Jim O'Keeffe (Cork South West, Fine Gael)
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Question 123: To ask the Minister for Foreign Affairs the arrangements made to audit official aid expenditure and in particular to ensure that it is not misappropriated in recipient countries. [10219/08]

Michael Kitt (Galway East, Fianna Fail)
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Irish Aid has in place rigorous accounting and audit controls. Audits of the Irish Aid programme are undertaken on the basis of a three-year rolling work plan, with clear priority being given to the audit of expenditure in programme countries. The strategy embraces four separate though very complementary approaches:

(a) Work carried out directly by Irish Aid's Evaluation and Audit Unit, and by our internal auditors based at Missions in programme countries;

(b) Work carried out by internationally-reputable audit firms commissioned by Irish Aid;

(c) Joint donor-funded audits of specific programmes (e.g. of the health sector in Mozambique, where Ireland jointly funds an audit with Canada, Denmark and Switzerland), and

(d) Audit reports obtained from partner organisations (e.g. those carried out by National Audit Offices and by Non-governmental Organisations). Our own internal auditors, based in our Missions in the programme countries, implement an audit programme of inspections of partner organisations in receipt of Irish Aid funding. Where any issues of concern arise, Senior Management is alerted. Management in turn has the responsibility of providing responses to such audit queries, and to follow-up on the implementation of the recommendations made.

In addition to the above, the internal auditors actively review the controls in place at our Missions. The Missions, moreover, are audited annually by internationally-reputable audit firms. As systems of control in developing countries are often weak, and to mitigate the risk of misappropriation of aid, Irish Aid works closely with partner governments and other organisations to improve their financial and accounting systems. This work includes strengthening audit institutions and standards in line with international best practice, with capacity building where appropriate.

With regard to NGO partners, which Irish Aid funds via two main schemes (the Multi- Annual Programme Scheme for the large five Irish NGOs and the Civil Society Fund for other organisations), these organisations are subject to external/statutory audits, and are required to submit their annual audited financial statements to Irish Aid. The Evaluation and Audit Unit also conducts its own internal audit/review work of NGO partners, as part of its evaluation and audit work programme, which will be further developed in the period ahead.

In addition to these robust internal systems, the Department's Audit Committee provides an independent appraisal of our audit and evaluation arrangements through regular interaction with the Evaluation and Audit Unit and with Senior Management. The Committee meets regularly with the Secretary General and, annually, with the Comptroller and Auditor General. It also publishes an annual report on its work. Its 2006 report is available at www.dfa.ie. The Audit Committee, which is extremely active, helps ensure that the Evaluation and Audit Unit meets its Mission Statement on the audit of the aid programme. In pursuit of this, the Committee regularly reviews the policy, procedures and work plans of the Unit to ensure it is operating to the highest standards.