakonia Audit guide was presented and discussed at the Partners

forum where all Partner Organisations participated.

Local auditors are used at the COs and the Partner Organisations in all countries except in Somalia,

where auditors from Kenya are used. In some countries Diakonia has experienced difficulties with the

quality of the local auditors especially in Mozambique (ÖhrlingsPriceWaterhouseCoopers) and

Zimbabwe (BDO).

ÖhrlingsPriceWaterhouseCoopers has audited Diakonias financial reports under the agreement with

Sida in accordance with generally accepted auditing standards, based upon SNT 4400 and in

accordance with Sida‘s Audit instructions. The Team‘s opinion is that the Audit certificate from

ÖhrlingsPriceWaterhouseCoopers is of good quality22

. It notes that agreements with Partner

Organisations do not include regulations regarding procurement. It also notes that formal

Management letters in some cases have not been submitted. In addition, the Audit Memorandum23

notes some significant observations. It notes that in four out of five samples where Management letter

is missing the audit reports contain the corresponding information. During the review 2009

ÖhrlingsPriceWaterhouseCoopers noticed that unreported project costs which should have been

reported 2008 or earlier amounts to MSEK 45.7 out of which MSEK 19.7 relates to project costs for

the years 2007 and 2008, MSEK 24.4 to 2004-2006 and MSEK 1.6 to 2003.

The audit for each RO and CO depends upon the legal status, inherent risk and control risk for that

office. In most locations, local regulations require both a Management audit and an Audit of year-end

to be performed for the local reporting purposes. Regarding the Management audit it is required that

Management letters will be raised. If there is no issue to be reported this should be stated in the

report. Any comment by the auditor of internal control or any other issue should be documented in

the Management letter. Each office gets a written management response to its own Management

letter. It is recommended to include the Management response in the Management letter below each

recommendation from the auditor. The same principles apply for the Partner Organisations.

The grant Audit Certificate is sometimes a separate document and sometimes included as a separate

signed page in the Audit Financial Statement. However, it is also common to see the Audit opinion in

the Audit report as the Audit certificate. The wording of the Audit opinion is normally close to what

is required in the Audit Certificate required by Sida. At least the message is the same. However, for

some local auditors it is confusing to be required to deliver both the Audit report and an Audit

certificate. This has been communicated with Sida for some time by FAR and some of the auditors

used by the frame organisations24

. Diakonia‘s auditor share the views expressed in these Memos to

Sida. The issues under discussion and the different views on these are clearly presented in these

22

Audit Certificate for Diakonia, dated 14 May 2009 23

Audit Memorandum regarding the audit of Diakonia‘s agreement with Sida for 2008-2010, dated 14 May 2009 24

PM: Synpunkter på Sidas nya revisionsregel, 2009-04-06 (Diakonia, Plan Sverige, Rädda Barnen, Svenska Röda

Korset); Svar från Sida på detta PM, 209-06-04; PM: Synpunkter på Sidas revisionshandbok 2009-11-16 (Diakonia, Plan

Sverige, Rädda Barnen, Svenska Röda Korset och PricewaterhouseCoopers); Skrivelse från FAR till Sida: Revisors

granskning och rapportering avseende program/projekt/insatser som genomförs helt eller delvis med stöd av medel från

Sida, 25 maj 2010 med bilagan Kommenterade Sida-dokument samt Sidas svar till FAR, 2010-06-30


55

documents. Sida has assigned Ehrenberg Konsult to together with Allegretto review and clarify Sidas

instruction25

. The Team has been told that the draft problem analysis will be available in a few weeks.

Diakonia has a special form for the assessment of the Partner Organisations‘ audit reports. Partner's

audit report must be approved by Diakonia before any further payment is permitted. Furthermore, if

the Audit report is not approved Diakonia will not renew the contract.

The Team‘s assessments of the Audit memorandums from Partner Organisations in Colombia and

Peru showed no major irregularities. However, as will be detailed below, there have been some

reported irregularities in Kenya. Most common comments in the three visited countries taken together

had to do with the need to strengthen internal administrative controls in the Partner Organisations.

The most common comment in Peru was on timing problems due to clash between Peruvian end of

the fiscal year and Diakonia‘s. This forces auditors in Peru to comment on matters which would not

appear if audits were done after the completion of the Peruvian fiscal year.

