CANBERRA — World Vision Australia is facing a major blow to its reputation, with allegations of nepotism and corruption within its ranks that led to ongoing kickbacks as part of a $2.5 Australian dollar ($1.6 million) printing and marketing contract.
The allegations were accompanied by emails and invoices provided by a whistleblower outlining payments to a consultant, brought onto the World Vision project by his son — an executive at World Vision Australia, to manage the procurement process by the organization.
“[Contract favoritism] happens within many organizations, and it is kind of endemic to an extent.”— Fiona Haines, professor of criminology, University of Melbourne
World Vision Australia responded to the allegations on March 8 in a statement. Gordon Allison, chief financial officer for World Vision Australia, said that the organization had been made aware of the allegations on March 3 and had notified police, the Australian Charities and Not-for-profits Commission, and engaged auditing company KPMG to “undertake a formal, independent investigation of this matter.”
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Follow up allegations from the investigation suggest that World Vision Australia was made aware of potential corruption by a whistleblower in December, raising questions on its timeline.
Devex, however, understands from sources that the issues raised in December were not associated with bribery and kickbacks. The allegations raised by the whistleblower against World Vision Australia and Chief Executive Claire Rogers were in relation to concerns that contract documents had been forged or falsely signed by the printing company. The whistleblower held the printing contract prior to the organization’s alleged corruption, and was working within the new printing entity that took over the contract at the time. This enabled the whistleblower with access to emails, invoices, and contracts.
World Vision Australia has since stated that the additional allegations will be part of the review by KPMG, and is unable to provide further comment while investigations are ongoing.
On March 11, further financial challenges emerged with the organization revealing it had underpaid “around 200 casual and 45 permanent employees” at an anticipated cost of $8.9 million. The Australian Red Cross faced a similar challenge in 2018, underpaying staff by $20 million.
These scandals come at a time when annual reports reveal monetary donations and gifts to the NGO have declined by $101 million since 2010 and could potentially put further financial strain on the organization.
Rogers resigned prior to the allegations being made public citing family reasons. The resignation had been raised with the World Vision Australia board in a meeting on February 28 prior to being made aware of the corruption allegations.
What happens next
Allegations of corruption are the focus of the investigations in progress, and limited information is available on the specific World Vision Australia case. However, ACNC has said that the allegations are being looked into with the possibility of penalties.
“Due to secrecy provisions in the legislation that established the ACNC, we are unable to comment on the specific circumstances of individual charities,” an ACNC spokesperson told Devex.
“The ACNC takes all concerns about charities seriously, including notifications made by a charity itself. We assess all concerns we receive and investigate when there is evidence that a charity has failed to comply with its obligations.”
The obligations charities must comply with to remain registered include governance standards of board members’ responsibilities, along with obligations to act in the best interests of the charity, to disclose conflicts of interest, and to manage the finances responsibly.
“The ACNC has a range of powers that it can exercise when taking action against a charity,” the spokesperson said. “From warnings and directions through to financial penalties and revocation of a charity’s registration. Our action depends on the details of a charity’s non-compliance — we take action proportionate to the non-compliance we seek to address.”
The Australian Council for International Development, the peak body for Australia’s international NGOs, will be discussing the allegations against World Vision Australia as part of a board meeting this week, along with any breaches of the code of conduct — in particular breaches of the code in relation to whether the governance of the organization was “accountable, transparent and responsible.”
"ACFID’s members sign-up to our code of conduct which sets and maintains standards for the important work our sector undertakes,” a spokesperson for ACFID said. “Accordingly, we take any suggestion of wrongdoing extremely seriously and are working actively with World Vision Australia in regards to this matter.”
The spokesperson said ACFID’s code of conduct committee will also be considering the issues that have come to light and will consider any further action.
"As a sector, trust is one of the most valuable assets we have and we must meet the high expectations we have set ourselves and which the community expects,” the spokesperson said.
The Department of Foreign Affairs and Trade, as a major funder of World Vision Australia through the Australian NGO Cooperation Program, will also be closely monitoring the outcomes of ongoing investigations.
“DFAT ... will consider appropriate actions regarding its relationship with World Vision Australia based on the findings of this independent process,” a spokesperson for DFAT told Devex. “DFAT treats all allegations of fraudulent or corrupt activity seriously.”
Corruption within NGOs
Financial corruption and favoritism in awarding contracts are issues all organizations need to be aware of and it is not just an issue in the for-profit sector, Fiona Haines, professor of criminology at the University of Melbourne, told Devex.
“It happens within many organizations, and it is kind of endemic to an extent,” she said.
Playing favoritism in awarding contracts in particular, Haines said, sits at the intersection of three competing obligations.
“One is an obligation of care for family and trusted relationships within a family. The second is a need for organizations to be able to trust their employees and members, and the third is a need for the organization to do the right thing in terms of fairness, complying with the law and so on. With a scandal such as this, it exposes those tensions.”
As staff face competing obligations between work and home, organizations need to acknowledge this and build processes that take into consideration what they will do when conflicts emerge. And this can be a balancing act.
“From inside the organization, having everything on paper with clear procedures and making everybody go through those procedures can be a good thing, but it also signals that you don’t trust your colleagues,” Haines said.
“Rather than saying you should follow procedure, it is important to have a conversation to say that we know this happens across the board. It may be that each organization comes up with a policy and procedure that is clear to everyone. But what is important is a process that takes the distrust of an individual away.”
Conversations also need to happen around the risks staff are exposed to in certain roles, with contracting and subcontracting relationships or purchasing for the organizations, Haines said.
“Every position comes with a vulnerability,” she said. “Having conversations as well as procedures and frameworks that are not about the individual but the position can help in identifying and responding to risk, and it takes some of the emotion out of it.”
They are processes that should not create a financial burden to organizations and are important to limit the need to respond to allegations of corruption, which Haines warned could get messy.
“It’s never straight forward,” Haines said. “When things like this erupt, people might see it as clear black and white. But it’s not.”