Posted: 3:55 am ET
Jacintoport International LLC and Seaboard Marine Ltd Agree to Settle False Claims Allegations Related to Delivery of Humanitarian Food Aid
The Justice Department announced today that Jacintoport International LLC (Jacintoport) and Seaboard Marine Ltd. (Seaboard Marine) have agreed to pay $1.075 million to settle a lawsuit alleging that the companies violated the False Claims Act in connection with a warehousing and logistics contract for the storage and redelivery of humanitarian food aid. Jacintoport is a cargo handling and stevedoring firm headquartered in Houston, Texas, and Seaboard Marine, an affiliate of Jacintoport, is an ocean transportation company headquartered in Miami, Florida.
In its lawsuit, the United States alleged that Jacintoport executed in 2007 a warehousing and logistics contract with the United States Agency for International Development (USAID) for the storage and redelivery of emergency humanitarian food aid. This contract contained explicit caps on the rates Jacintoport could charge ocean carriers to load humanitarian food aid onto ships (referred to as “stevedoring” charges) bound for crisis areas around the world. The complaint alleges that beginning around January 2008 and continuing through at least October 2009, Jacintoport, under the supervision and control of Seaboard, charged ocean carriers more for stevedoring than permitted to load over 50,000 tons of humanitarian food aid. These inflated stevedoring charges were subsequently lumped into other costs for delivering humanitarian food aid and passed on to the United States.
“USAID’s humanitarian food aid program provides critical assistance to starving people all over the world,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The Justice Department will hold accountable those who seek to abuse this important program.”
“It is unacceptable for companies that do business with the federal government to inflate their costs,” said U.S. Attorney Channing D. Phillips for the District of Columbia. “This settlement demonstrates our determination to protect the taxpayers’ dollars – and humanitarian programs – from abuse.”
The allegations resolved by this settlement were initially brought in a lawsuit filed under the qui tam or whistleblower provisions of the False Claims Act by John Raggio, a shipping contractor who allegedly received an invoice from Jacintoport that contained the excessive stevedoring charge. Under the Act’s qui tam provisions, a private citizen, known as a “relator,” can sue on behalf of the United States and share in any recovery. The United States is permitted to intervene in the lawsuit, as it did here. Raggio will receive $215,000. Earlier today, the government requested that the case be dismissed.
This matter was handled by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the District of Columbia, with assistance from the USAID Office of the Inspector General. The claims resolved by this settlement are allegations only and there has been no determination of liability. The case is United States ex. rel. Raggio v. Jacintoport International, LLC, et al. Case No. 1:10-cv-01908 (D.D.C.).
Posted: 4:05 am ET
In May 2015, the former president, chief executive officer, and chairman of the board of USAID contractor Louis Berger Group Inc. (LBG) was sentenced to 12 months of home confinement and fined $4.5 million for conspiring to defraud the U.S. Agency for International Development (USAID) with respect to billions of dollars in contracts over a nearly 20-year period. See Conspired to Defraud Uncle Sam? Be Very Afraid. We’re Gonna Put You in Home Confinement! Last week, USDOJ announced that it has filed a lawsuit under the False Claims Act against the former LBG CEO Derish M. Wolff and former CFO Salvatore J. Pepe “for conspiring to overbill the U.S. Agency for International Development (USAID) and other government agencies for costs incurred performing reconstruction contracts in Afghanistan, Iraq, and other countries.”
Via USDOJ: United States Sues Former Executives of Government Contractor for Making False Claims in Connection with Reconstruction Contracts in Afghanistan and Iraq
The Justice Department announced today that the government has filed suit under the False Claims Act against Derish M. Wolff and Salvatore J. Pepe, respectively the former CEO and CFO of Louis Berger Group Inc. (LBG), for conspiring to overbill the U.S. Agency for International Development (USAID) and other government agencies for costs incurred performing reconstruction contracts in Afghanistan, Iraq, and other countries, the Justice Department announced today. LBG is based in East Orange, New Jersey.
“Those who do business with the U.S. government should expect appropriate consequences if they do not deal fairly,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “As this case demonstrates, the government will hold both corporate entities and individuals accountable if they misuse taxpayer funds.”
