Aid fraud cases revealed

The foreign affairs department has revealed it investigated the misuse of Australian aid money in Papua New Guinea, Solomon Islands, East Timor, Afghanistan and Somalia.


In one case the head of the PNG Law and Justice secretariat gave himself and his staff an unauthorised 23 per cent pay raise worth close to $577,300.

Staff who resigned received excessive entitlements.

As well, assets worth $40,000 went missing.

The PNG government subsequently paid back the money in 2012.

Details of the case and others elsewhere in the region have come to light after the department disclosed them on its website in response to a Freedom of Information application.

In a ministerial submission in October 2013 the department insisted there were strong measures in place to combat fraud and corruption risks.

“Levels of fraud against the aid program are low,” it said.

Potential losses in 2012-13 were $706,290 or 0.014 per cent of the total aid program.

But Foreign Minister Julie Bishop was not impressed and hand wrote her response: “$700k lost to fraud is $700K.”


* AFGHANISTAN scholarships program: investigation found two Afghan staffers had sought bribes from applicants. Ten scholarship awardees were asked to make payments in cash or mobile phones. Contractor also skimmed funds from the project. Program temporarily suspended. One recipient had scholarship terminated. Australian government sought to recover losses.

* SOLOMON ISLANDS health program: inflated invoices for freight services totalling $1.5 million. Solomon Islands government agreed to recover money. One individual convicted of money laundering and a second facing 15 counts.

* EAST TIMOR peace building project: Local non-government organisation director and finance manager withdrew program funds of $44,480 for personal use. Two employees subsequently dismissed.

* SOMALIA stolen food: World Food Program confirmed in March 2013, 178 metric tonnes of food worth $87,150 donated by the Australian aid program was looted in 2011 in Mogadishu. The food was unable to be recovered.

* PNG HIV Aids prevention campaign: subcontractor did not deliver on SMS campaign as stipulated in their contract. Australian government seeking to recoup $56,483.

* PNG law and justice partnership: correctional services director overruled IT manager on a recommendation for computer equipment and arranged a quotation from a non-reputable company. The justification was questionable and pointed to receipt of a kickback payment. Potential loss $91,592.

(SOURCE: DFAT FOI documents)