Also the Assessments carried out by Diakonia reveal some administrative problems to address in the

Partner Organisations. Frequent notes in Management letters from Auditors and Assessments from

Diakonia regarding Partner Organisations are the following:

Risk analysis are not carried out and/or documented.

Only one staff knows how the financial management system works.

The annual budget is not broken down into shorter periods (quarterly for example) where

performance is monitored against budgeted performance.

Deviations or variances from work plans and budgets are not extracted and analysed.

Action plans are not developed on how to eliminate identified problems.

Appropriate action is not taken to rectify identified issues and/or there is no follow up to

secure that planned action has taken place.

It takes long time before questions to management on reports or financial statements are

clarified.

Purchase of goods and services without quotes or a quote only from the selected provider.

Purchase orders are missing.

Payment vouchers are missing.

Surprise cash counts are not carried out.

Less frequent notes in Management letters from Auditors and Assessments from Diakonia are as

follows:

Deduction from salary is done for Pay as You Earn Systems or National Social Security

systems but payments are not made to the relevant state organs.

Large amounts of cash are withdrawn from bank for payment to vendors.

The Team has assessed the competence and routines at Diakonia for analysing and acting on audit

issues and suspected irregularities. The Team has found that the competence is good when it comes to

the analysis. However, when it comes to action it is more complicated. Then it is not only a question

of analytical skill. Programme officers who are highly competent in objective analysis may have

25

Sidas instruktion för bidragsposten Stöd genom svenska organisationer i det civila samhället, 2010-02-18.


56

difficulties when it comes to action. The necessary actions influence the relations with the

counterparts within the Partner Organisation and, thus, the character of that relation plays a

significant role.

In most cases Diakonia has had a fruitful dialogue with the Partner Organisation on the audit reports

and management letters leading to constructive actions by the partner in order to solve the identified

problems. However, there are also examples where the Partner Organisation has not taken adequate

action and, thus, Diakonia has had to act accordingly:

The 2007 audit report from CREDO (Constitution & Reform Education Consortium) had a

qualified opinion with respect to a banking fraud. The management letter submitted did not

include management response. Seeking clarifications, Diakonia received no response and

subsequently a decision was taken not to renew the partnership with the organisation.

In the management letter for 2007 for the African Women´s Economic Policy Network

(AWEPON) the Auditor has noted ―irregular funds virement‖. This issue has not been solved

yet. Please refer to Appendix 7 for more details.

The review of the audit report and management letter revealed that the Kenya Women

Workers Organization (KEWWO) financial records contained significant inconsistencies that

may impact on the accountability of funds given by Diakonia in 2008. This issue has not been

solved yet. Please refer to Appendix 8 for more details

The Country Programme Manager submitted an Incident, alert and non conformity report on

KEWWO on the PHS on the 5th

May 2010. The misuse of funding in AWEPON has not been

reported in the PHS.

These examples indicate that there is need for changes on the system level on how to handle these

issues, not to put the individual programme officers in an impossible situation of mixed loyalties

based on invested trust.


The audit of framework grants from Sida has been communicated with Sida for some time by

Diakonia and other frame organisations, some of their auditors and FAR. The issues under discussion

and the different views on these are clearly presented in the documents mentioned in sub-section

5.5.1.

In most Partner Organisations the Audits are of good quality even if they sometimes are not meeting

the requirements when it comes to Audit certificates. In member-based organisations it is stressed

that the Auditor‘s report is directed to the members. For the sake of transparency the Management

letter should be available for the Board, the members and the donors upon request.

Some local auditors are reluctant to issue both specific Audit Certificates and Audit reports arguing

that their Audit opinion in the Audit report is what they are required to deliver according to the

International Accepted Standards they use. The Team‘s understanding is that this issue will be

addressed by Sida. Since a comprehensive analysis will be available shortly that will give a much


57

more substantive point of departure for recommendations than is the case in this system-based audit

of one frame organisation only the Team will not provide any recommendations in this regard.

The Team is of the opinion that the competence is high enough at all levels of Diakonia to analyse

audit reports and management letters. However, there is need to improve the processes when it comes

to how Diakonia act in practice on suspected irregularities. Please refer to the recommendations in

section 4.4.


