Review

The rapid review, which is not scored, found that the FCDO has effective processes in place to identify, assess and monitor multilateral organisations’ fraud risk management frameworks. However, the review also found that the FCDO does not currently include the European Commission, where it had previously identified weaknesses, in its oversight of fraud risk frameworks across multilateral organisations.

This review builds on the Tackling fraud in UK aid review conducted by ICAI in 2021, which focused on the UK’s bilateral aid expenditure.

Findings

• FCDO has appropriate processes in place to identify, assess and monitor multilateral organisations’ fraud risk management frameworks
• Central Assurance Assessments are generally completed to a good standard but there is no systematic quality assurance process
• Monitoring of fraud risks is matched to risks identified in CAAs but relies on reporting by multilaterals
• The Multilateral Effectiveness Team does not have an oversight role and there is no overarching view of fraud risks across all multilateral organisations
• FCDO’s Fraud Investigation Team had managed suspected fraud cases
• Multilateral organisations see the UK as being among the leading donors pushing for strong counter-fraud measures.
• Budget reductions may have affected FCDO’s leverage to influence multilateral organisations’ risk management systems.
• Reductions in funding may increase fraud risk in some areas.
• Despite being the UK’s biggest multilateral ODA recipient, FCDO is not actively engaging with the European Commission on fraud risk management.
• FCDO collaborates effectively with like-minded donors, but not with the European Commission.
• FCDO is changing its main ODA record management system.
• Secondments of FCDO staff have delivered significant value to multilateral organisations but FCDO has not effectively captured and used learning.
• Networking and learning on fraud with the European Commission is not happening
• The lack of peer review is a missed opportunity

Recommendations

1. FCDO should establish a risk-based portfolio approach to managing governance risks across funding to all multilateral organisations.
2. FCDO should continue to build stronger coalitions with like-minded donors to maintain counter-fraud and good governance as a top priority for multilateral organisations.
3. FCDO should renew and document its assessment of the European Commission’s ODA fraud risk management, in line with its processes for all multilateral organisations it funds