Managing risks in cash programmes
How to identify and manage risks in cash and voucher programmes: fraud, diversion, inflation, safety and tension, with simple controls for each phase.
Short answer
Cash programmes carry fraud, diversion, price, security, protection and social-tension risks, as other aid does. Manage them with a risk register built at the start, controls at each phase such as clear targeting criteria, separated duties and independent monitoring, market monitoring, safe delivery choices and a feedback channel. Review the register often.
Key points
- Cash is not inherently riskier than other aid, but its risks are more visible.
- Build a risk register before launch and update it during the programme.
- Separate who targets, who pays and who verifies.
- Monitor markets for price changes and adjust transfer values.
- Check for accidental errors before accusing anyone of fraud.
What risks do cash programmes face?
The CALP Network says the biggest barrier to wider use of cash and voucher assistance (CVA) has been the perceived risk of misappropriation or leakage. CALP also reports that the evidence shows cash is no riskier than any other form of aid, although some donors look harder at partners' risk management when cash is involved. A CALP blog on risks adds that the extra control on CVA makes fraud and protection risks more visible, which is positive, and that in-kind distributions come with their own risks.
So the aim is not to avoid cash, but to know the risks and manage them. They fall into groups.
| Risk group | Examples |
|---|---|
| Fraud and corruption | Ghost recipients, staff favouring relatives, bribes for registration, theft of cash |
| Diversion | Money spent on unintended items, or taken by someone else in the household |
| Market | Price rises when many people have cash and supply is short |
| Security | Robbery on collection or travel |
| Protection and social | Conflict at home, tension with people not selected, pressure on women |
| Financial service provider | FSP failure, hidden costs, poor treatment of recipients |
The Red Cross CVA financial management guidance lists internal risks, such as fraud, theft and bribery, and external ones, such as inflation, volatile currency and failure of a financial service provider.
How do I build a risk register?
- List risks by phase: assessment and targeting, registration, finance, delivery, monitoring.
- Rate each risk by likelihood and effect: low, medium, high.
- Choose controls and name an owner for each.
- Agree the response if a risk happens.
- Review every month, and after any incident.
Our risk register guide gives a simple layout for this.
What controls work at each phase?
CALP's fraud and corruption mitigation template matches risks to controls by phase. Here is a short summary.
- Assessment and targeting: use clear criteria, different teams for targeting, distributing and verifying, and independent checks of any lists from authorities.
- Registration: use structured selection with checks and balances, verify lists, use independent monitoring staff, and tell communities how selection works and that registration is free.
- Finance: standard timing for transfers, strong internal controls with separated duties, and random, unannounced checks of financial records.
- Logistics: follow procurement rules when selecting a financial institution or transfer company.
- Monitoring: keep monitoring staff separate from implementation staff, and keep a complaint mechanism such as a hotline or box that allows anonymous reports.
The financial management guidance adds that rotating staff on duty limits fraud, and recommends electronic transfers or vouchers where appropriate.
How do I manage safety, prices and tension?
The Red Cross guidance suggests these measures.
| Risk | Possible controls |
|---|---|
| Insecurity | Electronic transfers or vouchers, small amounts, varied routes, secure cash transport |
| Social tension | Separate consultations with men and women, community consultation, community-based targeting |
| Inflation | Market analysis, price monitoring, rules to adjust transfer value, staggered and spread-out distributions |
| Diversion | Solid needs assessment, proper targeting, sensible transfer values, vouchers, instalments with verification |
Programme design should also pay attention to gender dynamics. A Plan International CVA guideline published through CALP says cash is not inherently risky, but ignoring gender dynamics and unequal control over resources, and failing to put mitigation in place, can cause unintended effects. It recommends participatory risk assessments, tailoring design to different groups, and protection monitoring built into post-distribution monitoring. See post-distribution monitoring.
What if I suspect fraud?
The financial management guidance warns that fraud and diversion are always possible, but that teams should consider accidental errors before jumping to conclusions, because false accusations quickly destroy trust. A sensible sequence:
- Secure records and stop affected payments if needed.
- Check for simple errors, such as duplicate names or spelling differences.
- Ask someone independent to review.
- Follow your organisation's anti-fraud and disciplinary procedure, and inform the donor as the agreement requires.
- Tell communities what happened and what you changed, without naming individuals.
Check your agreement and take advice on local law and donor rules. See also anti-fraud.
What about delivery partners?
A CALP risk workshop noted that using financial service providers can bring speed and transparency but may also disconnect the organisation from recipients and give agents too much power without accountability. It also noted that diversifying providers can help, if you have the resources to manage them closely. Agree service levels, fees and complaint routes in writing, and visit payment points.
In Myanmar, cash availability, bank access and mobile networks can change quickly. Keep a back-up payment option, use small pilots, and tell people early if a delay is likely.
How EMPO can help
EMPO is a trusted, Yangon-based training and consultancy provider and one of Myanmar's leading names in practical NGO training, with 1,200+ people trained and 15 partner organisations. We train teams on Cash & Voucher Assistance (CVA) online or in person, in English and Burmese. See our services or contact us.
Sources
- CVA and Risks: What happens in the field, stays in the field? — CALP Network, 2019
- Cash and Voucher Assistance and Risk in Financial Management and Compliance — CALP Network
- Guidance for financial management of CVA programmes — Red Cross cash hub, 2024
Questions people ask
Is cash riskier than in-kind aid?
CALP says the evidence shows cash is no riskier than any other form of aid, though some donors apply more scrutiny. In-kind distributions carry their own risks.
What is a financial service provider (FSP)?
An FSP is a bank, mobile money company, remittance firm or similar business that delivers payments to recipients. Choose and check FSPs carefully, as failures or hidden fees can affect programme results.
How do we reduce risks to women and children?
Ask men, women and young people separately about risks, such as pressure inside households, then adjust delivery, timing and messages. Include protection questions in post-distribution monitoring.