Monitoring development cooperation policy

Report | 13-11-2013

Conclusions

We concluded that the government had achieved the spending cuts it had proposed for 2012. Gross expenditure in 2012 totalled €4.4 billion, equal to 0.71% of gross national product (GNP) in 2012. This 0.71% represents a spending cut of €823 million.

Greater effectiveness thanks to lessons learnt

We found that important lessons had been learnt regarding the need for sanitation and hygiene training in the water sector in Benin in order to have an impact on the quality of drinking water. Evaluations had found that there were problems realising the desired impact but significant steps had been taken in the interventions financed by the Netherlands to overcome them.

Measure still needed to improve result measurement

The Ministry of Foreign Affairs took several initiatives in 2012 to improve result measurement. But there are still weaknesses measuring results in the field. More attention must be paid to measuring outcomes and impacts, as well as outputs. The measurements are currently the principal features of project evaluations. Baseline measurements and the reliability of the figures collected should also be taken into account. The Policy and Evaluations Department (IOB) concluded from a study of 20 local evaluations carried out on behalf of embassies and departments that this problem was a frequent occurrence.

Allocation of funds to multilateral organisations greater than thought

No significant differences were seen in 2012 – as in previous years – in the allocation of expenditure over the four financing channels. We concluded that the allocation to the channels is no more than a rough indication of the funds provided for Dutch development assistance and says little about the recipients. A large proportion of the expenditure included in the figures for the bilateral channel related to multi-bi funding; in practice, the funds are channelled through the embassies to multilateral organisations. If we add multi-bi funding to the expenditure allocated to the multilateral channel, we find that multilateral organisations receive 45% of total Dutch development assistance. This puts the information that the House of Representatives receives every year on the allocation to channels in a different light.

Other conclusions:

• Focus on partner countries slowly emerging in the macro figures
• Focus on policy priorities partially realised
• Efficiency improvements thanks to internal reforms
• Reduced management burden at the Ministry of Foreign Affairs

Recommendations

We recommend that the Minister for Foreign Trade and Development Cooperation take the following measures to optimise the effectiveness and efficiency of policy and the use of development assistance: 

• Result measurement: use result measurements and accounts to increase the organisation's learning capacity. Improve the organisation of result measurement to increase insight into outcomes and impacts as well as into outputs.
• Continuity and knowledge sharing: maximise continuity in the ever-changing personnel, invest in knowledge management and improve access to the knowledge environment in order to accumulate and share knowledge. Appoint a single project team for knowledge management with a clear mandate and a deadline. 
• Communication and information exchange: improve communication and the exchange of information on policy implementation between the policy theme departments in The Hague and the embassies.

Response

Response of the Minister for Foreign Trade and Development Cooperation

The Minister for Foreign Trade and Development Cooperation (BHOS) thought the report made a valuable contribution to the goal of increasing effectiveness and managing by results. The minister agreed with our conclusion on knowledge management and accepted the recommendation to appoint a single project team with a clear mandate and a deadline. She also agreed with our conclusion that the exchange of information between central and local units could be improved. The minister also wrote that embassies and departments had already made agreements to improve the exchange of information and an action plan would be implemented at the end of 2014.

Regarding our finding that the allocation of funds to multilateral organisations was greater than it seemed, the minister noted that the multi-bi expenditure in the bilateral channel was consistent with the international OECD-DAC definitions. She thought our finding that the intended increase in expenditure on private sector development had not been achieved in 2012 had been due to a large proportion of private sector development expenditure being transferred to a new budget article for food security.

The minister wrote that she did not fully agree with our conclusion and recommendation that further measures should be taken to improve result measurement. She thought that our wording was not appropriate for our audit in a number of instances and did not do full justice to the efforts already made. She noted that the scope of the Ministry of Foreign Affairs' evaluations was adequate and she outlined the measures the Ministry of Foreign Affairs had taken in recent years to improve result measurement and evaluation. They included the policy scans carried out by the IOB's evaluation service, the Quality@Entry process, the results reports and the recent progress reports on the policy priorities.

Court of Audit's afterword

We are pleased that the Minister for BHOS thought the report made a valuable contribution and that she agreed with our main conclusions on knowledge management and information exchange.

The minister provided further information regarding our finding that a large proportion of funding was channelled through multilateral organisations. We would stress that we looked behind the figures on channel allocation in order to clarify the proportion received by multilateral organisations. In our opinion, the explanation for the lower realisation of private sector development is a valuable addition to the explanation provided in the Ministry of Foreign Affairs' annual report for 2012, in which the lower realisation was attributed to delays.

The minister provided up-to-date information in an appendix. We will consider it in our audit of the 2013 annual accounts of the Ministry of Foreign Affairs. The relatively high cover of the Ministry of Foreign Affairs' evaluations is favourable but our conclusion related to the IOB's finding that the evaluations carried out on behalf of embassies were of relatively poor quality.