By Ethan Strassfield

The Centre for Humanitarian Dialogue (CHD), an independent mediation organization, has sadly been the victim of business fraud by its own former Director of Finance and Administration. The fraud was discovered in June 2010 by CHD senior management, who then engaged KPMG to conduct a full investigation.

This is an unfortunate occurrence in an organization that does great work in promoting peace all over the world. Since 1999 CHD, an independent mediation organization, has been improving the global response to armed conflict through mediation. It helps belligerents find ways of resolving their differences peacefully and addresses humanitarian issues to reduce the impact of conflict on civilians, with notable successes in Aceh, Philippines, Darfur and Somaliland.

CHD also lodged a criminal complaint against the alleged perpetrator and taking legal steps to recover the stolen sum. KPMG conducted a thorough forensic audit to reveal that the former Director of Finance had been committing fraud since 2004 using a number of different schemes to the tune of Swiss Francs CHF 3.8 million.

Upon confirmation of the fraud by KPMG, Martin Griffiths, CHD Executive Director since establishment in 1999, immediately volunteered his resignation because he felt morally responsible. The Board accepted the resignation in order to put in place a new senior management. A search for a new Executive Director has been launched and Angelo Gnaedinger has been appointed CHD Interim Executive Director effective 6 September 2010, to lead the organisation until the recruitment of a permanent replacement.

The HD Centre has financial policies and procedures in place which govern financial transactions and accounting and which fully conform to generally accepted standards including Swiss legal requirements for Foundations. It has also received clean external audits every year since its establishment. As a result of this fraud, the CHD has already begun putting in place additional measures to strengthen control and compliance systems.

According to CHD, it has informed all its donors, with whom it has good relations on the basis of delivering valuable and useful work. The organization’s valuable peacemaking efforts continue unaffected in locations such as Sudan, Somalia, Somaliland and The Philippines.

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KPMG