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Oxfam flood aid to Pakistan embezzled, report finds

An independent financial investigation found invoices had been falsified and cheques manipulated to divert funds in two projects managed by a Pakistani agency working with the charity.

The unnamed culprit identified by the investigation had been fired and the British charity had cut all financial ties with the agency.

Oxfam said it hoped to recover all the missing money.

Neva Khan, Oxfam GB's country director in Pakistan, said: "We will recover every penny of this money and continue to ensure that donors' funds reach the people who need it most.

"Oxfam has a zero-tolerance policy towards corruption and we, and all our partners, share a commitment to high legal, ethical and moral standards." "Corruption is never acceptable. It, literally, takes away food from peoples' mouths; takes away clean water to give them life; and takes money away that could provide people with better hygiene and shelter."

The investigation by accounting firm PwC had been ordered by Oxfam after its own checks found suspicions of fraud.

A spokeswoman said the missing money had not come from public donations, but had been taxpayers' money from the Department for International Development.

The fraud took place during a period from September 2010 to March 2011 from funds covering operating expenses, overheads and human resources in two aid programmes managed by the Pirbhat Women's Development Society.

Pirbhat was delivering water and sanitation goods to temporary camp sites in Shahdadkot and Larkana, in upper Sindh, and distributing cheques to flood-victims to meet their basic daily needs.

It said the senior official identified in the report as a perpetrator and beneficiary of fraud was fired in May.

A statement from Pirbhat said: "We feel that our good work and our name has been blackened because of the action of one senior individual who has badly let us down as well as the communities we work with.

"We have already taken steps to tighten up our policies and practices to ensure something like this never happens again".

Oxfam raised more than £39 million to help victims of what the United Nations said was the worst natural disaster it had ever seen.

More than 1,750 died and more than 18 million were affected by last summer's floods.

Floodwaters first swept away houses and roads in the north east, before surging south and submerging large swathes of farmland for weeks as rivers burst their banks.

The crisis was made worse by a slow response from the Pakistan government and from the start there were widespread allegations of corruption.