Haiti Reconstruction: Factors Contributing to Delays in USAID Infrastructure Construction

United States Government Accountability Office GAO Report to Congressional Committees November 2011 HAITI RECONSTRUCTION Factors Contributing to Delays in USAID Infrastructure Construction GAO-12-68  November 2011 HAITI RECONSTRUCTION Factors Contributing to Delays in USAID Infrastructure Construction Highlights of GAO-12-68, a report to congressional committees Why GAO Did This Study What GAO Found On January 12, 2010, a powerful USAID and State have obligated and expended a small amount of funds for earthquake struck Haiti, resulting in an infrastructure construction activities in six sectors: energy, ports, shelter, health, estimated 230,000 deaths, including food security, and governance and rule of law. As of September 30, 2011, USAID more than 16,000 Haitian government and State had allocated almost $412 million for infrastructure construction personnel, and the destruction of many activities, obligated approximately $48.4 million (11.8 percent), and expended ministry buildings. In addition to approximately $3.1 million (0.8 percent). Of the almost $412 million, about 87 immediate relief efforts, in July 2010, percent was allocated from the 2010 Supplemental Appropriations Act and 13 Congress appropriated $1.14 billion in percent from regular fiscal year appropriations. USAID accounts for about 89 supplemental funds for reconstruction, percent of the $412 million, including funds for construction in the energy, ports, most of which was provided to the U.S. shelter, health, and food security sectors. State activities in the governance and Agency for International Development (USAID) and the Department of State rule of law sector account for the remaining 11 percent. (State). USAID and State are USAID had difficulty staffing the Haiti mission after the earthquake, a factor that administering about $412 million in has contributed to delays in infrastructure construction activities. Soon after the supplemental and regular fiscal year earthquake, 10 of the 17 U.S. citizen Foreign Service Officers, known as U.S. appropriations for infrastructure direct-hire staff, in Haiti left. USAID, lacking a process for expediting the construction activities. In May 2011, in movement of staff to post-disaster situations, had difficulty replacing them and response to a congressional mandate, recruiting additional staff. These staff included key technical personnel such as GAO reported on overall U.S. plans for engineers and contracting officers needed to plan and implement infrastructure assistance to Haiti. This report activities in sectors such as energy and ports, where the mission had not addresses infrastructure construction activities, including (1) USAID and previously worked. With limited U.S. direct-hire staff on board, the mission relied State obligations and expenditures; (2) heavily on temporary staff, and remaining staff assumed duties outside their USAID staffing; (3) USAID planning; normal areas of expertise. The mission plans to have all U.S. direct-hire staff on and (4) potential sustainability board by February 2012. Since infrastructure activities will continue until at least challenges USAID faces. GAO 2015, the mission will need to maintain sufficient staff for several years to reviewed documents and interviewed manage the activities supported by the increase in Haiti reconstruction funds. U.S. officials in Washington, D.C., and USAID and State are planning activities in Haiti, but various challenges have Haiti, and visited ongoing and planned contributed to some of USAID’s delays. As of October 2011, USAID had drafted construction sites in Haiti. eight Activity Approval Documents (AADs) that include planned activities, costs, What GAO Recommends risks, and assumptions. AADs for the education, energy, food security, governance and rule of law, health, and shelter sectors have been approved. The To facilitate USAID’s progress in AAD process has been more comprehensive and involved than is typical for such planning and implementing its many efforts, according to USAID officials. Although USAID made progress in planning, post-earthquake infrastructure construction of some activities was delayed for various reasons, and some construction activities in Haiti over the activities do not yet have planned start dates. For example, the mission was next several years, particularly those requiring key technical staff, GAO delayed in awarding contracts in the shelter sector due to issues such as recommends that the USAID identifying sites for shelter and obtaining land title. Administrator ensure that U.S. direct- The sustainability of USAID-funded infrastructure depends, in part, on hire staff are placed at the mission improvements to the Haitian government’s long-standing economic and within time frames that avoid future institutional weaknesses. USAID has considered various sustainability issues staffing gaps or delays. USAID and is planning institutional strengthening activities, such as management reform described certain actions it is currently of the power utility, but USAID planning documents acknowledge that these taking that, if continued, could address reforms will be challenging and that infrastructure activities face risks. These the recommendation. challenges are consistent with prior GAO reports that address sustainability of View GAO-12-68. For more information, U.S. infrastructure projects in other countries. contact David Gootnick at (202) 512-3149 or gootnickd@gao.gov. United States Government Accountability Office Contents Letter 1 Background 3 USAID and State Have Obligated and Expended Small Amounts of the Almost $412 Million Allocated for Construction Activities 9 USAID Staffing Difficulties Were a Factor in Delaying USAID Infrastructure Construction Activities in Haiti 13 USAID Planning Is Still Under Way; Various Factors Contributed to Delays in Infrastructure Construction 18 Haitian Government Capacity Is a Key Challenge to Sustainability of U.S. Government Infrastructure Reconstruction Activities 23 Conclusion 27 Recommendation for Executive Action 28 Agency Comments and Our Evaluation 28 Appendix I Scope and Methodology 31 Appendix II Sector Fact Sheets 35 Appendix III Comments from the U.S. Agency for International Development 48 Appendix IV GAO Contact and Staff Acknowledgments 52 Tables Table 1: Supplemental Funding for Post-Earthquake Reconstruction in Haiti 4 Table 2: USAID and State Total Funds Allocated, Obligated, and Expended for Bilateral Post-Earthquake Infrastructure Construction Activities in Haiti, as of September 30, 2011 9 Table 3: USAID and State Sector-Specific Funding Allocations for Post-Earthquake Construction Activities in Haiti, as of September 30, 2011 10 Table 4: USAID and State Total Obligations and Expenditures for Post-Earthquake Construction Activities, as of September 30, 2011 12 Page i GAO-12-68 Haiti Reconstruction  Table 5: Status of USAID Activity Approval Documents (AADs), as of October 2011 19 Figures Figure 1: Timeline of Actions Taken by the Government of Haiti, International Donors, and the U.S. Government since the January 12, 2010, Earthquake 5 Figure 2: Development Corridors and Selected Sites Targeted by the U.S. Post-Earthquake Assistance 7 Page ii GAO-12-68 Haiti Reconstruction Abbreviations AAD Activity Approval Document Act Supplemental Appropriations Act, 2010 Action Plan Action Plan for National Recovery and Development in Haiti ADS Automated Directives System CRC Civilian Response Corps EDH Electricité d’Haiti ESF Economic Support Fund FY fiscal year Haiti Strategy Post-Earthquake USG Haiti Strategy: Toward Renewal and Economic Opportunity HTT Haiti Task Team HUEH State University Hospital IHRC Interim Haiti Recovery Commission INCLE International Narcotics Control and Law Enforcement MCC Millennium Challenge Corporation Mission USAID Mission in Haiti NSDD-38 National Security Decision Directive 38 PSC personal services contractor State Department of State State/INL State’s Bureau of International Narcotics and Law Enforcement Treasury Department of the Treasury UN United Nations USAID U.S. Agency for International Development WINNER Watershed Initiative for Natural Environmental Resources This is a work of the U.S. government and is not subject to copyright protection in the United States. The published product may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately. Page iii GAO-12-68 Haiti Reconstruction United States Government Accountability Office Washington, DC 20548 November 16, 2011 Congressional Committees The January 12, 2010, earthquake centered near Port-au-Prince, Haiti, caused physical, social, and economic devastation to the poorest country in the Western hemisphere. The earthquake is estimated to have caused approximately 230,000 deaths, 300,000 injuries, and displaced approximately 2 million people from their homes. According to the United Nations (UN), the earthquake killed more than 16,000 of Haiti’s civil service employees and destroyed almost all ministry buildings. The World Bank reported that the earthquake caused $7.8 billion in damage (exceeding Haiti’s 2009 gross domestic product). The UN Office of the Special Envoy for Haiti reported that the country received unprecedented pledges of support from around the globe, with bilateral and multilateral donors, including the United States, pledging more than $5.6 billion to help Haiti recover from the earthquake through 2011. Individuals and private companies gave an additional $3.1 billion in private donations. In July 2010, Congress passed the Supplemental Appropriations Act of 2010 (the Act), which provided more than $1.14 billion in reconstruction funds for Haiti. 1 In January 2011, the U.S. government issued the 5-year Post-Earthquake USG Haiti Strategy: Toward Renewal and Economic Opportunity, which targets the Port-au-Prince, Saint-Marc, and Cap- Haïtien areas. The U.S. Agency for International Development (USAID) is allocating supplemental and other funds to support the construction and rehabilitation of infrastructure in the energy, food security, health, ports, and shelter sectors, while the Department of State (State) is allocating supplemental and other funds to support the construction and rehabilitation of infrastructure in the governance and rule of law sector. As currently planned, nearly half of USAID’s and State’s funding for post- 1 Supplemental Appropriations Act, 2010, Pub. L. No. 111-212, title I, ch. 10, 124 Stat. 2302, 2320 (July 29, 2010). Page 1 GAO-12-68 Haiti Reconstruction earthquake reconstruction assistance is for infrastructure construction activities. 