Fraud, corruption, anti-money laundering, and counter terrorist financing Policy

Identifying fraud and corruption, how to detect fraud and how to manage and finalise fraud cases

Current Policy effective from	October 2025
Next review	October 2028
Policy owner	Program Quality Manager/SER Focal Point

1. Introduction

1.1 Preamble

Catalpa International is committed to upholding the highest standards of integrity, transparency, and accountability in all aspects of our work. Fraud, corruption, money laundering, and the financing of terrorism undermine public trust, divert resources from development goals, and harm the communities we aim to serve.

As an organisation delivering projects in partnership with governments, donors, and communities across the Pacific and Asia, Catalpa recognises its responsibility to ensure that our operations, personnel, and partners act with honesty and ethical conduct at all times.

1.2 Statement of Commitment

Catalpa has a zero-tolerance approach to fraud, corruption, money laundering, and terrorist financing. We are committed to:

• Preventing, detecting, and responding to all forms of fraud, corruption, money laundering, and terrorist financing;

• Promoting a culture of integrity and accountability across all operations;

• Ensuring that funds, assets, and resources entrusted to Catalpa are used solely for their intended purposes; and

• Maintaining systems and controls that reduce the risk of financial and reputational harm to Catalpa, our partners, and beneficiaries.

This policy applies to all employees, contractors, consultants, suppliers, and partners working with or on behalf of Catalpa.

1.3 Policy Review and Ratification

This policy will be reviewed every three years or more frequently where required by organisational needs, regulatory updates, or donor requirements.

1.4 Policy Linkages

This policy should be read in conjunction with:

• Code of Conduct

• Financial Management Policy

• Procurement Policy

• Conflict of Interest Policy

• Confidentiality and Privacy Policy

• Whistleblower and Complaints Policies

• Modern Slavery Policy

2. Purpose and Scope

2.1 Purpose

The purpose of this policy is to define Catalpa’s approach to preventing, detecting, and responding to fraud, corruption, money laundering, and terrorist financing. The policy aims to:

• Safeguard Catalpa’s resources and reputation;

• Ensure compliance with relevant laws and donor requirements;

• Provide clear guidance to staff and partners on expected conduct; and

• Establish mechanisms for timely and fair investigation and resolution of incidents.

2.2 Scope

This policy applies to all Catalpa staff, consultants, contractors, board members, implementing partners, and visitors to Catalpa workplaces and projects. It also applies to all organisational and project activities, regardless of location or funding source.

3. Policy Principles

Integrity and Accountability

All Catalpa personnel are expected to act with honesty, fairness, and integrity in every aspect of their work, maintaining accountability for the use of resources and the decisions they make.

Prevention and Detection

Catalpa maintains robust systems and internal controls to prevent, detect, and respond to fraudulent and corrupt behaviour. Staff are required to remain vigilant to “red flags” or warning signs and to report concerns promptly.

Transparency

We promote transparent processes in procurement, recruitment, financial management, and decision-making to reduce opportunities for corruption or misuse of resources.

Confidentiality and Fairness

All reports and investigations will be handled confidentially and fairly. Those who raise concerns in good faith are protected from retaliation. Individuals accused of misconduct are presumed innocent until proven otherwise.

Shared Responsibility

Preventing and responding to fraud, corruption, money laundering, and terrorist financing is a shared responsibility. Every staff member, manager, and partner is expected to understand this policy and uphold Catalpa’s ethical standards.

Continuous Improvement

Catalpa is committed to regularly reviewing and strengthening its anti-fraud, corruption, and AML/CTF systems, learning from investigations and audits, and adapting to evolving international standards.

4. Procedures and Implementation Strategies

4.1 Identifying and Preventing Fraud and Corruption

Fraud and corruption involve dishonestly obtaining a benefit, or causing a loss, through deception or abuse of position. Examples include:

• Theft or misappropriation of assets or funds;

• Providing false or misleading information;

• Forgery or falsification of documents;

• Bribery, kickbacks, or facilitation payments;

• Unauthorised use of Catalpa property or information;

• Conflicts of interest that are not declared or managed appropriately.

