Major deficiencies in the management of almost €500 million in overseas aid spending have been revealed in an audit report of the Department of Foreign Affairs.
The report, seen by The Irish Times, says there are insufficient checks against fraud and major staff shortages in the evaluation and auditing of aid programmes.
It also says a "large number of material weaknesses and deficiencies in the accounting procedures and internal controls" of partner organisations, such as aid agencies, needs to be addressed.
The department's audit committee expresses serious concern about the proposed decentralisation to Limerick of the department's aid programme, Irish Aid. This is due to take place in stages from next spring, even though few existing staff have expressed a desire to move.
It says the proposed move will lead to substantially increased travel and liaison costs, as well as putting at risk the existing coherence between aid and other aspects of foreign policy, whose management will remain in Dublin. These "inherent" risks, which also include a loss of specialist staff and less contact with important partners, need to be actively managed.
The report states: "The predicted loss of key personnel at a critical time of significant budget and programme expansion is of the most serious concern."
According to committee chairman Fr Gerard O'Connor, "there is a danger that the excellent international reputation that Irish Aid enjoys will be threatened by staffing shortages".
None of the senior managers in place when decentralisation was announced three years ago has applied to go to Limerick and most have left the department. Impact trade union says only 47 Irish Aid staff, most of them newly arrived from other departments, have indicated a willingness to move, out of a total of 160 posts which are being transferred.
However, Irish Aid claims it has filled 69 per cent of its staffing requirement.
Although staff numbers are due to increase in Irish Aid, Fr O'Connor says the additional posts "will hardly be sufficient to efficiently and effectively administer an increase in budget of an additional €190 million over the next three years". An additional 20 posts have been sanctioned but these cannot be filled because of a dispute between Impact and the Department of Finance over specialist staff in the Civil Service. Talks on the dispute, which the department has appealed to the European Court of Justice, are expected to take place soon.
The audit committee report calls for a new fraud policy, which would involve the recording of fraud, consideration of the policy implications of fraud where it occurs and a distinction between internal fraud and fraud that occurs in aid agencies and other partner organisations.
Staffing levels in the department's evaluation and audit unit are "barely adequate" to ensure a meaningful work plan, it says.
"The unit is so thinly resourced that it is very susceptible to events such as sickness, emergencies, staff departures, etc. Moreover, the planned enormous increase in budget over the coming years is going to bring a host of new challenges, burdens and pressures."
It also questions the use of consultants as a substitute for staff: "While there is a need for an expanding consultancy budget, it needs to be planned so as not to create a situation whereby many consultancy reports are generated, but staff shortages prevent the implementation of the recommendations from these reports."
Earlier this year, former aid minister Liz O'Donnell said it was "reckless" for the aid programme to be expanded without its inadequacies being addressed.
The report covers spending of €472 million on overseas aid in 2005. This is due to rise to €1.5 billion by 2012.
