Vertical Markets

DFID fraud report

by Mark Rowe

There’s a clear relationship between fragile states and countries also perceived as the most corrupt, according to an official report on the Department for International Development (DFID) approach to tackling fraud. Based on DFID’s fraud cases, the National Audit Office (NAO) found there were few allegations of fraud reported to DFID in some of the countries ranking among the most corrupt.

In response to previous criticism by external scrutiny bodies, DFID has changed its counter-fraud strategy. It has built the consideration of fraud risk into the process that teams must follow when setting up programmes, the report found.

The number of allegations of fraud reported to DFID has increased, as a result of its work to increase awareness of fraud and reporting requirements among its staff and suppliers. This is more difficult to achieve in 55 per cent of its expenditure, which is routed through multilateral bodies, where DFID does not have direct control over all the funds it provides and relies on multilateral bodies’ systems.

DFID’s central fraud team investigated 93pc of the 429 fraud allegations made in 2015-16 and provided advice on the rest. DFID’s fraud caseload quadrupled between 2010-11 and 2015-16 and it received 475 new allegations during the nine months to December 2016.

Annual gross losses owing to fraud in 2015-16 were around 0.03 per cent (£3.2 million) of DFID’s budget. Between 2003 and 2016, non-governmental organisations accounted for nearly 40pc of reported fraud cases. Since 2003, DFID has recovered around two-thirds, by value, of the reported fraud loss.

Externally, DFID provides less information than it used to in its Annual Report, although this is made available on its website. Neither the FCO nor the British Council provide more fraud information in their annual reports than DFID.

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