Tackling fraud in UK aid

A rapid review assessing the extent to which the UK government takes a robust approach to tackling fraud in its aid spending.

Background

Fraud is a deliberate and illegal act which results in funds being diverted from their intended purpose. It is usually designed to be hidden so can be hard to detect.

Overall, fraud in the UK public sector in 2017 was estimated to be around 5% of public spending. Globally, it is estimated between 3% and 10% of Gross Domestic Product is lost to fraud.

Although there is no reliable estimate of fraud in UK aid, the amount of fraud detected in the UK’s official development assistance (ODA) – across the former Department for International Development (DFID) and other aid spending government departments – is much lower than the above estimated ranges.

Scope

This review will explore how departments prevent, detect, investigate, sanction and report on fraud in their aid delivery chains, and how they decide how to balance and manage fraud risk within portfolios, programmes and projects. The review will also explore how departments have evolved their approaches to tackling fraud, with increasing amounts of UK aid being spent across government departments in recent years, and the extent to which lessons have been learned and applied to their guidance, systems and practices. In particular, it will focus on understanding why so little fraud is detected compared to other areas of public spending.

The review aims to provide timely and useful insights following the establishment of the new Foreign, Commonwealth and Development Office and as departments adjust to changes in fraud risk following the COVID-19 pandemic.

It will focus on the five government departments allocated more than £100 million of ODA in 2019-20: DFID, the Foreign Office (FCO), the Department for Business, Energy and Industrial Strategy (BEIS), the Home Office and the Department for Health and Social Care (DHSC).

Review questions

  1. Relevance: To what extent do departments have systems, processes, governance structures, resources and incentives in place to manage risks to their ODA expenditure from fraud?
  2. Effectiveness: How effectively do departments prevent, detect and investigate fraud at portfolio, individual programme delivery and partner levels?
  3. Learning: How effectively do departments capture and apply learning in the development of their systems and processes for fraud risk management in their aid programmes?

Timeline

Research for this review began in August 2020, with publication expected in March 2021.

Call for evidence

As part of the evidence gathering process, ICAI is exploring why low levels of fraud are reported and we would like to hear from individuals or organisations that have been involved in the delivery of UK aid in any way through this short survey. The survey is open until Sunday 1st November.

The survey is anonymous. No personal information is required, and you will not be asked to identify yourself or the organisation you work for. Only aggregated findings will be included in the final report.

If you wish to directly communicate concerns about fraud in UK aid to the ICAI team, you can contact us in confidence by email at tackling-fraud@icai.independent.gov.uk. We will use this to help inform our review. Any such information will be anonymised within the report. The details of any specific allegation or suspicions of fraud will also be passed to the relevant UK authorities to consider any further action. Personal details will not be disclosed without your consent, unless required by law. For more information on how ICAI uses personal data, please see our privacy notice.

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