Whenever an organisation is required to
manage large numbers of cash transactions, minimising fraud is of a critical
value. VisionFund takes the operational risk of fraud very seriously and is
continuously working to minimise fraud at all levels.
approach, fraud is minimised through proper
operational controls, global and regional systems of checks and balances that
limit and warn of fraud occurring in a timely manner, immediate reporting as
well as internal and external auditing.
World Vision discloses fraud losses incurred in VisionFund network
operations during the year in their Annual Accountability Report. These are low
by industry standards but we remain vigilant.
VisionFund continues to innovate. Cashless
banking and Internet-connected real time loan processing have been introduced,
increasing efficiency and further reducing the risk of fraud. When fraud is
detected, VisionFund acts swiftly in accordance with its zero tolerance policy.
During the 2013 Fiscal Year, based on
information obtained from investigations performed by VisionFund Operations teams, Global
Centre Internal Audit and routine VisionFund Monthly Management Reports, the
total confirmed fraud loss for the VisionFund
network was US $1.3 million.
This represented 0.2% of assets, which VisionFund management believes is low
for the global microfinance industry.
Included within the figure was a series of
related frauds in Kosovo. Following discovery of these frauds, local management
in Kosovo has been changed and a comprehensive review of internal controls in
the MFI has been carried out to identify improvements that have now been
the Kosovo incident, fraud losses would have been less than 0.1% of total
assets in line with VisionFund’s experience in the prior fiscal year. This
level is regarded as excellent within the industry and is testament to the
amount of effort and attention that VisionFund pays to this important issue.