Herald Sun: Fraud Plagues Australian Aid Program

    An Australian newspaper alleges that the Australian aid program in Indonesia is riddled with fraud. Photo by: AusAID

    Australia’s overseas aid program worth 4 billion Australian dollars (USD3.5 billion) is reeling from corruption, an Australian newspaper alleges.

    Citing its own investigation, the Herald Sun says there are 134 “active” investigations into possible fraud in 16 nations. Most fraud cases are in Indonesia and Papua New Guinea.

    AusAID has disclosed 68 cases of “alleged, suspected or detected” fraud probed in 2009. AusAID chief Peter Baxter admitted that part of the problem was the lack of adequate legal and police capacity to pursue alleged cases of fraud in aid-recipient countries. 

    Australia’s flagship law and justice sector program in Papua New Guinea is under investigation for funding misuse, according to the Herald Sun. The newspaper saw documents indicating that PNG’s Correctional Services was conducting a probe of a contract worth 200,000 Australian dollars for the supply of vital radio equipment to prisons. An investigation by Wailyo Pindao, internal auditor at PNG’s Correctional Services, revealed “serious weaknesses” in the project. Pindao called for the formal investigation of the Aarons Security Service, the company contracted to supply repeater equipment to PNG prisons.

    AusAID, which aimed to double its budget to nearly 8 billion Australian dollars by 2015, would not comment on the alleged cases of corruption while investigations continued, Herald Sun reports.

    The Herald Sun was the same newspaper that ran an expose on the mega-salaries AusAID paid its consultants.

    About the author

    • Ma. Rizza Leonzon

      As a former staff writer, Rizza focused mainly on business coverage, including key donors such as the Asian Development Bank and AusAID.