System of external audit for Irish Aid needs help to improve standards– PAC report

The report follows a visit by a delegation from the PAC to Mozambique where it examined a number of Irish Aid projects.

Committee Chairman John McGuinness TD said: “We also need to look at the training of staff who are involved in financial controls so 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.”

The Report also deals with the case in Uganda where Irish aid money was the subject of an elaborate fraud. In all €12 million of aid funds (€4 million of which was money provided by the Irish taxpayer) was diverted to a third party account by senior officials in the office of the prime minister of Uganda. In examining this issue, the Committee had 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.

The PAC 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 concluded: “There can be positive outcomes that can arise from the fraud in Uganda and the weaknesses in our own system will have been 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. 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.”

Read the report here: http://bit.ly/15w2RR4

For further information please contact:

Ciaran Brennan,
Houses of the Oireachtas,
Communications Unit,
Leinster House,
Dublin 2

P: +3531 618 3903
M: 086-0496518
F: +3531 618 4551
 
Committee of Public Accounts Membership
 
John McGuinness (Chairman)
Kieran O’Donnell (Vice Chairman)
Paul J Connaughton,
John Deasy,
Paschal Donohoe,
Gerald Nash,
Simon Harris,
Michael McCarthy,
Mary Lou McDonald,
Sean Fleming,
Eoghan Murphy,
Derek Nolan,
Shane Ross.