Fraud hits aid – but 99.998% of funds get through

BY ANDREW TILLETT

WORKERS TRYING TO IMPROVE Papua New Guinea's justice system were among 32 contractors sacked by Australia's foreign aid agency for fraud or for botching projects, new figures show.

During the past five years, AusAID has torn up the contracts of two organisations delivering programs.  The rip-offs and bungling cost taxpayers more than $200,000.

Figures published in Hansard in response to questions from shadow foreign affairs minister Julie Bishop showed that most of the sackings occurred in PNG, Fiji and East Timor.

And the problems were not just with low-level staff such as clerks. Managers were among those who lost their jobs.

The Law and Justice Program in PNG had a clerical staff member sacked in 2006, with another local staff member terminated a year later.

One person hired for the "electoral support program" in PNG resigned in 2008 after being told his contract would be torn up.

An AusAID spokeswoman said the cases of fraud or mismanagement cost taxpayers $218,500, with almost $171,000 recovered so far.

She said AusAID's fraud controls were effective, with 99.998% of its administered funds going to intended recipients.

Regular audits were conducted of contractors, while police were called in when Australian law had been breached. Companies and non-government organisations blacklisted for fraud were banned from bidding for new contracts.

"AusAID has a zero tolerance policy towards fraud in the aid program," the spokeswoman said.

She added that the organisation investigated all reports, sought to recover money, prosecuted offenders and ensured probity.

Source: The West Australian, 15 November

Comments

[Peter Kranz]

Robin - The Opposition tried to make a big deal of the corruption story but when the stats showed over 99% of the funds were OK they shied away.

Still, the question remains as to whether the aid funds were spent on the right things and at the right level.

Paying a consultant nearly a million dollars on the Law and Justice project may not be corrupt, but is it wise?

[Robin Mead]

I'd say mismanagement has cost considerably more than the stated $218,000 - but it's a start.