§ Tony BaldryTo ask the Secretary of State for International Development what assessment he has made of fiduciary risk for direct budget support. [152083]
§ Hilary BennDFID has developed a comprehensive approach to assessing and managing the fiduciary risks associated with direct budget support, which has been agreed with the UK's National Audit Office.
Firstly, a thorough evaluation of the recipient government's public financial management and accountability procedures, systems, practices and associated risks must be carried out. We have set out eight good practice principles and 15 related benchmarks which provide a framework both to ensure that adequate and sufficient information is obtained and that a broad assessment can be undertaken.
Secondly, the recipient government must have a credible programme to improve public financial management and if necessary to incorporate temporary safeguards to mitigate identified risks. The decision to provide direct budget support is made where the potential development benefits justify the risk involved. DFID's policy in this area is clearly identified in the published document "Managing Fiduciary Risk When Providing Budget Support".
DFID is working with other development agencies and international financial institutions to harmonise approaches to fiduciary risk management, thereby limiting the burden placed on governments to meet the requirements of different donors and lenders. This includes harmonisation of donor assessment procedures.