Constraints: US aid for Pakistan at risk of being wasted, misused, says report
The NGO selected by USAID to disburse aid lacks capacity, according to OIG.
The NGO selected by USAID to disburse aid lacks capacity, according to OIG. PHOTO: FILE
ISLAMABAD:
The $90 million Kerry-Lugar funds are at an ‘increased risk of waste or misuse’, as the organisation selected to disburse the aid lacks the capacity and is not competitive, according to findings of the US inspector general.
The findings of the Office of the Inspector General (OIG) highlighted the weaknesses of the United States Agency for International Development (USAID) that chose the Agribusiness Support Fund (ASF) – a local NGO, for implementing the project despite knowing its capacity constraints.
“The USAID granted sole-source award to the ASF even though it had limited experience (in) issuing grants and managing an $89.4 million project,” said the audit report. The USAID own first pre-award assessment rated the ASF ‘high risk’ on account of finances, procurement, information system and internal controls.
The OIG, while quoting USAID officials, stated that the mission was under pressure from the embassy to use Pakistani implementers and favoured the ASF. However, in response to the OIG findings, the USAID mission defended its decision to award the deal to the ASF.
In November 2011, the US awarded $89.4 million five-year contract to the ASF aimed at linking farmers to markets to achieve three broader goals of accelerating economic growth, creating jobs and eliminating poverty. In the first year, the US had obligated $27.3 million.
Under the Kerry-Lugar Act, the Obama administration has committed $7.5 billion for Pakistan over a period of five years.
Before the award of the contract, the USAID had highlighted weaknesses that the ASF promised to address by hiring an international firm. But “that firm’s scope of work showed it was not responsible for providing capacity building for some of the (ASF) weaknesses,” the audit noted.
The ASF awarded a sub-contract of $5.3 million, which is 6% of the total project value, to Citizens Network for Foreign Affairs (CNFA) – a US-based international organisation, for providing technical assistance and services.
The sub contract underscored the US strategy of using aid committed to other nations for creating opportunities for its own citizens. This in Pakistan has triggered a debate about the actual aid being utilised in the country under various US assistance projects.
The OIG conducted the audit to determine whether the project was facilitating broad-based economic growth and creating jobs. It found that there had not been much success in achieving these goals.
“The ASF had limited experience managing a project that awards grants to sub recipients and beneficiaries. When the ASF received the grant, it did not have procurement and finance policies that complied with the US regulations, it added.
It further unearthed that the ASF lacked the capacity to manage the project and as a result the project is delayed, which would prevent it from achieving the project goals. The ASF missed first year targets. Formation of 700 farmer groups, support to 300 existing farmer groups, 20 cost sharing grants to corporations and individuals were missed.
“The ASF did not correct material weaknesses and as a result the funds may be at an increased risk of waste or misuse”, the OIG wrote in its report.
Published in The Express Tribune, November 3rd, 2013.
The $90 million Kerry-Lugar funds are at an ‘increased risk of waste or misuse’, as the organisation selected to disburse the aid lacks the capacity and is not competitive, according to findings of the US inspector general.
The findings of the Office of the Inspector General (OIG) highlighted the weaknesses of the United States Agency for International Development (USAID) that chose the Agribusiness Support Fund (ASF) – a local NGO, for implementing the project despite knowing its capacity constraints.
“The USAID granted sole-source award to the ASF even though it had limited experience (in) issuing grants and managing an $89.4 million project,” said the audit report. The USAID own first pre-award assessment rated the ASF ‘high risk’ on account of finances, procurement, information system and internal controls.
The OIG, while quoting USAID officials, stated that the mission was under pressure from the embassy to use Pakistani implementers and favoured the ASF. However, in response to the OIG findings, the USAID mission defended its decision to award the deal to the ASF.
In November 2011, the US awarded $89.4 million five-year contract to the ASF aimed at linking farmers to markets to achieve three broader goals of accelerating economic growth, creating jobs and eliminating poverty. In the first year, the US had obligated $27.3 million.
Under the Kerry-Lugar Act, the Obama administration has committed $7.5 billion for Pakistan over a period of five years.
Before the award of the contract, the USAID had highlighted weaknesses that the ASF promised to address by hiring an international firm. But “that firm’s scope of work showed it was not responsible for providing capacity building for some of the (ASF) weaknesses,” the audit noted.
The ASF awarded a sub-contract of $5.3 million, which is 6% of the total project value, to Citizens Network for Foreign Affairs (CNFA) – a US-based international organisation, for providing technical assistance and services.
The sub contract underscored the US strategy of using aid committed to other nations for creating opportunities for its own citizens. This in Pakistan has triggered a debate about the actual aid being utilised in the country under various US assistance projects.
The OIG conducted the audit to determine whether the project was facilitating broad-based economic growth and creating jobs. It found that there had not been much success in achieving these goals.
“The ASF had limited experience managing a project that awards grants to sub recipients and beneficiaries. When the ASF received the grant, it did not have procurement and finance policies that complied with the US regulations, it added.
It further unearthed that the ASF lacked the capacity to manage the project and as a result the project is delayed, which would prevent it from achieving the project goals. The ASF missed first year targets. Formation of 700 farmer groups, support to 300 existing farmer groups, 20 cost sharing grants to corporations and individuals were missed.
“The ASF did not correct material weaknesses and as a result the funds may be at an increased risk of waste or misuse”, the OIG wrote in its report.
Published in The Express Tribune, November 3rd, 2013.