The government’s complaint alleges that Wolff and Pepe designed and directed various accounting schemes that resulted in LBG billing the government for indirect overhead costs at inflated rates. According to the complaint, for example, Wolff and Pepe shifted portions of salaries of LBG executives and accounting personnel from contracts paid for by foreign and state governments and private entities to contracts paid for by the United States. Wolff and Pepe allegedly certified the false rates and submitted them to the government in annual financial reports.
The United States resolved criminal and civil claims against LBG arising from this conduct on Nov. 5, 2010. At that time, LBG entered into a Deferred Prosecution Agreement and paid $50.6 million to resolve False Claims Act allegations. Pepe pleaded guilty on that date to a charge of conspiracy to defraud the government and was later sentenced to one year probation. Wolff pleaded guilty to the same charge on Dec. 12, 2014, and was later sentencedto 12 months of home confinement and required to pay a $4.5 million fine for his role in the scheme. The complaint filed today asserts civil claims against Wolff and Pepe.
The United States filed its complaint in a lawsuit originally brought under the qui tam, or whistleblower, provisions of the False Claims Act, by Harold Salomon, an LBG accountant from March 2002 to October 2005. Under the Act, a private citizen can sue on behalf of the United States and share in any recovery. The United States is also entitled to intervene in the lawsuit, as it has done in this case.
This matter is being handled by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the District of Maryland, with investigative support from the FBI, USAID’s Office of Inspector General, the Defense Criminal Investigative Service and the Defense Contract Audit Agency.
“I applaud the dedication of USAID-OIG special agents, along with special agents of the FBI and the Defense Criminal Investigative Service,” said USAID Inspector General Ann Calvaresi Barr. “Their joint investigative work has helped the Justice Department take action against those responsible and signals our continuing commitment to protecting public funds from fraud, waste, and abuse.”
The case is United States ex rel. Harold Salomon v. Derish M. Wolff & Salvatore J. Pepe, Civ. No. RWT-06-1970 (D. Md.). The claims asserted against Wolff and Pepe are allegations only to the extent not admitted in their criminal pleas, and there has been no determination of civil liability.
Posted: 1:35 am ET
In FY2015, the United States provided some form of bilateral foreign assistance to about 144 countries. The following identifies the top 15 recipients of U.S. foreign assistance for FY1995, FY2005 and FY2015. Assistance, although provided to many nations, is concentrated heavily in certain countries, reflecting the priorities and interests of United States foreign policy at the time (via – PDF)
Posted: 12:18 am ET
The Foreign Service Grievance Board (FSGB) wants to know.
In December, it granted the unnamed auditor’s (the charged employee) Motion for Additional Discovery. USAID/OIG was ordered to produce the investigation files of both Mr. REDACTED and Ms. Lisa Mcclendon, the Deputy Assistant IG for Investigations at USAID OIG. Below is a quick summary of this case extracted from the publicly available records of the FSGB:
REDACTED, was employed by the United States Agency for International Development in the Office of the Inspector General (USAID OIG, agency) as a financial auditor in REDACTED from 2009 to 2011. During that time, she was assigned, inter alia, to audit two USAID programs (a REDACTED HIV/AIDs program in 2010 and a REDACTED Family Planning/Contraceptives program in 2011). The charged employee stated that she was prepared to make negative findings about both programs, alleging a waste of $120 million and $100 thousand dollars in each program, respectively. The OIG responded that the employee’s audit manager,REDACTED, and the Regional Inspector General, REDACTED, overruled her negative findings on grounds that they were erroneous and/or did not need to be included in the audit reports.
On June 9, 2011, an anonymous or confidential complaint was delivered to the REDACTED USAID OIG office, stating that the charged employee was submitting partially false vouchers for two-way education transportation reimbursement, because her husband was driving the children to school in the mornings. REDACTED, an investigator in REDACTED received the complaint and after consulting with an Assistant Special Agent in Charge in Washington, D.C., REDACTED, arranged for a Regional Security Officer (RSO) to follow Mr. REDACTED in the mornings to confirm that he was driving the children to school. The investigator also requested copies of the education transportation vouchers that showed that Ms. REDACTED had requested reimbursement for the cost of transporting the children to and from school.