Diakonia should establish routines and incentives that guarantee that audit reports, audit

certificates and management letters are submitted in time (h)

Diakonia should advice its Partner Organisations that the Management letter should be

available for the Board, the members and the donors upon request (l)

6 Aid effectiveness 6.1.1 Observations and analysis

The Team has in section 4.3 detailed how Diakonia views ownership. It is obvious that Diakonia

respect the leadership of the Partner Organisations and help strengthen their capacity to exercise it.

Diakonia also accept the Partner Organisations systems and procedures to the maximum extent

possible given the need to comply with the regulations set by the back-donors. Where use of the

Partner Organisation‘s systems is not feasible, Diakonia tries to establish additional safeguards and

measures in ways that strengthen rather than undermine these systems and procedures. There have

been some problems related to different requirements on the Partner Organisations as detailed in

section 5.5. None of the visited Partner Organisations have been forced to establish specific structures

for the implementation of the Diakonia-financed projects and programmes in addition to the usual

day-to-day management.

Diakonia distinguishes between core funding and project support. Both can be granted. As is detailed

in sub-section 2.7.3 the Team has visited both partner organisations receiving core funding and others

with project support. Six of the selected partner organisations have project support and nine have core

funding. Thus, the Team has been in a position also to assess differences in the management systems

related to type of funding. Core funding is understood as funding directed to the organisation as a

whole, to be channelled within the organisation in the way that partners find most convenient.

Diakonia does however consider it important that the responsibility for covering the administrative

costs is shared between all back donors. Partners are therefore expected to strive for administrative

contributions in negotiations with other back donors26

.

Long term partnerships are often characterised by core funding, but not necessarily. For example

currently all partner organizations in the Kenya programme receive project support. Core funding is

not common during the pilot phase. Even though project funding limits the funds to a separate

project, the project is preferably an integral part of a larger strategy plan.

26

The PME Handbook


58

Diakonia's current frame agreements with Sida/Seka and Sida/Rela imply a three plus one year

contract, meaning that the contract is for four years. The final report should be submitted already

after the first three years. The last year is considered a bridging year and is reported separately for

one year on the same results as the final report. The normal contract template needs editing for

periods shorter than four years.

Presently Diakonia is reviewing its instruments also detailing in the agreements the differences in

requirements between core funding and project support.

Many interviewees has pointed out that core funding facilitate aid effectiveness. Diakonia‘s Eastern

and Southern Africa region has also elaborated on this issue in a paper27

:

Ownership: Core funding is a more flexible funding where the Partner Organization is given

the freedom to allocate funds to the various budget items. The pre-requisite is that the Partner

Organization must have the needed capacity to take on this responsibility.

Harmonization: Development is a joint effort of many actors. Most Partner Organizations

have multiple donors who are interested in the same results. Core funding among the co-

funders would not only make it easier for the Partner Organizations to service them but also

catalyze the harmonization process. For example, because funding will be made into a basket,

reporting would be done generally without segregation.

Managing for results: Support to Partner Organizations is given to facilitate them in achieving

their planned results. Failing to support overhead costs means that the Partner Organizations

are expected to work for results without any consideration of the people necessary for those

results. Sustainable results require investments in staff skills, strategic work and

organizational development. Thus, the contract period normally used at present is assessed as

giving the Partner Organizations a reasonable number of years to work against their visions.

One year contracts are assessed to be too short to be efficient.

Mutual accountability: Donors and partners are accountable for development results. This

confirms healthy partnerships where both the donor and the partners have roles and

responsibilities. Core funding recognizes that there are many contributors to development

results and none can claim the full share.

When it comes to alignment on a more general level, traditionally Diakonia has not been cooperating

in the field with other international organisations, donors or the other Swedish frame organisations

with the aim at harmonising procedures. In 2009, Diakonia became a member of the Humanitarian

Accountability Partnership (HAP). HAP is an organisation that aims to raise the quality and

coordination of humanitarian action in the world. Diakonia is also member of CONCORD and take

part in its advocacy and training activities on the EC level. Diakonia has also participated in the

activities of Action by Churches Together (ACT). Diakonia is also a member of, and has been very

active both in APRODEV and in Eurodad regarding aid effectiveness on a European and global level.

