10.2 |
Reconstruction: July 2004 to July 2009
•
Of the £3m
that had been spent, the IAD estimated that over £2m had
been
spent in a
way “that did not meet [the SIESP’s] objectives”. The lack of
physical
monitoring
made it difficult to be more precise.
The IAD
assessed that the incident had soured the relationship between DFID
and the
PCs and
adversely affected DFID’s reputation and credibility with Iraqi
interlocutors, the
UK
military, other donors and “bona fide NGOs”.
The IAD
report detailed a number of lessons for the IISP.
In May
2006, DFID conducted an internal review in order to determine the
extent of the
loss from
the SIESP employment component.185
The review
concluded that:
•
£254,105 had
been spent on projects where there was clear evidence of full
or
partial
misuse of money, based on monitoring by DFID staff.
•
£296,187 had
been spent on projects where there was “no clear
evidence
of either good
use or misuse of money (because there
was no monitoring
information
on file) but where anecdotal evidence from interviews suggested
that
some
percentage of the projects were not successfully
completed”.
•
£1,021,223 had
been spent on projects which DFID was “reasonably
confident”
had been
successfully completed, based on information on file (in the form
of
photographs
or visit reports) or anecdotal evidence.
The review
stated that even those projects where there was evidence of misuse
had
“added
economic value to Iraq, though less than was originally
intended”.
The review
set out the methodology it had used to categorise projects,
including that in the
absence of
information to the contrary, the existence of monitoring
information on a project
was taken
as evidence that the project had been successfully
completed:
“For the
remaining project … we have no monitoring reports in the file.
However, there
is a CD
[compact disc] in the file which shows a street with sewage and
garbage,
and
provides a commentary (in Arabic) which explains what work needs
to be done.
Because we
have no other information, and no reason to believe that funds were
not
used
according to the purposes intended, we assume that this project was
successful.”
Dr Nemat
Shafik, DFID Permanent Secretary from March 2008, told the Inquiry
how DFID
had reacted
to the fraud within the SIESP:
“We have a
zero tolerance policy on corruption and we act on it immediately.
The
then
Provincial Council was very unhappy with us as a result … But on
that, we don’t
compromise.
“That [the
SIESP] is … the only case that we are aware of, where we had
a
significant
fraud, which, given the scale of the funds that we were disbursing,
and
given the
context, is, I think, a pretty good track record.
“In the
case of the Iraq portfolio … we actually had a higher level of
scrutiny than our
normal
portfolio because of the risks involved. So we would get monthly
reporting on
risks,
security risk, staff risk, risks to our money …” 186
185
Minute
Hendrie to Dinham, 19 May 2006, ‘SIESP Employment Generation
Project’.
186
Public
hearing, 13 January 2010, pages 54-55.
249