Accreditation Risk Management

Risk management within NGO programming is part of a broader risk management strategy. Managing risk is an important part of the Australian public sector reform agenda and of the accountability requirements of AusAID.

'Risk management' consists of a systematic process of assessing and then dealing with risk. As a Commonwealth agency, AusAID uses a number of public sector-wide tools for the management of risk to Commonwealth funds, and risk to the achievement of agency objectives. Some of these tools include the Finance Management and Accountability Act (FMA) and the Commonwealth Procurement Guidelines (CPG).

The Government has committed itself to a partnership with NGOs in development, with the level of funding each year determined through the Budget process. As a part of this commitment, AusAID takes an up-front risk management approach to NGO funding. AusAID has established a risk management framework for NGO Schemes consistent with the AusAID Risk Management Policy. The framework includes:

accreditation of all NGOs based on accepted capacity to deliver outcomes and accountability requirements
Financial Systems Assessment undertaken as part of the accreditation process
ACFID, SPHERE and ICRC Codes of Conduct that bind member NGOs
A Head Agreement that standardises administrative/legal issues
activity accountability by NGOs, including monitoring, reporting and acquittals
overall scheme performance assessment
audit of NGO management and administrative controls
spot-checks of NGO management and administrative controls; and
sample reviews of activities.

Accreditation reviews are undertaken on a five yearly basis. NGOs who are accredited can access a yearly allocation from the AusAID-NGO Cooperation Program (ANCP), AusAID NGO Country and Regional Windows and the Humanitarian Relief Programs. Each year, a sample of NGOs is subject to AusAID's normal risk management processes, including audits, spot-checks and evaluations. Audits, spot-checks and cluster evaluations also assess the capacity of NGOs accessing funding. Information from these processes will then feed into accreditation reviews.

The aid program funding for NGOs is also subject to review by the Australian National Audit Office as part of its five-year program of reviews of AusAID activities.

Information on NGO Spotchecks [PDF - 33KB]

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