Several weeks later, Lisa McClennon, the Deputy Assistant IG for Investigations, traveled to REDACTED allegedly for a routine site visit. When she arrived and reviewed the pending investigations, she testified that she concluded that REDACTED investigation “had not progressed.”2 She took over the investigation, interviewed more than a dozen witnesses and requested a large number of financial documents that Ms. REDACTED had submitted for reimbursement. Ms. McClennon stated that when she reviewed the documents and interviewed the witnesses, she concluded that the employee had submitted a number of false vouchers for reimbursement of educational travel expenses, a number of requests for cost of living allowance (COLA) payments to which she was allegedly not entitled, and a request for larger housing to which she was also allegedly not entitled.
(Note: WHOA! — requesting larger housing is against the rules? Isn’t that for the Housing Board to decide on entitlement? Active link and emphasis added above).
Ms. McClennon reported her findings to Mr. Carroll in Washington. He ordered Ms. REDACTED immediate curtailment, despite the fact that at that time she was away from post with her family. In addition, Mr. Carroll proposed to separate Ms. REDACTED from the Service for cause. After reviewing written and oral replies from the charged employee, Mr. Carroll recommended in a letter, dated August 3, 2012, that the employee be separated for cause.3 Ms. REDACTED responded to the recommendation by arguing that the investigation and the resultant charges were retaliatory based on her status as a whistleblower when she attempted to report negative findings in the REDACTED and REDACTED audits.
Before the Board was able to issue a final order,5 however, the employee filed a motion on November 14, 2014, advising the Board that Mr. Carroll had withdrawn his name from consideration for the position of IG and the President had formally withdrawn his name from consideration by Congress on November 12, 2014.6 The motion sought leave to file a supplemental pleading and to reopen discovery based on newspaper articles that reported that Mr. Carroll was accused by OIG auditors (not including Ms. REDACTED of putting pressure on them to modify audit reports in order to delete negative findings about USAID. In addition, the charged employee requested the opportunity to depose Mssrs.REDACTED and REDACTED.
- The Board initially came to the conclusion that Mr. Carroll did not have authority to prosecute this matter because his term as Acting IG expired before he recommended Ms. REDACTED for separation. The case was then dismissed. However, in 2013, Mr. Carroll was nominated to be the IG for USAID. Thus, he again became the Acting IG, pursuant to the Federal Vacancy Reform Act (FVRA) of 1998, 5 U.S.C. § 3345 et seq. As Acting IG, Mr. Carroll ratified his earlier recommendation to separate Ms. REDACTED for cause and the grievance appeal was reinstated.
- Mr. Carroll retired from the Foreign Service, effective December 31, 2014.
- Ex-USAID/OIG Pakistan: Finding fully developed for final report, whatchatalkinbout? Nov 2014
- USAID OIG: “The office is a watchdog not doing its job” — IG Nominee Withdraws Name Oct 2014
- Dear USAID OIG — That Nonprofit Contractor Mess Really Needs a Fact Sheet March 2015
- USAID Finally Gets an Inspector General 1,496 Days After Job Went Vacant Nov 2015
- Conspired to Defraud Uncle Sam? Be Very Afraid. We’re Gonna Put You in Home Confinement! May 2015
- USAID/OIG Highlights Challenges to the Management and Administration of Foreign Assistance Apr 2016
Posted: 12:15 am ET
Senators hope to rename some more streets?
President Obama’s nominations of eight career diplomats for ambassadorships and one development professional for an assistant administrator position for USAID remain stuck in the Senate as of Friday, May 13, 2016. The nominee for Ambassador to APEC has now waited for over 220 days. The nominees for the Marshall Islands and Micronesia have each waited over 190 days.
The Senate’s second session calendar is getting shorter. It will be on recess from May 30 – June 3 (Memorial Day); July 1 – 5 (Fourth of July); July 18 – September 5th (reconvene Tuesday September 6); and has the target pre-election adjournment on October 7th.
This has now become the new normal. Even non-controversial career diplomats routinely get stuck for months in confirmation purgatory. What crises would nudge these senators to confirm these nominees? Wasn’t there a U.S. airstrike west of the Somali capital of Mogadishu this past week? A coup somewhere? A hurricane?
Maybe some senators hope to rename some more streets in exchange for the confirmation of these ambassador nominees?
This must be laughable to look at from overseas. Here is the United States, a global power, and this is how our Senate functions; must be quite simply the envy of the world 🙃.
