Plans of the U.S. Agency for International Development to channel more resources to local organizations in Pakistan may pose “additional risks” of fraud and waste given that some of these groups lack the capacity to implement and monitor U.S. aid projects, according to a report by the U.S. Government Accountability Office.
The GAO report, which covers a performance audit from June 2010 to February 2011 of U.S. aid projects in the Islamic nation, urges USAID to support efforts that can address weaknesses of partner Pakistani organizations.
While USAID conducts pre-award assessments to determine the capacity of local implementing partners, it lacks guidance on “whether weaknesses identified in the preaward assessment must be addressed or whether assessment’s recommendations to enhance the accountability of U.S. funds must be implemented,” the report notes.
“For Pakistani organizations that were required to undergo a preaward assessment, GAO reviewed their respective contracts, grants, or agreements for fiscal year 2010 assistance as well as the assessment’s results. Our analysis indicated that not all of these contracts, grants, and agreements required these organizations to address the weaknesses identified in their preaward assessment,” the report reads.
To address weaknesses of Pakistani organizations, GAO recommends that USAID ensure these groups implement a conflict of interest policy, recruit more qualified internal audit and procurement staff, embed approved certified public accountants, and participate in a capacity-building program.
In its comment to the report, USAID stressed that its mission in Pakistan had already carried out measures to address weaknesses of local Pakistani organizations identified in pre-award assessments. These steps include the issuance of conflict of interest policy directive, implanting CPA firms in two implementing partners, increasing financial management and procurement staff in the mission, and establishing the mission’s assessment and strengthening program.
The GAO report also urges the State Department to include plans for operations research in its forthcoming semiannual monitoring report of Pakistani programs, and inform Congress on a projection of the levels of assistance to be provided to Pakistan under the $7.5 billion Enhanced Partnership with Pakistan Act, broken down into the 17 Millennium Challenge Account categories as prescribed by the act.
The State commented that plans for operations research are ongoing and said it intends to provide Congress with the projection of assistance levels.
The fourth quarterly report on U.S. civilian assistance program in Pakistan by inspectors general for USAID, the Department of State and the Department of Defense also indicates challenges in program monitoring, aid worker security and curtailment of fraud in U.S.-backed programs there. The report was issued last week.
>> Security, Oversight Issues Hamper US Civilian Work in Pakistan, Report Says
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