USAID used non-Federal audits (NFAs)—typically performed by supreme audit institutions or foreign accounting firms—to monitor U.S. assistance. This included assistance dispersed directly to foreign governments, known as government-to-government (G2G) awards. G2G awards can reduce costs and timelines by avoiding unneeded intermediaries, encouraging foreign governments to take greater responsibility for their own development, and building foreign government capacity throughout the duration of the award. However, these awards do not come without considerable risk. From October 2023 to March 2026, NFAs of G2G awards disproportionally identified questioned costs, weaknesses in internal controls, and noncompliance when compared to related audits of other types of USAID awards.
What We Suggest
We suggest that the Department of State consider addressing OIG’s open recommendations related to questioned costs, internal control weaknesses, and instances of noncompliance identified in NFAs of G2G awards, including recovering funds as appropriate. We also suggest the Department continue efforts to strengthen the capacity of supreme audit institutions conducting NFAs of these awards.