‘A’ is for Audit

It’s not often that you’re hanging on every word of an audit, but the Department for International Development’s (DFID’s) Report by the Comptroller and Auditor General, “Transferring Cash and Assets to the Poor” is quite the page-turner. As meticulously as one could imagine, the UK’s National Audit Office scrutinizes every aspect of DFID’s approach, execution, and follow-up in giving resources directly to people in poverty, which, it hastens to point out, is opposed to “widely prevalent development models.”

What’s amazing is that, under such intense scrutiny, cash transfer programs come out looking less like a fad and more like a mainstay in international development efforts.

Yes, DFID is faulted for being “under-informed on some key elements of cost-effectiveness, with insufficient comparisons of its approaches with other program design options.” At the same time, the report states that the benefits of these programs are up to four times their cost, so one might forgive DFID for moving forward with them without having a perfect “grip on trade-offs.”

The stats on program effectiveness are what drive the reader through the less riveting (though equally important) sections on targeting, proper overhead calculation and operational management information systems. “Transfers show clear immediate benefits including reducing hunger and raising incomes,” the audit concludes. “Where longer-term benefits were evaluated, people stayed out of extreme poverty after transfers ended.” More specific data points include:

• In Bangladesh, the Chars Livelihoods Program increased real incomes by between 15 and 66 per cent on average,
• In Ethiopia, the Productive Safety Nets Program reduced the period of food insecurity for beneficiaries by almost a third, and
• In Kenya, the Orphans and Vulnerable Children Program decreased poverty levels by 13 percentage points.

While DFID should continue to explore how it can improve its cash transfer programs, it’s good to see it simultaneously increasing their budget allotment (and to see these programs becoming mainstream in emergency contexts). From the current total of 9, DFID will make use of transfer programs in 16 of its priority countries by 2014. With the crucial insights of audits such as these, DFID will be able to maximize the cost-effectiveness of its investments and, more to the point, make a lot of people’s lives a little bit simpler.