AusAID sees some success in fight against fraud

    Peter Baxter, director-general of the Australian Agency for International Development, boasted recently of the aid program’s success in cutting losses due to fraud. Photo by: Russell Watkins / Department for International Development / CC BY-SA

    After last year’s independent aid effectiveness review on the Australian Agency for International Development’s “fraud management,” the agency further intensified efforts to fight “fraud risks.” These efforts seem to be paying off.

    Peter Baxter, director-general of the Australian Agency for International Development, boasted recently of the aid program’s success in cutting losses due to fraud  from some 1.4 million Australian dollars ($1.43 million) in fiscal 2010-2011 to AU$580,000 Australian dollars in fiscal 2011-2012, according to ABC News.

    The reduction, Baxter says, was due to AusAID’s comprehensive approach to “combating fraud risks.” The program has “more than doubled” support for fraud control and has appointed fraud control officers in high-risk locations, according to a press release.

    But these are not the only measures the aid agency has taken since the independent review of its aid program last year.

    AusAID has introduced a risk and fraud management plan at every “post,” which it updates annually. It has also maintained a memorandum of understanding with the World Bank Integrity Vice Presidency, enabling the aid agency to stop dealing with organizations debarred by the bank and the other multilateral financial institutions that signed the cross-debarment agreement in 2010.

    Further, AusAID has continued to review and audit specific fraud control mechanisms of its partner nongovernmental organizations, commercial contractors and tertiary institutions. This ensures their compliance in the agency’s “financial, contractual and activity management requirements, including fraud reporting and risk management,” an AusAID spokesman told Devex.

    The agency has opened up a risk management and fraud control branch in March to boost its fraud control capacity as well. Moreover, countries are being “assessed in detail” before AusAID disburses funds to support development work, although the agency also provides assistance to these countries to improve oversight and fraud control.

    Most cases of fraud were found in the Asia-Pacific region, including Papua New Guinea, Solomon Islands, Vanuatu, Fiji, Indonesia, the Philippines and Cambodia. “Significantly less cases” are found in countries in Africa and Latin America.

    The agency was mired in controversy last year due to such cases of fraud. Documents acquired by media through the country’s Freedom of Information Act revealed fraud cases that involved corrupt overseas agencies and officials in some 27 countries.

    Some cases under investigation involve falsification of documents concerning grant applications, alteration in check payments, and “collusion among tenderers and falsification of quotes submitted in tender processes.”

    In April, Laurie Dunn, the agency’s first assistant director-general, expressed the difficulty of recovering money lost to fraud. But the spokesman said the latest estimated “figures are subject to change and potentially may improve as AusAID continues investigation of matters and makes further recovery efforts.”

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    About the author

    • Jenny Lei Ravelo

      Jenny Lei Ravelo is a Devex Senior Reporter based in Manila. She covers global health, with a particular focus on the World Health Organization, and other development and humanitarian aid trends in Asia Pacific. Prior to Devex, she wrote for ABS-CBN, one of the largest broadcasting networks in the Philippines, and was a copy editor for various international scientific journals. She received her journalism degree from the University of Santo Tomas.