The Trump administration has decimated the U.S. government’s ability to spot fraud and abuse in the flow of aid to other countries, according to a Monday memo from the inspector general of the lead foreign-aid agency.
The memo arrives as the administration is working to dismantle the U.S. Agency for International Development and sideline its workers, even as it continues to send at least some funds abroad—and amid continuing calls by Donald Trump’s political allies for more investigations, not fewer, into the distribution of U.S. foreign aid.
Last week, the Trump administration said it would place some 90 percent of USAID workers on leave. That plan was blocked by a federal judge—but on Monday, USAID employees who reported to work at the agency’s D.C. headquarters were turned away.
“USAID’s existing oversight controls—albeit with previously identified shortcomings—are now largely nonoperational given these recent directives and personnel actions,” according to the memo.
That means there is little way to oversee some $8.2 billion in obligated but undisbursed humanitarian assistance funds, the memo said.
One official from the inspector’s office who spoke to Defense One on background said “staffing reductions are really going to hurt the [United States’] ability to keep tabs on a lot of this stuff, whether it is something technical, like generators for energy-security projects in Ukraine, or if it’s food assistance and making sure food assistance is getting to where it needs to go.”
It is not clear why USAID’s inspector general was not among the dozen or so removed by Trump in late January—the numbers remain unclear—nor why the office was not subjected to the same staff reductions that hit the rest of the agency.
Like its counterparts at other agencies, the USAID IG operates independently, serving as a watchdog and making regular reports to Congress about the agency’s activities. In USAID’s case, the IG’s office looks for fraud and abuse as assistance funds flow abroad.
Its most recent semi-annual report, issued last fall, offers a detailed—and at times very critical—look at USAID activities. For instance, it identifies “shortcomings and vulnerabilities in USAID’s oversight mechanisms to prevent diversion of aid to Hamas.”
In other words, it’s exactly the sort of monitoring the agency’s critics have been demanding.
The attempts to block and sideline USAID staff are hurting the agency’s ability to ensure that U.S. funds are not flowing to groups hostile to the United States, the memo said.
“USAID staff have reported that the counter-terrorism vetting unit supporting humanitarian assistance programming has in recent days been told not to report to work (because staff have been furloughed or placed on administrative leave) and thus cannot conduct any partner vetting. This gap leaves USAID susceptible to inadvertently funding entities or salaries of individuals associated with the U.S.-designated terrorist organizations,” the memo reads.
The turmoil also hurts the agency’s ability to use “third-party monitors” to keep tabs on the flow of aid.
USAID and the Defense Department have struggled to keep people on the ground in Ukraine to make sure that aid and equipment is not being diverted or stolen, a deficiency noted in previous reports from the IGs at both agencies.
That gap contributes to continued perceptions of corruption in Ukraine’s government. But it’s not Ukraine’s fault, the USAID official said. The agency has a “good working relationship” with the Ukrainians; Defense Department inspectors have said much the same.
That’s true of many places where USAID provides humanitarian assistance. In those instances, the inspectors rely on third-party monitors, or TPMs, to conduct surveys in the field and check to make sure aid is being delivered correctly. But the staff and funding freeze “suspended all TPM contracts and activities, including in high-risk environments such as Ukraine, Afghanistan, Ethiopia, Haiti, Gaza, Iraq, Lebanon, Somalia, Syria, and Venezuela, impacting another layer of oversight over U.S. taxpayer-provided aid.”
In something of a tragic twist, Ukraine has taken pains to stand up precisely the sort of highly-digital, easily accessible tracking and accounting system for aid that the Department of Government Efficiency claims to be working on.
As early as 2022, Ukraine was worried the war would make it difficult for inspectors to get out into the conflict zone to monitor how aid—both military and humanitarian—was being spent, Daria Kaleniuk, the executive director of the Anti-Corruption Action Center in Ukraine, said Monday at the German Marshall Fund. To defray concerns about corruption, Kyiv set out to create a digital platform to track all the aid that came in and all the people who may have touched it before it arrived. It gets to the battlefield, down to the battalion level. That makes it much harder for people to attempt to steal aid before it gets to where it’s supposed to go, and enables Ukraine’s law enforcement to catch them when they do.
Gaps in U.S. monitoring were “taken very seriously by the Ukrainian Armed Forces,” Kaleniuk said. “So I’m quite confident that we are good on that track.”
Another speaker at the German Marshall Fund repeated what officials and other sources have said: The Trump administration’s hamstringing of foreign aid is a gift to the Kremlin at the worst possible moment.
Josh Rudolph, who leads the Fund’s transatlantic democracy working group, said the freeze imperils Ukraine’s ability to provide energy to its people amid continued Russian attacks on infrastructure. That could undermine the relatively tough stance Trump has taken against Russia in his new second term, such as threatening additional sanctions and moving Patriot missiles from Israel to Ukraine.
“It’s just that, that would be undermined if Ukraine goes into negotiations in the middle of winter, losing its energy security. I mean, this is something that Putin traditionally does,” Rudolph said.
