Gauging AusAID's effectiveness in PNG*

BY PAUL OATES

THE RECENTLY released review of Australian overseas aid to PNG contains the following statement in its list of recommendations:

Greater use of monitoring and evaluation, extending beyond audit, would enable AusAID to establish not only that funds have not been misused, but that they have been used effectively, and provide a stronger evidence base for policy dialogue.

This appears to be fairly innocuous until its full import is considered. Closer examination suggests AusAID may be totally unable to efficiently monitor and evaluate whether aid funds are being used effectively or not.

The review then throws some light on the reasons why the effective monitoring and evaluation of aid expenditure is difficult.

Reporting of Australian aid on the PNG budget is comprehensive, and the focus on recurrent spending promotes fiscal sustainability. Alignment of the Australian aid program with PNG budget priorities is a fundamental requirement of aid effectiveness...

However, although repeated attempts to forge a tight link between aid and PNG Government spending have been made, they have not been sustained… A multi-year expenditure framework is needed. This would indicate how funds would be allocated to major sectors in the coming years, and would provide a basis for setting realistic sectoral performance targets.

Put simply, there appears to be no coordination between AusAID funding and the PNG government's method of managing and expending the PNG Budget.

An indication of why coordination is difficult seems to be contained in this recommendation to the PNG government:

Strengthened government leadership and coordination of the aid program by the PNG Government is critical for improved aid effectiveness. In particular, the Department of National Planning and Monitoring should avoid assuming management responsibilities for sectoral projects and programs and focus its efforts on providing strategic guidance and oversight to the aid program.

The current PNG Minister for this Department, Paul Tiensten, has been in the news recently, with Prime Minister Somare first sacking him and then suddenly reinstating him after his Department was at a loss to know if they were still operating or not.

In the 2009 AusAID Annual Performance Report [link to it here] further facts emerge as to why the agency has difficulty measuring its performance under the current arrangements with the PNG government.

Overall, 2008 was a challenging year for the PNG aid program. The Flagship monitoring, evaluation and dialogue mechanism of the Development

Cooperation Strategy-Performance Review and Dialogue ceased in 2008 because triggers for performance payments could not be agreed. This reduced opportunities to engage with Australia's key counterpart for aid, the Department of National Planning and Monitoring, on strategic policy and governance issues. The Decision by the Department not to continue with the placement of a co-located AusAID officer also undermined the prospects for collaboration.

While Australia's support for strengthening the public service made some incremental improvements in some agencies, key processes for reforming the public sector stalled in 2008... Another important reason for the lack of reform was the anticipated benefits of the LNG project, which are expected to cause the PNG Government to be even less focused on reform…

This indicates that a coordinated approach to monitoring and evaluating the effectiveness of AusAID programs in PNG is not possible while there is obfuscation and a distinct lack of accountability within the PNG government.

So in order to be able to identify and assess future aid effectiveness, AusAID expenditure must be managed and monitored separately, rather than integrated into everyday PNG government operations.

In summary, the 2010 Review of AusAID echoes the 2009 AusAID Annual Performance Report.

The conclusions drawn from both are that it is not possible to achieve or measure results from nearly half a billion dollars worth of annual Australian aid given to PNG because the funds and efforts are hopelessly jumbled with PNG government programs.

These programs basically achieve very little and are not effectively monitored.

This situation has been confirmed by the findings of the recent Commission of Inquiry into PNG government finances that found almost all government departments and authorities were not able to manage their financial operations and only five were given some degree of approval by the Commissioners.

There is an inescapable conclusion to be drawn from this. Australia’s aid money to PNG must be separated and managed independently from the PNG government machine, at least for the time being.

* This is the second in a series of reviews on matters raised in the recently publicised Review of Australian Aid to PNG, which you can link to here.

Comments

[Colin Huggins]

All very interesting, but where is the $$457 million from the Australian taxpayers' pockets? This amount is just for one year!

The mind really does boggle at what seems a complete waste for the PNG people and their welfare and improvement for such basics as education and health, or is this money to pay for the bureaucrats of AusAID or the finger dipping members of the Somare government?

I think this from Paul sums it up - "there appears to be no coordination between AusAID funding and the PNG government's method of managing and expending the PNG Budget."

What is needed is a head-kicking High Commissioner from Australia who will not tolerate these apparent abuses. I can think of some very suitable candidates from each side of the political spectrum in Australia, but modesty prevails!

Keep it up, Paul.