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Oxfam Uncovers Fraud in Tsunami-Relief Work

The Chronicle of Philanthropy

May 15, 2006

By Brennen Jensen

Oxfam International, a London relief organization, has uncovered fraudulent expenditures of $22,000 related to its humanitarian efforts in Aceh, Indonesia, which was devastated by the 2004 tsunamis in South Asia.

Following a seven-week internal investigation, the charity reports that $20,000 has been recovered and 10 staff members, all Indonesians, have been accused of wrongdoing and face possible dismissal. Another 12 staff members, including five from outside the country, face less-severe disciplinary actions.

"The basic investigation is pretty much done," says Stephen Greene, spokesman for Oxfam America, in Boston. "There is a process we need to go through in terms of giving people a chance to respond to the charges."

Oxfam cites "weak management and monitoring systems" and high staff turnover as factors contributing to the misconduct, which was centered on discrepancies between the amount paid for relief supplies and the actual supplies delivered. Relief services that were not considered essential were suspended in the region for a month during the investigation.

"We have what we feel is a fairly rigorous system of checks and procedures to try to prevent this kind of thing from happening," Mr. Greene says. "We were trying to ramp up quickly in view of the overwhelming magnitude of the need, and hiring lots of people in a short amount of time who were maybe not getting as much training as they should have."

Seeking Court Action

Indonesian Corruption Watch, a Jakarta nonprofit group fighting political corruption in the island nation, has urged Oxfam to take the staff members who are found guilty to court to face criminal charges.

Mr. Greene says that while the 10 employees violated Oxfam's standards and procedures, his group is not yet sure if their actions broke Indonesian law. Supplemental legal action through the local courts remains a possibility, he says.

Trent Stamp, executive director of the charity watchdog group Charity Navigator, says he is "heartened" by Oxfam's efforts to uncover "a very small amount of fraud" amid the $48-million that the charity is spending on tsunami relief.

"It's unrealistic to expect our charities to be perfect, especially those that operate thousands of miles away from this country," he says. "The best we can hope for is that they're responsible, transparent, and accountable, and I think Oxfam has met that expectation here."

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