30 October 2014

Exposed: USAID watchdog's watered-down audits

So it looks like the report from USAID’s Office of the Inspector General, its internal watchdog, have been significatly edited over the years to not include some of the most critical findings. That is according to a Washington Post report published last week. It hints that the findings, uncovered by the newspaper and the Senate, are behind acting inspector general Michael G. Carroll's decision to withdraw his nomination to be the permanent inspector general, after waiting for 16 months.

Comparing draft versions of audits against what was finally published showed significant edits to negative references.
The Post obtained draft versions of 12 audits by the inspector general’s office, covering projects from the Caribbean to Pakistan to the Republic of Georgia between 2011 and 2013. The drafts are confidential and rarely become public. The Post compared the drafts with the final reports published by the inspector general’s office and interviewed former and current employees. E-mails and other internal records also were reviewed.

The Post tracked changes in the language that auditors used to describe USAID and its mission offices. The analysis found that more than 400 negative references were removed from the audits between the draft and final versions.

In one audit, the number of negative references fell from 113 to 61; in another, from 170 to 13.
One example of this happening comes from Pakistan:
For example, in October 2010, USAID launched a program to reduce waste and fraud in the nearly $1 billion in U.S. assistance to Pakistan. USAID hired three contractors to help monitor the spending and train Pakistanis to manage the money.

In a draft audit of the program written in 2012, auditors found that $32 million of the program’s $44 million budget went to “fringe benefits, consultants and travel.” Auditors also found that one contractor hired to provide training billed the agency $954,000 for “expenses such as salaries, fringe benefits, and travel” but did not train anyone for the 16 months of the contract.

One key section of the audit was titled “Program Is Not Being Efficiently or Effectively Implemented.” The section detailed how the USAID mission office in Pakistan increased spending on the project, even though there were few or no reports documenting whether the program was working.

Those findings and that section were removed from the draft report, along with other negative findings, and placed in a confidential management letter. A finding that the auditors were not provided with detailed records of the spending was also placed in the management letter. It was sent to the USAID mission director in Pakistan on Sept. 30, 2012 — the day the final audit was publicly released by the inspector general’s office.

The inspector general defended the changes, saying in a letter to Coburn that the auditor’s overall assertion that the program was ineffective could not be supported by evidence of “cause, and effect.”
It is worth reading the article in full to understand all the claims made. In the end, there are some serious questions that the USAID’s Office of the Inspector General needs to answer. One good example appears to be the Special Inspector General for Afghanistan Reconstruction. The more focused watchdog has issued a series of reports outlining various problems with the US-led effort in Afghanistan. Another good example is the Independent Commission for Aid Impact, which issues reports scoring programs carried out by the UK's Department for International Development.