The aid program is subject to regular and extensive external oversight of financial and program accountability. In addition to the regular Senate Estimates process, AusAID has been included in the Australian National Audit Office's (ANAO) annual work plan of performance audits since 2009. In 2010‑11, AusAID's Audit Committee made the shift to having an independent chair and a majority of independent members. A Financial Sub‑Committee of the Audit Committee was also established.
As a member of the Organisation for Economic Cooperation and Development (OECD) Development Assistance Committee (DAC), Australia is also subject to regular peer reviews by other bilateral donors. The last OECD DAC Peer Review in 2009 commended Australia for its "reinforced strategic focus on poverty reduction and the MDGs and its continuous engagement in states in fragile situations". The next peer review of Australia will commence shortly with the final report to be issued in April 2013.
As outlined in the Comprehensive Aid Policy Framework (CAPF), the Government will accelerate reforms to ensure that the aid program remains effective. From 2012, the aid program will be subject to an Annual Review of Aid Effectiveness. Underpinning this is an internal performance management system aimed at driving continuous improvement across the aid program. The robustness of this system has been recognised at the national and international levels by the ANAO and the OECD DAC and it has since been further strengthened in line with An Effective Aid Program for Australia: Making a real difference — Delivering real results.
The Government has established an Independent Evaluation Committee to strengthen the independence and credibility of the work of the Office of Development Effectiveness (ODE). Under the oversight of the Independent Evaluation Committee, ODE will expand its role in assessing the effectiveness and evaluating the impact of the aid program.
Performance management and continuous improvement in the aid program is driven by AusAID's Performance Management and Evaluation Policy that sets out the minimum expectations for performance management of Official Development Assistance (ODA). It applies to ODA delivered by all Australian government agencies.
The policy was updated in February 2012 to strengthen the emphasis on results. This represents an important step in a broader shift towards results-based management and improved results reporting in the Australian aid program.
The performance system for the aid program, which implements the policy, involves three types of performance reports:
- annual performance reports, which assess the achievements of a particular program against the objectives set out in the strategy for that program, specify actions that will be taken to improve effectiveness and report on progress against the CAPF;
- quality reports, which assess how individual initiatives contribute to achieving overall program objectives and ensure any issues are identified and managed; and
- independent evaluations of significant initiatives, which are commissioned at least once during their lifetime.
AusAID is taking measures to improve its external and internal review and evaluation process to make it more rigorous and robust (see Diagram 6).
Annual Review of Aid Effectiveness
From 2012, the Minister for Foreign Affairs will report on the achievements of the aid program in an Annual Review of Aid Effectiveness (the 'Annual Review'). This will replace the Annual Review of Development Effectiveness, or ARDE.
The Annual Review will inform Cabinet of the performance of all aid delivering government agencies against the headline and organisational effectiveness results contained in the CAPF as outlined in Section 1.3. The Annual Review will also recommend any changes to the budget strategy as a result of performance and/or changing circumstances. The first Annual Review is due by the end of October 2012.
Independent Evaluation Committee
In the new aid policy, An Effective Aid Program for Australia: Making a real difference — Delivering real results, the Government indicated that it would improve the aid program's evaluation function so that it could contribute to more efficient and effective delivery of aid. As part of this commitment, the Government has established an Independent Evaluation Committee to provide independent expert evaluation advice to the Development Effectiveness Steering Committee (DESC). Importantly, the Independent Evaluation Committee will also oversee the work program of AusAID's ODE in planning, commissioning, managing and disseminating a high quality evaluation program, which produces technically sound and policy relevant evaluations that contribute to improved aid effectiveness.
ODE was established in in 2006 to monitor the quality and evaluate the impact of the Australian aid program. ODE is a unit within AusAID. It reports directly to the Director General of AusAID and is separate from program management.
The Independent Evaluation Committee has three external members (including the chair) and one senior AusAID representative. External members are appointed by the Minister for Foreign Affairs, while the Director General of AusAID appoints the AusAID representative. The committee has a whole of ODA, and therefore whole‑of‑government, mandate.