Diakonia was very active in the process leading up to the Accra meeting. Diakonia took part in and

contributed towards the following workshops amongst other things:

- Northern Regional Workshop on Civil Society and Aid Effectiveness, held in Brussels on

Monday 15 October & Tuesday 16 October 2007

27

Diakonia, Eastern and Southern Africa region: Core funding, 16th December 2008


59

- Global North / South Civil Society Dialogue meeting in Nairobi, November 15/16, 2007

- International Forum on civil society and aid effectiveness in Ottawa 3-6 February, 2008

- Actively participating, representing APRODEV, in the Open Forum for CSO Development

Effectiveness, in the Global Facilitation Group, 29 an30 June 2008; and

- The Accra meeting itself,

In 2007 Diakonia together with other Swedish NGO‘s in Kenya made a study called ―Consequences

of the Paris Agenda on Civil Society in Kenya‖. In Kenya Diakonia has also organised seminars for

the Partner Organisations in cooperation with other Swedish frame organisations as for example Save

the Children in order to establish shared views on for example anti-corruption and procurement.

Diakonia tries to participate in meetings and seminars arranged by the Partner Organisations to meet

with their other funders among others with the aim to coordinate reporting and harmonise

requirements on performance assessments so as to avoid presenting Partner Organisations with an

excessive number of potentially conflicting targets and results indicators.

Diakonia also participates in seminars and meetings arranged by the Swedish Embassies.

Interviewees at Diakonia have underlined the importance of increased coherence between Sida-

Stockholm and the Swedish Embassies. Among others coordination on the reporting requirements are

requested.

Interviewees have proposed that Diakonia on the regional level of its organisation should cooperate

with relevant regional church organisations in order to share experiences, disseminate findings from

local programmes and projects, coordinate and prioritise country programmes and projects.


Diakonia respect the Partner Organisations‘ ownership and is actively supporting the further

development of their capacity. Diakonia try to align with the Partner Organisations‘ own systems and

procedures to the extent possible; however, the need to comply with back-donors requirements puts

some limitations to these efforts.

Long term partnerships are often characterised by core funding, but not necessarily. The normal

contract period of three plus one year is adequate in order to give the Partner Organisations enough

time to implant their strategic plans and achieve sustainable results. Core funding is not common

during the pilot phase. Diakonia considers it important that the responsibility for covering the

administrative costs is shared between all back donors. Partner organisations are therefore expected

to strive for administrative contributions in negotiations with other back donors.

At the individual Partner Organisation level Diakonia has participated in efforts to harmonise

procedures. Diakonia has also been active in the area of aid effectiveness in general especially on the

global level. Diakonia has declared its awareness of the need to continue to work pro-active in this

regard.


Diakonia should make efforts to have regular meetings with other organisations that support

CSOs in the same country (l)


60

Diakonia should always actively participate in meetings that the Partner Organisations are

organising for their funders (l)

Diakonia should discuss the added value of regional cooperation with regional churches and

networks (l)


61

7 Sammanfattning (Executive Summary in Swedish)

7.1 Inledning

Diakonia är det gemensamma biståndsorganet för fem svenska kyrkor, nämligen Alliansmissionen,

Baptistsamfundet, Evangeliska Frikyrkan, Metodistkyrkan och Missionskyrkan. Diakonias

representantskap fattar beslut av övergripande karaktär, utser styrelseledamöter och fastställer de

ekonomiska ramarna.

Diakonias arbete sker i partnerskap med cirka 400 lokala organisationer, samfund och folkligt

förankrade rörelser i ett 30-tal länder. Genom dessa görs insatser för varaktig förändring av

situationen för de mest utsatta och fattiga. Centrala arbetsområden är demokratisering, mänskliga

rättigheter, jämställdhet, ekonomisk och social rättvisa samt fred och försoning. Diakonia anser att ett

starkt civilt samhälle är av fundamental betydelse för en hållbar utveckling. Tillsammans med

medlemskyrkorna arbetar Diakonia i Sverige med folkbildning, mobilisering, kampanjer och

insamling.

