Profiteering in the Aid Sector:
The Value of Efficient, Cost-Effective and Reliable Partners
Earlier this week, The Times newspaper in the UK published an article detailing a recent report by Members of Parliament that exposes a culture of profiteering, overcharging and corrupt practice amongst contractors commissioned to implement foreign aid projects.
The report by the International Development Committee finds contractors are using sharp practice to retain extremely large overseas aid contracts from the Department for International Development (DFid), saying “anything they can” to win the contract; contractors are allegedly exploiting not-for-profit organisations by including them in bids before dropping them to increase profit margin once the contract is won.
The report also found damning evidence that contractors are charging DFid more than twice the going market rate for staffing costs, with one contractor receiving a margin of 141% between the amount charged for the project and the market rate. DFid’s contracts state that companies are permitted to make “fair but not excessive profits”, leading to calls for better enforcement and assurances from the department to ensure contractors are not grossly benefiting from aid and taxpayer money.
The practices of NGOs, NPOs and charities have been under the spotlight in the UK in recent years; high-profile cases such as the closure of children’s charity Kids Company due to financial mismanagement, and published comments from the International Development Secretary Priti Patel on profiteering aid executives, are likely to cause even heavier scrutiny of processes and costs within the charity sector. Contracts of work are already subject to rigorous bidding processes and close regulation by bodies such as the Charities Commission, and with the recent attention on the sector expenditure will tighten, processes will streamline and audits will intensify.
Mauve Group prides itself on its long-standing, trustworthy relationship with NGOs, NPOs and charities around the world, and can offer global mobility services with fast project timescales, constant visibility and communication, and fees that sit well within market rates. Our considerable experience in providing value-for-money, efficient services to aid projects is supported by numerous references from leading charities around the globe, and our attendance at aid sector events like the recent Bond conference in London ensures we are constantly up-to-date with compliance news, developments and best practice. If you are looking for reliable support to restructure and enhance your organisation’s global operations, please get in touch via the Contact page.
To read the original article ‘Taxpayers Being Ripped Off by Foreign Aid Profiteers’ by Dominic Kennedy, published in the Times on April 4th 2017, please click here: https://www.thetimes.co.uk/article/taxpayers-ripped-off-by-foreign-aid-profiteers-k8nfjkkp5
The information provided has been checked for accuracy as of the date of publication, and is intended as a general guide and for information purposes. It is subject to unanticipated and unexpected changes and does not constitute legal advice.