A Sourcebook - UN-Water

Box 8.6 Procurement Outsourcing to the UNDP in the Philippines
The UNDP Philippine Country Office set up a Development Support Services Center (DSSC) to support national executed
projects by ensuring project inputs are converted to project outputs. Executing agencies can turn to the DSSC
for support in:
Procurement of goods
Comprehensive and high quality assistance to publicly-bid contracts
Sub-contracting of services in various fields of expertise
Recruitment of local professionals and other project personnel
Other project-related and work plan-based activities.
Source: http://www.undp.org.ph/?link=25
8.3 Project Supervision
Once a contract has been awarded, weak supervision of physical implementation may also allow for
corruption.
Effective project supervision includes monitoring, technical support, review and reporting. Most project
executing agencies have rules on how projects should be supervised. However, as with procurement
rules, the mere presence of guidelines on supervision is not enough—practitioners must apply the rules
intelligently and consistently, and adapt their methods to suit the project context (see Box 8.7 on how
project inspections of World Bank projects in Indonesia were rigged).
8.3.1 Third party and community oversight
Large water and sanitation project require technical expertise to be able to assess whether the works
are being completed in line with the specifications. When project supervision is done by the utility staff,
the staff may accept below standard work in exchange for a share of the payments.
In most donor financed projects, and many utility and government-finance projects, the government
or utility delegates the job of construction supervision to the Project Engineer—usually a private engineering
consultancy. However, even these external supervision arrangements are not a guarantee
Box 8.7 Rigged Project Inspections in Indonesia
The World Bank’s INT department received information from an informant, Mr. “G”, on fraud and corruption in water
and irrigation projects in Indonesia. Mr. “G” had been widely regarded as one of the world’s prominent water engineers.
However, in 1998, after a quarter century of dealing with ever worsening corruption in Indonesia and East Asia,
he refused to pay what he considered to be unreasonable bribe demands and ultimately, lost his business. INT investigations
have confirmed the accuracy of the descriptions provided by Mr. “G”.
Mr. “G” explained that the fraud and corruption schemes he observed in Indonesia had escaped detection from
Bank task managers through several strategies. Work would always be “ramped up” with local temporary employees
when supervision missions visited. Project officials would always arrange for Bank field visits to “model” project sites
where efforts were concentrated, with the other out-of-sight project locations being “short-changed” by poor implementation.
Project officials also knew there was little likelihood of surprise visits or unannounced inspections by Bank
staff because of limited time and resources being devoted to supervision. Further, he believed that the typical limited
skills in the local language by most Bank task managers further protected the corrupt scheme from discovery.
In response to these disclosures from Mr. “G”, the World Bank has been developing guidance on improved supervision,
including “surprise visits” with both international and local World Bank staff to project sites.
Source: “Case Study: Indonesia—Water and Irrigation Projects”. World Bank EASUR Anti-Corruption Initiative.
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