Inspector General Finds Lack of Oversight of Chemonics…Again
|Monday, 01 October 2012 16:17|
The USAID Inspector General (OIG) released an audit this weekend of Chemonics’ Haiti Recovery Initiative II program (HRI-II), funded by USAID. HRI-II, the successor to the HRI program which began right after the earthquake, aims to “help Haiti strengthen its economy and public institutions in the three strategic development corridors of Port-au-Prince, Saint-Marc, and Cap-Haitien,” according to the OIG. But, as the Associated Press reports today:
A newly released audit says the largest U.S. contractor working to stabilize Haiti after the 2010 earthquake is “not on track” to compete its assignments on schedule, has a weak monitoring system and is not adequately involving community members.
The audit is the second since the earthquake to find significant problems with Chemonics’ work in Haiti. The AP reported in December 2010:
And an audit this fall by USAID's Inspector General found that more than 70 percent of the funds given to the two largest U.S. contractors for a cash for work project in Haiti was spent on equipment and materials. As a result, just 8,000 Haitians a day were being hired by June, instead of the planned 25,000 a day, according to the IG.
Nevertheless, Chemonics has been the largest single recipient of post-earthquake funding from USAID. For the two HRI programs, Chemonics has received $103.8 million. This same process played out in Afghanistan, where despite consistently failing to produce results, Chemonics continued to receive hundreds of millions of dollars in contracts.
“The subcontractor will be responsible for the following:
Going on to note that, “No dates or estimated timelines were included.” Of course, this is the same temporary parliament building that was left vacant for months after it was “inaugurated.” As Jacob Kushner and Jean Pharés Jérôme reported in March:
But more than four months later, that location remains vacant. The building is scattered with woodwork trimmings and debris from a costly ongoing renovation paid for by the Haitian treasury because legislators say the United States never finished the job. And critics in Haiti charge that the unfinished work and empty building stand as a powerful metaphor for much of what is wrong with USAID’s approach to development in Haiti: that it lacks coordination with and input from the Haitians themselves about how best to undertake reconstruction projects.
Of course, this is not just a problem with Chemonics, but with USAID/OTI, the office that gave them the contract. As the OIG notes, “All of the problems discussed in this finding stemmed from the fact that OTI did not make monitoring and evaluation a priority early in the HRI-II’s implementation.”
OTI has conducted only one evaluation for HRI-II so far, and it took place in June 2011 to discuss and draft OTI’s strategy for Haiti, to build the new HRI-II team, and to propose ideas of where to conduct activities.
This despite the fact that “According to the HRI-II contract, program monitoring efforts should include regular evaluations of the program, as well as the activities… In general, they should be conducted between two and four times a year.”
used contractors from Port-au-Prince to implement a number of activities in Cap-Haitien and Saint-Marc; these contractors brought their own people to do the jobs instead of hiring locals. As a result, residents saw jobs in their neighborhoods being done by outsiders, and without an understanding of the activities, they did not see how anyone local benefitted.
The OIG also found that “urban beautification” projects failed for similar reasons. The OIG writes, “The purpose of these projects was to improve public areas by installing plants and benches, as well as doing minor masonry work, and to project “a positive image of what role the nearby Caracol industrial park and other upcoming economic investments will play in citizens’ lives.” Although Chemonics did do some plantings, “they died from lack of care.” Meanwhile:
According to the project’s final evaluation report, residents did not understand how the activity led to the beautification of the area nor did they associate it with the industrial park. Limonade’s mayor said the municipality could have been involved more in planning the activity to ensure its success.
Budget line items in the contract provided for grants under contract ($37.3 million) and “non-grant under contract” activities, such as direct procurement of goods and services ($3.3 million) for a total of $40.6 million. As of February 2012, 141 activities worth about $22.9 million had been developed and approved, leaving $17.7 million available for new activities to be approved, implemented, completed, and closed in the 7 months left.”
Yet despite having over $17 million left, and not being on track to complete their projects, USAID has allocated an additional $23.3 million to Chemonics for the HRI-II project since February 2012, according to the Federal Procurement Database System. As for how much of this gets spent in Haiti and how much goes to overhead and back to their Washington DC headquarters, there is no information available. Documents obtained from Freedom of Information Act requests submitted by HRRW have redacted any cost information and the mandated reporting requirements on who received funds were not released. The cost information was redacted because it is considered proprietary information, presumably of the contractor, yet the AP reported recently on their quest to obtain financial information from USAID contractors in Haiti:
When the AP asked for a budget breakdown, FHI 360 spokeswoman Liza Morris said, "We were pulling that for you but were told that it was proprietary by our funder."
Reform and Pushback
The theory behind relying more on local institutions is simple and compelling: If the goal of development is to build sustainable local capacity and ownership, why not have countries play a larger role in helping help themselves? Not only is this good development policy in countries where proper management controls are in place, it also has the potential to save American taxpayers a great deal of money.
Of course, with hundreds of millions of dollars being awarded to for-profit firms each year, and the lack of oversight and evaluation of those firms well established, the threat of waste and corruption by them is a much greater worry.