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John McGuinnessT D Eamonn Farrell/Photocall Ireland
Irish Aid

Irish Aid requires an external audit system to improve standards - PAC report

The Committee of Public Accounts says Irish Aid’s external audit needs help from more qualified auditors in order to improve standards.

IRISH AID’S SYSTEM of external audit needs help in order to improve standards and provide more comprehensive coverage of the State’s spend, according to a new report by the Committee of Public Accounts (PAC).

A PAC delegation visited Mozambique to examine a number of Irish Aid projects, and concluded that the training of staff involved in financial controls was requited to ensure that certain minimum standards apply.

“The basic problem in Mozambique is the shortage of skilled administrators and skilled auditors as those that are trained can get higher paid jobs in the ever expanding private sector. This has to be addressed especially in the Auditor General’s office where the number of qualified auditors has dropped from 150 to 110,” said Committee Chairman John McGuinness TD.

The Report also references the case in Uganda where Irish aid money was the subject of an elaborate fraud, which saw a total of €12 million of aid funding (€4 million of which was money provided by the Irish taxpayer) diverted to a third party account by senior officials in the office of the Ugandan prime minister.

The Committee was allowed access to an internal report from the Department of Foreign Affairs and Trade on the fraud in Uganda where €4 million of Irish Aid funds was misappropriated, and found that:

  • The Department was open about where it had fallen down and has taken corrective action
  • The audit system in Uganda works: The Auditor General uncovered the fraud and we can take certain assurances from the comprehensive and independent stance taken by the Auditor General to combat fraud
  • The money was paid back
  • The perpetration of the fraud has led to a debate in Uganda about the prevalence of fraud and it should lead to a higher level of intolerance by the State on the issue of fraud as the consequences of not acting are that it could endanger the entire aid budget on which Uganda is so dependant

Deputy McGuinness said there could be “positive outcomes” as a result of the fraud in Uganda, which include highlighting the weaknesses the own system which can be tightened up. “In Mozambique, we need to focus on increasing the capacity of those who are working in the area of financial management and also in the area of audit. Investment in staff training and also staff retention issues must be addressed so that the oversight systems deliver to a standard that we consider acceptable,” he said.

“Finally countries like Mozambique will not remain programme countries forever and we need to look at how best Ireland as a donor nation can help them to move to self-sufficiency,” he concluded.

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