Weaknesses in Oversight of USAID’s Syria Response Point To the Need for Enhanced Management of Fraud Risks in Humanitarian Assistance

Audit Report
Report Number
8-000-21-001-P
USAID has provided more than $5.6 billion between 2012 and 2020 in humanitarian assistance to help Syrians affected by the civil war, including refugees in neighboring countries. USAID-funded implementers procured items including emergency food, shelter materials, blankets, water treatment systems, hygiene kits, and medical supplies from international and local suppliers and transported them across borders from Jordan, Iraq, and Turkey to be delivered to those in need in Syria. OIG investigations, beginning in 2015, uncovered complex fraud schemes affecting the quality and effectiveness of humanitarian assistance delivered to Syrians affected by the conflict, including bid-rigging, bribery, collusion, kickbacks, and product substitution. While USAID took action to address fraud risks revealed by the investigations, USAID, through at least 2017, lacked a framework to manage fraud risks in humanitarian assistance responses. USAID took actions, to mitigate risk to its programming, but did not sustain monitoring of cross-border activities to reduce fraud risks. While this audit focused its scope on USAID’s oversight of one implementer, the International Rescue Committee, our findings point to broader implications for the Agency’s humanitarian assistance programming beyond Syria, as the fraud risks OIG investigations revealed were not unique to any one implementer. We made recommendations to improve USAID’s anti-fraud controls for its humanitarian assistance programming and one recommendation for the Agency to determine the allowability of questioned costs and recover funds, as appropriate.

Recommendations

Recommendation 1

Implement a fraud risk management framework for humanitarian assistance responses that sets out procedures for conducting regular fraud risk assessments; developing fraud risk profiles, anti-fraud control activities, and a fraud strategy; and
monitoring and incorporating feedback.

Questioned Cost:
$0
Funds For Better Use:
$0
Recommendation 2

In coordination with the Bureau for Management, conduct an assessment of
International Rescue Committee's progress in implementing corrective actions it pledged to complete in response to the 2016 Show Cause Notice, and evaluate any risk posed to current programming in determining whether any specific conditions should be incorporated into current and/or future awards to mitigate risk.

Questioned Cost:
$0
Funds For Better Use:
$0
Close Date:
Recommendation 3

In coordination with the Office of Management Policy, Budget and Performance's Compliance and Oversight of Partner Performance, conduct an assessment of the Agency's existing guidance for monitoring and oversight of pledged implementer corrective action plans and develop guidance for how and when such corrective action plans should be incorporated into agreements.

Questioned Cost:
$0
Funds For Better Use:
$0
Recommendation 4

Determine the allowability of $11,601,969 in questioned costs ($11,595,045 ineligible and $6,924 unsupported) and recover funds, as appropriate.

Questioned Cost:
$11601969
Funds For Better Use:
$0