2 In the Act, Congress made funds available for GAO to monitor U.S. post- earthquake assistance to Haiti. 3 In response, in May 2011, we issued a report that described the planned uses for U.S. reconstruction assistance, USAID’s internal controls for overseeing U.S. reconstruction funds, and Interim Haiti Recovery Commission governance and oversight structures. 4 This report addresses, for infrastructure construction activities only, (1) the amounts of USAID and State obligations and expenditures; (2) USAID’s staffing; (3) USAID’s planning; and (4) potential sustainability challenges USAID faces. To address these objectives, we reviewed reports, documents, and data and interviewed officials from USAID and State in Washington, D.C., and Haiti. In Haiti, we also met with representatives from organizations involved in the reconstruction efforts. In Port-au-Prince, we visited sites damaged by the earthquake where USAID and State have ongoing or planned reconstruction activities. In the Cap-Haϊtien area, we visited sites USAID is considering for reconstruction assistance. We conducted this performance audit from November 2010 through November 2011 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our work objectives. (App. I contains a more detailed description of our scope and methodology. App. II contains 2 As agreed with USAID and State, for this report we used USAID’s definition of infrastructure as the stock of fixed capital equipment in a country, including factories, roads, schools, etc. Construction includes reconstruction, renovation, and remodeling along with new construction. We did not include disaster response programs of a short- term nature and programs by the Offices of Food for Peace and Transition Initiatives, which may include longer-term infrastructure-related components. 3 The law directed that funds previously available to GAO pursuant to Title I, Chapter 4 of Pub.L. No. 106-31 (to monitor provision of assistance to address the effects of hurricanes in Central America and the Caribbean) also be available to GAO to monitor post-earthquake expenses related to Haiti, including relief, rehabilitation, and reconstruction aid. 4 GAO, Haiti Reconstruction: U.S. Efforts have Begun, Expanded Oversight Still to Be Implemented, GAO-11-415 (Washington, D.C.: May 19, 2011). Page 2 GAO-12-68 Haiti Reconstruction  a more detailed description of each of the six sectors with infrastructure construction we reviewed.) Background Haiti is the poorest country in the Western Hemisphere, with more than 75 percent of the population living on less than $2 per day and the unemployment rate estimated at 60 to 70 percent. These conditions were exacerbated when the largest earthquake in Haiti’s recorded history devastated parts of the country, including the capital, on January 12, 2010. Since then, Haiti has suffered from a cholera epidemic that has affected over 450,000 persons and caused over 6,000 deaths. In addition, Haiti has experienced political uncertainty following the earthquake. Due to the inconclusive presidential election of November 2010, the new President was not inaugurated until May 2011. On May 13, 2011, the U.S. and Haitian governments signed the Haiti Reconstruction Grant Agreement. Later, the Haitian Parliament rejected two candidates nominated by the new President for the post of Prime Minister, who serves as head of government. In early October 2011, the Parliament approved the President’s third nominee. In response to the earthquake, in the Act, Congress provided more than $1.14 billion in reconstruction funds for Haiti, available through the end of fiscal year 2012. Of this amount, about $918 million was directed to USAID and State, 5 of which $770 million was provided through the USAID-administered Economic Support Fund (ESF) account and about $148 million through the State-administered International Narcotics Control and Law Enforcement account (see table 1). 5 Of the $918 million, USAID and State are directly administering $796 million in bilateral reconstruction assistance funding from the Act, excluding $120 million in ESF funding provided to the multilateral Haiti Reconstruction Fund and $2 million provided to the Smithsonian Institution for a bilateral cultural preservation project. Page 3 GAO-12-68 Haiti Reconstruction Table 1: Supplemental Funding for Post-Earthquake Reconstruction in Haiti Dollars in millions Recipient Reconstruction amounta USAID and State $917.7 USAID 770.0 State 147.7 Treasuryb 219.8 USAID Inspector General 4.5 Total $1,142.0 Sources: Congressional Research Service, GAO analyses of U.S.-government fiscal year 2010 supplemental budget request, and final appropriation in the Supplemental Appropriations Act, 2010 (Pub. L. No. 111-212). Note: Funding amounts do not add to total due to rounding. a In addition to reconstruction funding, the Act provided about $1.64 billion for post-earthquake relief activities, which were primarily implemented by the Department of Defense and USAID’s Offices of Foreign Disaster Assistance, Transition Initiatives, and Food for Peace, as well as $144 million for diplomatic-related expenses. b Funding for the Department of the Treasury includes $212 million for Haitian debt relief and $7.8 million for a Treasury attaché office in the U.S. Embassy in Port-au-Prince and technical assistance. Of the almost $918 million in supplemental funds, as of September 30, 2011, $356.9 million was allocated for the construction and rehabilitation of infrastructure. In addition to these supplemental funds, USAID and State allocated funding for reconstruction activities from other budgetary sources, such as annual appropriations for fiscal years 2010 and 2011, of which $54.8 million was allocated for construction and rehabilitation of infrastructure. In total, the agencies allocated almost $412 million from both supplemental and other budgetary sources for construction and rehabilitation of infrastructure. 6 In September 2010, State and USAID, as required by the Act, issued a joint spending plan that showed allocations of supplemental reconstruction funds (see fig. 1 for a timeline of key government of Haiti and international donors and U.S. government actions and events after the earthquake). 6 For more detailed information on the funding provided to assist Haiti in the Fiscal Year 2010 Supplemental Appropriations Act, as well as expanded oversight actions for the increased level of funding, see GAO-11-415. Page 4 GAO-12-68 Haiti Reconstruction Figure 1: Timeline of Actions Taken by the Government of Haiti, International Donors, and the U.S. Government since the January 12, 2010, Earthquake Note: See GAO, Haiti Reconstruction: U.S. Efforts Have Begun, Expanded Oversight Still to Be Implemented, GAO-11-415 (Washington, D.C.: May 19, 2011), for a description of the Interim Haiti Recovery Commission and the Haiti Reconstruction Fund. Page 5 GAO-12-68 Haiti Reconstruction In January 2011, the U.S. government issued the 5-year Post-Earthquake USG Haiti Strategy: Toward Renewal and Economic Opportunity. Consistent with the government of Haiti’s development priorities, the U.S. strategy seeks to, among other things, encourage reconstruction and long-term economic development in several regions of the country— known as “development corridors”—including a region on the northern coast of Haiti that is not close to the earthquake epicenter, but where some people displaced by the earthquake moved. The strategy notes that 65 percent of Haiti’s economic activity was located in greater Port-au- Prince 7 and states the U.S. government’s intent to support new economic opportunities in the Saint-Marc and Cap-Haïtien development corridors, in addition to assisting with reconstruction in the Port-au-Prince corridor, which suffered the most damage from the earthquake (see fig. 2). 7 The strategy further notes that, before the earthquake, migration toward Port-au-Prince had concentrated Haiti’s social and economic problems; over the last 10 years, poverty declined by more than 8 percent across Haiti while increasing by 13 percent in Port-au- Prince. Page 6 GAO-12-68 Haiti Reconstruction Figure 2: Development Corridors and Selected Sites Targeted by the U.S. Post-Earthquake Assistance Page 7 GAO-12-68 Haiti Reconstruction The U.S. strategy identifies planned U.S. reconstruction assistance in eight sectors. 8 Six of these sectors—energy, ports, shelter, health, food security, and governance and rule of law—involve infrastructure construction and rehabilitation, while two sectors—economic security and education—do not. The strategy also encompasses some of the objectives set forth in the Haitian government’s 10-year Action Plan for National Recovery and Development in Haiti, issued in March 2010. The Action Plan identified and prioritized short- and long-term reconstruction needs in four areas: (1) territorial rebuilding in Port-au-Prince and three targeted regions of Cap-Haïtien, Saint-Marc, and Les Cayes; (2) economic rebuilding in sectors such as construction, agriculture, and tourism; (3) social rebuilding in the health, education, food security, and other sectors; and (4) institutional rebuilding focused on developing government capacity, justice, and a legal and regulatory framework. To advise and support U.S. earthquake reconstruction efforts in Haiti, USAID and State created special offices in Washington, D.C. • In February 2010, USAID created the Haiti Task Team (HTT) to help coordinate U.S. emergency relief and reconstruction work and provide technical and staff support. At its peak, the HTT had approximately 50 staff positions, primarily U.S. full- or part-time staff who were temporarily reassigned from USAID’s Bureau for Latin America and the Caribbean and other bureaus, as well as contracted staff. • In September 2010, State created the Office of the Haiti Special Coordinator to oversee the planning and implementation of the U.S. strategy in Haiti in coordination with USAID and other U.S. departments and agencies. The Haiti Special Coordinator has approximately 20 staff positions, primarily staff temporarily reassigned full- or part-time from other bureaus and offices within State, and other U.S. agencies as well as contracted staff. 