Ahead of International Fraud Week 2025, Oli May explains why cutting aid because of fraud, diversion and safeguarding issues will make abuse worse, not better, and be an own goal for donor nations

At my last count I’d led, managed or quality-assured nearly five hundred investigations into fraud, corruption, sexual abuse and exploitation, terrorist resourcing, sanctions busts and wider misconduct. In one matter, I found actual references to Al-Shabaab in an organisation’s journal entries. In another, more than 30 women were being silenced in the shadow of local organised crime.

Most of these incidents were not in mining, or banking, or whichever other industry is this week’s bête noire – but in humanitarian and development assistance.

I’m not raising this to boast (who would brag about how harrowing some of these experiences were?) but to reassure you of my credibility. When major figures claim that NGOs funded by USAID represented “one of the biggest sources of fraud in the world,” I actually know what aid fraud looks like.

This year is the tenth anniversary of Fighting Fraud and Corruption in the Humanitarian and Development Sector, the first comprehensive book on tackling aid sector fraud and corruption with a holistic approach. Fighting Fraud’s estimated fraud losses put the range at about 2-4% of total value of any given aid spend. While that’s an average (some projects much less, some much more), it was seen as readily believable by the finance, audit and program professionals I spoke to for Fighting Fraud.

That’s not nothing. Official Development Assistance (ODA) by OECD donor countries was around US$212bn in 2024. That estimate would put losses at around $4-8bn. That’s about enough to provide clean drinking water to a population the size of France, Germany or the UK. As you might expect, while people like me use these analyses to support greater investment in stemming corruption in aid, there are those who use them to attack its very existence.

Walking away from aid on the basis of fraud doesn’t just abandon people in crisis, it hands all the influence to whoever shows up next.

That’s not rational, for five good reasons.

Firstly, it’s bad leadership. Why would any prudent executive cut an entire, impactful portfolio because of that level of loss? If we took that approach then no supermarket would open, no government department would exist, and I wouldn’t bother buying lollies for long car journeys because I know my six-year-old is going to steal them. It punishes victims, not perpetrators (millions will die consequent to this year’s cuts) and ignores the importance of a nation’s ODA to its national interests. With geostrategic competition high on the agenda, walking away from aid on the basis of fraud doesn’t just abandon people in crisis, it hands all the influence to whoever shows up next.

Secondly, the sector’s capacity and capability to tackle these issues is stronger than ever before. Here in Australia, DFAT continues to lead the reform curve with welcome updates to its fraud control toolkit and child protection, prevention of sexual exploitation, abuse and harassment policies. After the 2018 safeguarding crisis, investment in prevention and protection has made the aid safeguarding profession unrecognisable from its anaemic, funding-starved and marginalised roots. Two aid organisations are even amongst the ACFE’s sponsors for International Fraud Awareness Week!

Thirdly, while losses and abuse are unacceptable and must be tackled, they are routinely overestimated. Claims that “88%” and “70%” and “20%” of total aid doesn’t get overseas, is skimmed or lost are not only false but wouldn’t pass the pub test if you actually unpacked them. The same is true of waste. Research shows that people tend to overestimate the scale of aid spending on ‘overheads’ by a long shot – around a third, while they’d happily tolerate a fifth. In fact, it’s closer to a tenth. That’s not to say there isn’t waste to squeeze out – of course there is. I routinely help aid organisations to streamline outrageously over-complicated partner due diligence, for example. The point is that the facts don’t match up to the assumptions.

Fourth, the trajectory of aid is towards more sustainable, lower risk approaches. The Humanitarian Reset and localisation reforms are already shifting us towards leaner, more community-led systems. You see this in the integrity space too with important work around decolonising investigation and making risk management more locally led, for example. These are not jargon-tastic buzzwords (well, not necessarily, anyway), but forward thinking ways to take the security, safety and impact of aid to new levels. Cut aid, and we’ll be set back years.

Tackling fraud and abuse requires investment in prevention, oversight and locally-led reform. That’s stewardship, not weakness.

Finally, here’s the kicker for those slashing aid. Reducing it is going to make abuse worse, not better. Here’s why: fighting fraud, corruption and the abuse of vulnerable people are costs. They’re in those ‘overhead’ buckets that people complain about – HR, IT, finance, audit; the things you need to keep your work safe and secure. Meaningful ‘segregation of duties,’ a key fraud control, needs bums on seats. Both the bums and the seats are ‘overhead.’ These costs are inevitably the first on the chopping block when multilaterals, NGOs and other aid organisations need to pivot as core funding dries up. Cut them, and you’re cutting the brakes.

In the end, what we knew when Fighting Fraud came out in 2016 is still true: tackling fraud and abuse requires investment in prevention, oversight, and locally-led reform. That’s stewardship, not weakness. Cutting aid will worsen the problem, not fix it.

Oli May is the founder of Koala International Development, an Australian boutique consultancy seeking to change how purpose-led organisations think about risk, strategy and governance. He has previously been the head of counter-fraud for Oxfam GB, the director of legal, governance, risk and compliance for the Fred Hollows Foundation, and led Deloitte Australia’s international development practice

First published on LinkedIn, November 2025