Due to the ambiguity of the definition and lack of tailored training, even with policies and reporting mechanisms in place, reports of facilitation payments may be non-existent. However, that does not mean these payments are not occurring. It is often a matter of how to Identify Facilitation Payments.
In an organisation with many outsourced processes, for instance, facilitation payments may not be directly made by your organisation. However, they can still involve touchpoints with your organisation that are possible to identify and address.
In this article, you will learn a step-by-step approach to identify facilitation payments in your organisation and apply relevant solutions for addressing the situation. This approach consists of:
- Risk Assessment
- Focus Interview
- Review of Relevant Organisation’s Records
- Feedback to Local Management
- Training
Risk Assessment
The first step in identifying facilitation payment requests is to get a thorough understanding of your organisation’s business operations.
Let’s consider an example. If your organisation imports goods, it’s essential to understand how this process works. You should begin by identifying the operational areas within your organisation that are more likely to find requests for facilitation payments. Once these areas are identified, determine exactly where within these operations such requests might arise.
Therefore, for the risk assessment, focus on two key aspects:
- Identify Potential Areas: Examine your organisation’s business and pinpoint the areas where facilitation payments could be requested. This may involve processes such as importing goods, road transport, local transportation, manufacturing, regional offices, or the use of company trucks or third-party delivery services.
- Investigate Specific Areas: For example, in road transport, look closely at where these payments could occur, such as during customs clearance, at road stops, or during vehicle inspections. It’s important to be as specific as possible in identifying these points.
| FAFPI has a risk assessment tool available that can help you determine whether facilitation payments are a significant concern in your organisation. It is also a useful tool for selecting the focus area(s) with the highest risk of facilitation payments in the organisation. You can access it here. |
Focus Interview
After identifying and investigating the potential areas where requests for facilitation payments can occur, you can move forward to the next step: the focus interview.
You may not be familiar with how your organisation handles specific processes. Therefore, you will need to identify who knows the most about these processes. For example, the logistics team might handle customs clearance. If your investigation points to customs, you can start with the logistics team, where you will be able to engage with knowledgeable individuals within that area. Here are some more examples:
- Fleet Manager: Responsible for transportation and truck inspections.
- Human Resources Department: Handles visas and visitors, as well as work permits and truck drivers. They might also coordinate with agencies managing these processes.
- Warehouse Manager: Can explain processes related to warehousing, including fire and safety inspections.
Once the key personnel are identified, conduct focus interviews to delve into the details of each process. These interviews can range from 15 minutes to 2 hours, depending on whether the process is managed internally or outsourced.
For the interview, you can start by understanding the process flow. You can ask questions related to, for instance, how the process is conducted; who is responsible at each stage; the sequence of actions and the documentation involved. Depending on your findings, you may move forward to scheduling new interviews with more relevant people.
It is very important that you ask for some of the relevant documentation mentioned in the interview. You can, for instance, ask for documents from the last three months. For example, if customs clearance is outsourced, you can ask for the agreements with the freight forwarder and related invoices from the last three months.
Therefore, start by understanding the process and then move forward to requesting documents.
Review of Relevant Organisation’s Records
After collecting the documentation and understanding the various processes, you are ready to start investigating the organisation’s records. This phase is basically about following the money. Employees typically don’t pay facilitation payments out of their own pockets, so there will be records, whether in the organisation’s books or invoices from service providers.
You can examine, for instance, employee claims, cash advances, payslips, and invoices from service providers. Look for the following:
- Patterns in Small Amounts: Identify unusual payments, such as repetitive payments of the same amount (e.g., $50), which might indicate non-standard transactions.
- Undocumented Amounts: Ensure every payment, specifically those marked as customs fees or similar, is backed by appropriate documentation. The absence of receipts or supporting documents is a red flag.
- Creative Terminology: Facilitation payments might use euphemistic terms or local language variants. Research to understand common local terms for such payments in the countries where your organisation operates.
| Practical example: In one of our auditing processes, we identified that facilitation payments were being registered as employee bonuses. An employee received 26 bonuses in one month, corresponding to 26 trips to customs with truckloads. This was well-documented but not explained until further investigation. |
When your organisation operates in another country, it may be beneficial to rely on a trusted local employee who can assist with translation and local communication. This person can help write questions and translate answers to ensure clarity and accuracy.
Moreover, it is always a good idea to engage with the Human Resources and Finance teams for additional insights and documentation support. They can help you identify unusual financial patterns and provide necessary records.
Feedback to Local Management
After your investigation, it is time to provide local management with feedback on the identified risks and findings. You can do this by writing a brief report (one to one and a half pages) that summarises the key findings of your investigation. You can include:
- Identified Risks: Outline the risks associated with facilitation payments, providing specific examples discovered during the investigation.
- Recommended Actions: Offer your recommendations to address these risks, including changes to policies, procedures, and controls. If you have identified documentation gaps, indicate these as well. Explain why these gaps are problematic and how they can be addressed.
You can also report on your next steps in this process. Detail your plans for conducting employee training (the next session) based on your findings. Highlight the importance of these trainings in preventing future facilitation payments. Moreover, you may also describe any follow-up actions, such as further audits.
This ensures that local management is informed about the risks and understands the steps required to mitigate them.
Training Adapted to the Findings Made During Previous Steps
To ensure lasting improvements, the next step is to conduct employee training sessions incorporating the findings from your investigation.
| FAFPI members get access to pre-made training materials that can be customised based on their needs and findings. |
For your training, use real examples from your investigations to make the training more impactful and relevant to employees’ daily operations. Focus on stopping any identified facilitation payments and properly reporting any requests.
To improve engagement, encourage questions and discussions to ensure employees fully understand the policies and procedures. Finally, ensure the training content is consistent across different locations but tailored to local contexts and examples. This approach will help employees relate to the material and apply the lessons learned in their specific environments.
Conclusion
By following these steps, you can now assess and mitigate facilitation payments in your organisation. Start with a risk assessment to understand the organisation’s operations and identify areas for investigation. Conduct focus interviews to get a deeper understanding of the processes in the investigated areas and to access relevant documentation. Review the organisation’s records to investigate specific occurrences that could be identified as facilitation payments. Provide feedback to local management, reporting your findings, offering recommendations, and outlining the next steps. Finally, conduct training sessions adapted to the findings to ensure lasting improvements in the fight against facilitation payments.
By joining collective action, your findings and contributions can have an even broader impact, helping to create a world where organisations, society, and individuals no longer bear the cost of this corrupt practice. You won’t need to deal with this issue alone and can collaborate with like-minded organisations against facilitation payments. Besides, one organisation may have limited leverage with relevant stakeholders in the fight against facilitation payments, but together, we can be much stronger. Learn more about the Fight Against Facilitation Payments Initiative (FAFPI) here, and consider engaging with us.