8 The strategy refers to these eight sectors as “priorities,” but we are using the more common term “sector.” Page 8 GAO-12-68 Haiti Reconstruction USAID and State Have As of September 30, 2011, USAID and State allocated $411.6 million for bilateral post-earthquake infrastructure construction activities in Haiti Obligated and using $356.9 million in fiscal year (FY) 2010 supplemental funds and Expended Small $54.8 million from regular fiscal year appropriations. 9 In addition, USAID and State had obligated $48.4 million 10 (11.8 percent) and expended $3.1 Amounts of the million (0.8 percent) of the total allocated, as shown in table 2. 11 Almost $412 Million Allocated for Table 2: USAID and State Total Funds Allocated, Obligated, and Expended for Bilateral Post-Earthquake Infrastructure Construction Activities in Haiti, as of Construction September 30, 2011 Activities Dollars in millions USAID State Total Total funds allocated $365.7 $45.9 $411.6 FY 2010 supplemental 311.2 45.7 356.9 Other sources 54.6 0.2 54.8 Total funds obligated 42.6 5.8 48.4 FY 2010 supplemental 41.8 5.6 47.4 Other sources 0.8 0.2 1.0 Total funds expended 1.4 1.7 3.1 FY 2010 supplemental 0.6 1.7 2.4 Other sources 0.8 0.0 0.8 Source: GAO analysis of USAID and State data. Notes: Other sources are regular fiscal year 2010 and 2011 appropriations. For food security infrastructure construction activities, USAID plans to provide $55.5 million during fiscal years 2011 through 2014; however, we did not include this amount because USAID did not provide the funding data by fiscal year. Total amounts may not add due to rounding. 9 USAID defines an allocation as the identification and setting aside of resources for a specific program action. 10 An obligation is a definite commitment that creates a legal liability of the U.S. government for the payment of goods and services ordered or received (see GAO, A Glossary of Terms Used in the Federal Budget Process, GAO-05-734SP (Washington, D.C.: September 2005)). This report defines obligations as the total amount of orders placed, contracts awarded, services received, and similar transactions during a given period that will require payments during the same or future period. USAID labels these actions subobligations. Consistent with 31 U.S.C. § 1501, which defines when an agency can record an obligation, USAID generally treats as an obligation the bilateral agreements it makes with other countries to deliver assistance. 11 In addition to the funding and activities described in this report, the USAID mission in Haiti (mission) has 11 activities that began before the earthquake—at an estimated cost, for infrastructure and construction components, of about $172 million—that include planning, design, and construction of infrastructure activities. Page 9 GAO-12-68 Haiti Reconstruction USAID and State Allocated Combined, USAID and State allocated $411.6 million for post-earthquake Almost $412 Million in infrastructure construction activities as of September 30, 2011 (see table Supplemental and Other 2). USAID is responsible for implementing most of the infrastructure construction activities. USAID activities in five sectors—shelter, energy, Funding for Post- ports, health, and food security—account for $365.7 million (88.9 percent) Earthquake Infrastructure of the $411.6 million in total funds allocated for infrastructure construction. Construction Activities in State has activities in the governance and rule of law sector, which Haiti account for $45.9 million (11.1 percent) of the total funds allocated for infrastructure construction. See appendix II for additional detailed information on each of the six sectors. Table 3 shows USAID and State funding allocations by sector. Table 3: USAID and State Sector-Specific Funding Allocations for Post-Earthquake Construction Activities in Haiti, as of September 30, 2011 Dollars in millions FY2010 supplemental Total (percentage of supplemental Sector funds Other funding sources and other funds) Energy (USAID) $85.3 $13.0 $98.3 (23.9) Ports (USAID) 77.7 0.0 77.7 (18.9) Shelter (USAID) 55.1 1.6 56.7 (13.8) Health (USAID) 50.5 40.0 90.5 (22.0) Food Security (USAID) 42.6 0a 42.6 (10.3) Governance and Rule of Law (State) 45.7 0.2 45.9 (11.1) Total $356.9 $54.8 $411.6 Source: GAO analysis of USAID and State data. Note: Other sources are regular fiscal year 2010 and 2011 appropriations. a For food security infrastructure construction activities, USAID plans to provide $55.5 million during fiscal years 2011 through 2014; however, we did not include this amount because USAID did not provide the funding data by fiscal year. Examples of post-earthquake infrastructure activities are as follows: • The energy sector includes rehabilitating substations in the Port-au- Prince area and in the Cap-Haïtien development corridor, providing power to the North Industrial Park—an activity that is key to Haiti’s economic development with donor and private-sector commitments of about $400 million and a goal of creating about 60,000 direct and indirect jobs, according to USAID and State officials. • The ports sector includes the construction of a new port along the northern coast of Haiti in the Cap-Haïtien development corridor. Upon Page 10 GAO-12-68 Haiti Reconstruction  completion, the port could provide improved shipping access for firms operating in the North Industrial Park and other locations in the area. • The shelter sector includes the development of approximately 15,000 service plots, which include housing and access to essential services, in new residential settlements in the Port-au-Prince and Cap-Haïtien development corridors. • The health sector includes the reconstruction of the State University Hospital in the Port-au-Prince development corridor. • The food security sector includes the construction of irrigation canals and farm-to-market roads in the Cap-Haïtien, Port-au-Prince, and Saint-Marc development corridors. • The governance and rule of law sector includes construction activities funded through State’s Bureau of International Narcotics and Law Enforcement (State/INL); the activities include the rehabilitation of facilities at the Haitian National Police Academy. USAID and State Have As of September 30, 2011, USAID had obligated $42.6 million for Obligated Almost 12 activities in the energy, ports, shelter, health, and food security sectors. Percent and Expended 0.8 The majority (67 percent) of USAID’s obligations have been for two energy activities—$15.8 million for construction of power generation at Percent of Funds Allocated the North Industrial Park and $12.9 for rehabilitation of 5 power sub- for Infrastructure stations in the Port-au-Prince area. State had obligated $5.8 million, as of Construction September 30, 2011, for its activities in the governance and rule of law sector. State officials said that designing and planning of construction activities generally involves a more lengthy process than for other activities, and they expect obligations to grow at a faster pace later this year and during 2012 as USAID and State infrastructure construction activities reach the implementation stage. See table 4 for obligation and expenditure data. Page 11 GAO-12-68 Haiti Reconstruction Table 4: USAID and State Total Obligations and Expenditures for Post-Earthquake Construction Activities, as of September 30, 2011 Dollars in millions Obligations Expenditures USAID Activities Total $42.6 $1.4 Energy sector: Rehabilitation of 5 Port-au-Prince electrical substations • architectural and engineering design services 0.2 0.2 • construction 12.7 0 Energy sector: North Industrial Park short-term power generation • architectural and engineering design services 0.8 0.3 • construction 15.0 0 Ports sector: Feasibility study for the design of a new port 2.8 0 in northern Haiti Shelter sector: Residential shelter site preparation, 9.8 0.7 environmental assessment, and design (Caracol Ekam) Shelter sector: Residential shelter environmental 0.3 0.3 assessments and design Health sector: Environmental assessment of the State 0.4 0 University Hospital (Port-au-Prince) Food security sector: Watershed Initiative for Natural 0.5 0 a Environmental Resources (WINNER) State Activities Total 5.8 1.7b Governance and rule of law sector: Haitian National Police 5.0 1.1 Academy repairs Governance and rule of law sector: Prison repairs—site 0.2 0.2 surveys of Petionville and Carrefour facilities Governance and rule of law sector: Construction 0.3 0.3 supervision—oversight of construction activities Governance and rule of law sector: National Penitentiary 0.2 0.2 repairs Governance and rule of law sector: Police station repairs 0.2 0 Source: GAO analysis of USAID and State data. Note: Amounts may not add due to rounding. a Estimated award, total obligation, and expenditure amounts are for infrastructure, planning and design, and construction components of WINNER. The total award amount for WINNER is $127 million; total obligations and expenditures as of June 30, 2011, are $59 million and $49 million, respectively. WINNER’s infrastructure-related activities include erosion prevention, irrigation restoration, and rebuilding and repair of transportation infrastructure. b State refers to expenditures as liquidations. Page 12 GAO-12-68 Haiti Reconstruction USAID Staffing Difficulties Were a Factor in Delaying USAID Infrastructure Construction Activities in Haiti USAID Has Had Difficulty Within a month after the earthquake, 10 of the mission’s 17 U.S. direct- Replacing Staff Since the hire staff 12 had departed Haiti, leaving the mission with 7 staff in country Earthquake to manage a program heavily involved in massive relief operations and anticipating an increase in reconstruction activities. According to mission officials, U.S. direct-hire staff were permitted to leave for several reasons, primarily because approximately 40 percent of U.S. embassy housing was damaged or destroyed, the school for mission staff children was damaged and not functional, and staff were experiencing emotional challenges after the earthquake. To fill the U.S. direct-hire vacancies, USAID posted 10 routine agency wide job announcements in March 2010, but no U.S. direct-hire staff applied. According to USAID officials, potential applicants did not apply due to, among other things, the damaged school, uncertainty about the quality of life in Haiti, and the lack of financial or other incentives in the job announcements. In May 2010, USAID again posted the 10 job announcements and, this time, attracted a number of applicants because the postings included financial incentives and waived the requirement that successful applicants bid on positions in four USAID-designated critical priority countries—Afghanistan, Iraq, Pakistan, and Sudan—upon completion of their tours in Haiti. 