Foreign Minister Micheline Calmy-Rey could run the Swiss Agency for Development and Cooperation (SDC) more effectively, according to a key Senate committee.
The report, published on Monday, recommends the SDC focus on priority regions, notably in poorest Africa. It says the government should review the SDC's management tools and strategic conduct.
The government was also urged to guarantee the systematic checking of projects and clarify any grey areas between the SDC and the State Secretariat for Economic Affairs (Seco).
In recent years Swiss development cooperation has been the target of criticism regarding the variety of fields, the regional distribution of its projects and a perceived lack of management strategy.
Questions have been asked over the transparency in the use of funds and the monitoring and political control of the SDC's activities.
The report commissioned by the Senate's control committee not only compared the aims of Swiss policy on development cooperation and the aims defined by parliament and the government but also examined the content of the SDC's programmes and projects.
The document acknowledged that Swiss development cooperation enjoys widespread recognition concerning its technical quality, its integrative standards and its professionalism.
Parliamentarian Hansruedi Stadler, speaker of the commission, dismissed criticism that the SDC's activities did not correspond with Swiss policy on development cooperation as defined by parliament.
Only with a "very large" amount of room to manoeuvre and with financial autonomy of up to SFr20 million ($16.6 million) would the SDC be in a position to be flexible, according to the report.
Nevertheless Stadler said such autonomy must be balanced by raised transparency and clear management by the government.
The commission also saw possibilities to increase effectiveness and to reduce general costs "for the benefit of more productive aid in the field".
It recommended that the government critically look at its strategic control in the field of international cooperation as a whole and that the 1976 law on international development and humanitarian aid be revised "within a convenient period of time".
The levels of expertise between the SDC and Seco ought also to be clarified and simplified, and the work in priority regions should be consolidated and funds in those areas increased.
The report concluded that the assignment of various missions to departments was sensible, but coherence and effectiveness could be strengthened by a combined strategy.
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In 2005 Switzerland gave SFr2.206 billion to development aid.
The figure includes the budgets of the Swiss Agency for Development and Cooperation, the State Secretariat for Economic Affairs, international peacekeeping missions, direct contributions to United Nations agencies and aid from cantons and communes.
Also included is SFr178 million spent on asylum seekers and SFr279 million of cancelled debts of poor nations.
Switzerland's annual aid budget is equivalent to 0.4% of gross national product, which is below the 0.7% recommended by the UN.
In 2005 the SDC had a budget SFr1.3 billion.
The agency focuses its aid programmes on 17 countries.
SDC undertakes direct actions, supports the programmes of multilateral organisations, and helps to finance programmes run by Swiss and international aid organisations in the following areas: bilateral and multilateral development cooperation, humanitarian aid and cooperation with Eastern Europe.