By Vivienne Russell | 20 October 2011
MPs have reprimanded the Department for International Development for ‘taking its eye off the financial ball’.
In a report published today, the Public Accounts Committee said the department had stopped monitoring its finance plan last year. ‘That must not happen again and DFID should report publicly on its financial management,’ said PAC chair Margaret Hodge.The DFID is one of just two Whitehall departments protected from the government’s spending cuts. The money devoted to international aid programmes is being increased by 35% to 0.7% of gross national income by 2013, although the department itself has to reduce administration costs by a third.
The MPs said reconciling the rapid expansion in the department’s budgets with internal cuts would be a ‘substantial challenge’.
They also warned of an increased risk of fraud and corruption. Hodge said: ‘The department is going to be spending more in fragile and conflict-affected countries and the danger to the taxpayer is that there could be an increase in fraud and corruption. However, the department could not even give us information as to the expected levels of fraud and corruption and the action they were taking to mitigate it.’
She added that the department’s ability to make informed spending decisions was ‘undermined by its poor understanding of levels of fraud and corruption’.
The report concluded that to ensure that the maximum amount of aid gets through to the front line, the department should have clear plans about how it is going to reduce or control running costs.