But in this article about Merrick Garland’s nomination for SCOTUS, part of “Confirmations: The Battle Over the Constitution,” and also relevant to ambassador-rank appointments, the author Michael D. Ramsey — a Professor of Law at the University of San Diego School of Law and a former judicial clerk for Justice Antonin Scalia — notes:
The relevant text is the appointments clause of Article II, Section 2, which provides: “[The president] shall nominate, and by and with the Advice and Consent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges of the supreme Court, and all other Officers of the United States…” This language makes the Senate’s consent a prerequisite to presidential appointments, but it does not place any duty on the Senate to act nor describe how it should proceed in its decision-making process. Even if the word “shall” in the clause is read as mandatory, “shall” refers only to things the president does. Instead, the Senate’s core role in appointments is as a check on the president, which it exercises by not giving consent—a choice it can make simply by not acting.
The Senate’s practice, under both Democrats and Republicans, shows that it thinks the appointments clause does not impose a duty to take formal action.
It remains to be seen if these executive nominees will survive the Senate obstacle course this year.
The 2016 Election Day is in 175 days.
PN933 | Robert Annan Riley III, of Florida, a Career Member of the Senior Foreign Service, Class of Minister-Counselor, to be Ambassador Extraordinary and Plenipotentiary of the United States of America to the Federated States of Micronesia
PN934 | Karen Brevard Stewart, of Florida, a Career Member of the Senior Foreign Service, Class of Minister-Counselor, to be Ambassador Extraordinary and Plenipotentiary of the United States of America to the Republic of the Marshall Islands
PN895 | Matthew John Matthews, of Oregon, a Career Member of the Senior Foreign Service, Class of Minister-Counselor, for the rank of Ambassador during his tenure of service as United States Senior Official for the Asia-Pacific Economic Cooperation (APEC) Forum.
PN1041 | Adam H. Sterling, of Virginia, a Career Member of the Senior Foreign Service, Class of Counselor, to be Ambassador Extraordinary and Plenipotentiary of the United States of America to the Slovak Republic.
PN1054 | Kelly Keiderling-Franz, of Virginia, a Career Member of the Senior Foreign Service, Class of Minister-Counselor, to be Ambassador Extraordinary and Plenipotentiary of the United States of America to the Oriental Republic of Uruguay.
PN1055 | Stephen Michael Schwartz, of Maryland, a Career Member of the Senior Foreign Service, Class of Counselor, to be Ambassador Extraordinary and Plenipotentiary of the United States of America to the Federal Republic of Somalia.
PN1154 | Christine Ann Elder, of Kentucky, a Career Member of the Senior Foreign Service, Class of Counselor, to be Ambassador Extraordinary and Plenipotentiary of the United States of America to the Republic of Liberia.
PN1155 | Elizabeth Holzhall Richard, of Virginia, a Career Member of the Senior Foreign Service, Class of Minister-Counselor, to be Ambassador Extraordinary and Plenipotentiary of the United States of America to the Lebanese Republic.
PN1139 | R. David Harden, of Maryland, to be an Assistant Administrator of the United States Agency for International Development.
Posted: 2:26 am PT
Last year, the NYT covered SIGAR’s John Sopko.
This past Labor Day, there was this big splash, quite an effort here from a dozen or so folks from three agencies:
Detractors describe Sopko as “egomaniacal,” “petty,” “a bully” and “the Donald Trump of inspectors general.” But Sopko has publicly brushed off — even relished — the criticism, arguing that it’s his job to shine a light on mistakes made by “bureaucrats” who would prefer that his reports “be slipped in a sealed envelope in the dead of night under the door — never to see the light of day.”
“My job is to call balls and strikes,” Sopko once told NBC News. “Nobody likes the ump.”
Here’s SIGAR Sopko previously discussing his media strategy:
Then here’s one view from Afghanistan:
John F. Sopko was appointed Special Inspector General for Afghanistan Reconstruction on July 2, 2012 by President Obama. In his last congressional post, Mr. Sopko was Chief Counsel for Oversight and Investigations for the House Committee on Energy and Commerce, chaired by Rep. John D. Dingell (D-Mich.), during the 110th Congress.
