With the State Department and U.S. Agency for International Development racing toward direct assistance as a way to disperse billions of foreign assistance funding, the government’s top watchdog is waiving the caution flag.
In March 3 congressional testimony, the Government Accountability Office warned that Afghanistan and Pakistan are so unstable that State and USAID plans to give cash to them would cause ”the vulnerability of U.S.-funded programs to waste, mismanagement, and corruption…to increase given the weak internal controls of some of the Afghan and Pakistani entities involved in implementing them.”
While putting money directly in the hands of foreign leaders will surely build some temporary good will, it doesn’t necessarily build local capacity, prevent money from going to the enemy or otherwise ensure work actually gets done. Well-designed programs that strategically deploy the expertise of U.S. development firms, however, build lasting good will by nurturing sustainable local capacity and leaving tangible improvements behind.
Ironically, one reason State and USAID are moving toward direct assistance is because they believe bypassing U.S.-based firms would increase accountability and build local capacity faster by putting money in the hands of local government officials, who GAO now says may not be spending the money as intended. Unlike U.S.-based implementing partners, foreign governments are not subject to the same rigorous reporting, oversight requirements and controls. Additionally, decisions to hand aid directly to governments to build capacity ignores the fact that U.S.-based companies employ locals to execute U.S.-funded programs, building just the kinds of skills State and USAID claims aren’t being developed.
If State and USAID provide direct assistance, GAO advises the agencies to conduct pre-award assessments of direct aid recipients and closely monitor those organizations deemed high- or medium-risk. In Afghanistan and Pakistan, the application of such assessments has been inconsistent at best, according to the testimony.
Hopefully that message resounded on the Hill to avoid risking the waste of funds, particularly when there aren’t any funds to waste.
