Kingdom of Morocco

Strengthening Micro-Entrepreneurship for Disadvantaged Youth Project

                                            Redacted Report




                                                           March 2018
                                Statement of Use and Limitations

This Report was prepared by the World Bank Group (the WBG) Integrity Vice Presidency (INT).
It provides the findings of an INT administrative inquiry (the Investigation) into allegations of
corrupt, fraudulent, collusive, and/or coercive practices, as defined by the WBG for purposes of
its own policies, rules and procedures (the WBG’s Framework regarding Anti-corruption), in
relation to the WBG-supported activities. The purpose of the Investigation was to allow the WBG
to determine if the WBG’s Framework regarding Anti-corruption has been violated.

This Report is being shared to ensure that its recipients are aware of the results of the INT
Investigation. However, in view of the specific and limited purpose of the Investigation underlying
this Report, this Report should not be used as the sole basis for initiating any administrative,
criminal, or civil proceedings. Moreover, this Report should not be cited or otherwise referred to
in the course of any investigation, in any investigation reports, or in any administrative, civil, or
criminal proceedings.

This Report is provided without prejudice to the privileges and immunities conferred on the
institutions comprising the WBG and their officers and employees by their respective constituent
documents and any other applicable sources of law. The WBG reserves the right to invoke its
privileges and immunities, including at any time during the course of an investigation or a
subsequent judicial, administrative or other proceeding pursued in connection with this matter.
The WBG’s privileges and immunities cannot be waived without the prior express written
authorization of the WBG.




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Background

The Strengthening Micro-Entrepreneurship for Disadvantaged Youth Project (the Project) in
Morocco aims to provide beneficiaries in the Project areas with access to micro-entrepreneurship
development services. The Project is financed by a trust fund for which the International Bank for
Reconstruction and Development (IBRD)1 acts as the Implementing Agency. The Project is
implemented by a Project Management Unit (PMU).

Allegations

The World Bank Group Integrity Vice Presidency (INT) received a series of allegations against
the PMU involving mismanagement, conflicts of interest involving PMU employees and non-
governmental organizations (NGOs) selected under the Project, and other misconduct. In addition,
a post-procurement review highlighted red flags in the PMU’s selection of service providers and
suppliers.

Methodology

After obtaining further details from complainants, and conducting a desk review that showed
additional indicators of irregularities concerning purchase orders under the Project, INT conducted
an investigation into certain purchase orders.

Findings

    1. Purchase Order X

The PMU awarded Purchase Order X to Company A. Documentation obtained from the PMU
indicated that two losing bidders, Company B and Company C, submitted quotations. The
presence of three quotations gave the impression of a competitive selection process, and thus
compliance with the PMU’s operations manual, which required that at least three quotations be
collected from prospective suppliers.

However, evidence indicates that all three bidders likely are owned by the same person, Mr. A.
INT was unable to meet with Mr. A, as he claimed to be travelling when INT contacted him. INT
also could not physically locate Companies C and B, while Company A was closed during INT’s
field visit.

Nevertheless, INT found evidence indicating that:
•   According to the addresses listed on their quotations, Companies A, B, and C are all located in
    the same neighborhood, on the same street;
•   Company A and Company C have the same telephone number;



1
  The IBRD is one of the five institutions comprising the World Bank Group. The International Development
Association (IDA) and the IBRD constitute the World Bank. The IBRD and the World Bank are used interchangeably
throughout this Report.

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•   When INT called the telephone number of Companies A and C, the person who answered—
    but refused to fully identify himself—stated that Mr. A owns Company C;
•   Company registration documentation indicated that Company B’s shareholders are all
    members of the Mr. A’s family, one of whom is listed as “Mr. A,” and
•   Companies B and C are not in the business of providing the services for which they submitted
    quotations.

The poor quality of the documentation on file at the PMU prevented INT from identifying the
individuals who prepared and sent the requests for quotations to these three companies.

    2. Purchase Order Y

Purchase Order Y was awarded to Company D. The documentation obtained from the PMU
indicated that two losing bidders, Companies E and F, submitted quotations, but evidence indicates
that these quotations may have been “courtesy” bids designed to give the appearance of
competition.

The requests for quotations on file were dated on a certain date (the Request Date). But according
to Company D’s owner, the relevant services had been provided up to nine months before the
Request Date. Evidence indicates that a PMU-prepared document confirmed the earlier dates and
details of these services.

In addition:
•   Company E’s owner stated that he was unaware that Company E submitted a quotation, and
    that he had never seen its purported quotation before;
•   One individual, who introduced himself as an associate of Company E, stated that he had
    prepared the quotations of both Company E and Company F for this purchase order; and
•   Company F could neither be located at the address provided in its quotation, nor reached at the
    telephone number stated in its quotation.

Evidence indicates that Company D is a well-established service provider that, among other things,
works at the headquarters of the PMU’s parent ministry. Some evidence suggests that, instead of
going through a PMU-operations-manual-required competitive selection process, Company D had
been single-sourced for the purchase order.

    3. Purchase Order Z

Purchase Order Z was awarded to Company G. Documentation obtained from the PMU indicated
that two losing bidders, Companies H and I, had submitted quotations. However, evidence
indicates that the quotation allegedly submitted by Company H was falsified, and that its signature
and the logo on the quotation were not genuine.

After failing to locate Company G’s offices despite multiple attempts using the address on
Company G’s quotation, INT managed to locate Company G’s premises with the help of a witness.



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However, INT was unable to meet with any Company G representatives, as their offices were
closed, and no one answered to the telephone numbers listed on the company’s quotation.

   4. Purchase Orders V, W, X, Y, and Z

Evidence indicates that documents for purchase orders V, W, X, Y, and Z were backdated. INT
did not, however, find evidence of other misconduct regarding these purchase orders.

Follow Up Action by the World Bank

INT did not seek the imposition of World Bank Group administrative sanctions in this matter.
INT’s investigative findings largely pertained to apparent weaknesses in internal controls within
the Project Management Unit, which may be addressed through operational remedies and risk
mitigation measures.




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