Aid risk management approach

The Australian aid program operates in a number of countries with challenging security environments and weak governance. By their nature, aid investments contain a high degree of risk which requires careful management. Early identification and management of risks contributes to managing aid effectively.

The Department of Foreign Affairs and Trade (DFAT) considers risk at all stages of the aid management cycle.

Risk and controls are reviewed regularly enabling sound decision making and the development of proportionate and defensible management strategies that balance risk against benefits.

DFAT has a range of aid risk management measures including due diligence assessment of delivery partners, evaluations of partner governments’ financial systems; fraud control and anti-corruption efforts, as well as the application of environmental and social safeguards.

The department’s approach to identifying and assessing risk in aid investments follows the principles of the International Standard on Risk Management (AS/NZ 31000:2009).