7.2 Observationer och analys

Vi har analyserat relevant dokumentation från Diakonia och Sida. Dessutom har vi genomfört

fältresor till de regionala kontoren för Afrika och Latinamerika, samt landkontoren för Kenya,

Colombia och Peru, för dokumentgranskning och intervjuer. För att studera hela organisationskedjan

har vi också besökt ett urval på 15 partnerorganisationer för att granska deras system och intervjua

representanter för dessa organisationer. Vi har också intervjuat Sidapersonal, personal vid Diakonias

huvudkontor, Diakonias revisor samt Diakonias styrelseordförande och ett urval på ytterligare fyra

styrelseledamöter. Sammanlagt har 135 personer intervjuats.

Sammanfattningsvis har vi gjort följande observationer (i den ordningsföljd som anges i

uppdragsbeskrivningen i bilaga 1):

7.2.1 Organisationsstruktur

Mission, vision, mål och policies

Diakonias uppgift, övergripande mål och vision delas av styrelse och personal och är väl förankrat i

hela organisationen. Partnerorganisationerna uppskattar Diakonia inte bara för det ekonomiska stödet

utan även för värdegemenskapen och stödet i utvecklingen av organisationernas kapacitet. Vi

bedömer dock att de pågående förändringarna av huvudmannaskapsstrukturen innebär en risk om

dessa förändringar medför att grundläggande värderingar, uppgifter och vision skulle ändras märkbart

utan att detta är förankrat hos de viktigaste intressenterna.

Styrelsens roll och mandat

Styrelsen har en tydlig roll och ett tydligt mandat. Förändringarna av huvudmannaskapsstrukturen

kommer emellertid att påverka styrelsearbetet och innebär en betydande risk som måste hanteras på

rätt sätt. Konsekvenserna av att tre medlemskyrkor slås samman och att de två återstående eventuellt

lämnar Diakonia bör analyseras mera noggrant.


62

Organisation och beslutsprocesser

Diakonia håller på att utveckla en mer decentraliserad organisation som är mer flexibel och som är

lättare att anpassa till nya förutsättningar och utvecklingsbehov. Hittills har processen varit

framgångsrik. Införande av resultatkontrakt och årliga uppföljningar av resultat skulle öka

resultatorienteringen ytterligare och säkerställa en bra arbetsmiljö med tydligt avgränsade krav och

förväntningar och en återkoppling där goda resultat uppmärksammas och belönas.

Organisation och beslutsprocesser är tydliga. Projekthanteringssystemet är utformat för Sida-stödda

program och projekt och behöver göras mer flexibelt så att det även passar för EU- och FN-stöd.

7.2.2 Verksamhetsstyrning

Resultatstyrning

Såväl Diakonia, på alla nivåer, som partnerorganisationerna gör stora ansträngningar för att öka

resultatorienteringen. Diakonias handbok anger minimistandarden i projektcykeln på ett

ändamålsenligt sätt. Handboken och projekthanteringssystemet används i praktiken på alla nivåer.

Rapporteringssystemet ger ett bra informationsflöde från landkontoren till regionkontoren och vidare

till huvudkontoret. Diakonia använder resultatstyrning men denna kan vidareutvecklas när det gäller

att formulera tydliga mål och mätbara resultatindikatorer.

Kriterier och procedurer för val av partnerorganisationer och deras projekt eller program

Kriterierna för såväl val av länder som för programutformningen är ändamålsenliga och används i

praktiken i det pågående omstrukturerings- och decentraliseringsarbetet. Det kan emellertid i vissa

länder vara svårt att få tillräckligt med programstöd till breda landprogram. Kriterierna för val av

partnerorganisationer och att vidmakthålla partnerskap är också ändamålsenliga och används i

praktiken.

Partnerorganisationers och målgruppers delaktighet i planering, uppföljning och utvärdering

av projekt och program

Diakonia har ett väl utvecklat förhållningssätt när det gäller partnerorganisationernas och

målgruppernas delaktighet i planering, uppföljning och utvärdering av projekt och program med en

tydlig fördelning mellan Diakonias ansvar för sina program och partnerorganisationernas ansvar för

sina projekt och program. Dessa fundamentala principer efterföljs på alla nivåer. Emellertid saknas

ofta systematiskt insamlad information om läget vid projektstart.