Office of Development Effectiveness
ODE will serve as the secretariat to the Independent Evaluation Committee and, in 2012‑13, will finalise an evaluation strategy and a three-year rolling work program of independent evaluations. Both the ODE strategy and the work program will be published.
In 2012‑13, ODE will increase the number of evaluations that it undertakes and also produce an annual summary of evaluations and a quality assurance report.
ODE will continue to draw on international thinking and best practice on aid effectiveness. Its partnerships with key international think-tanks, such as the Brookings Institution and the Overseas Development Institute's Centre for Aid and Public Expenditure, are central to this effort. These partnerships played an important role in informing Australia's preparations for the Fourth High Level Forum on Aid Effectiveness (HLF-4) in Busan in November 2011 (see Box 6).
ODE's partnership with the World Bank's Regional Centers for Learning on Evaluation and Results supports efforts by the Australian aid program to build local capacity in developing countries in evaluation and results-based management.
Box 6: Fourth High Level Forum on Aid Effectiveness
The Fourth High Level Forum on Aid Effectiveness (HLF-4) was held in Busan, Republic of Korea from 29 November to 1 December 2011. Over 3,000 delegates attended. Australia's delegation was led by the then Minister for Foreign Affairs.
The Forum built on commitments made at previous aid effectiveness meetings in Paris (2005) and Accra (2008). The key outcome was the endorsement by all participants, including the emerging economies (China, India and Brazil) of common principles for effective development cooperation. These principles include ownership of development priorities by developing countries, a focus on results, inclusive development partnerships, and transparency and accountability. Participants also agreed to establish a new Global Partnership for Effective Development Cooperation to support the implementation of HLF-4 commitments, review progress and promote accountability.
HLF-4 had a strong focus on strengthening aid to fragile and conflict-affected states, with the launch of the New Deal for Engagement in Fragile States, developed by the G7+ group of fragile and conflict-affected states. This confirms the relevance of the Paris Principles for fragile contexts, in a world where an increasing share of the poor live in fragile states.
Australia has already met, or is on track to meet, key Busan commitments by the specified deadlines as we implement An Effective Aid Program for Australia: Making a real difference — Delivering real results. Australia will be an active participant in the new Global Partnership and continue to work with all development partners to improve the quality, transparency and effectiveness of our aid.
Box 7: Delivering An Effective Aid Program
The Government's commitment to expanding the aid budget to an estimated $7.7 billion by 2015-16 (up from $4.8 billion in 2011‑12) is an opportunity for Australia to make an even greater difference to people living in poverty, but it also comes with a risk of a decrease in the effectiveness of aid delivered.
To ensure the aid program continues to be effective, the Government has put strong policy foundations in place. These include a new aid policy, An Effective Aid Program for Australia: Making a real difference — Delivering real results, which was released in July 2011, a comprehensive four-year ODA budget strategy, and a comprehensive results framework to ensure value for money. The challenge now lies in giving them effect. AusAID — its people, systems and infrastructure — can deliver on this enormous undertaking, but only if adequately resourced.
To this end, the Government will invest a further $49.7 million over four years to enable AusAID to deliver a growing and effective aid program. The funding will be invested in corporate and operational areas of AusAID, including in financial and human resource management systems, and the staff required to manage fraud and risk, workforce planning, communications, performance management, whole‑of‑government engagement, and contracting.
Taking into account AusAID's overall projected growth, the proportion of the organisation's departmental resourcing will decline from 6 to 5 per cent of the overall aid budget by 2015-16. Further, AusAID will deliver an estimated 35 per cent increase in efficiency, with the average amount of ODA budget administered per staff member increasing from $2.4 million now, to approximately $3.3 million in 2015-16. This would reaffirm AusAID as one of the four leanest of the OECD DAC's 23 bilateral donors.
Diagram 5: Review and evaluation
If www.budget.gov.au responds slowly or you are having trouble downloading a document, try one of the Budget Website Mirrors
Note: Where possible, Budget documents are available in HTML and for downloading in Portable Document Format(PDF). If you require further information on any of the tables or charts on this website, please contact The Treasury.