Watchdog finds staffing, guidance gaps in transfer of USAID programs

By Simon Lewis

WASHINGTON, July 27 (Reuters) - The ‌U.S. State Department's hurried ​takeover of ​aid programs from the shuttered U.S. Agency for International Development (USAID) last year was hampered by staffing shortages, IT issues and delayed guidance, an internal watchdog said in a report released on ‌Monday.

President Donald Trump ordered the closure of USAID shortly after returning to office in January ⁠2025. Well over 10,000 people were fired and thousands of programs canceled, throwing into turmoil U.S.-funded aid operations on which millions of ‌the world’s poorest people depended.

The State ‌Department's Office of Inspector General said in its report that aid projects carrying $51.5 billion in obligated funds were transferred just as the department was undergoing its own reorganization. The so-called "Green List" of awards that survived ​the shutdown of USAID comprised 1,504 aid awards, including projects in conflict zones like Ukraine and Israel and the Palestinian territories, it said.

"The transition happened extremely fast, with evolving guidance,” the Office of Inspector General cited ⁠officials from one bureau as saying. The report found that the department had not implemented the inspector general's earlier recommendations aimed at smoothing the ​transition.

The department's top office for management told the authors that implementation of the watchdog's recommendations was underway, the report said.

A State Department official, responding to the report on condition ​of anonymity, did not address the specific findings but said ‌the inspector general made "friendly recommendations" but "did not find deficiencies in the new reorganization led by the Trump administration." Projects transferred from USAID had been replaced with new models such ⁠as bilateral health agreements and targeted funding through the UN's humanitarian aid agency, the official said.

"One year into America First Foreign Assistance, our assistance is more agile, quicker to respond, and more accountable to the American taxpayer," the official said.

About a ⁠third of the State Department offices that had to take on USAID awards had no prior experience managing foreign assistance projects, staff ​told the watchdog. The department hired 838 new positions to administer the awards, but this was far fewer than bureaus requested, the Office of Inspector General found.

Guidance on how to update the terms of aid awards was not fully in place until ‌December, and an artificial intelligence-driven data management tool introduced to help with the transition was beset by data problems, the report said.

The continent with the largest number ‌of different awards transferred to the State Department was Africa, with 639 awards carrying $17 billion of obligated funds.

The Bureau of African ⁠Affairs, which took on a majority of those ‌awards, requested 732 new positions ​to administer the awards, but ultimately only hired 232 people, the vast majority of them locally employed staff based out of U.S. missions.

(Reporting by Simon Lewis; Editing by Aurora Ellis and ‌Andrea Ricci )

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