Friday, July 18, 2008

USAID memo on Cuba program

A memo that USAID circulated today, signed by Deputy Assistant Administrator Stephen Driesler:

This memo is sent to provide you with the latest details regarding the status of USAID’s Cuba Program. As you know, we have encountered challenges in the implementation of this important program. Audits of USAID’s Cuba Program by the Government Accountability Office (GAO) in 2006 and the USAID Office of Inspector General (OIG) in 2007 highlighted issues with grants management. To generalize, these audits found there were internal controls issues both in USAID’s management of the grants, as well as with regard to grantee capacity. USAID responded to the GAO and OIG findings and recommendations by taking the actions stated below.

· A financial monitoring and audit contract was awarded in mid 2008 to facilitate enhanced oversight of grantees’ management of USAID funds. The OIG will oversee the USAID-contracted audits of all the grantees. The audits will review costs incurred from the grant’s inception to the present. These audits will include a review of internal controls and compliance.

· The Latin America and Caribbean Bureau (LAC) will be holding quarterly portfolio reviews of existing grantees to review status, and results of the grants and to highlight potential problems and outstanding issues.

· USAID’s Office of Acquisition and Assistance (OAA) issued additional guidance on pre-award reviews in March 2007, resulting in conduct of pre-award reviews for new awards with written findings issued prior to the awarding of grant funds. This helps ensure that findings are tracked and resolved in a timely manner.

· OAA is employing a system to track compliance with the Single Audit Act, which requires audits of NGOs spending more than $500,000 annually in Federal funds.

Grantees with expenditures below the $500,000 threshold will now be audited internally.

· LAC/Cuba program staff cognizant technical officers (CTOs) conduct systematic grantee on-site monitoring and track submission of required reporting, such as project implementation plans, monitoring and evaluation plans, program narrative reports, financial reports, etc.

· LAC/Cuba program staff has been increased and received training in grants management

· LAC is working to restructure the Cuba program to add an umbrella grant program through a contract in order to improve management capability of small grantees.

Many of these initiatives have only recently begun implementation and we believe that they will have a significant impact over time. Some are bearing fruit already, however, given the problems identified in both audits, issues with some grants have surfaced in the last few months. In particular, you are well aware of the problems with the Center for a Free Cuba (CFC) involving alleged illegitimate use of USAID grant funds by a former CFC employee. This grant was suspended in March 2008 and remains suspended. The Department of Justice and the USAID OIG are conducting ongoing investigations. Significant Congressional concern has been expressed, and the GAO is conducting a follow-on to its 2006 audit which, although broader, encompasses the CFC matter. Given the continuing investigations, significant Congressional concern and review, and the need to ensure USAID is meeting our federal management responsibilities, we have decided to wait until additional information is available from the USAID/OIG as well as other programmatic reviews and audits that USAID is undertaking, to make a decision on reinstatement of the CFC grant.

Recently, another Cuba Program grantee problem surfaced during an USAID-funded financial review of our Cuba program grantees in accordance with the first bullet above. As a result of irregularities identified during this financial review, the Executive Director of Grupo de Apoyo a la Democracia (GAD) notified USAID regarding the use of GAD’s purchase card by one of GAD’s contract employees to purchase unauthorized items. Most of GAD’s funding comes from USAID, therefore it is likely that funds used to cover costs incurred under the purchase card are USAID grant funds. GAD informed USAID that the employee signed a statement admitting to his actions, and promising to repay all improperly incurred expenses. The employee gave GAD a cashier's check for approximately eleven thousand dollars ($11,000), but the amount at issue remains to be determined and is expected to be higher. USAID immediately referred this matter to our OIG and suspended the grant. The OIG investigation is ongoing and USAID/OAA is conducting a review. GAO has also been informed of this situation.

Given the information resulting from the GAO and OIG audits, as well as the problems with the two grantees detailed above, USAID has decided to conduct an immediate review of all the grants to determine where financial vulnerabilities exist and how best to address these vulnerabilities to strengthen the program for future success. All grants are currently undergoing review, and pending the outcome of these reviews, some grants will be partially suspended. Audits of partially suspended grants will be conducted, management and internal controls vulnerabilities that exist will be identified, and any that are significant will be addressed prior to reinstatement of the grant in full.

We recognize and appreciate Congress’ oversight role with regard to use of funds appropriated for USAID’s programs. USAID takes seriously our responsibility as federal managers of appropriated funds, therefore we are focused on taking the steps laid out herein to ensure the future viability of this important program. If you have any questions or need additional information please do not hesitate to let me know.


Anonymous said...

I am anti-castro, but frankly the fact that we (meaning USAID) have millions of dollars flowing into Cuba to support dissidents is , objectively, a violation of autonomy and sovergnity of the state of Cuba.

Imagine if Iran funded groups openly advocating the downfall of the social order in usa. Would our government act so kindly toward those groups receving the money.

Castros must leave, but its up to the Cubans, NOT the US taxpayer to meddle in the affairs of other countries, no matter how "bad" the situation is, unless its genocide (which Cuba is definetly not).

Anonymous said...

This is a tremendous step towards bringing freedom to Cuba. Those funds were being misused and everyone knew it. These new investigations will ensure that those funds are used for their intended purpose, bringing change to the island through direct cash aid.

Anonymous said...

The Cuban American National Foundation has done great work to make this a public issue. Through their hard work and dedication, change is among Cuba. If not for the CANF, the newly issued funds would have been continuously misused.

Anonymous said...

Why is the CIA blogging, anyway? Aren't you supposed to be covert?