House of Commons - Public Accounts

Select Committee on Public Accounts Third Report

EMERGENCY AID: THE KOSOVO CRISIS

Managing the Department's grant giving

35. To facilitate a swift reaction, the Department apply streamlined procedures for approving aid proposals for humanitarian emergencies. Nevertheless, their procedures recognise the need to be satisfied that the project is relevant to their objectives and is likely to succeed. The National Audit Office examined 42 projects and found considerable variation in the extent to which the Department had documented the basis for their decisions. It was not always clear what evaluative criteria the Department had applied in specific cases, what had been done to test the robustness of the project proposal, and how the Department had reached a judgement about the amount of money to award.[32]

36. Asked about their assessment of grant applications, the Department told us that they had published guidelines requiring applicants to set out in detail the purposes for which they were seeking a grant, their qualifications, and the outcomes they were trying to secure. They acknowledged that applications had not gone through a structured process, but the Department had looked carefully at all the data they had received to reach a judgement, and they had taken decisions at the appropriate level of delegated authority. However, they had concluded that it would be sensible to structure more tightly their assessment of grant applications, and they had now prepared a checklist for officers to go through before taking a decision, which in future would be on file as part of the audit trail.[33]

37. To ensure that their funds are used as intended, the Department recognise the need to monitor project progress against the agreed timescale and budget. The Department's reporting requirements are normally for grant recipients to provide interim progress reports at quarterly intervals and a final report at the end of the project.[34] In the very first phase of the crisis the agencies funded by the Department had been extremely busy implementing actions on the ground. Because they had relied on agencies that had a track record of working in such situations, they had been able to accept that as long as the work was progressing and monitoring indicated that this was the case, the paperwork could catch up later. We asked about the use of local agencies and whether the Department were happy that monies had been used for the purposes intended. They said that the field offices had been required to carry out detailed appraisals of local organisations, and they had not advanced the whole grant until the service had been delivered and inspected by their staff. There had been cases where the Department had been dissatisfied with the results and the grant had been terminated.[35]

38. In two cases in Macedonia, the Department recovered unspent grants totalling about £16,000 as a result of field office visits to the projects.[36] Asked about the recovery of unspent grants, the Department told us they were very confident that would recover unspent balances. They required project completion reports, which included an accounting for the grants, and had received 93 per cent of these.[37]

Conclusions

39. A major component of the Department's contribution to the relief effort has been to provide funds to support specific projects run by other organisations. It is important that they deal quickly with requests for funding, while being able to demonstrate that decisions are properly made. The Department assured us that decisions were made on the basis of detailed proposals, and within delegated limits of authority, but did acknowledge that applications had not gone through a structured vetting process. In future they will provide an audit trail by completing a checklist to support grant decisions.

40. The Department require completion reports to record what projects have achieved and to account for the grant. These reports are the Department's principal means of identifying and recovering any unspent grants and it is essential that they follow-up any that are outstanding. We note that the Department have now received 93 per cent of final project reports from grant recipients. They need to pursue those that remain outstanding.

41. The Department's monitoring of progress on some local projects against agreed timescales and budgets had prompted them to terminate grants where they had been dissatisfied with the results. In view of its size and complexity, we recommend that the Department review their experience of grant-giving during this operation, to see what lessons can be learned.



© Parliamentary copyright 2001	Prepared 14 February 2001