Inquiry launched into ‘shocking’ mishandling of African aid scheme

Inquiry launched into ‘shocking’ mishandling of African aid scheme

Justine Greening tells MPs southern African aid programme was poorly managed but finds no evidence of fraud or corruption.

An investigation into who was to blame for the woeful mismanagement of the TradeMark Southern Africa (TMSA) programme has been launched by the UK government after a scathing report by the aid watchdog that prompted its closure last week.

Mark Lowcock, the permanent secretary at the Department for International Development (DfID), told the parliament’s international development committee that the investigation would “get to the bottom of who did what” in the implementation and running of the five-year programme that sought to boost regional trade in southern Africa.

It is unclear whether the names of those held responsible would be made public.

The TMSA programme was roundly criticised by the Independent Commission for Aid Impact (Icai) in its report on Friday. In an attempt to limit the damage, Justine Greening, the international development secretary, announced two days earlier she was closing down the programme.

Icai had found “serious deficiencies” in the governance, financial management, procurement, value for money, transparency of spending, delivery and impact of TMSA, “as well as its failure to use DfID’s body of knowledge in trade and poverty”. The programme had failed to adequately take into account the needs of the poor and the impact of opening new trade corridors on local economies.

Giving evidence to the committee on Tuesday, Greening and Lowcock repeatedly expressed astonishment at the level of mismanagement involved in the programme, which was launched in 2010 and was due to end next year. Neither could offer much in the way of explanation of how a DfID programme that was being so poorly managed could be allowed to continue for four years. Neither had visited the programme headquarters in Pretoria, South Africa.

Greening said she shared the committee’s shock at how appallingly the programme was executed. “It was badly set up, the governance structure was badly designed … and poorly managed,” she said, reiterating that her department had taken “remedial steps to claw back £42m” of the £67m that had been placed in an account for TMSA. Some money had already been allocated to projects in the region that would now be scrutinised to see if the programmes offered value for money.

Greening said it was “absolutely shocking” that tax-free salaries of more than £200,000 had been paid to those in charge of the project. “It’s very hard to say anything beyond that,” she added.

Lowcock said: “It can’t be justified. There were a series of mistakes made. It shouldn’t have happened.”

Questioned how £80,000 of TMSA funding was transferred to the Zimbabwe government, in contravention of British policy, both said it was an oversight.

Greening said oversight mechanisms were being put in place to avoid a similar situation in the future. She added that the department would spend the next few months deciding how UK aid money would be spent supporting the tripartite trade agreement between the Common Market for Eastern and Southern Africa (Comesa), the East African Community (EAC) and the Southern African Development Community (SADC), which TMSA was supposed to support.

“I have spoken with the heads of Comesa, SADC and EAC to talk about how I had to make this decision. As a government, we’re always been supportive of the tripartite trade agreements. We need to do a better job at doing it,” Greening said. “This programme was well-intentioned but badly delivered. We’ve agreed with the heads of the three regional bodies that we will look to have alternative mechanisms … to support the tripartite.”

The secretary of state added that more resources would be channelled to the department’s internal auditors to allow them to conduct country reviews every two years, rather than the current four.

Committee members questioned the conduct of internal auditors who told DfID that Icai’s concerns about the programme raised in May after its initial fieldwork had been overstated. Lowcock said he had agreed with Icai’s conclusions.

Asked how this programme was allowed to continue for so long before action was taken, Greening and Lowcock blamed poor management and lack of credible scrutiny by the department. Both accepted that the external auditors, Deloitte, relied too much on the success stories given to them by programme managers.

DfID is “in dialogue” with Deloitte about what could have been done differently. Lowcock conceded that Deloitte’s reports had not been adequately scrutinised by DfID.

Both Greening and Lowcock agreed there was no evidence of fraud or corruption in the programme. © 2013 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

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