Target 8: Ensuring value for money

Target 8: Ensuring value for money

Deliver high standards of value for money in at least 85 per cent of aid investments. Where standards are not met and improvements are not achieved within a year, investments will be cancelled

DFAT seeks to ensure that value for money considerations are applied across all aid management policies, practices and investments. Data to track progress towards this target is drawn from DFAT’s annual Aid Quality Checks. Investments rated as satisfactory against the efficiency and effectiveness criteria are considered to be delivering high standards of value for money. In 2015-16, 86 per cent of investments were rated as satisfactory for efficiency and 87 per cent of investments were rated as satisfactory for effectiveness. 

Annual effectiveness outcomes have ranged between 86 per cent and 90 per cent since 2011-12 (Figure 8). The 2015-16 outcome of 87 per cent for effectiveness is lower than last year but consistent with the average outcome since 2011-12. In the Performance of Australian Aid 2014-15 report, ODE expressed concern that there were inconsistencies in the application of the Aid Quality Check ratings scale. In 2015-16, DFAT adjusted its quality reporting processes to address this issue.

Efficiency outcomes have been rated higher in the past two years than for 2013-14 and earlier years (Figure 8). It is too early to make a definitive judgement about whether the underlying efficiency of the overall aid program has permanently improved. While increases in efficiency ratings have been recorded across all regions compared to 2013-14 and earlier, the largest increase has occurred in South-East and East Asia. This reflects the shift of most South-East and East Asia programs towards economic partnerships, in recognition of their higher levels of development and comparatively less complex operating environments, both of which should facilitate more efficient programming. Another factor likely contributing to higher efficiency outcomes is increased consolidation of the aid program – this is discussed further under Target 9 below.

This strategic target also requires the identification of underperforming investments based on unsatisfactory ratings for both effectiveness and efficiency criteria. In 2015-16, twenty underperforming investments were identified as Investments Requiring Improvement. If performance does not improve within 12 months, investments will be cancelled. In 2014-15, 18 underperforming investments were identified as Investments Requiring Improvement. Of these 18 investments, four investments were again assessed in 2015-16 as unsatisfactory. Three of these investments have now been ended with the fourth under review. 

In 2015-16, the department recorded 2,188 engagements of international advisers to support the delivery of the Australian aid program. All advisers were engaged in accordance with the Aid Adviser Remuneration Framework, which promotes the transparency of adviser remuneration and allowances based on professional discipline categories and job levels. 

In 2015-16, the average remuneration (daily/monthly rates, applicable allowances and support costs) paid to long and short term advisers represented a 23.8 per cent and 35.2 per cent saving respectively, when compared to remuneration paid prior to the introduction of the framework in February 2011.