ICAI Publishes First Four Reports

22 Nov 2011

ICAI today publishes its first reviews of the UK aid programme: two covering general areas of the programme:
ICAI’s Approach to Effectiveness and Value for Money; and
The Department for International Development’s (DFID) Approach to Anti-Corruption;
and two covering specific programmes in DFID’s country offices:
DFID’s Climate Change Programme in Bangladesh; and
DFID’s Support to the Health Sector in Zimbabwe.

ICAI’s Approach to Effectiveness and Value for Money
Taxpayers have the right to expect that the aid budget not only maximises impact but also delivers value for money. Effectiveness and Value for Money sets out ICAI’s approach to defining these concepts in the context of international aid. With a strong focus on the impact for intended beneficiaries and the robustness of delivery approaches, the report establishes a set of guiding criteria for whether aid is fit for purpose and being used to tackle the most important issues.
• It is ICAI’s view that effectiveness and value for money are inextricably linked. Effectiveness requires a sustained impact for intended beneficiaries; and value for money is the best use of resources to deliver that impact.
• When carrying out reviews, ICAI will look for:
o relevant, realistic and clear objectives;
o pragmatic, robust and cost effective delivery arrangements;
o transformational, positive and lasting impact on the lives of the intended beneficiaries; and
o incorporation of learning and good practice to improve future aid delivery.
• ICAI reports will have a simple ‘traffic light’ scoring system. The four assessment ratings are: green, green-amber, amber-red and red.

DFID’s Approach to Anti-Corruption
The UK Government recently announced an increase in the proportion of the aid budget going to fragile and conflict-affected countries to 30% by 2014-15. In DFID’s Approach to Anti-Corruption, ICAI concludes that this focus on fragile states, together with the planned increase of the aid budget, will expose UK aid to higher levels of corruption risk.
• Overall assessment: Amber-Red.
• DFID needs to develop an explicit anti-corruption strategy for any country assessed as having a high risk of corruption. At present there is a lack of coherent and strategic response.
• DFID should develop a more coordinated approach to risk assessment, risk management, anti-corruption programming and fraud response. It must shift from reactive to more proactive approaches to fighting corruption.
• Some areas of DFID’s approach are performing positively, especially on awareness of threats from fraud and corruption and lesson learning.

DFID’s Climate Change Programme in Bangladesh
ICAI’s review of DFID’s Climate Change Programme in Bangladesh shows that the £75 million programme is innovative and making an important and recognised contribution to climate change resilience. There are, however, areas that need addressing.
• Overall assessment: Green-Amber.
• The programme is building resilience through improving early warning systems and increasing people’s knowledge. It is supporting people to stand up to the impacts of climate change by providing cyclone shelters, raising homes above flood level and trialling new ways of producing food to protect people’s livelihoods.
• Whilst channelling funds through the World Bank and the UNDP adds technical value, DFID is not holding them sufficiently to account. Delays in start up and coordination mean that only £13 million of the £75 million programme has been spent so far.
• DFID should ensure that organisations implementing UK aid are selected competitively and managed according to clear performance targets.

DFID’s Support to the Health Sector in Zimbabwe
Over £100m has been spent by DFID on the Zimbabwean health sector since 2004, mainly on the prevention and treatment of HIV/AIDS, support to maternal health and the supply of essential medicines. In DFID’s Support to the Health Sector in Zimbabwe ICAI has found that UK funds provide critical support and have had a substantial and positive impact, most notably for those living with HIV/AIDS.
• Overall assessment: Green-Amber
• DFID’s support has been influential and has contributed to the halving of the HIV/AIDS prevalence since the 1990s.
• Value for money has been good overall but the underlying health system is still failing. The likelihood of achieving sustained improvement in health outcomes will remain poor until there is a more secure political context.
• DFID now needs to plan to address the risk of falling value for money if the funding is scaled up further.
• DFID has succeeded, however, in safeguarding aid flows in a challenging political and economic context. DFID should support the Zimbabwe Ministry of Health to strengthen their capability to manage the health system.

Graham Ward, ICAI Chief Commissioner, said: “My fellow Commissioners and I are delighted to be publishing our first four reports. Our report on effectiveness and value for money establishes a simple and clear framework and underpins the way we will scrutinise UK aid programmes.

“In order to manage the increasing risks presented by DFID’s focus on fragile states, DFID must give more attention to the fight against corruption. DFID needs to invest more in analysis of corruption risks and a more strategic approach to tackling corruption proactively.

Bangladesh is highly vulnerable to the impacts of climate change. The DFID programme aims to make improvements sustainable by building local knowledge, skills and systems. The programme is progressing well and is establishing effective models with good local engagement. Parts of the programme, however, have been subject to delay in start-up and are, therefore, not yet having widespread impact.

“DFID’s delivery in Zimbabwe has been responsive, well co-ordinated with other donors and aligned with agreed priorities. DFID has significantly increased the availability of free antiretroviral treatment and contributed to the halving of HIV/AIDs prevalence since the 1990s. Explicit attention needs to be paid to the risk that increased levels of aid cannot be as quickly absorbed by a weak health system.

“We believe that our mixture of robust scrutiny and constructive recommendations will assist the UK Government to make decisions on how best to ensure effectiveness and value for money of the aid budget. It is our intention to build on this body of work. We will continue to gather evidence on whether the UK aid programme is effective and learning lessons to ensure lasting and positive impact for intended beneficiaries and value for money for the UK taxpayer.”

Notes to editors:For further information please contact Clare Robathan on 020 7270 6734 or
c-robathan@icai.independent.gov.uk.

The Independent Commission for Aid Impact (ICAI) is the independent body responsible for scrutinising UK aid. We focus on maximising the effectiveness of the UK aid budget for intended beneficiaries and on delivering value for money for UK taxpayers. For further details on ICAI, the workplan and for links to each report please visit www.independent.gov.uk/icai.

ICAI’s Chief Commissioner is Graham Ward CBE. The three other Commissioners are: Mark Foster, John Githongo and Diana Good. Their biographies are on the ICAI website.

ICAI has appointed a contractor to carry out work on its behalf. This work is led by KPMG LLP in partnership with:
• Agulhas – a UK-based development consultancy
• CEGA – a multi-disciplinary research centre based at the University of California, Berkley, which specialises in development evaluations
• SIPU International – a Swedish consultancy and training organisation specialising in capacity building and institutional development in transitional and developing countries, which has expertise in joint donor evaluations and capacity building.

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