By Judith Ugwumadu | 16 January 2015

The UK aid spending target has presented the Department for International Development with challenges in managing its budget and spending, auditors have said.

DFID is committed to spend 0.7% of the UK’s annual gross annual income on overseas aid each year and the department complied with this target in 2013/14, the National Audit Office said in a report published today.

The watchdog noted that the target had increased DFID's budget by a third at a time when budgets for other Whitehall departments were being reduced.

Although the department worked hard to manage its larger budget, improving many of its business processes, difficulties and challenges remain, not least the requirement to work towards two year ends.

‘Although the target relates to cash expenditure in a calendar year, the department continues to account to a March financial year end,’ the report stated.

‘This difference is likely to represent more than an accounting difficulty because of the need to hit a target with little or no flexibility, causing significant decisions to be made late in the year and at short notice.’

The report highlighted spending in November and December 2013, which was £1bn more than initially forecast.

In response, DFID said the additional £1bn spending in the last two months of 2013 went towards increasing humanitarian support in Syria and the Philippines as well as providing additional funding to the Global Fund to Fight AIDS TB and Malaria and the World Bank.

The department stated that the NAO found no evidence that normal business processes were not followed.

A DFID spokeswoman added: 'Using available GNI estimates, DFID sets a clear strategy each year to deliver its ODA target and works with [the Treasury] to monitor and manage this through the year.

'It is normal practice and good financial management for organisations to take stock of priorities and emerging pressure through the year. The nature of issues that DFID deals with, including humanitarian emergencies, means it is important to retain this flexibility.'