Plan International Inc.

“.”

“Plan International, Inc (Plan) has a management services subsidiary, Plan Limited, established in the United Kingdom (UK). The directors of this subsidiary during the year ended June 30, 2017 were the CRO, Deputy CEO and CFO of Plan International, Inc. The Deputy CEO, CFO and other Senior Management of Plan Limited report to the CEO of Plan International. Inc. The services provided by Plan Limited include programme and fundraising support services and management services for Plan International, Inc. and its member organizations. Programme support services include programme policy and technical expertise, impact evaluations and research, as well as systems which are integral to programme implementation. Fundraising activities include funding of new Plan National Organizations, business development of existing National Organizations and business planning services designed to develop the fundraising capabilities of Plan. Support activities include governance, legal, finance, internal audit, human resources and back office information technology services.”

“The Members of Plan International, Inc are separate legal entities(National Organizations) established with objectives, purposes and constitutions which are substantially similar to those of Plan International, Inc. These National Organizations carry out fundraising, development education and advocacy and those in India and Colombia also carry out development programmes in their respective countries. National Organizations are admitted as Members of Plan International, Inc. in accordance with Plan International, Inc's By-laws. During the year ended June 30, 2017 there were 21 Member National Organizations.”

“During the year ended June 30, 2017 the Members' Assembly”

“of Plan International, Inc. (Plan) approved and adopted”

“a new Purpose Statement (Vision and Mission) which will”

“place the advancement of children's rights and equality”

“for girls at the centre of Plan's work. This purpose”

“statement has been reflected in changes in Plan's legal”

“objects in its Certificate of Incorporation, which were”

“approved by the Members' Assembly in November 2016. In”

“June 2017, the Members' Assembly also authorized the”

“launching of a new five-year global strategy on July 1,”

“2017. Further details are available on Plan's website,”

“www.plan-international.org.”

“The Internal Revenue Service no longer issues letters”

“confirming the tax-exempt status of organizations that”

“report significant changes to their organizational”

“documents but it is Plan's contention that its revised”

“Purpose Statement is consistent with its tax-exempt”

“purpose.”

“********** diversion of assets **********”

“During the year ended June 30, 2017 it was identified”

“that there had been an ongoing diversion of funds”

“between April 2013 and December 2015 in one of the”

“Plan International, Inc. (Plan) programme countries, Sierra Leone. This diversion occurred through fraudulent activites by a small number of Plan employees and third parties, sometimes in collusion. As soon as Plan became aware, the local police were alerted and staff suspended and subsequently terminated. Investigations were undertaken by the Sierra Leone Criminal Investigations Department and later the Anti-Corruption Commission. At the time of this writing, a criminal trial is underway.”

“After a thorough internal investigation, sufficient evidence exists to conclude that funds amounting to $1,824,259 had been subject to fraud.”

“There were further transactions with a total value of”

“$1,764,879 for which it is impossible to draw conclusions”

“due to missing documentation which may have been lost,”

“misplaced or intentionally destroyed or made unavailable.”

“The combined value of $3,589,138 has been expensed in the”

“June 30, 2017 financial statements and a further prudent”

“amount of $1,197,408 for transactions with questionable”

“documentation is included in contingent liabilities.”

“Plan is pursuing all options to recover funds.”

“Immediate and long-term measures have been implemented to protect”

“funds against future misappropriation. A new Country”

“Director has been appointed in Sierra Leone to reform”

“the operations structure and implement a new operating”

“model; key staff in functions such as administration,”

“procurement and finance have been changed. Partnership”

“agreements with implicated NGO partners have been”

“terminated and the local supplier database has been”

“rebuilt from scratch, with implicated vendors blacklisted.”

“Other controls in place include the following:”

“1. PEOPLE/VALUES:”

“A. A team of experienced managers has been hired to lead on all key functional areas. This includes the position of Deputy Country Director Operations,Logistics Manager, Finance Manager, and Grant Manager;”

“B. New recruitment procedures are in place to assure transparency and fairness in recruitment processes and to ensure that only people with the required skills and competency sets are hired;”

“C. Complete redundancy has been implemented and the process is ongoing to build the office back from scratch;”

“D. Organizational development action plan is currently being implemented to creat a new organizational culture better aligned with Plan values.”

“2. Finance/budget/management:”

“A. No check or wire transfer is processed by the bank before a telephone confirmation of the payee and the amount is done by the Country Finance Manager (CFM);”

“B. Bank reconcilations reviewed on a monthly basis by the CFM and approved by the Deputy County Director (DCD)/Country Director (CD);”

“C. Budget analysis report prepared by the CFM and discussed as a standing item on the monthly Country Management Team (CMT) meeting agenda;”

“D. Advance liquidation reports include a bank reconciliation statement and a copy of the bank statement to help trace reported expenditures to the bank statements;”

“E. Monthly cost recover reports at the CMT meeting;”

“F. Monthly budget monitoring review (MBMR) meetings with project managers;”

“G. Monthly budget management analysis (expenditures tracking, burn rate etc.)and report discussed during CMT meetings to identify inconsistency and inaccuracy for follow up actions;”

“H. Bi-monthly random verification by the Country Internal Control Department of effectiveness of existing controls and report any short-comings to CMT for action;”

“I. Quarterly review of effectiveness of existing control using the Internal Control Questionaire (ICQ) and subsequent implementation of mitigation actions.”

