RegulationCorporate GovernanceNAO urges tighter aid controls

NAO urges tighter aid controls

Public spending watchdog says Britain's overseas aid budget is open to 'significant risks'

Lax financial controls have exposed the UK’s £500m overseas aid budget to
fraud following a change in government policy, the National Audit Office has
warned.

The public spending watchdog said the Department for International
Development’s policy switch from project-linked funding to wider ‘budget
support’ in delivering aid to countries in an attempt to reduce poverty had led
to ‘significant risks that the national administration may not be capable of
using the funds efficiently and effectively or funds may be misapplied for
political reasons or through corruption’.

This month however
DFID
reaffirmed its commitment to using budget support.

The NAO recommended DFID better define its objectives in using budget support
programmes, as well as ‘identify any key weaknesses in the national monitoring
systems and give increased priority to mitigating them’.

It should also ‘further strengthen its risk assessments and analysis of
developing country government systems’.

‘Some 15% of indicators do not have specific time-bound targets, and
baselines against which to measure progress were missing in 22% of cases, the
NAO
report
found.

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