Opening Statement to the Standing Committee on Public Accounts

Strengthening Aid Effectiveness—Canadian International Development Agency

(Chapter 8 - 2009 Fall Report of the Auditor General)

9 December 2009

Richard Flageole, FCA
Assistant Auditor General

Mr. Chair, thank you for this opportunity to discuss Chapter 8 of our 2009 Fall Report, Strengthening Aid Effectiveness, concerning the Canadian International Development Agency (CIDA). Joining me at the table are Mr. John Reed, Principal, and Mr. Dusan Duvnjak, Director, who were responsible for the audit.

CIDA is the agency that administers the bulk of Canada’s official development assistance. In the past fiscal year, it spent around $3.5 billion, almost half of which was for its geographic, or country-to-country, programming. CIDA’s geographic programming takes place in over 60 countries of which 20 are considered countries of concentration.

Our audit examined the extent to which the Agency is meeting commitments it made in 2002 to improve the effectiveness of delivering aid in its geographic programming. Specifically, we looked at CIDA’s management processes to sustain the implementation of its commitments related to

  • aligning with the needs and priorities of recipient countries,
  • harmonizing with other donors,
  • using program-based approaches, and
  • achieving greater sectoral focus.

CIDA views these commitments as important for delivering aid effectively.

As noted in the chapter, CIDA has made progress in aligning its projects with the needs of recipient countries and harmonizing its efforts with other donors. Many stakeholders in the development aid community— both here in Canada and abroad—described CIDA and its field staff as a valued and active partner.

Yet, overall, we found that CIDA had not put in place the basic management processes required to direct and sustain implementation of its commitments. Frequent changes in priorities and policy direction, and weak management practices have hampered CIDA’s ability to deliver foreign aid more effectively.

With respect to achieving greater sectoral focus, the Agency recognized that its aid is widely dispersed across many sectors. It therefore committed to focusing on fewer priorities to make a more meaningful Canadian contribution. However, we found no evidence that it was concentrating its aid on fewer sectors. This is due to CIDA’s sectoral priorities being too broadly defined and changing too often, and to the Agency never developing a robust plan to achieve greater focus.

This situation has also had a negative impact on the Agency’s ability to determine and build upon its strengths relative to other donors. CIDA’s relative strengths in the development of its country programs and individual projects were not evident in our audit. The Agency has also made limited progress in deciding what types of skills and expertise it needs to support its priorities and how to provide them. CIDA needs to clearly identify which sectoral priorities and programming areas it will and will not fund, and acquire the appropriate skills and expertise.

Over the past decade, new forms of projects known as program-based approaches have been put in place. These approaches entail new forms of funding, such as direct transfers to the budgets of recipient countries, and involve several donors working together. They typically rely on recipient government systems for delivery.

Our audit found that the support for using these approaches has been neither uniform nor timely throughout the Agency. CIDA management has provided little specific direction and no targets to country desks on how and when to use program-based approaches. Further, it has not clearly defined the specific conditions under which the Agency would or would not participate in a program-based approach, and it has not standardized the types of risk assessments that must be done before accepting such approaches.

Given that CIDA has gained considerable experience with such approaches over the past decade, it would be important that the Agency evaluate its use of them to determine whether the approaches are, in fact, achieving the Agency’s goals.

With respect to CIDA’s process for planning its country programming, we found that programming frameworks for the countries that we examined had all expired by the end of our audit and a rigorous country planning process was missing. The Agency was embarking on a new planning process whose requirements were constantly changing, causing frustration among staff, and taking time away from analytical work. As a result, donor partners, recipient governments, and program staff were unclear about the Agency’s direction and long-term commitment.

With respect to funding projects, we found that CIDA adequately identified project risks up front and monitored those risks through implementation. However, we also found that burdensome administrative processes within the Agency hamper effective decision-making. For example, an internal study conducted by the Agency in 2007 found that it took on average 43 months to get project approval. The Agency acknowledged such problems in 2002 and yet this long-standing issue remains unresolved.

In our view, many of the weaknesses discussed above and in the chapter can be traced to the absence of a master plan to implement the commitments made in the 2002 policy statement. Early intentions were simply not matched with specific action plans and follow-through. Indeed, even when action plans were developed, they were not completed.

Finally, as we note in the chapter, the long-term nature of international development requires stability and predictability of programming. In our view, frequent changes in policy direction and substantial turnover of senior managers have posed significant challenges to CIDA in achieving its aid effectiveness agenda.

CIDA has agreed with our recommendations and we understand it has prepared a detailed action plan. While we are encouraged by the current management commitment, we are mindful of past initiatives that fell short of timely and full completion. Your committee may wish to have the Agency report on its progress to ensure that the current momentum is sustained.

Mr. Chair, this concludes my opening remarks. We would be pleased to answer any questions the Committee may have. Thank you.