Learning from NGOs
A recent report from the National Audit Office examining the Department for International Development’s financial management has highlighted concerns about the effectiveness of the UK’s overseas aid budget.
The £6.63bn spent by DfID in 2009-2010, classed as ‘official development assistance’ is vulnerable to fraud because of a reactive approach to tackling the problem. The spending watchdog observed that the UK had no clear picture of the ‘extent, nature and impact’ of funding lost to fraud and that value for money was ‘more important than ever’.
This can hardly be helpful when more is being asked of funders and donors as the government retreats from state funding. International non-government organisations have much to teach DfID about how they ensure funds reach the projects they were destined for because their accountability requirements far exceed those for governments.
Having fought the fraud problem for years, they know that if the public lost confidence in their aid actually reaching disaster zones donations would dry up. So they equip their operators with sound financial management skills. Why then, is the DfID funding different?
Part of the problem is that DfID has ‘limited input into financial management at an operational level’ and UK government aid is inevitably tangled up in security. Andrew Mitchell, the international development secretary, has made it abundantly clear that DfID has to work alongside the Foreign Office and the military. The importance of this was clarified by former MI6 deputy head Nigel Inkster. At Crowe Clark Whitehill’s INGO conference last year Inkster explained that overseas aid was being repositioned to “focus on countries that are vulnerable in security terms”.
This is not going down well with the public. Reponses to the NAO report unsurprisingly call for removal of overseas aid and suggest leaving this to the experts – the charities – who are ‘trusted channels.’
What should happen is that the bits of the DfID budget that are really security spending in disguise should be called that, and moved to the appropriate department. Then the bulk of the aid programme should go to international NGOs who have trusted senior local staff on the ground. This would cost a lot less than British officials working abroad who are often transferred internally, or to another country – hardly conducive to building and retaining local knowledge.
In summary, the problem with UK government aid is that there are not enough good people at all levels, the smell of money makes people behave strangely, and local power structures tend to collar much of the money or where it is directed to.
If the home front sees the third sector as a significant partner in delivering welfare reform, why can’t this happen in overseas aid? This would be a huge vote of confidence in the sector and at least the money would get through.
Author: Clarissa Dann
Clarissa Dann was the editor of Caritas as well as an HR and management online service,he People Bulletin until July 2011.
She is now the editor of the specialist trade finance magazine, Trade and Forfaiting Review which can be viewed at www.tfreview.com but does write on charity finance and investment from time to time.
Clarissa has a background in legal and professional publishing, as well as business journalism and holds an MBA from
There are no comments on this article. Be the first to comment.