“ Projects funded by international development banks seem to provide easy targets for corruption perhaps because these funds are perceived as coming “from outside” and are subject to relatively little external monitoring.
Corruption diverts perhaps 30 percent from billions of dollars spent annually for international development loans. Importantly, this illegitimate cash flow becomes the primary reason why funds are requested. Desire to maintain this flow alters project planning, design and implementation. Bureaucratic and personal work characteristics become imbedded in, and reinforce, these corrupt systems.”
Richard G. Dudley
The Rotten Mango: The Effect of Corruption on International Development Projects
LAGA developed many financial tools as a solution to corrupt practices in the NGO business – mismanagement, double funding for the same project, inflating costs, diverting public funds towards personal interest, recieving money for activities that never take place, and other common practices.
LAGA does not use donor's money directly. It uses the cash flow and many times loans to operate. Only later on, donors money is "requested" through a complicated (though highly accountable) system of expenditure broken down to single budget lines. Our financial records do not include vague budget lines as ‘workshop’ or ‘fees’ but describe the exact activity and its justification, in an activity and results oriented format. This sytem educates for personal accountability, in a place where NGOs are widely precieved by the public as The "goldmines" for corrupt gains.
LAGA regards any confidentiality concerning public fund as immoral. Therefore all of LAGA’s Grant proposals, budgets and detailed financial reports are open for public review.
LAGA rigorously maintains its independence. Several times in the past LAGA chose to reject donors funding when it felt the donor tried to influence its policy, violated principles of transparency or tried to take an unethical commission under the word "overhead". LAGA demands full public financial disclosure from its donors as a condition for receiving a grant.
LAGA’s regulations forbid receiving funds from any industry connected to the actual problem it is set to solve. For that matter, it does not create any “collaboration” or “partnership” or any other hidden endorsement with this industry. This regulation exists to avoid conflict of interest, which is identified as a major problem in NGO-industry collaboration.