“3. PARTNERSHIP:”

“A. Re-assessment of all active partners based on a thoroughly amended assessment tool to inform management decision;”

“B. All active partners now have bank accounts where payments are made;”

“C. All active partnership agreements amended to insert a clause that indicates long outstanding advances will result in non-renewal of the agreements with the partners;”

“D. Staffs in charge of partners advance liquidation trained on diligences they need to exercise during review;”

“E. Checklist in place to support consistent review of all partner documents;”

“F. A monitoring mechanism for donor reporting with a clear RACI matrix and timeline from the implementing partner to the grant department responsible to send this report is in place;”

“G. Training of the staff on effective management of grant funded projects.”

“4. Logistics & procurement:”

“A. Implementation of action plan resulting from the procurement and logistics self-assessment tool required by the regional office;”

“B. A contract management tool is being developed to improve monitoring of contracts and to ensure that the terms and conditions are being adhered to;”

“C. The rebuilding of the supplier database;”

“D. Approved procedures to transparently recover vehicle use costs to projects;”

“E. Conduct annual update of the suppliers database based on assessment; purge the database of all unsatisfactory suppliers;”

“F. Development and approval of the supplier roster ensuring that all received quotes are professionally assessed and site visits are conducted and accounted for with rigor;”

“G. Internal asset disposal process completed and ongoing external stage;”

“H. Alignment of Plan Sierra Leone's procurement practices to commonly accepted standards by developing and implementing a set of procedures and tools;”

“I. Training of administration staff in various areas including SAP;”

“J. New contract templates designed and signed off by an attorney that ensure key requirements and protecting clauses are embedded in our contractual documents;”

“K. A guidance document for use by Procurement Committees and the training of PC members on how to professionally assess quotes/tenders.”

“5. FILING:”

“A. Guidelines are now in place for a systematic filing of payment documents and partners liquidations;”

“B. Re-filing of past payment vouchers with the view not only to find some missing documents, but also to deterimine the extent of loss of documents;”

“C. Log books available in each department to monitor the movement of files.”

“**********”

“The Board of Plan International, Inc, is elected by the Members of Plan International, Inc. Elections are held either when the term of office of a Board Director expires or on the resignation of a Board Director. Each term of office is for a period of three years.”

“.”

“The Members Assembly has the responsibility for approving the strategy of Plan International, Inc., the annual budget and long term financial plans, the appointment of the auditors, the annual financial statements, changes to the governance documents and governance arrangement, establishing the goals for the Board and monitoring its performance and ratifying the appointment of the CEO. Each Member National Organization is entitled to a minimum of one vote. Entitlement to further votes is determined by the level of funds transferred to Plan International, Inc. or to Plan International, Inc. approved programmes in India and Columbia.”

“The Form 990 is reviewed by senior members of the Global Finance Department and the CFO and by an independent certified public accountant appointed by the organization.”

“Plan lnternational, Inc. has required Directors, Officers and Key Employees to disclose potential conflicts of interest as they arise throughout the year ended June 30, 2017. The Corporation revised its Conflict of lnterest policy in June 2014 to meet the requirements of the New York State Non-Profit Revitalisation Act and other developments in good practice. On introduction of the new policy, Officers, Directors, Key Employees, Regional Directors, other Senior Management of the Management Services company, Plan Limited, and the Group Treasurer were required to disclose relevant interests or confirm that none arose. Declarations will continue to be required as circumstances change, when individuals are newly appointed and also on an annual basis. Entries on the register of interest will be disclosed to the Financial Audit Committee of the Board at least annually.”

“The compensation of the CEO is determined by a performance review by the Chair and the Vice Chair of the Board and by use of comparability data for similar roles in the sector.”

“The financial statements of Plan International, Inc. together with the governing documents and policies are available upon request. Additionally, Plan International, Inc. posts the Annual Review and Worldwide accounts as well as the main policies that govern Plan's work on it's website (http://plan-international.org)”

“Other changes in net assets or fund balances is due to the currency translation adjustment between opening and closing reserves of ($6,615,910).”

“The A-133 audit for the fiscal year ended June 30, 2017 is still in progress.”

“***FORM 990, PART III, LINE 4d, OTHER PROGRAM SERVICES***”

“Sexual and Reproductive Health including HIV ($37,264,840). Provision of sexuality education and awareness training to children, adolescents and young people. Plan reached 2,118,307 girls, boys, women and men through it's sexual and reproductive health and rights work.”

“Water and Improved Sanitation ($41,843,691). Installing latrines, sewer systems, provisions of affordable drinking water, hygiene promotion and health education and training. During the year ended June 30, 2017, Plan reached 6,364,197 girls, boys, women & men through its improved sanitation work.”

“Adequate Standard of Living ($49,962,594). Availability of water, improving sanitation standards, medical access and education, as well as building sustainable communities. During the fiscal year ended June 30, 2017, 53,311 communities were directly affected by Plan's work.”

“Protection from all forms of Violence ($46,198,612). Protection from exploitation, neglect, abuse and violence; training of children and parents, capacity building of government and civil society organizations in child protection issues, child protection and promotion of child rights. During the fiscal year ended June 30, 2017 Plan reached 6,577,558 girls, boys, women & men through its protection programs.”

“Participate as Citizens ($38,759,353). Education through child media, life skills training for adolescents, Because I am a Girl Campaign and child and youth group activities. During the fiscal year ended June 30, 2017 Plan reached 6,577,558 girls, boys, women and men through its participation work.”

“Sponsorship Communications ($35,758,882). From enrolling children in the scheme, monitoring their development within their communities and other visits and communications with their sponsors. During the fiscal year ended June 30, 2017 1,193,314 children were assigned to sponsors and 199,114 children were assisted pending and assignment to sponsors.”

“See Schedule O XXX-XX-XXXX. 0. 0.”