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Concerns raised over Ausaid funding for Kiribati

Updated December 12, 2011 09:11:52

The way the Australian government spends millions of dollars on overseas scholarships is in the news again.

This time the Kiribati Government has allegedly barred Australian government officials from meetings to determine which students will get offers to study in Australia. An audit of AusAID's office in the capital Tarawa, obtained under freedom of information law, warns the closed-door approach may expose the scholarship scheme to nepotism. Australia will provide approximately $32,000,000 in total overseas development aid to Kiribati in the 2010/11 financial year.

Presenter Geraldine Coutts
Markus Mannheim, reporter with the Canberra Times.

MANNHEIM: We have been putting in freedom of information requests this year of AusAid about the scholarships program in general. It's a program that we've had a lot of interest in because of some problems in the way it's allocated money in the past, and also a general lack of transparency around whether the program actually works at all. But I must give AusAid some credit in this instance. They have been making greater efforts to make more of this sort of information available to the public and to journalists, and that's how this particular story about Kiribati has come up. It's documented in an audit of AusAid's activities in its office in Tarawa. And perhaps I should just give you a little bit of background about the scholarships program. It's a massive part of Australia's aid budget in most countries. We'll soon be spending about half a billion dollars a year on aid scholarships, so it's a very big deal for Australia. And essentially we pay for students from poorer nations to study at Australian universities, or somewhere else like the University in Suva to gain the sort of skills that they can take back home and help their country develop. Now this is particularly important for Kiribati of course because as you know that country is facing very serious problems due to climate change and rising sea levels, and we need to help the Kiribati government train its people with the sort of skills that will help them get jobs in other countries. Now back to the audit, scholarships are very costly, just for example the typical Australian development scholarship represents an investment of more than 100-thousand dollars in a single person. So we need to be as sure as we can be that Kiribati is picking the right students to train, and we need that process to be squeaky clean, it's got to be transparent and it must be merit-based. The problem in Kiribati though is that according to this audit Australia's aid staff have not been involved in selecting students, they've not been at the meetings where these decisions are made, and they've not even been shown how Kiribati is selecting students. So while there's no evidence of nepotism and there's no evidence of a lack of merit, there's certainly no transparency, and it's very suspicious when the Kiribati government as it did last year, actually agrees to let AusAid into these meetings and then changes its mind and says actually no, you're not allowed to come in, which is what has happened.
COUTTS: Alright and so on what grounds has the Kiribati government barred the Australian officials from these meetings that are very expensive for the Australian government?
MANNHEIM: Unfortunately that is not detailed in the audit, and it's a very curious question. It was linked to a change in the head of the Kiribati public service office, so that position changed some time early this year, and then when the new head of the public service office came in, the government then advised AusAid that it would not be welcome to be involved in the selection process. So it's a big problem, I think particularly because of the amount of money that we invest in single people and the need for AusAid in particular above all other government agencies, it must set an example around good government, has to set an example around being transparent, and doing things according to merit. And it's a little disappointing in a way that it allowed this to go on for at least three years according to the audit.
COUTTS: Have you approached AusAid and asked them why they're allowing Kiribati to do this?
MANNHEIM: I have asked AusAid, I'm still waiting for a clarification on that answer. But essentially they say that they have now resolved the matter. They will be involved, they have approached Kiribati about their concerns. Kiribati has agreed to involve AusAid staff in next year's round of scholarships and to let them sit in on meetings. I wouldn't necessarily myself take that for granted though given that Kiribati has previously committed to that and changed its mind, and so I'm hoping that AusAid will keep us in the loop about what happens next year to see if there is progress there.
COUTTS: One of the questions that you've asked of AusAid Markus was if they are considering suspending the scholarship program to Kiribati until they're able to have a say in who gets them and why?
MANNHEIM: Yes that wasn't answered directly, they said that the problem is now resolved from their point of view because the Kiribati government recently agreed to involve AusAid next year. So I guess that unless these problems recur next year, this matter has been dealt with from AusAid's point of view. But like I say, I think it's something that we all have to watch carefully.
COUTTS: Has this situation occurred in other countries to your knowledge?
MANNHEIM: I haven't heard of this situation. There has been previous criticism including from the Australian Auditor General of the way selections occur. I should say that there were three other recent audits of other countries, and that included scholarships in Vietnam, Papua New Guinea and also Fiji, and they found none of these types of problems. So in this particular case it was only Kiribati that was experiencing this problem. Having said that though, the Auditor General has previously criticised the way selections occur in the past. There hasn't been a lot of consistency around how AusAid goes about setting up selection processes. I guess it's very important for the recipient country to be involved in the selection. It shouldn't be a case of Australia going in and single-handedly choosing the students that it wants to train. We have to of course give developing countries, governments in a say in that process because they will know the sorts of skills that they need their people to have. Equally though we have to be careful where monitoring selection processes and that we know how it's occuring, so that the sorts of allegations like nepotism can't be made against our aid program.
COUTTS: Well does this seem extraordinary Markus that with the amounts of money, like 100-thousand per student, that they tolerated countries like Kiribati saying no you can't come in to see how the money's being spent, and the audit also comes up with three moderate risks and four low risks, and they were looking specifically at nepotism and fraud risk?
MANNHEIM: Yeah I share your concern, I find it really surprising that AusAid would sit back essentially according to the audit for three years and allow this process to go on. Now AusAid did say that it didn't actually have until recently a formal agreement that it must be involved in the selection process. Now I see that in itself as a failing on behalf of the aid agency, it should have ensured that it was involved formally through any agreement it had with the government before it started funding scholarships. According to the audit it's an independent report on scholarships recommended that it be involved, this was back in 2009. Kiribati government agreed that that was worthwhile doing in 2010, but like I said it then changed its mind in May this year and continued to keep AusAid staff out.

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