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Monitoring and evaluation

Auditing


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Each year, the Federal Ministry for Economic Cooperation and Deve­lop­ment (BMZ) issues grants for activities car­ried out by organi­sa­tions such as political foundations, the German Development Service, German Agro Action, Caritas Germany and the central agencies of the churches.

To this end, the BMZ works together with a large number of Implementing organisations and other bodies and invests some 800 million euros annually. The public expects these government funds to be used efficiently. They should not be wasted or used im­properly. The BMZ division responsible for external auditing exa­mines how funds have been used. By conducting project evalua­tions and by auditing activities and providing advice based on these findings, the division's aim is to ensure that funding is used economically, effi­cient­ly and for the purpose for which it was intended. In this way, it res­ponds to the justified expectation of parliament, the public and the Federal Court of Audit that public funding be subjected to continuous control.

Since German development projects are not implemented by the BMZ itself but by specialist organisations, the division is mainly concerned with examining the way they and other grant recipients have used those funds.

The division has three responsibilities: external auditing, auditing of equity holdings and auditing of contract awards.

External auditing

The main aspect of the division's work is external auditing. Generally, two auditors (or more, depending on the scale of the audit) visit the grant recipients to examine their business records and accounts. Both in Germany and in the cooperation countries, auditing is carried out promptly, no later than within nine months of receiving the state­ment on the use of funds. If any funds have been misused, they must be paid back with interest.

The annual analysis and comparison of some 1,700 measures con­duct­ed by several hundred grant recipients helps to optimise ma­na­ge­ment and decision-making in development policy; external audit­ing is thus a component of quality assurance within the BMZ and with the grant recipients.

Auditing of equity holdings

The BMZ is a shareholder in the following organisations:

The Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), the German Deve­lop­ment Institute (DIE) and the German Institute for Tropical and Subtropical Agriculture (DITSL).

The Ministry is obliged to audit the Federal Government's holdings and report to the Federal Court of Audit on the annual accounts and all relevant occurrences in the past financial year. The head of the division, as the person responsible for auditing equity holdings, must send a report to the Federal Court of Audit within three months of the annual accounts being adopted.

Auditing of contract awards

Public institutions mostly commission major work through a tendering process. In cases where it is deemed appropriate, the team res­pon­sible for tendering within the auditing division examines whether contracts have been awarded in accordance with the relevant regu­la­tions. They can instruct those responsible for tendering procedures to reverse any measures that are in contravention of the law. They also advise on tendering procedures and mediate in disputes.

Since its establishment in 1960, the auditing division has played a major part in ensuring that BMZ funding is used effectively and efficiently. Evaluations both within and outside the BMZ have repeatedly drawn on its findings.

BMZ glossary

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