Catalpa expressly prohibits facilitation payments — small, unofficial payments made to secure or expedite routine actions by officials.

To prevent such acts, Catalpa will:

• Maintain internal controls to safeguard funds and assets;

• Ensure segregation of duties and appropriate approvals;

• Conduct due diligence on staff, partners, and suppliers;

• Require regular fraud awareness training for all personnel; and

• Encourage a culture of openness where concerns can be raised without fear.

4.2 Anti-Money Laundering (AML)

Catalpa is committed to ensuring that its operations are not used to facilitate money laundering or conceal the proceeds of criminal activity.

To uphold this commitment, Catalpa will:

• Conduct Know Your Partner (KYP) due diligence on all suppliers, contractors, implementing partners, and grantees prior to engagement;

• Verify the legitimacy and ownership structure of entities receiving Catalpa funds or resources;

• Monitor financial transactions for irregular or suspicious activity;

• Prohibit the acceptance of cash or non-transparent payments unless pre-approved and documented;

• Maintain accurate financial records and audit trails;

• Report any reasonable suspicion of money laundering to the Compliance and Risk Lead, who will coordinate next steps in accordance with legal and donor obligations; and

• Ensure that all staff are trained on AML obligations and indicators.

4.3 Counter-Terrorist Financing (CTF)

Catalpa takes all necessary measures to ensure that no funds, resources, or assets are used to support terrorism or individuals or entities associated with terrorist activities.

Catalpa will:

• Screen all partners, suppliers, and recipients of funds against recognised international sanctions lists (including the Australian DFAT Consolidated List and UN Security Council Sanctions Lists);

• Prohibit engagement with any individual or organisation identified on these lists;

• Require staff and partners to immediately report any suspicion that funds, goods, or services may be diverted to support terrorism;

• Cooperate fully with lawful investigations by relevant authorities; and

• Maintain confidentiality and data protection in all CTF-related due diligence processes.

4.4 Reporting and Managing Fraud, Corruption, AML or CTF Concerns

All staff and partners must report suspected or actual fraud, corruption, or financial crime — including suspected money laundering or terrorist financing — within five working days of becoming aware of it.

Reports can be made through:

• A line manager or the Compliance and Risk Lead;

• Catalpa’s independent whistleblowing channel (“Stopline”), which allows anonymous reporting; or

• Email to [email protected] (or equivalent designated reporting channel).

Reports should include all relevant details, evidence, and context available at the time. Proof is not required before making a report — reasonable suspicion is sufficient.

4.5 Investigation and Response

Catalpa will ensure all reports are assessed and, where appropriate, investigated in a timely and fair manner. Investigations may involve internal staff, auditors, or external investigators.

If fraud, corruption, money laundering, or terrorist financing is substantiated, Catalpa may apply one or more of the following actions:

• Termination of employment, contract, or partnership agreement;

• Disciplinary measures in line with HR policies;

• Referral to law enforcement or regulatory authorities; and

• Recovery of lost funds or assets through legal or administrative means.

Catalpa will also review and strengthen internal controls to prevent recurrence.

4.6 Recovery and Remediation

Where losses occur as a result of fraud, corruption, or related financial crimes, Catalpa will:

• Seek recovery from the responsible individual(s) or through insurance;

• Document all recovery efforts; and

• Seek approval for non-recovery only when all reasonable avenues have been exhausted.

4.7 Recordkeeping and Confidentiality

All reports, investigations, and outcomes will be documented and stored securely. Access will be limited to authorised personnel only. Confidentiality will be maintained to protect all parties involved.

5. Communicating the Policy

This policy will be shared with all Catalpa personnel and made publicly available through the Catalpa Handbook. Catalpa will provide regular training and communication to reinforce awareness of fraud, corruption, AML, and CTF risks and reporting mechanisms.

Any individual or organisation concerned that Catalpa is not upholding the commitments outlined in this policy may raise a concern through Catalpa’s independent Stopline platform or other established complaints mechanisms.