13 Having received a sufficient number of 12 For U.S. direct-hire staff, we used the workforce definition developed by USAID’s 1990 Workforce Planning Working Group: U.S. citizen direct-hire foreign service staff, most of whom serve at overseas missions. U.S. direct-hire staff do not include U.S. personal services contractors (PSC) and other staff such as Haitian and third-country nationals. At the time of the earthquake, 17 of the mission’s 20 authorized U.S. direct-hire positions were filled. 13 USAID considers these countries, as designated by the USAID Administrator, to be its most challenging assignments. Page 13 GAO-12-68 Haiti Reconstruction  applicants for the May 2010 posting, the mission soon selected the staff. However, U.S. direct-hire staff did not begin to arrive in Haiti until early 2011 because, among other things, households and families had to be moved and some staff required up to 6 months in language training. In addition to filling existing positions, USAID received approval from the U.S. Ambassador to Haiti in February 2011 for 15 additional U.S. direct- hire staff to manage the surge in earthquake-related funding. 14 These positions were announced and some candidates selected when the approval was granted in February 2011. Eleven had arrived as of September 2011 and, according to mission officials, all are expected to arrive in Haiti by February 2012. However, the mission will be implementing infrastructure construction activities until at least 2015, according to USAID planning documentation. During the next 4 years, U.S. direct-hire staff will have opportunities to bid for other positions at other posts. As U.S. direct-hire staff leave Haiti, the mission will need to replace them in order to continue the progress of infrastructure construction activities. Lack of Staff Created Since the earthquake, the mission has been operating with a reduced Planning Delays number of U.S. direct-hire staff. During that time, the mission experienced delays in planning and implementing some construction activities. According to USAID officials, U.S. direct-hire staff are essential in planning and establishing continuity for long-term reconstruction activities, including infrastructure activities such as the design of power generation facilities, which require specific skills. Delays in staffing key positions, such as engineers, contracting officers, and sector specialists, created particular difficulties. For example: Engineering: Although USAID allocated more than $300 million in supplemental funds for infrastructure activities that would require engineering skills, the mission’s planning process was delayed due, in part, to the lack of U.S. direct-hire engineers, according to USAID officials. USAID was unable to reassign U.S. direct-hire engineers from other missions around the world because USAID has few engineers worldwide, according to mission officials. At the time of the earthquake, the mission had two Haitian engineers on its staff, but these individuals 14 Per National Security Decision Directive 38 (NSDD-38), the Chief of Mission (the U.S. Ambassador to Haiti) must approve any U.S. department or agency request to increase the number of staff posted in country. Page 14 GAO-12-68 Haiti Reconstruction had experience in constructing and repairing roads and bridges and rehabilitating small infrastructure—with no experience in energy and ports construction. In anticipation of its pending involvement in infrastructure activities, the mission created a new Office of Infrastructure, Energy, and Engineering, but staff with specialized engineering skills did not begin to arrive at the mission until early 2011. For example, the mission’s chief engineer, who is responsible for overseeing construction activities in the energy sector, arrived in April 2011, and an engineer overseeing the construction of health facilities arrived in May 2011. Mission officials in the health sector stated that initial delays in staffing an engineer in the Office of Infrastructure, Energy, and Engineering presented a planning challenge because in-country engineering expertise is essential to rehabilitate a major hospital and numerous smaller health clinics. According to mission officials, the lack of staff and expertise made planning difficult for several reasons. For example, some staff who were involved in developing certain cost and planning estimates and assessing potential constraints had limited expertise, thus requiring more review by others. Further, some construction activities experienced delays as a result of staff shortages. For example, on September 22, 2011, about 3 months later than initially planned, the mission awarded a feasibility study related to its plans to invest in port development in the Cap-Haïtien development corridor. According to USAID officials, the delay occurred because mission staff were focused on energy-sector issues related to the North Industrial Park. The feasibility study is needed before the mission can determine its specific plans for port construction and set an award date for the construction contract that is expected to follow. Contracting: The mission also experienced delays in awarding some infrastructure construction contracts as originally scheduled because it had only one U.S. direct-hire contracting officer in country with the authority to approve contracts of more than $3 million, according to USAID officials. 15 The mission plans to award several complex contracts for more than $3 million each from the more than $300 million in 15 USAID requires contracting officers to be U.S. citizen direct-hire employees of the U.S. government (see 48 CFR 701.603-70). The authority of overseas heads of contracting is generally limited to a $100,000 threshold for most contracts (see 48 CFR 701.601). The mission received support from USAID headquarters, which assigned temporary duty staff with contracting experience; however, according to mission officials, temporary staff did not have sufficient approval authority. Page 15 GAO-12-68 Haiti Reconstruction  supplemental funding it has allocated for infrastructure activities. The mission currently has three other contracting officers with lower contracting authority approval limits, and as of September 2011, the mission had requested additional contracting officers it anticipates will be needed to keep pace with the planned time frames for the mission’s planned infrastructure activities. Programming: The mission also experienced delays because, for more than 1 year following the earthquake, it did not have several sector directors, including a program office chief and office chiefs for economic growth and democracy and governance offices, among other programming positions. According to mission officials, key decisions during the design and planning of construction activities were delayed, in part, because the mission had not been involved in such activities before the earthquake and there was limited expertise among existing staff. In addition, mission staff have experienced increased workloads and some mission staff have had to take on additional responsibilities outside their normal areas of expertise. For example, the deputy mission director assumed the additional role of leading energy sector planning for about 15 months until the April 2011 arrival of the chief engineer. In addition to other staffing issues, three of USAID’s Haitian employees died in the earthquake. Further, mission officials stated that numerous surviving Haitian employees have been unable to contribute quickly to post- earthquake planning efforts because some had family members who died or were injured in the earthquake and many had residences that were damaged or destroyed. USAID Haiti Relied Largely Based on our review of USAID policies and guidance, including its on Temporary Staff Automated Directives System, and statements of mission officials, USAID Following the Earthquake does not have an expedited process for placing U.S. direct-hire staff to work on reconstruction efforts in an urgent post-disaster or post-crisis situation such as Haiti. 16 Absent such a process, USAID Haiti used USAID’s routine but lengthy staffing process, which involves, among 16 In 2002, we recommended that the USAID Administrator develop and implement procedures to allow USAID to reassign quickly key personnel, particularly contracting officers, in post-emergency and post-crisis situations. See GAO, Foreign Assistance: Disaster Recovery Program Addressed Intended Purposes, but USAID Needs Greater Flexibility to Improve Response Capability, GAO-02-787 (Washington, D.C.: July 24, 2002). Page 16 GAO-12-68 Haiti Reconstruction other things, posting job opportunities agency-wide, receiving applications, selecting staff, and waiting until they are released from their current assignments. To meet the increased need for mission staff to manage the program, the agency temporarily hired or reassigned staff, including staff from its Haiti Task Team in Washington, D.C., to complete more than 400 temporary duty assignments for periods ranging from one week to several months. 