The Government should not fund every aid organisation tackling major emergencies such as the 2004 Asian tsunami, a State-ordered review has found.
Following the disaster, Irish Aid gave €18 million to 34 organisations which "suggests an implicit or explicit pressures to fund almost all UN agencies and reputable NGOs with Irish links", it found.
The number of Irish non-governmental organisations, "both home-grown and those with an Irish base", has increased rapidly in recent years, according to Intrac, consultants hired by the Department of Foreign Affairs.
"Without corrective action, in any similar emergency in the future, there is a danger that Irish Aid will become fragmented between a large number of recipient agencies. The greater the number of aid recipients, the more difficult it became for Irish Aid to monitor grants effectively and efficiently."
Irish Aid "should not feel a sense of obligation to fund almost every international NGO with an Irish base", and should instead divert some future aid to bodies such as the UN and the Red Cross.
Every agency receiving Irish money should have to abide by tighter contracts and tougher reporting rules, though no misuse of aid was discovered.
Some agencies "supplied only very general and sometimes inaccurate reports", while most felt that they got very little feedback from Irish Aid on the reports that they did file.
While many aid bodies are criticised for excessive administration costs, the consultants found that Irish Aid could operate better with more accountants, and other inspection staff.
In its finding, which went to the Department of Foreign Affairs in mid-September, Intrac said it was concerned that the "management-light approach is not conducive to good humanitarian donorship".
Irish Aid's administrative costs, including the cost of appointing former minister of state Chris Flood as a special envoy to the disaster-struck areas, reached €231,984 - just 1.2 per cent of the total aid budget.
"By any standards, this is a very low ratio for administrative costs. While this might be considered good news for the Irish taxpayer, our conclusion is that it is, in fact, too low."
Irish Aid "could have been even more effective" if more money had been spent on monitoring and technical support, and could still keep administration bills below 5 per cent.
The tsunami provoked a "huge" public interest in Ireland, "on a scale not seen since the response to the Ethiopian famine in 1984", thus creating pressure to "do more and do it sooner".
The impact of Irish Aid "could have been even greater" if money had been diverted faster from meeting immediate needs - which were well-funded - into longer-term recovery work.
The nine largest Irish NGOs received €6.9 million from the Government, while five smaller ones received €550,000. The rest of the money was divided between the UN, the Red Cross and other agencies.
Irish Aid lacked the staff and resources to "cope with the enormous pressures it faced" in the first two months after the tsunami, which killed 250,000 people.
More than half of the Government's aid was spent by the time a specialist adviser was appointed, though he had to cover all of the tsunami-affected countries.
The resources of Irish Aid's emergency and recovery section are sufficient for it to cope with the "normal" demands placed on it by the Third World, but it needs "to be improved to cope more efficiently with large-scale emergencies in which a large number of grants have to be approved and monitored in a very short time", said the review.