Another Inspector General Audit, Another Failing Grade for USAID in Haiti
|Tuesday, 05 March 2013 17:08|
The U.S. Agency for International Development Inspector General (IG) last week released an audit of a program to provide loans to businesses in Haiti (available here). The audit is just the latest report from the IG to find significant problems with USAID’s programs in Haiti, following previous findings regarding cash-for-work programs, shelter provision, food aid and USAID’s largest contractor, Chemonics. The Associated Press’ Trenton Daniel reports that:
An audit of a U.S. Agency for International Department program that aimed to boost Haiti's economy by providing loans to businesses has found that the program failed to award loans to intended targets, train workers and keep accurate records.
The loan program provided some $37.5 million in guarantees, of which just over $19 million in guarantees have been extended. According to publicly available data, only about a quarter went to woman-owned businesses, less than 30 percent went to first-time borrowers, and 75 percent were concentrated in the West department, though these numbers likely overstate the reality on the ground. In addition to many other problems, the audit found that “the key monitoring data was outdated, incomplete, or inaccurate,” for example, information on whether the recipient was a first-time borrower was “recorded incorrectly 41 percent of the time.”
They were a Haitian bank named Sogebank, a Haitian development finance institution named Sofihdes that USAID helped create in 1983 and an agriculture-focused outfit named Le Levier Federation.
And while the loans were intended to target “development corridors,” Daniel notes,
Instead they stayed in the Port-au-Prince area.
Other problems included that,
The USAID office in Haiti failed to properly train workers who make the loan guarantee coverage decisions. Lenders didn't always understand or carry out program goals and didn't always adjust lending practices to meet the goals.
The loans weren't supposed to go to enterprises that appeared on a list of "prohibited businesses" that supported law enforcement activities, surveillance, gambling, tobacco, pharmaceuticals, and alcohol and jewelry. Loans, however, went to some of these businesses because, the audit said, "lenders didn't have effective practices in place and because USAID didn't periodically review the loans."
Many of the problems found by the IG revolve around the lack of oversight provided by USAID, which allowed the problems detailed above to occur. As we have previously noted, USAID's increasing reliance on contractors has affected efforts to provide greater oversight, implement procurement reform and improve the efficacy of U.S. aid in Haiti.