17 For example, USAID used personal services contracts to hire staff to provide financial management expertise; assigned headquarters-based staff from its Latin America and Caribbean Bureau to manage and oversee rubble removal and other efforts; and provided fiscal year 2010 supplemental funding to an implementing organization to manage people who repaired roads, cleaned drainage canals, and performed other rehabilitation activities. According to mission officials, planning and implementation of reconstruction activities were delayed because the few staff remaining in Haiti were heavily involved in recruiting, placing, and training temporary staff in Haiti. Senior mission staff stated that, for many temporary staff positions, the mission had to develop detailed scopes of work for the positions and then brief and train newly arrived staff on substantive issues. In addition, mission staff noted that the continuity of efforts was sometimes problematic as multiple staff, who turned over frequently, managed the efforts. 17 These temporary staff included personnel from the Civilian Response Corps (CRC), a multi-agency group of civilian federal employees who are specially trained and equipped to deploy rapidly to countries in crisis or emerging from conflict. CRC provides the U.S. government with a first responder effort and supports the implementation of longer-term reconstruction activities. Also, according to USAID, some of the temporary staff assisted with immediate earthquake relief and the subsequent cholera outbreak. Page 17 GAO-12-68 Haiti Reconstruction USAID Planning Is Still Under Way; Various Factors Contributed to Delays in Infrastructure Construction USAID Has Finalized Six USAID planning for its earthquake reconstruction activities in Haiti is still of Eight Sector-Specific under way. 18 The USAID mission in Haiti, in coordination with other U.S. Planning Documents government agencies and USAID in Washington, D.C., has drafted eight Activity Approval Documents (AADs)—detailed planning documents for each sector. 19 As of October 2011, six AADs had been approved: education, energy, food security, governance and rule of law, health, and shelter (see table 5). These six AADs account for 87 percent of USAID’s available supplemental and program funds, according to USAID. The two remaining AADs require additional work before they can be approved, according to USAID officials. Specifically, the AAD for economic security—which does not include any planned infrastructure construction—requires further interagency discussion with the U.S. Department of the Treasury (Treasury), which is the co-implementer of economic activities in Haiti, and the AAD for ports has not been approved because, among other things, USAID is waiting for the Haitian government to make key decisions regarding port regulations, use of territorial waters and the Haitian customs code. 18 Because USAID’s planned funding level for infrastructure activities is almost 8 times larger than State’s, we focused our review on USAID’s planning efforts. 19 State/INL, which is planning infrastructure construction activities in the governance and rule of law sector, does not develop an AAD-type document during its planning process, according to a State official. The U.S. government strategy and supplemental spending plan describe State/INL’s plans for infrastructure construction activities, such as the construction of a new women’s prison, repairs to two correctional facilities damaged in the earthquake, repairs to facilities at the Haitian National Police Academy damaged by the earthquake, and repairs and construction of police substations and counternarcotics outposts. For more detail, see appendix II. Page 18 GAO-12-68 Haiti Reconstruction Table 5: Status of USAID Activity Approval Documents (AADs), as of October 2011 AADs approved AADs not approved Education Economic Security Energy Ports Food Security Governance and Rule of Law Health Shelter Source: GAO analysis of USAID data. Notes: USAID does not plan any infrastructure construction activities in the governance and rule of law AAD, however, the AAD includes State/INL infrastructure construction activities. USAID does not plan any infrastructure construction activities in the economic security and education AADs. According to USAID officials, the AADs for Haiti are more comprehensive and have involved a more extensive review process than is typical. For example, USAID officials stated that the AADs for USAID activities in Haiti have included more analytical metrics, such as the results USAID plans to achieve in return for its investment. These AADs incorporate a discussion of how each sector will meet USAID’s agency wide procurement reform known as USAID Forward, which has, among other objectives, the goal of broadening the base of USAID’s implementing partners. 20 According to USAID officials, incorporating USAID Forward has changed the procurement plan structure in the AADs, requiring more scrutiny by agency officials. For example, USAID indicated for activities described in the AAD procurement plans whether those activities will be targeted at local firms or organizations or use traditional partners. In addition, several factors led to a more extensive review process for the AADs for activities in Haiti. According to USAID officials, AADs are usually drafted at the mission and approved by the mission director. However, due to U.S. foreign policy interests in Haiti, in addition to the review and approval of the Haiti mission director, these AADs have undergone high-level review by USAID and State’s Office of the Haiti Special Coordinator. Because the U.S strategy is a whole-of-government strategy, a number of other U.S. agencies were involved in reviewing and 20 USAID Forward is the USAID Administrator’s reform agenda for the agency. It outlines seven areas for reform: implementation and procurement reform, talent management, rebuilding policy capacity, strengthening monitoring and evaluation, rebuilding budget management, science and technology, and innovation. Page 19 GAO-12-68 Haiti Reconstruction  approving the AADs. These agencies included the U.S. Department of Agriculture for food security, Treasury for economic security, and the Centers for Disease Control and Prevention for health. According to USAID and State officials, the inclusion of other agencies in the process added levels of review that have extended AAD development and approval. Prior to AADs being approved in Washington, D.C., the Haiti mission continued with other planning efforts. The mission’s Office of Acquisition and Assistance developed a procurement plan to manage contract actions—such as the award of contracts for planning, design, and construction services—that enable implementation of the activities. In the shelter sector, for example, the mission has awarded contracts for the design of the proposed residential sites; the design includes site layout plans, environmental impact assessments, and housing-unit design specifications. In instances where an AAD had not been approved but where the mission deemed that sufficient planning had been completed, the mission used activity-specific approval memoranda to initiate procurement actions, and, in some instances where design work was completed, award construction contracts. For example, a contract for the construction of a 10-megawatt power plant for the North Industrial Park in the Cap-Haïtien development corridor with a value of approximately $15 million was awarded while the energy AAD was in draft. A Few Infrastructure As of September 15, 2011, the mission had awarded its first two Construction Activities Are infrastructure construction contracts—rehabilitation of five electrical Under Way; Various substations in Port-au-Prince and construction of a power plant in the North Industrial Park—at a combined cost of $28.8 million; approximately Factors Contributed to 7 percent of USAID’s total allocation for infrastructure construction Delays activities. 21 These awards were slightly delayed, as described below: • Rehabilitation of five electrical substations in Port-au-Prince: On July 28, 2011, about 1 month later than planned, USAID Haiti awarded a $12.7 million construction contract for work to improve electrical service in Port-au-Prince. USAID extended the time for contractors to submit construction proposals because USAID issued new information in response to contractors’ questions, such as those 21 The $28.8 million includes $1 million for two engineering design contracts, one contract each for the two activities. Page 20 GAO-12-68 Haiti Reconstruction  concerning the length of the contract performance period—considered by contractors to be too short—and requests for clarification of technical documents referenced in the original proposal solicitation. 22 • Construction of a power plant in the North Industrial Park: On September 15, 2011, about 6 weeks later than planned, the mission awarded a $15 million contract for construction of a power-generating facility to meet the start-up electrical needs of the North Industrial Park. Some of the delay was to allow contractors time to respond to USAID’s clarifications and new contract requirements that were the result of contractor questions, changes to documents in the original solicitation, and the addition of environmental mitigation requirements. Some of the delay was also due to time spent by USAID mission staff focusing on a bid protest of the Port-au-Prince substation rehabilitation contract. Some key USAID activities experienced delays in their original schedule due to technical issues, and other activities do not yet have a planned award date. These delays are in part related to issues such as the length of time it takes contractors to submit construction proposals, difficulties obtaining building sites, and incomplete environmental assessment documents. In addition, some activities do not yet have dates set for award of construction contracts because the scope and location of the infrastructure have yet to be determined. • North Industrial Park long-term power generation: The mission delayed its planned award of a construction contract to increase the power plant’s generation capacity from November 2011 to April 2013. According to a mission official, the dates were revised because the 22 According to mission officials, after the construction contract was awarded on July 28, 2011, one of the unsuccessful bidders filed a bid protest with GAO. As a result, the mission’s chief contracting officer suspended work for 3 months while the protest is under consideration, per USAID standard operating procedure; as of November 15, a decision on the protest had not been announced. Bid protests may be filed with GAO against procurement actions by federal government agencies. A bid protest is a challenge to the award or proposed award of a contract for procurement of goods and services or a challenge to the terms of a solicitation for such a contract. Protests can also be filed with the agency responsible for the procurement and the U.S. Court of Federal Claims (31 U.S.C. § 3551 et. seq.). Page 21 GAO-12-68 Haiti Reconstruction  number of future tenants in the industrial park and their electrical power requirements are not yet known. 