State Department watchdog office expands foreign aid investigations

The State Department’s independent watchdog office is expanding its remit, launching 25 new investigations into foreign assistance projects taken over from the U.S. Agency for International Development. The probes will cover whether the State Department is able to effectively continue USAID’s foreign aid contracts; the estimated $1.8 billion of foreign aid sent to Ukraine; and the State Department’s ability to respond to international disasters after USAID’s dismantling, among other topics. “In July 2025, responsibility for more than 1,000 USAID awards, valued at approximately $75 billion, transferred to the Department,” reads a fact sheet published to the State Department’s Office of Inspector General, or OIG, website on Sept. 11. “More than a dozen Department bureaus, some of which formed during the Department’s recent reorganization, and others that have not previously implemented foreign assistance programs, are now tasked with administering these awards.” Identifying — and rooting out — waste, fraud, and abuse has been a rallying cry behind the Trump administration’s dismantling of USAID. But during Trump’s first few weeks in office, the inspector generals of both the State Department and USAID watchdog offices were fired. That included the State Department’s Cardell Richardson Sr., who was fired alongside over a dozen other inspector generals from various government agencies on Jan. 25, and USAID’s Paul Martin, who was fired on Feb. 11. There is one inspector general per office. Martin’s firing occurred one day after his office released a report that found the administration’s crippling of USAID had made it more difficult to track the misuse of humanitarian aid, hampering the agency’s ability to monitor potential diversion by U.S.-designated terrorist organizations. “This removal, coupled with the lack of pushback from Congress, has sent a decided chilling message across the inspector general community: ‘be careful,’” Martin told PBS’ Frontline in March after his dismissal. “That’s a sad, sad place to be.” In 2024, the State Department managed approximately $13.2 billion in foreign aid funds; with the collapse of USAID, the State Department has taken on another $75 billion. Earlier this year, the State Department’s OIG found that “short timeframes, the dynamic operational environment, varying legal considerations, continuing foreign assistance review, and Department reorganization have further complicated efforts to realign USAID functions.” The report also noted that the team overseeing the transfer of programs from USAID to the State Department was set to be disbanded by July 1 — “leaving the Department without dedicated leadership to oversee implementation” of to-be-continued programs. The scale of the transfer is most evident in global health, which represents nearly two-thirds of the portfolio shifted from USAID to the State Department. As a result, the State Department’s OIG will be auditing three pieces of global health assistance specifically: USAID’s multibillion dollar global health supply chain project; the transfer of the President’s Emergency Plan for AIDS Relief, the country’s flagship HIV/AIDS program, from USAID to the State Department; and U.S. contributions to the Global Fund to Fight AIDS, Tuberculosis and Malaria, a worldwide partnership dedicated to eliminating AIDS, tuberculosis and malaria. There will also be new investigations centered on disaster assistance, including the State Department’s now-assumed responsibility of five USAID warehouses stocked with emergency relief supplies, and an audit of the State Department’s capacity to coordinate, deliver, and program $600 million in food assistance to Gaza. Fourteen foreign assistance oversight projects are already underway at the State Department’s OIG office, including an evaluation of the agency’s funding to international organizations. But the State Department’s OIG office — even as it expands — won’t replace the watchdog agency that covered USAID, a spokesperson at USAID’s OIG told Devex. Both OIG offices report directly to Congress, providing semiannual reports on their activities, audits, and investigations. Historically, USAID’s OIG has focused on foreign assistance, while the State Department’s OIG has focused on the agency’s diplomatic and foreign aid programs. While it now seems that the State Department’s OIG is expanding, the USAID OIG spokesperson pointed to a document that states as of September 2025, his agency has 300 ongoing investigative matters open, including 149 active investigations, 23 preliminary inquiries into fraud, corruption, and diversion, and 128 open complaints. Of those 149 active investigations, 35 have been accepted for criminal prosecution by the Department of Justice, the document states. Sixteen have been accepted by the Department of Justice as civil fraud issues. That includes an investigation into a decade-long bribery scheme involving over $550 million in contracts, leading to one USAID contracting officer and three corporate executives being barred from participation in government programs. “USAID OIG’s investigative work to protect hard-earned American taxpayer dollars remains active and ongoing,” the document reads. “Our number of open complaints/allegations increases by the day, due to our active Hotline which continues to receive allegations related to misuse of taxpayer dollars by NGOs, contractors, UN agencies, and government personnel.” Despite that, the White House proposed cutting the USAID OIG’s budget from $85 million to $0 in the administration’s 2026 budget request, while adding an extra $21.6 million to the State Department’s OIG. The request also proposed adding 25 additional staff to the State Department’s OIG to “bolster oversight of realigned foreign assistance programs” and the transition of those programs from USAID “in an exceptionally dynamic foreign affairs environment.” The House Appropriations Committee included similar provisions in its own funding bill, which was approved at the end of July — though it’s still unclear where the Senate will land. In recent discussions on the country’s national defense bill, Sen. James Risch, a Republican from Idaho, proposed an amendment to redesignate the existing USAID OIG as an inspector general for foreign assistance at the Department of State. With this redesignation, a spokesperson for Risch’s office told Devex that the new OIG for foreign assistance would “maintain all the authorities and responsibilities for the former USAID OIG.” “Though it certainly will continue to coordinate with the existing State OIG, the newly established OIG for Foreign Assistance would be a standalone unit focused exclusively on conducting audits and investigations of all non-military foreign assistance,” the spokesperson added. “These are capacities that fall outside the core competence of the existing State OIG, and are needed to safeguard American taxpayer dollars from corruption and mismanagement.” Update, Sept. 17, 2025: This story was updated with a comment from Sen. Risch’s office.