System för riskanalys och riskhantering (inklusive korruptionsrisker)

Besluts-PM i projekthanteringssystemet inkluderar riskanalys. Diakonia har nolltolerans vad gäller

korruption. Format och instruktioner för rapporteringen om korruption och misshushållning av

resurser är innehållsdigra. I de studerade länderna finns få fall av rapporterade incidenter. Dessa

incidenter indikerar emellertid en viss svaghet i Diakonias sätt att hantera misstankarna och

ansvarsfördelningen i den fortsatta processen.

Utfasningsstrategier vad gäller partnerorganisationer, projekt och program

Diakonia har rutiner för avslutning av program och kriterier för utfasning av partnerorganisationer.

Emellertid finns det inga utfasningsstrategier avseende hållbarhet för partnerorganisationen. Det


63

verkar vara ovanligt att fasa ut en partnerorganisation på grund av att den kan klara sig genom egen

finansiering.

7.2.3 Ekonomisk styrning och kontroll

Ekonomisystem

All finansiell information rörande Diakonia finns registrerad i Visma (information från PHS,

Hogia/Flex, Mysoft och lokala ekonomisystem). Men processerna är ineffektiva på grund av att man

använder sig av flera olika system på olika nivåer. Planer finns att vidareutveckla ekonomisystemet

och PHS med målet att skapa ett sammanhållet globalt system. Detta har potential att signifikant öka

effektiviteten genom att nuvarande överlappningar och dubbelarbete försvinner.

Avtalsefterlevnad

Diakonia svarar upp mot Sidas villkor och föreskrifter med några få undantag som finns beskrivna i

denna rapport. De nya avtalen med partnerorganisationerna och den noggranna bevakningen av

partnerorganisationernas system för internkontroll har potential att säkra att även

partnerorganisationerna efterlever villkoren. Men uppföljningen av partnerorganisationernas

internkontroll borde göras mer systematiskt genom mer frekventa besök hos partnerorganisationerna.

För att undvika att rapportera genom flera nivåer kan det eventuellt i vissa fall vara möjligt att

använda sig av trepartsavtal.

Medelsöverföring samt hantering av bankkonton och kontanter

Ett av de tre besökta landskontoren krävde endast en signatur för betalning med check,

banköverföringar och finansiella transaktioner. Kontant betalning har i ett fåtal partnerorganisationer

gjorts på ett sätt som öppnar upp för felaktig medelsanvändning och korruption. Diakonia har inte

alltid snabbt vidtagit erforderliga åtgärder - inte ens i fall där problemet har rapporterats av revisorn.

System, regler och rutiner för upphandling

Diakonia har fastställda riktlinjer för upphandlingar. Dessa bör också vara minimistandard för

partnerorganisationerna. Men i praktiken är upphandling inte ens reglerat i alla kontrakt med

partnerorganisationer. Vissa partnerorganisationer har regler för upphandling som möter

internationell standard. Andra partnerorganisationer använder sig av upphandlingar på ett sätt som

öppnar upp för korruption och felaktig medelsanvändning.

Revision

I medlemsbaserade partnerorganisationer betonas att revisionsberättelsen är riktad till medlemmarna.

Revisions-PM ska finnas tillgängligt för styrelsen, medlemmarna och givarna vid begäran. Vissa

lokala revisorer är ovilliga att utfärda både revisionsintyg och revisionsrapporter med argumentet att

deras åsikt som revisor i revisionsrapporten är vad de är skyldiga att leverera enligt internationell

standard. Kompetensen att analysera revisionsrapporter och revisions-PM är tillräckligt hög på alla

nivåer inom Diakonia. Men det finns behov att förbättra processerna kring hur Diakonia handlar

praktiskt när det kommer till misstänkta oegentligheter.

7.2.4 Biståndseffektivitet

Diakonia respekterar partnerorganisationernas ägarskap och stöttar aktivt den vidare utvecklingen av

deras kapacitet. Diakonia försöker anpassa sig till partnerorganisationernas egna system och metoder


64

så långt det är möjligt. Diakonia försöker också koordinera rapporteringen och harmonisera kraven

med andra givare till en specifik partnerorganisation. Diakonia har varit aktiv inom området

biståndseffektivitet, speciellt på den globala nivån. Diakonia är medveten om behovet att fortsätta att

arbeta pro-aktivt inom detta område.

