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Fraud and Risk Focus Blog

The future of fraud and corruption for international development

31 March 2016

The international aid industry is huge. Official Development Assistance alone reached £90bn in 2014. Supplemented by vast private giving, much is spent in places where fraud and corruption are key risks. International aid agencies operate in some of the world’s most under-developed and fragile environments; the risk of diversion is critical and so it is a great honour to be presenting at the Cifas Annual Conference 2016 on how we might expect that risk to develop in the future.

This is no enviable task, because we’re only just starting to understand what fraud and its enablers look like in the sector now. My new book unpacks what this risk might look like, but evaluating how it might develop is challenging, not least as it’s hard to over-state how unpredictable the future of international development itself has become. An enormous debate is underway about everything from the localisation of aid, to the role of international charities, to the way that the global humanitarian system works and how the traditionally major donor countries fund it. International development may never have been more dynamic.

Fraud, however, has always been dynamic – seeking out the exploitable vulnerabilities whatever the world looks like, just as water finds the holes in a bucket. It flourishes more in some environments than others, and certainly international development agencies have their own common vulnerabilities and enablers.
 
But fraud has one great constant – and that’s people. However we illustrate the abstract concepts of ‘fraud’ and ‘corruption,’ we need to remember that these are still actions carried out by human beings like you and me. Humans are fraud’s consistent trait, its common denominator. Humans are fraud’s weakness.
 
This might be the key. Whatever international development looks like in fifteen years, whether its agencies are able to reduce their fraud and corruption risk footprints will depend on their ability to apply the lessons we are learning now about human behaviour and organisational culture. It will depend on whether they are able to use them to liberate the issue from finance and audit functions and embed it into operational teams, to sew it into the hearts of those who actually raise and spend the funds that are at risk. And it will depend on whether donors, aid workers, trustees, researchers and the public are able to assume complementary roles to keep aid agencies transparent, accountable and effective.
 
This is an exciting time for those helping aid agencies to reach more beneficiaries by reducing their fraud losses. This may be a time of great uncertainty, but that means that the future of international development remains unwritten. The counter-fraud community can help to write it.

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Posted by: Oliver May

Oliver is Head of Counter-Fraud for Oxfam GB.

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Posted by: Oliver May

Oliver is Head of Counter-Fraud for Oxfam GB.

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