By Nick Mann | 22 March 2012
The UK Department for International Development needs to address the risk of fraud and leakage in its aid to Afghanistan, a watchdog said today.
An assessment of the programme found the department’s financial management processes were ‘insufficiently robust’. As a result, the Independent Commission for Aid Impact rated the controls and assurance ‘amber-red’ in a report published today.
According to the commission, which was set up by DFID in 2010 to police its aid programmes, the rating means the ‘programme meets some of the criteria for effectiveness and value for money but is not performing well. Significant improvements should be made’. In particular, it found that the DFID did not fully document the risk of leakage in Afghanistan and did not perform thorough risk assessments. It should make explicit how it is assessing and considering this risk, the report said.
More people should be deployed by the DFID to improve its financial grip on the aid delivery chain and reduce risk, it said. The department places too much reliance on partners to detect fraud and corruption.
ICAI chief commissioner Graham Ward said: ‘We acknowledge that DFID has to manage this programme in an extremely complex and challenging environment.
‘Our view, however, is that DFID does not give sufficient importance to identifying and managing risks in the design and delivery of programmes in Afghanistan.’
In a separate report, the ICAI gave a ‘green-amber’ rating for the effectiveness of the DFID’s work with the World Bank. The department has contributed £5.1bn to the bank over the past five years, and the ICAI praised its work in influencing the bank’s programmes and its moves towards reform.
It noted, however, that there was no single point of accountability within the department for overseeing the ‘significant amount’ of money it allocates to World Bank trust funds. It should develop a strategy for ensuring these resources were spent in line with UK aid objectives, the report said.
Ward added: ‘The findings from our review of theWorld Bank broadly align with those of DFID’s Multilateral Aid Review.
‘We believe that DFID engages effectively with the Bank but that it could do more to help to drive improvements in the cost-effectiveness and performance of the Bank’s projects.’
