Compliance & forensics in development cooperation

The aim of development cooperation (DC) is to give all "people the freedom to shape their lives in a self-determined and self-reliant manner without material hardship and to enable their children to have a good future" (BMZ). A noble goal that is unfortunately still a long way off.

This makes it all the more important to utilise the limited development funds available in such a way that losses due to corruption or inefficiencies are avoided. After all, every euro that is embezzled or wasted through mismanagement reduces the effectiveness of development cooperation or is lost for the actual beneficiaries, who are regularly among the poorest people in the world.

Ensuring compliance, i.e. ensuring that funds are used in accordance with the rules, also costs money; money that is no more available to the beneficiaries than the funds that are lost due to corruption or inefficiencies. It is therefore important to maintain a balance between the need for control and the costs associated with control in order to serve the objectives of development cooperation.

The bottom line is that compliance must not cost more than the respective development project benefits from compliance - in the form of less corruption or less waste of funds.

The second question that donors in Germany and Europe should ask themselves is the question of the right instruments to sustainably reduce the risk of corruption and waste of funds in the recipient countries.

White-collar crime and the fight against it depend on country and sector-specific characteristics, meaning that the simple export of familiar solutions from donor countries falls short in many cases. For example, whistleblowing systems can only function to a limited extent if there is an overriding sense of loyalty to members of one's own ethnic group, as is the case in many regions of Africa. Another example is the regularly divergent requirements in relation to existing processes such as accounting, which is often still done in Excel by local partner organisations involved in development cooperation.

Together with our international KPMG network, our experts for compliance & forensics in development cooperation are familiar with the formal requirements of donors in Germany and Europe as well as with the linguistic, cultural, legal and socio-economic conditions in the main recipient countries.

Based on this expertise, we offer within the framework of IDAS  innovative solutions that support public and private actors in development cooperation in detecting, investigating and preventing corruption and ensuring the efficient use of funds in Africa, Asia and Latin America without negatively impacting the administrative costs of the donor organisation.