Irish Aid - €6 billion spent in an unregulated sector with low standards of accountability

The media controversy in Ireland surrounding the boutique charity GOAL has drawn attention to the standard of public accountability and transparency of its principal sponsor Irish Aid, the State’s Overseas Development office. GOAL is one of a small number of Irish charities that participate in a Multi-Annual Programme Scheme intended to provide long-term funding to alleviate distress in a small number of countries. This programme was started in 2003 and by the end of 2011 it had spent over €477 million out of a total Irish Aid spend of over €6 billion during that time.

Ireland ranks ninth in the world after Norway, Luxembourg, Sweden, Denmark, Netherlands, Belgium, UK and Finland in terms of the proportion of GNI committed to overseas aid. The tax revenue of these countries expressed as a percentage of GDP is significantly higher than in Ireland. Its is 42.4% in Norway, 38% in Luxembourg, 48.5% in Denmark, 39.5% in The Netherlands, 46.4% in Belgium, 37.4% in the UK and 42.3% in Finland. The corresponding figure for Ireland (in 2010) was 29.8%.

But Ireland is also the 8th most indebted country in the world in terms of the ratio of General Government Debt to GDP, currently at 110%. When it comes to debt burden Ireland follows Zimbabwe (238.8%) , Japan (208.2%), Sint Kitts & Nevis (185%), Greece (165.4%), Lebanon (137.1%), Iceland (130.1%), Anigua & Barbados (130%) and Jamaica (126.5%).

The year 2003 is significant in the sense that Irish tax receipts then broadly mirrored those of last year (€32 billion versus €34 billion). The Irish Government committed €445.7 billion to overseas development aid in 2003 and the exchequer deficit was €979 million. The ODA budget in 2003 was equivalent to €360 from each income tax payer, who also carried a €35,000 share of the General Government Debt that year.

GOAL obtained €8 million to spend on its multi-year projects, but did not publish audited accounts then, or subsequently to inform the public how it spent State money and how much it cost to deliver the services it provided.

The Irish Aid Programme carried out an internal audit of the taxpayers’ money GOAL spent in 2009, which was of the order of €12.8 million on MAPS toward which it was to have added €4.26 from voluntary public donations. The GOAL expenditure that year was €1.5 million, well short of its 25% matching criteria. The audit took four months to complete but it took GAOL six months to respond to the preliminary findings of the audit, a critical feature of which concerned the sharply declining funding levels that GOAL was capable of providing through donations.

It is noteworthy from the perspective of accountability and transparency that this audit did not publish the audited accounts of GOAL. But the 2010 Annual Report of Irish Aid did not publish a list of the recipients of the €675.84 million that it dispersed in 2010. There was plenty of financial pebble-dash about the relationship of Overseas Development Aid to Irish Gross National Income; the various initiatives and sectors toward which bilateral aid was directed. There was a geographical analysis of where Irish taxpayers money was spent and the nature of the projects it was spent on but no comprehensive list of the recipients and the cumulative amount of money each received from Irish taxpayers.

The annual contribution of taxpayers to Irish Aid has increased by 67% from €360 per capita in 2003 to €600 in 2009. But General Government Debt per income tax payer increased from €34,969 to €86,929 in 2009 and upwards to €136,654 in 2011 with the prospect of increasing further to over €154,000 by the end of 2013. Ireland's exchequer deficit was over €24 billion last year, over €6 billion higher than in 2010.

Where to for overseas development aid? Where to for public accountability and where to for transparency and governance? At what cost will the Irish Government contain its GGD/GDP ratio to 3% by 2014?