Auditors and Auditors General are consistently speaking out about the lack of governance around the contract life-cycle.
June 28 David Crawshaw writes in The Australian that BETTER safeguards are needed to ensure Australian aid money used to rebuild tsunami-ravaged Indonesia is spent appropriately, a report has found.An analysis by the National Audit Office has called for improved accountability so that money administered by AusAID, the national aid agency, is not lost to fraud or corruption.
The audit office’s report, released today, warns AusAID must be constantly on the lookout for corruption as it works with Indonesian contractors to rebuild the shattered region.
It criticises AusAID’s risk management and accountability measures.
“A key risk for activities is that of fraud and corruption,” the report said.
“This is a recognised risk in Indonesia, which the Indonesian Government has declared a commitment to tackle.”
Despite these dangers, AusAID did not identify strategic risks until August 2005 and did not perform a proper risk assessment.
“Identification of risks at the strategic and operational levels has not been timely or sufficiently systematic and structured,” the audit concluded.
“By the time risk management plans had been put in place, some risks had already materialised, particularly the pressures on the timely and effective delivery of aid.”
The report said AIPRD aid money had been spent more slowly than anticipated, with only $70 million spent up to March this year.
AusAID also needed to improve its contract management, it said.
“A number of contracts were signed after the provision of services had commenced, including ones delivering aid after the emergency period had passed.”
The report urged AusAID to keep a closer eye on procurement of goods and services, particularly those obtained through direct sourcing instead of tender.
It said AusAID was the victim of 43 suspected fraud cases worth $917,000 between 2002-03 and 2004-05, although some of this money had been recovered.
In a one-line statement contained within the report, AusAID welcomed the analysis and agreed to act on its findings.
“AusAID is satisfied with the outcomes and conduct of the performance audit and has agreed to act upon all of its recommendations,” the agency said.