In the fall of 2010, a bi-partisan group of senators and POGO called for the removal of Mr. Sopko’s predecessor. At that time, POGO reported that “the SIGAR office has largely been considered a disappointment, and numerous deficiencies in its operations and audit reports have been identified.” The POGO investigator also said at that time that the “office has produced milk-toast audits that have not inspired congressional confidence.” In January 2011, the previous inspector, Arnold Fields, a retired Marine major general, resigned, per WaPo “after a review by the Council of Inspectors General found that many of his office’s audits barely met minimum quality standards and that Fields had not laid out a clear strategic vision.”
In accordance with Government Auditing Standards, SIGAR is required to undergo a periodic external quality control review (peer review). SIGAR’s latest peer review, which was conducted by the Council of Inspectors General on Integrity and Efficiency (CIGIE) was publicly released on March 30, 2016:
The NASA Office of Inspector General reviewed the system of quality control for the Special Inspector General for Afghanistan Reconstruction (SIGAR) Auditing Division in effect for fiscal year 2015. As indicated in our February 25, 2016, report, we assigned SIGAR a “pass” rating. During our review, we found three issues that were not of sufficient significance to affect our opinion on this rating but that require your attention. We believe these issues could be addressed through simple revisions to the policy manual.
So SIGAR was reviewed by IG peers and got a pass rating! Imagine that.
Mr. Sopko’s deputy famously said once,“Some people are unhappy with the fact we get press coverage, even though our two-person press shop pales in comparison to the squadrons of PR people at Embassy Kabul, ISAF, or DOD. Some people think we’re doing this to attract attention and gratify our egos. They are mistaken. Neither John nor I are angling for another government job, movie role, book advance, or trying to become the next YouTube sensation.”
We should note that when we request information from SIGAR, we always get a response. When we request information from US Embassy Kabul, our emails just get swallowed by black holes of indifference.
Posted: 5:07 pm ET
Updated: 6:20 pm ET
Updated: 6:37 pm ET
Updated: 10:04 pm ET
According to media reports, Xulhaz Mannan, an employee of the U.S. Embassy in Dhaka (USAID) and the editor of Roopbaan, Bangladesh’s first ever LGBT magazine launched in 2014 was killed in his apartment along with another LGBT activist, Tanay Fahim, in a latest of the brutal machete attacks targeting academics and writers. Local news says that the assailants posed as courier service staff.
Xulhaz’s colleagues regarded him with special affection. He first joined the U.S. Embassy as a Protocol Specialist, serving for eight years in that capacity before joining USAID last September. In his role as a Project Management Assistant in the Democracy and Governance office, he worked tirelessly to support organizations focused on broadening and deepening political understanding throughout Bangladesh. Unsurprisingly, he also devoted extra time to building a more open and welcoming workplace, serving as a founding member of the U.S. Embassy Diversity Committee.
The US Embassy in Dhaka released the following statement via FB from Ambassador Bernicat:
I am devastated by the brutal murder of Xulhaz Mannan and another young Bangladeshi this evening in Dhaka. Xulhaz was more than a colleague to those of us fortunate to work with him at the U.S. Embassy. He was a dear friend. Our prayers are with Xulhaz, the other victim, and those injured in the attack. We abhor this senseless act of violence and urge the Government of Bangladesh in the strongest terms to apprehend the criminals behind these murders.
Posted: 1:52 am ET
In January 2017, the next President of the United States will enter office facing as daunting and diverse a set of challenges as any President in recent times. In order to address these challenges and threats, the next President will need more than new polices; he or she will need an effective and capable Department of State to implement his or her vision, including carrying out presidential instructions. The State Department, however, is not nearly as effective as it should be, to the detriment of American standing and effectiveness in the world. The Heritage Foundation’s Brett Schaefer details the steps that would better equip the State Department to focus on its traditional mission, and be of true value to future U.S. foreign policy.
Below is a quick excerpt:
When the President relies too often or too heavily on individual “czars” or “envoys” to address discrete issues, however, he risks undermining clarity and consistency of policy, distorting the importance of issues in the overall spectrum of U.S. foreign policy interests, and confusing both U.S. and foreign officials about the chain of command through the multiple lines of communication to the President.
Historically, the most prudent and effective approach is to allow the Secretary of State to be the chief foreign policy adviser and diplomat with appropriate input from other advisers and, when their equities are involved, other departments and agencies. To address this issue, the next Administration should:
- Appoint the appropriate Secretary of State for the President.
- Reduce the operational role of the NSC and place those responsibilities chiefly on Under and Assistant Secretaries of State.
