Spending watchdog says ex-PM’s changes made wrongdoing more likely
FRAUD investigations involving foreign aid have rocketed, the National Audit Office (NAO) reported yesterday.
The NAO found that in the five-year period from 2010/11, the Department for International Development (DfID) fraud caseload quadrupled.
The report showed an 11 per cent increase in the number of cases by the end of December 2016.
The major fraud allegations involve countries including Afghanistan, Somalia, Syria and the Democratic Republic of Congo.
Reforms introduced by former prime minister David Cameron to change the way aid is targeted in fact increased the risk of wrongdoing, according to the watchdog. It warned that it was difficult to detect levels of fraud due to the money now being channelled through other organisations including the United Nations and the World Bank.
But it said that financial crimes in UN organisations could be “significant and endemic,” suggesting they are underreported.
Under Mr Cameron’s reforms the government committed £12 billion to international aid, with the DfID told to spend at least half of its budget on “fragile states and regions” until 2020.
The report found the department lost £3.2 million to fraud in 2015/16 though it has recovered two thirds of its losses since 2003.
The NAO said that the rise in the number of allegations was due to the DfID’s work to increase awareness of fraud. But it criticised the department for significantly reducing its reporting of fraud in public accounts and annual reports.
The report also suggests that Foreign Office fraud cases have doubled since 2011 with about three quarters of the 50 cases involving staff claims for travel and subsistence or procurement.
A report last month from the Independent Commission for Aid Impact (ICAI) identified issues of “fraud and leakage” in the DfID’s cash payments programme — Britain gives about £200m of foreign aid in direct cash payments to 28 countries across the world.
But the ICAI found that aid officials avoided dealing with issues of “fraud and leakage” in the cash transfers programme despite it being “well known and evidenced.”
It cited “recurrent problems with the money being given to the wrong people.”
The DfID had not commented as the Star went to press.
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