Aid to PNG - Lack of oversight - Australia's awry aid model

I WAS STRUCK by the report in PNG Attitude (No 150, August 2010) on alleged corruption within the aid program.

In 2003 I was lamenting the approach that was fast being adopted by AusAID to devolve administration and program management to Port Moresby. The setting up of sector-based program silos seemed novel at the time, but I had worries about loss of corporate memory in Canberra and, of perhaps more concern, a lack of oversight in contract governance. It seemed to me that full program devolution would bring with it a raft of problems.

One of the scenarios I aired at the time went like this: What happens when one of our large projects in the law and justice sector has a contractual problem involving misuse of funds? Under the previous arrangements, desk officers and contract managers in Canberra would oversight all aspects of a contract. It was sometimes an unwieldy process, particularly if the hands-on managers were inexperienced, but there were checks and balances in the system to minimize the opportunity for ongoing misuse of funds.

Of course,the reality of delivering complex projects on the ground throws up implementation delays, personnel problems, administrative inefficiencies and so on, and it is important to have people in the field to liaise with government counterparts and contractors and to report on these matters. But it is equally important to have a cadre of people back in Canberra who understand the activity, manage the contract and who are hands-on with the Australian managing contractor. You also need highly skilled and independent monitoring and evaluation that can be mobilized as required. Officers in the field are on two year postings. The majority move on to other things on completion of the posting. Whether they are program or contract managers, their corporate memory is limited to their time in country.

Much of the management of the program has been devolved to sector-based units, made up of high-priced consultants, AusAID officers and locally engaged staff, who manage contracts and liaise with government and project personnel. Posted officers and consultants have limited tenure in country and it beggars belief that all the complexities and governance issues associated with delivering large program activities can be managed effectively under this regime. Some of these activities can involve implementation periods of five years and more. Certain activities in the police and corrections area have been implemented over several phases covering 10-15 years or longer.

It comes as no surprise to me that corruption has raised its ugly head in these circumstances.

Two other pieces in Attitude caught my eye. One called upon Australia to scrap the aid program because it is feeding corruption and another focused on the need to get the arrangements between local government and civil society right as a starting point to reform of the PNG political system.

I would conflate these issues so that Australian aid shift focus abruptly to the urgent reform of local level government systems (including the administrative enabling and regulatory framework), decentralization of service delivery and the governance of financial and program administration at all levels of government.

Golly gosh, what a novel idea!