How does Norad work to prevent misuse and corruption in development aid?
There is always risk involved in development aid. Aid often goes to the world’s most vulnerable contexts: the poorest countries, countries affected by war and conflict, and countries with fragile governance and weak institutions. The risk of corruption is high.
That is why financial control is so important.
Norway has zero tolerance for corruption and other forms of financial misconduct. Funds that do not reach their intended purpose hinder development and undermine collective efforts.
Most Norwegian aid is managed by Norad. The main recipients are international organisations such as the UN and the Red Cross Movement, civil society organisations, authorities in partner countries in the Global South, and increasingly, also private sector companies. Norad works to reduce risk and prevent misuse in all projects. From before a project starts until it is completed, Norad follows up and monitors how the funds are used.
Quality and risk
Norad assesses both the organisation and the project thoroughly before any grant is awarded, and sets requirements for systems and controls. We look at, among other things:
- Thematic expertise and knowledge of the country or region
- Capacity and financial management
- The partner’s relationship with its own implementing partners
- Risk mitigation measures
We also assess the applicant’s risk assessment and what measures are needed to reduce risk. In cases where elevated risk is identified, we may impose stricter requirements in the agreement.
Applicants must have ethical guidelines in place in accordance with Norad’s standards.
The requirements have become clearer in recent years.
Reporting and control
Partners that receive support are required to report regularly on results, risk and the use of funds.
The agreements state that Norad may claim repayment in the event of serious breaches of the terms and conditions.
Norad follows up projects through dialogue, meetings and, where relevant, project visits. For projects exceeding NOK 100,000, an audit is always required.
Norad also carries out spot checks. These are used to test whether control routines work in practice. In this way, we can identify weaknesses or errors.
At the end of an agreement period, the partner must submit a final report and, in many cases, an evaluation.
Both positive and negative experiences are used for learning and improving future projects.
Suspicion of misuse
All recipients of Norwegian development aid funding are obliged to report immediately if they suspect that funds are not being used for their intended purpose. The same applies to suspicions of sexual exploitation, abuse or harassment. International organisations such as the UN are responsible for handling such cases internally.
The Norwegian authorities may also become aware of concerns through ordinary follow-up procedures or spot checks. In some cases, reports are submitted directly to Norad or the Ministry of Foreign Affairs.
Norad’s Internal Audit and Investigations Unit handles all reports submitted to varsling@norad.no and through Norad’s whistleblowing channel. Internal Audit assesses whether there may be misuse of funds involving Norad-managed aid and, in many cases, carries out its own investigations.
Reporting concerns and sanctions
When Norad opens a whistleblowing case, we always assess whether further disbursements to the project should be suspended to prevent additional losses.
Funds that have not been used in accordance with the agreement must always be repaid.
Norad may also terminate the agreement or require the partner to address weaknesses as a condition for continued support.