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Thursday, 20 October 2011

Aid cash lost to fraud 'could rise'
(UKPA) – 8 hours ago
The amount of British aid lost to fraud and corruption could rise because of changes to how the money is targeted, an influential committee of MPs has warned.
The Department for International Development (DfID), whose budget is rising despite massive cuts across Whitehall, is refocusing overseas aid on countries seen as fragile and in conflict, such as Somalia, Burma and Pakistan.
But the cross-party Public Accounts Committee (PAC) cautioned that "operating in high-risk environments means the potential for increased risk of leakage through fraud and corruption".
"The department intends to focus more on fragile and conflict-affected states which pose higher risks in terms of poor security, delivery capacity, measurement of costs and outcomes, and leakage of funds through fraud and corruption," it said in a report.
The PAC also warned that increasing spending via multilateral organisations - such as the European Commission and the World Bank - may also mean more British money is lost to fraud and corruption.
"The department plans to increase the proportion of its funding spent via multilaterals but does not have the same visibility over the cost and performance of multilaterals' programmes as it does over its bilateral programmes," the PAC said.
"Furthermore, the strategy to increase DfID spend through multilateral programmes appears to have more to do with it being easier for DfID to do this than for it to assess the viability, effectiveness and value for money of bilateral programme proposals."
The PAC also criticised DfID's "poor understanding" of the scale and likelihood of aid being lost to fraud.
International Development Secretary Andrew Mitchell said the coalition had transformed DfID's financial management and took a "zero-tolerance" approach to fraud.
"Although accurately reflecting the position under Labour, the report appears to take little account of the huge changes the coalition has made since taking office," he said.

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