23 • South Industrial Park power generation: As of October 2011, a site for the South Industrial Park had not been established. Therefore, the mission has not yet determined the contract award date for this activity, which will provide power to a new South Industrial Park. • State University Hospital in Port-au-Prince (HUEH): The mission delayed by about 5 months its plans to enter into an agreement 24 with the governments of France and Haiti to reconstruct, repair, and modernize earthquake-damaged buildings on Haiti’s State University Hospital campus. 25 The delay is due, in part, to a USAID-funded environmental assessment of the HUEH which is taking longer than planned. 26 Mission officials expect that the assessment will be completed near the middle of November 2011, and estimate that the mission will be able to execute the HUEH agreement by December 2011. • Shelter demonstration project: The mission planned to break ground on a “demonstration” settlement of 200 houses and other residential infrastructure on January 12, 2011. According to USAID officials, the mission has faced challenges in obtaining land titles for property on which to build because the government of Haiti lacks a comprehensive, functional system for recording land ownership— resulting in only 40 percent of landowners possessing documentation of title to their land and land records which may be inaccurate—as 23 According to this official, the mission is conducting two studies on the expansion, one to determine least-cost options and one to evaluate renewable energy alternatives, which will be completed in December 2011 and October 2012, respectively. 24 According to a USAID official, the agreement will be a fixed amount reimbursable agreement. Under terms of the agreement, USAID will pool $25 million of its funds with $25 million provided by the government of France and approximately $3 million from the government of Haiti to fund construction work. 25 The construction contract under which this work will be performed will be administered by the technical unit of the government of Haiti’s Ministry of Finance. 26 USAID guidelines require an environmental assessment for planned activities. According to the mission’s regional legal advisor, the agreement cannot be completed until the environmental assessment is completed and the results of the assessment can be included in the agreement. According to USAID officials, the environmental assessment for these planned activities is complex. Page 22 GAO-12-68 Haiti Reconstruction  well as overarching shelter legislation to guide housing, land-use, and urban planning. • Development and construction of new residential settlements: The mission’s plan to award contracts to prepare 15,000 housing plots and build 4,000 housing units has been delayed about 7 to 10 months. Originally planned for August 2011, the awards of most of these contracts are now expected to occur between March and June of 2012. It has taken longer than planned to identify the sites, negotiate agreements with the Haitian government on the selection of beneficiaries, and negotiate agreements with nongovernmental organizations building some of the housing. Haitian Government The sustainability of USAID-funded infrastructure activities depends, in part, on improvements to Haiti’s long-standing economic and institutional Capacity Is a Key weaknesses, the Haitian government’s political will to implement change, Challenge to as well as the success of planned capacity-building activities. Based on data from the UN Office of the Special Envoy for Haiti, aid from bilateral Sustainability of U.S. and multilateral donors represented approximately 57 percent of the Government government of Haiti’s total revenue in 2009. Following the earthquake, the percentage increased substantially, to an estimated 80 percent of total Infrastructure government revenue in 2010. 27 Additionally, more than 16,000 civil Reconstruction servants died in the earthquake and, including those who left the country, the Haitian government workforce is now reduced by 33 percent, Activities according to the United Nations Development Program. 28 Further, according to the U.S. government strategy and USAID documents and officials, electricity laws, the structure of the health care system, the customs code, and housing and urban development policy, among other areas, all need reform. 27 United Nations Office of the Special Envoy for Haiti, Has Aid Changed? Channeling Assistance to Haiti Before and After the Earthquake (New York, N.Y.: June 2011). 28 United Nations Development Program, Haiti One Year Later (Port-au-Prince, Haiti: December 2010). Page 23 GAO-12-68 Haiti Reconstruction As part of its required planning processes, USAID considered various sustainability issues for its infrastructure activities. 29 Some activities face sustainability challenges. In planning and assessing the sustainability of its activities in Haiti, USAID used a variety of resources. These included relevant provisions in the Foreign Assistance Act, 30 guidance from the agency’s Automated Directives System (ADS), 31 the agency’s project design guidance, and studies and assessments by USAID and other donors such as assessments of Haitian government ministries by the Inter-American Development Bank. In addition, for infrastructure activities, the mission relied on general principles for estimating costs, including projecting operations and maintenance costs and estimating basic returns on investments. For four activities, as of September 2011, USAID has also completed certification required by the Foreign Assistance Act indicating that Haiti is capable of effectively maintaining and utilizing the projects. In addition, each AAD contains a section broadly describing the sustainability issues of the activities planned in each sector. The following are examples of some of the challenges identified by USAID and its plans to address those issues. Energy sector: The power utility, Electricité d’Haiti (EDH), faces considerable technical and managerial challenges that have resulted in 29 USAID defines sustainability in different ways depending on the goals of the sector and project, such as usage for infrastructure projects, financial stability for capacity-building projects, and environmental stability for numerous other projects. USAID also states that the four key principles of sustainable development are (1) improved quality of life for current and future generations; (2) responsible stewardship of the natural resource base; (3) participation in political and economic life; and (4) effective institutions that are transparent, accountable, responsive, and capable of managing change without continued external support. 30 Section 611(e) of the Foreign Assistance Act of 1961 requires that for capital assistance projects of more than $1 million, the agency head receive a certification of the country's capability to maintain and utilize the project, taking into account, among other things, the maintenance and use of projects in the country previously financed or assisted by the United States (22 U.S.C. § 2361(e)). As of September 2011, USAID had signed 611(e) certification memos for four activities: the North Industrial Park power generation facility, new residential settlements in the Cap-Haïtien and Port-au-Prince development corridors, reconstruction of the HUEH, and construction of the Millet Bridge in Port-au-Prince. 31 For example, USAID’s ADS, Planning, 201.3.9.3 and 201.3.11.6 (Washington, D.C.: rev. Apr. 2, 2010). Page 24 GAO-12-68 Haiti Reconstruction financial losses. The utility receives an annual subsidy from the Haitian government of approximately $100 million, which, according to USAID’s energy AAD, represents approximately 12 percent of the government of Haiti’s national budget. To assist the EDH, in April 2011 the mission awarded a 2-year contract to improve EDH management while long-term modernization options are developed and evaluated. In addition, USAID plans for the North Industrial Park power generation facility to be managed independently of EDH through September 2016. This facility is expected to generate enough revenue to cover operations and maintenance costs, including the replacement of major equipment. However, modernization of the energy sector is based, among other things, on the assumption that the Haitian government will decide on an appropriate modernization model and take necessary, but politically challenging steps, to implement that model, according to the energy AAD. Health sector: The Haitian government has made efforts to decentralize the health care system since the 1990s, but only 12 of 63 local health networks are currently operational. 32 To support Haitian government efforts to decentralize the health care system, USAID is planning to provide resources, such as repair or construction of health facilities, to 9 to 12 local health networks in the U.S. development corridors. USAID is also requiring business plans in this sector so that USAID will no longer need to contribute to operations and maintenance of new or renovated health facilities within 3 to 5 years of completion. USAID acknowledges that strengthening the Haitian Ministry of Health and a decentralized health care system—both of which would likely enhance sustainability— are complex undertakings that will require long-term efforts. According to USAID, there are also shortages of community health workers, low retention of doctors and nurses who can earn more money in private practice or working for nongovernmental organizations, and a low skill and knowledge base at all levels. Ports sector: According to USAID’s draft ports AAD, the Haitian government does not have a well-defined legal and regulatory framework for ports, and the three Haitian government entities involved in port operations have unclear roles and responsibilities. 