7.3 Övergripande slutsatser

Målen med systemrevisionen enligt uppdragsbeskrivningen finns angivna i tabellen nedan. Vi har för

varje mål sammanfattat våra övergripande slutsatser i tabellen.

Målen för systemrevisionen Vår bedömning

att granska tillförlitligheten och relevansen i

systemet för operativ och finansiell kontroll inom

Diakonia och att bedöma i vilken utsträckning

systemet tillämpas och efterföljs på alla nivåer

inom organisationen.

1. Systemen för operativ och finansiell kontroll

inom Diakonia är relevanta och tillförlitliga.

Emellertid finns en tendens att inte agera

systematiskt och snabbt nog när korruption

eller felaktig användning av finansiering

misstänks.

2. Systemen är implementerade på alla nivåer

inom organisationen. De interna system som

används av partnerorganisationerna möter i

de flesta fall åtminstone en likvärdig

standard. Emellertid har vissa

partnerorganisationer en svag internkontroll.

att avgöra, på basis av granskningen, om

dokumentationen och rapporterna till Sida enligt

nuvarande ramavtal återspeglar den verkliga

situationen och därmed kan anses fungera som

tillförlitlig information för Sida i

bedömningsprocessen

Dokumentationen till Sida enligt nuvarande avtal

återspeglar den verkliga situationen och kan därför

anses fungera som tillförlitlig information för Sida i

bedömningsprocessen.

att bedöma om Diakonia efterlever Sidas villkor

samt om Diakonias kontrollsystem säkrar att även

partnerorganisationerna efterlever dessa villkor

1. Diakonia efterlever Sidas villkor med få

undantag som finns beskrivna i denna

rapport.

2. Diakonias kontrollsystem säkrar att

partnerorganisationerna också efterlever

dessa villkor

att bidra med förslag till organisationens

förändringsprocesser och systemutveckling

The Audit Team has in the report provided Diakonia

with concrete recommendations on how to further

develop the management systems.

Vi har i rapporten bidragit med konkreta

rekommendationer om hur Diakonia kan

vidareutveckla styrsystemen.

Mer detaljerade slutsatser finns i slutet av varje avsnitt.


65

7.4 Rekommendationer

Rekommendationerna finns presenterade i slutet av varje avsnitt. De föreslagna rekommendationerna

överensstämmer med de mest betydelsefulla iakttagelserna och slutsatserna som finns presenterade

ovan. Vi har följande rekommendationer i prioritetsordning:

Högst prioritet (i den ordning som de återfinns i rapporten):

Diakonia genomgår en öppen institutionell visionsprocess med målet att nå konsensus kring

den långsiktiga inriktningen och en gemensam vision inom ramen för den nya

sammansättningen av medlemmar (kapitel 3.1).

Förändringarna beträffande Diakonias medlemsorganisationer bör noggrant analyseras,

inkluderande en riskbedömning (kapitel 3.2).

Diakonia bör införa tydliga åtaganden och årliga uppföljningar av dessa (kapitel 3.3).

PHS bör utvecklas för att förenkla/underlätta genomförandet av projekt finansierade av EU,

FN och andra givare (kapitel 3.3).

PME-handboken bör utvecklas för att öka flexibiliteten på regionkontors- och

landkontorsnivåerna, speciellt för program som har stöd från andra än Sida (kapitel 4.1).

Mål och resultatindikatorer för program och projekt bör vidareutveckla för att ge nödvändig

och validerad information som underlag för programmens och projektens fortsatta utveckling

(kapitel 4.1).

Diakonia bör ge sina partnerorganisationer stöd i att introducera resultatstyrning och att

utveckla mätbara mål- och resultatindikatorer (kapitel 4.1).

Diakonia bör fortsätta sina ansträngningar att systematiskt implementera participatoriska

uppföljnings- och utvärderingssystem i samarbete med partnerorganisationerna (kapitel 4.1)

Diakonias huvudkontor bör ge de regionala kontoren systematisk återkoppling på rapporterna

(kapitel 4.1)

I de länder där Diakonia bestämmer sig för att bedriva verksamhet och det är svårt att få full

budgetfinansiering för ett kostnadseffektivt program bör Diakonia överväga att se över

utformningen av landsprogrammen för att möjliggöra en projektportfölj som finansieras av

olika givare som komplement till kärnprogrammet (kapitel 4.2.).