- Return the Policy Planning Staff to its original purpose, or eliminate it.
- Refuse to accord cabinet rank to the U.S. Ambassador to the United Nations.
- Curtail the use of special envoys and special representatives.
- Ensure that all candidates for ambassadorial appointments are qualified.
- Reinforce the authority of U.S. Ambassadors.
- Increase Foreign Service assignments from three to five years.
- Conduct an in-depth evaluation of standards, training, and qualifications for both the Foreign Service and Civil Service.
Under Strengthening the State Department’s Traditional Bilateral and Multilateral Diplomacy, the author proposes the following:
- Establish an Under Secretary for Multilateral Affairs.
- Shift the responsibilities of most functional bureaus to the Under Secretary for Bilateral Affairs and the Under Secretary for Multilateral Affairs.
- Rename the Bureau of Economic and Business Affairs as the Bureau for Economic Development. The new bureau should encompass USAID; many of the current responsibilities of the current Bureau of Economic and Business Affairs; and primary responsibility (currently led by the Department of the Treasury) for U.S. policy at the World Bank and the regional development banks.
- Eliminate the Under Secretary for Civilian Security, Democracy, and Human Rights.
- Eliminate the position of Deputy Secretary for Management and Resources.
- Merge complementary offices and bureaus and emphasize their overarching purpose.
- Reconsider lines of authority for non-U.N. multilateral organizations.
- Treat former U.S. territories as the independent nations they have become.
There’s a lot more! The full report is available to read online here. Also available to read below or to download as PDF:
Posted: 3:24 am ET
On March 15, the new USAID Inspector General Ann Calvaresi Barr went before the Subcommittee of the Senate Committee on Appropriations during its review of the FY2017 budget request and funding justification hearing for USAID. She told the subcommittee that in FY2016, OIG issued 698 financial and performance audits and reviews with more than 1,268 recommendations for improving foreign assistance programs.
These audits identified approximately $290 million in questioned costs and funds to be put to better use. OIG’s investigative work led to 10 arrests and 91 administrative actions such as suspensions, debarments, and terminations of employment. OIG also realized nearly $85 million in savings and recoveries in FY 2015 as a result of its investigations. In addition, OIG provided 270 fraud awareness briefings and training sessions for close to 8,600 attendees in 36 countries.
She talked about changes in the USAID OIG operations:
On the horizon are changes to improve OIG’s work to ensure it has a meaningful impact on the strategy, policy, and practice of U.S. foreign assistance. This includes building and maintaining a workforce equipped with the right guidance, skills, and resources to evaluate complex development programs, unravel sophisticated fraud schemes, and address new oversight requirements.
In addition to recruiting and developing top-notch staff, I am committed to making certain that OIG has the right internal policies, processes, and systems in place to meet the highest standards for reliable and meaningful oversight. The quality of our audit and investigative work must be beyond question.
Most importantly, she highlighted to Congress the many challenges to the management and administration of U.S. foreign assistance:
Work in nonpermissive environment:
Work in nonpermissive environments is a leading challenge for foreign assistance agencies. Programs in conflict-affected settings face greater risks than those operating in more stable environments. These risks typically include a more acute threat to the lives of U.S. Government and implementer personnel. In these settings, in addition to limited access to projects and threats to safety, USAID often confronts dishonest and opportunistic actors who look to prey upon the influx of foreign aid. In some cases, instability and weak institutions threaten both the immediate progress and long-term benefit of development efforts. Agency staff and implementing partners alike face severe constraints in monitoring the progress of development and humanitarian assistance activities in these settings. Shortfalls in these activities can lead to health and environmental hazards, such as those we observed in a camp for displaced persons in Iraq. They can also create conditions for pervasive fraud and diversion. OIG, for example, recently documented the large-scale substitution of basic hygiene and food items intended for displaced Syrians with substandard materials. In other cases, we have noted the diversion of humanitarian goods to terrorist groups, and uncovered a case in which a sub-implementer received funds for a range of humanitarian assistance activities that it never performed. Meanwhile, in Afghanistan we found that a lack of access to project sites constrained USAID’s ability to observe 74 percent of the projects it funded.