33 Furthermore, the 32 Local health networks consist of five to eight community health clinics and one hospital to which the clinics refer patients that need more specialized care. 33 These Haitian government entities are the National Port Authority, the General Customs Administration, and the Maritime Security Service. Page 25 GAO-12-68 Haiti Reconstruction sector is characterized by excessively high port charges, unreliably slow port clearance processes, inadequate human and institutional capacities, and poor integration between international and regional ports. To assist with port construction in the Cap-Haïtien development corridor, according to USAID’s draft ports AAD, (1) a public-private partnership 34 will be created and (2) USAID will provide technical assistance to Haitian officials to help them lower port charges in the northern port and introduce processes to expedite port clearance and tax collection. However, the ports sector AAD notes that port construction is a “high-risk” program whose success depends on, among other things, the political will of the Haitian government to make improvements in a sector controlled by a few individuals, tens of millions of dollars in additional funding from other donors, and sufficient demand for port use. Shelter sector: Haiti lacks a single agency for housing and urban development policy resulting in a sector characterized by fragmented authorities and unenforced policies, according to the shelter sector AAD. Among other things, Haiti does not have an effective national land register—known as a cadastre—and system to record land ownership; a policy framework that establishes and streamlines building standards and other controls to promote disaster-resistant housing; and has poor capacity to support the community organizations needed for shelter infrastructure and service delivery. USAID plans to provide assistance in areas such as building standards and enforcement mechanisms; land tenure, land title, and property tax records; and housing finance and mortgage markets. The shelter AAD notes that sustainability depends on the ability of the Haitian government to manage and maintain infrastructure and services over the long term. Policy change requires the political will and dedication of the Haitian government, as well as support from other members of the donor community. Sustainability also depends on economic growth, governance reform, and the ability of Haitians to pay taxes. If economic opportunities at the planned new shelter sites in locations outside of the capital are insufficient, people may return to Port- au-Prince. The success of USAID plans will depend on new economic opportunities that would enable municipalities to pay for road maintenance at the new sites and for housing beneficiaries to pay fees for water services and basic maintenance, according to U.S. officials. 34 For infrastructure, USAID defines a public-private partnership as “a long-term contract signed by a public agency and a private party for the construction, rehabilitation, operation and/or maintenance of an infrastructure network.” Page 26 GAO-12-68 Haiti Reconstruction  Our past work on U.S. assistance in developing countries shows that the U.S. government has previously encountered challenges in ensuring the sustainability of infrastructure activities. For example, following the 2001 earthquakes in El Salvador, we reported on sustainability challenges to USAID-funded shelter and health clinic construction, including residents who could not afford the cost of connecting to the potable water and electricity systems in the new houses. 35 In addition, in July 2011, we reported that the governments of Cape Verde and Honduras faced challenges sustaining several activities funded through the Millennium Challenge Corporation (MCC). 36 For example, in Honduras, uncertainty about government funding for maintenance and other construction activities may jeopardize the sustainability of some major roads built with MCC funds. Conclusion The United States is providing over one billion dollars to Haiti for reconstruction but faces an enormous task in helping the country begin to recover from the 2010 earthquake. A number of factors have delayed USAID’s planning and implementation of projects to rebuild infrastructure in the energy, ports, and shelter sectors—areas where the agency has not previously worked and that require specific skills or expertise. Haiti has always been a challenging operating environment, and the earthquake created additional difficulties. Further, USAID had difficulties securing staff—particularly technical staff such as contracting officers and engineers—who were willing to live and work in the country after the earthquake and who could bring the expertise necessary to plan and execute large, complex infrastructure projects. Such difficulties have contributed to delays in U.S. efforts, with only a few contracts awarded to date. Additional issues, such as difficulties in obtaining land title and the time needed to conduct environmental assessments, have led to delays in planning construction activities, and some activities do not yet have start dates. Further, the Haitian government’s long-standing economic and institutional weaknesses are complicating U.S. efforts and could affect the future of this assistance, and the political will of the recently formed Haitian government to implement reforms and undertake 35 GAO, Foreign Assistance: USAID’s Earthquake Recovery Program in El Salvador Has Made Progress, but Key Activities Are Behind Schedule, GAO-03-656 (Washington, D.C.: May 15, 2003). 36 GAO, Millennium Challenge Corporation: Compacts in Cape Verde and Honduras Achieved Reduced Targets, GAO-11-728 (Washington, D.C.: July 25, 2011). Page 27 GAO-12-68 Haiti Reconstruction  sustainability efforts is unknown. Even though USAID is taking some steps to address the long-term future of U.S.-funded infrastructure, it is unclear at this point in time if those projects will ultimately be sustainable. U.S. activities in Haiti will continue for many years, and USAID staff can be expected to turn over numerous times. It is therefore critical that USAID do as much as possible to match the number of staff with the demands placed on the mission to ensure that the substantial amount of U.S. funding provided for reconstruction is used efficiently and within time frames that address the pressing needs in the country. Recommendation for To facilitate USAID’s progress in planning and implementing its many post-earthquake infrastructure construction activities in Haiti over the next Executive Action several years, particularly those requiring key technical staff such as contracting officers, engineers, and program specialists, we recommend that the USAID Administrator ensure that U.S. direct-hire staff are placed at the mission within time frames that avoid future staffing gaps or delays. Agency Comments USAID provided written comments on a draft of this report, which are reprinted in appendix III. State did not provide written comments. USAID and Our Evaluation agreed with our finding that staffing difficulties were a factor in delaying USAID infrastructure constructions activities in Haiti. In addition, USAID described certain actions it is currently taking, such as providing accelerated one-on-one language training and special bidding incentives for Haiti, that, if continued, could address our recommendation. USAID also emphasized staffing actions that the agency took following the earthquake to quickly deploy staff temporarily to Haiti. Our report recognizes these actions and the contributions they made in helping with the relief and recovery efforts in Haiti. However, we maintain that such efforts did not include bringing on U.S. direct-hire staff to fill permanent positions and provide the continuity needed to manage longer-term reconstruction projects. In particular, USAID noted that its Civilian Response Corps (CRC), part of an interagency initiative, was used to provide a surge capability and quickly deploy staff with specialized knowledge and skills to Haiti. Our report notes that CRC, whose staff are deployed for an average of 90 days, provides the U.S. government with a first responder effort and supports the implementation of longer-term reconstruction activities. Page 28 GAO-12-68 Haiti Reconstruction State and USAID both provided technical comments. Those comments, along with information contained in USAID's written response, were incorporated into the report where appropriate. We are sending copies of this report to interested congressional committees, the Secretary of State, and the USAID Administrator. We will also provide copies to others on request. In addition, the report will be available at no charge on the GAO Web site at http://www.gao.gov. If you or any of your staffs have any question about this report, please contact me at (202) 512-3149 or gootnickd@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made major contribution to this report are listed in appendix IV. David Gootnick Director, International Affairs and Trade Page 29 GAO-12-68 Haiti Reconstruction List of Congressional Committees The Honorable John Kerry Chairman The Honorable Richard Lugar Ranking Member Committee on Foreign Relations United States Senate The Honorable Patrick Leahy Chairman The Honorable Lindsey Graham Ranking Member Subcommittee on the Department of State, Foreign Operations, and Related Programs Committee on Appropriations United States Senate The Honorable Ileana Ros-Lehtinen Chairman The Honorable Howard L. Berman Ranking Member Committee on Foreign Affairs House of Representatives The Honorable Kay Granger Chairwoman The Honorable Nita M. Lowey Ranking Member Subcommittee on the Department of State, Foreign Operations, and Related Programs Committee on Appropriations House of Representatives Page 30 GAO-12-68 Haiti Reconstruction Appendix I: Scope and Methodology Appendix I: Scope and Methodology We reviewed the infrastructure-related post-earthquake reconstruction efforts of the U.S. Agency for International Development (USAID) and the Department of State (State) in Haiti. 