Foreign aid fraud cases quadruple in five years
FRAUD allegations involving Britain’s £12billion aid budget have quadrupled in the five years since David Cameron’s spending target was set, a damning report reveals today.
The official watchdog said pledging 0.7 per cent of national income to foreign aid – and targeting ‘fragile’ states – had increased risk of wrongdoing.
Some taxpayers’ money may even have ended up in the hands of extremists, the National Audit Office (NAO) warned.
Its report found there were 429 fraud investigations in 2015/16, compared with 102 in 2010/11 – the year Mr Cameron came into office and set the 0.7 per cent target.
The NAO said at least £3.2million was lost last year through fraudulent activity, a third of which was never recovered. It also warned that, in the first nine months of the current financial year, there were 475 fraud cases – higher than the total for the whole of the previous year.
The report also warned Britain delivers aid to many countries where nepotism and paying bribes – which many Britons consider fraudulent – are commonplace.
‘Britain delivers aid to many countries that operate with significantly different cultural and economic value systems, which in many respects the UK taxpayer would regard as fraudulent practices,’ it said.
‘For example, some societies operate within cultural norms that expect bribes to be paid to officials for access to services, including justice; where family members will be preferred to open competition when allocating work contracts; and where senior officials take a percentage of the salaries of junior staff members.’
The Department for International Development (DfID) insisted the number of investigations had risen only because officials were improving at spotting potential fraud.
International Development Secretary Priti Patel said: ‘The UK operates in the most fragile countries because these are the places where the poorest are dying from starvation, drought and disease; these are the places where conflict and economic failure drive mass migration; and these are the countries where it is in the UK’s direct national interest to keep them stable and secure. We expect all international agencies to have the same zero- tolerance approach to fraud that we have if they are to receive taxpayers’ money.
‘It is time for the global aid community to be honest about the challenges it faces to increase the transparency and accountability of the international aid system.’
Last month the Daily Mail revealed that the amount of aid money channelled into the 20 most corrupt countries had reached £1.1billion.
Under Mr Cameron, the Government committed to spending 0.7 per cent of national income on international aid. That target has seen the budget soar to around £12bllion.
As part of the 2015 Strategic Defence and Security Review, DfID was ordered to spend at least half of its cash in ‘fragile states and regions’ until 2020.
The NAO warned these reforms could increase the risk of fraud.
The report warned it was ‘particularly challenging’ to detect fraud in more than half of DfID’s spending because the money was routed through organisations such as the United Nations or World Bank.
Financial crimes in UN organisa- tions were believed to be underreported and the problem could be ‘significant and endemic’, it said.
Nearly 40 per cent of DfID’s fraud cases between 2003 and 2016 involved non-governmental organisations, such as charities and international bodies. Radical groups also accounted for 0.3 per cent of fraud cases, according to the report.
The watchdog found that DfID’s fraud caseload quadrupled between 2010/11 and 2015/16 to 429.
Most of the increase related to ‘lower priority’ allegations while the most serious cases remained at between 20 and 25 incidents a year.
The largest number of high-priority investigations involved allegations in Afghanistan, Somalia, Syria and the Democratic Republic of Congo.
The NAO said the increase in the number of allegations being dealt with by DfID could be as a result of its work to increase fraud awareness.
The Foreign Office has also seen a ‘significant increase’ in its fraud caseload, with 50 allegations last year – twice as many as 2011. Around three-quarters of cases involved staff making claims for travel and subsistence or procurement. It has taken five cases to court in the past seven years – two leading to convictions and one dropped due to rising costs.
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