Watchdog warns Trump’s gutting of USAID leaves $8.2bn unspent with no oversight

The move by the Trump administration to gut the US Agency for International Development (USAID) has crippled the agency's ability to conduct proper oversight of unspent aid worth $8.2bn (R151.64bn), an independent government watchdog said on Monday.

A report by the USAID office of the inspector-general (OIG) also said waivers issued by the state department to make “life-saving humanitarian assistance” exempt from Trump's freeze on US foreign aid were hampered by sweeping staff cuts and uncertainty over what kind of aid is and is not permissible.

Hundreds of USAID programmes covering billions of dollars of assistance across the globe came to a halt after Trump on January 20 ordered a freeze on most US foreign aid, saying he wanted to ensure it was aligned with his “America First” policy.

His administration has moved to dismantle USAID, which had more than 10,000 staff at home and overseas, and possibly merge it into the state department. The agency's website has been down for more than a week. However, the report from the OIG, an independent oversight division of the agency, appeared on Monday on its website, which remains online.

OIG said its report was covering the risks around the agency's $8.2bn of “obligated but undisbursed humanitarian assistance funds” since the administration's halt to aid and subsequent staff cuts, both of which it said had effectively crippled USAID's bureau of humanitarian affairs (BHA).

“Recent widespread staffing reductions, coupled with uncertainty about the scope of foreign assistance waivers and permissible communications with implementers, has degraded USAID’s ability to distribute and safeguard taxpayer-funded humanitarian assistance,” the report said.

“Specifically, USAID’s existing oversight controls — albeit with previously identified shortcomings — are largely nonoperational given the recent directives and personnel actions,” it said.

USAID programmes in certain countries require partner vetting and third-party monitoring to ensure funds are delivered to those intended and do not go to “terrorists and their supporters”, but oversight mechanisms were crippled by the staff cuts, the report said.

“The gap leaves USAID susceptible to inadvertently funding entities or salaries of individuals associated with US-designated terrorist organisations,” it said.

Most of USAID's workforce was put on administrative leave last week, with the exception of about 600 people, according to a notice sent to staff last week and shared with Reuters by an administration official.

While US secretary of state Marco Rubio issued waivers for what he called “life-saving humanitarian assistance” to be exempt from the freeze, aid workers and UN staff said most programmes remained shut.

The report said “a lack of clarity about the scope of the humanitarian assistance waivers and the extent of permissible communications between BHA staff and its implementers” hampered USAID's capacity to disburse humanitarian assistance.

The state department did not immediately respond to a request for comment.

Reuters