Unreliable data: collection, reporting and use
[T]he collection, use, and reporting of unreliable data in connection with development programs. OIG has identified poor data quality as a concern across a spectrum of USAID’s programs, irrespective of geographic location or functional area. Of 196 performance audit and survey reports OIG published from FY 2013 to FY 2015, about 4 in 10 identified problems with data quality or sufficiency. OIG has repeatedly identified errors and overstatements, gaps in data collection and reporting, and problems in the consistency with which underlying calculations are made. Recent OIG work on USAID’s Ebola response activities, for example, found that the Office of Foreign Disaster Assistance lacked adequate performance measures given the nature of the Ebola crisis. OIG identifies data quality problems in more traditional development programs as well, as indicated in recent reports on justice system reform efforts, activities under the Feed the Future Initiative, and education programs. Without reliable data that meaningfully speaks to program results, USAID cannot effectively manage its programs or plan new ones. Moreover, absent reliable information on program progress, policymakers are unable to make fully informed decisions on the course of U.S. foreign assistance.
USAID’s long-term goal is to transfer ownership of its development initiatives so that the progress and results from its projects continue. To achieve this end, USAID is responsible for building sustainability into its plans and activities. Notwithstanding this aim, sustainability remains a major management challenge and OIG has often found that USAID planning for the end of projects has been inadequate. About a quarter of performance audit reports OIG issued from FY 2013 through FY 2015 contained recommendations to do more to ensure sustainability. In one case, we noted an HIV/AIDS project lacked a formal transition plan 3 years after the project began, threatening its continuation. In other cases, OIG has found that a lack of host country support, including the limited capacity of some USAID partners, reduced the likelihood that development goals could be realized and sustained. Recent OIG reports on programs in Afghanistan and Armenia, for example, noted that local partners lacked the ability to effectively support or continue USAID programs.
The capacity of host country governments and local implementers can indeed determine the success or failure of development efforts. In recognition of the need for technical capacity within host country systems, USAID’s Local Solutions Initiative aims to provide direct funding to host governments and to local private and nonprofit entities. Yet, USAID’s risk mitigation efforts in association with this initiative have not been consistent and this constitutes another significant management challenge for the agency as a result. OIG audit and investigative work over the years has provided evidence that agency and partner controls are unable to effectively safeguard funds in many of these cases. The U.S. Government has channeled a sizable share of assistance to Afghanistan and Pakistan through local systems, for example, but not always demonstrated sufficient accountability for these funds. In FY 2015, we issued a report on USAID’s controls over direct assistance in Afghanistan, identifying shortcomings in both its oversight and in how it communicated about employees’ responsibilities and the expectations placed upon Afghan implementers. In Pakistan, a direct assistance program to support municipal services in Khyber Pakhtunkhwa (KP) fell short in part because the mission failed to effectively work with the grantee, KP’s Planning and Development Department, which lacked adequate capacity to implement the program on its own.
Human resources management, decentralized IT and information security:
Two additional challenges facing USAID pertain to the management of its human resources and decentralized management of information technology (IT) and information security. Audit work last year continued to indicate that USAID faces a shortage of experienced, highly skilled personnel familiar with USAID guidelines, standards, and processes. Staff retained under the Development Leadership Initiative pointed to irrelevant training, poor support in preparation for overseas assignments, and being assigned roles that were less than those of other employees as problems facing a major hiring effort in recent years. We also found that staffing shortages have hampered program implementation and oversight in many locations where USAID operates.
On the IT front, OIG has noted the lack of an effective risk management program as well as a substantial number of open recommendations from prior IT-related audits. OIG deems this to indicate a significant deficiency in the security of USAID-wide information systems, including financial systems. An audit relating to the agency’s privacy program for information technology identified new weaknesses and risks related to potential noncompliance with major privacy laws, including the Privacy Act of 1974, as amended.
The full testimony is here (PDF).
- Ann Calvaresi Barr: USAID’s Watchdog Now Officially On Duty
- USAID Finally Gets an Inspector General 1,496 Days After Job Went Vacant
- Ann Calvaresi Barr: USAID Gets a New Inspector General Nominee After Vacancy of 1,310 Days
- Dear USAID OIG — That Nonprofit Contractor Mess Really Needs a Fact Sheet
- USAID OIG: “The office is a watchdog not doing its job” — IG Nominee Withdraws Name
- Ex-USAID/OIG Pakistan: Finding fully developed for final report, whatchatalkinbout?