Diakonia bör införa en modell för riskbedömning och riskhantering (kapitel 4.4)

Diakonia och dess partnerorganisationer bör noggrant följa upp de exempel på felaktig

medelshantering som har rapporterats och fortsätta rapportera misstänkta oegentligheter även

i framtid (kapitel 4.4)

Diakonia bör införa en gemensam process kring hur inrapporterade incidenter och felaktig

medelsanvändning ska hanteras (kapitel 4.4)

Incidenter ska alltid omedelbart rapporteras i PHS (kapitel 4.4)

När incidenter om misstänkta oegentligheter har rapporterats om en partnerorganisation bör

regionchefen ha ansvaret för utredningen och utredningsarbetet bör bedrivas på

regionkontoret (kapitel 4.4)

Diakonia bör intensifiera sina ansträngningar att efterleva avtalen med Sida (kapitel 5.2)

Diakonia bör följa upp partnerorganisationernas internkontrollsystem mer systematiskt

(kapitel 5.2)

Diakonia bör överväga att använda trepartsavtal när aktiviteter är koordinerade av en

partnerorganisation men implementerade av andra organisationer (kapitel 5.2)


66

I förebyggande syfte bör checker och finansiella transaktioner signeras av två personer

(kapitel 5.3)

Diakonia bör kräva att kontantbetalningar i partnerorganisationer inte tillåts för belopp

överstigande till exempel 1 000 kronor (kapitel 5.3)

Diakonia inkluderar regler för upphandling i alla kontrakt med partnerorganisationer (kapitel

5.4)

Diakonia i uppföljningen av partnerorganisationerna internkontroll säkerställer att

upphandlingsreglerna efterlevs (kapitel 5.4)

Diakonia bör införa rutiner och incentivs som garanterar att revisionsrapporter, revisionsintyg

och revisions-PM lämnas in i tid (kapitel 5.5)

Lägre prioritet (i den ordning som de återfinns i rapporten):

Diakonia bör utveckla en kommunikationsstrategi för organisationen globalt (kapitel 3.1)

Diakonia bör revidera rapporteringssystemet med syfte att undvika dubbleringar och fokusera

på vad som är relevant information för olika intressenter (kapitel 4.1)

Diakonia bör i dialogen med partnerorganisationerna mer explicit be om riskanalyser och

information om riskhantering (kapitel 4.4)

Diakonia bör klargöra vilka kriterier som gäller för olika typer av partnerskap med eller utan

finansiellt stöd (kapitel 4.5)

I avtalen med partnerorganisationerna bör Diakonia be dem genomföra baslinjestudier

(kapitel 4.5)

Diakonia fortsätter sina ansträngningar att införa ett effektivt ekonomisystem (kapitel 5.1)

Diakonia bör besöka partnerorganisationerna oftare för att följa upp deras system för

internkontroll (kapitel 5.2)

Diakonia bör överenskomma om realistiska deadlines särskilt när det gäller projektstöd som

går genom partnerorganisationers huvudkontor till lägre nivåer inom organisationen (kapitel

5.2)

Diakonia bör ändra kraven när det gäller underskrift av kontrakt så att dessa krav

överensstämmer med partnerorganisationerna egna system (kapitel 5.3)

Diakonia bör ge partnerorganisationerna rådet att revisions-PM bör vara tillgängliga för

styrelsen, medlemmarna och givare enligt önskemål (kapitel 5.5)

Diakonia bör eftersträva att regelbundet träffa andra organisationer som ger stöd till

partnerorganisationerna i samma land (kapitel 6)

Diakonia bör alltid delta aktivt i möten som partnerorganisationer anordnar för sina givare

(kapitel 6)

Diakonia bör diskutera mervärdet av regionalt samarbete med kyrkor och nätverk på regional

nivå (kapitel 6).

system based audit of diakonia · 2014. 4. 8. · diakonia head office, diakonia‘s auditor,...

Documents