DfID accused of taking its eye off the 'financial ball'

20 October 2011

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20 October 2011 | Angeline Albert

The Department for International Development’s (DfID) ability to make informed spending decisions is “undermined by its poor understanding of levels of fraud and corruption,” when giving aid across the world.       

That is the conclusion of Margaret Hodge MP, chairwoman of the Committeeof Public Accounts (PAC) in a report DfID Financial Management, published today.

A DfID spokesman said: “We make no apology for our focus on conflict and fragile countries.”

The amount DfID spends on aid will rise by 35 per cent by 2013 but the department has to cut its overall running costs by a third. With this in mind, Hodge said: “The department could not even give us information as to the expected levels of fraud and corruption and the action it was taking to mitigate it. Unfortunately, the department has not always kept its eye on the financial ball and in 2010 stopped monitoring its finance plan.”

DfID said the incident the report referred to fell at the time of the 2010 election, “when the incoming coalition government decided to move to a broader value-for-money agenda, which superseded the old financial plan”.

It said countries affected by war and instability are the source of problems that impact us in the UK, whether that be immigration, drugs trafficking or extremism. “We are increasing the number of financial specialists and putting more emphasis on financial management for all staff who handle taxpayers’ money. All programmes are designed with a range of safeguards – including more risk assessment, monitoring and audits,” it added.

The PAC’s report was published in response to a NationalAudit Office review published on 6 April.

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