1 This report examines, for infrastructure construction activities only, (1) the amounts of USAID and State obligations and expenditures; (2) USAID’s staffing; (3) USAID’s planning; and (4) potential sustainability challenges USAID faces. In response to a congressional mandate in the Supplemental Appropriations Act of 2010 (the Act) that made funds available for GAO to review U.S. efforts in Haiti, we focused our review on the $918 million in bilateral reconstruction funding provided to USAID and State in the Act 2 as well as other funding provided to USAID and State in annual fiscal year appropriations that support reconstruction activities, including infrastructure construction and rehabilitation, in Haiti. Of the $918 million, $770 million was provided through the USAID-administered Economic Support Fund (ESF) account and $148 million through the State- administered International Narcotics Control and Law Enforcement (INCLE) account. USAID and State have planned to allocate $356.9 million for infrastructure construction activities from the funding appropriated in the Act. In addition, USAID and State supported infrastructure construction activities with almost $54.8 million from regular fiscal year appropriations, such as, for example, fiscal year 2010 funding for the Global Health and Child Survival account. Combined, USAID and State have allocated almost $412 million from both supplemental and regular fiscal year appropriations for infrastructure construction activities. 1 Supplemental Appropriations Act, 2010, Pub. L. No. 111-212, title I, ch. 10, 124 Stat. 2302, 2320 (July 29, 2010). The law mandated that funds previously available to GAO pursuant to Title I, Chapter 4 of Pub. L. No. 106-31 (to monitor provision of assistance to address the effects of hurricanes in Central America and the Caribbean) also be available to GAO to monitor post-earthquake expenses related to Haiti, including relief, rehabilitation, and reconstruction aid. In May 2011, we issued a report that described the planned uses for U.S. reconstruction assistance, USAID’s internal controls for overseeing U.S. reconstruction funds, and Interim Haiti Recovery Commission governance and oversight structures. See GAO-11-415. 2 In the Act, Congress provided more than $1.14 billion in reconstruction funds for Haiti available through the end of fiscal year 2012, including about $918 million for USAID and State and about $220 million for the Department of the Treasury for debt relief, a Treasury attaché office in Port-au-Prince, and technical assistance. We did not review the funding directed to Treasury. Additionally, we did not review $1.64 billion in funding provided primarily to reimburse U.S. agencies for their emergency and humanitarian efforts in Haiti immediately following the January 2010 earthquake, nor did we examine the approximately $144 million in U.S. embassy-related funding included in the law. Page 31 GAO-12-68 Haiti Reconstruction Appendix I: Scope and Methodology To obtain information on the appropriations, allocations, and planned uses of U.S. reconstruction funding for Haiti, 3 we reviewed the Supplemental Appropriations Act of 2010, enacted by Congress in July 2010; the State and USAID FY 2010 Supplemental Appropriations Spending Plan, issued by State in September 2010; the interagency Post- Earthquake USG Haiti Strategy: Toward Renewal and Economic Opportunity, issued by State in January 2011; and Congressional Research Service reports on Haiti. We also reviewed the Action Plan for National Recovery and Development of Haiti, issued by the government of Haiti in March 2010. In addition, we reviewed the Haiti Reconstruction Grant Agreement, signed by the U.S. and Haitian governments in May 2011. We met in Washington, D.C., and in Port-au-Prince, Haiti, with officials from USAID and State and other organizations implementing U.S. government-funded activities. USAID defines allocation as the identification and setting aside of resources for a specific program action. To determine the amounts of funding obligated from USAID’s supplemental ESF funding and State’s supplemental INCLE funding, as well as funding from other sources for infrastructure construction activities, we analyzed data reported by USAID as of June 30, 2011, and September 30, 2011, and by State as of September 30, 2011. The amounts reported to us by USAID and State include both expenditures and unexpended obligated balances. These data include information on obligations of supplemental appropriation funding overall, as well as amounts provided for particular activities. To assess the reliability of the data on planned allocations, obligations, and expenditures, we conducted follow-up correspondence and interviews with cognizant officials from USAID and State both in Washington, D.C., and in Haiti. We asked them standard data reliability questions—including questions about the purposes for which funding data were collected, the use of the data, how the data were collected and generated, and how the agencies ensured that the data were complete and accurate—and determined the data to be sufficiently reliable for the purposes of this report. 3 USAID and State have changed amounts allocated for infrastructure construction activities as plans have developed. We are reporting amounts allocated based on the most current information we received. Page 32 GAO-12-68 Haiti Reconstruction Appendix I: Scope and Methodology To assess USAID’s staffing challenges in Haiti, we reviewed bidding opportunity notices, staffing pattern analyses produced by the mission Executive Office, and interviewed relevant officials at the mission in Haiti and at USAID’s headquarters in Washington, D.C. To determine the status of USAID’s planning activities, we reviewed the agency’s policies for planning as outlined in the Automated Directives System. We also reviewed eight sector-specific Activity Approval Documents (AADs), six of which had been finalized as of October 2011, as well as more detailed planning documents for specific activities with infrastructure components, which we obtained during our visits to the USAID mission in Haiti. To determine challenges USAID faces in implementing activities as planned, we reviewed USAID’s and State’s requests for proposals, amendments, and award documents posted at the U.S. government’s Web site www.fedbizopps.gov. We also reviewed USAID’s AADs, award documents provided by the mission, and USAID’s activity procurement plan. In addition we interviewed relevant officials at the mission’s Office of Acquisition and Assistance and the mission’s Infrastructure, Energy, and Engineering Office to discuss the procurement plan, bid solicitation process, and activity delays. Due to the small amount of INCLE funding allocated for infrastructure activities, we did not review the State Bureau for International Narcotics and Law Enforcement’s planning process. To describe issues related to the capacity of the Haitian government, we reviewed U.S. government documents such as the U.S. government Haiti Strategy and the AADs, and reports from the United Nations Office of the Special Envoy for Haiti and the United Nations Development Program. To discuss USAID’s planning process for sustainability and potential sustainability-related challenges, we interviewed relevant officials both at the mission in Haiti and also at USAID’s headquarters in Washington, D.C., about sustainability and reviewed agency guidance, documents, and legislation. We also reviewed prior GAO reports with sections on sustainability challenges experienced by the U.S. government in other countries. We traveled to Haiti in April 2011 and August 2011 and met with U.S. officials from USAID and State, as well as representatives of some of USAID’s international and local implementing partners for humanitarian, development, and reconstruction programs—including the Cooperative Housing Foundation and the American Institutes for Research. We also met with officials from the Interim Haiti Recovery Commission. We visited sites damaged by the earthquake where USAID and State have ongoing Page 33 GAO-12-68 Haiti Reconstruction Appendix I: Scope and Methodology or planned reconstruction efforts, such as the State University Hospital, Haitian National Police Academy, and sites in Port-au-Prince where rubble removal was ongoing. In addition, we visited sites in the Cap- Haïtien development corridor that USAID has targeted for reconstruction assistance. While there, we observed and discussed with USAID officials the preliminary results of U.S.-funded development programs, including a planned residential settlement site, a planned port, and various planned agricultural and watershed management activities. We conducted this performance audit from November 2010 to November 2011 in accordance with generally accepted government audit standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our work objectives. Page 34 GAO-12-68 Haiti Reconstruction Appendix II: Sector Fact Sheets Appendix II: Sector Fact Sheets Appendix II provides information on the funding, status of activities, select challenges, and sustainability plans for the six sectors that include infrastructure construction activities: energy, ports, shelter, health, food security, and governance and rule of law. Page 35 GAO-12-68 Haiti Reconstruction  Appendix II: Sector Fact Sheets Energy Sector HAITI RECONSTRUCTION Building and Rehabilitating Electrical Transmission Lines, Generation Facilities, and Other Infrastructure Introduction Funding for Infrastructure Prior to the January 2010 USAID allocated $98.3 million for infrastructure activities in the energy earthquake, less than 30 percent of sector, including an estimated $85.3 million from fiscal year 2010 Haitians had access to electricity, Economic Support Fund (ESF) supplemental appropriations and $13.0 and many of those had access to million from other sources. less than 10 hours per day. This situation negatively affected Funding of Energy Activities, as of September 30, 2011 economic growth because a Dollars in millions functioning energy sector and a Allocated Obligateda Expended dependable supply of electricity are key to creating jobs and supporting FY10 ESF Supplemental $85.3 $28.6 $0.3 a healthy economy in Haiti. Other funding 13.0 0.2 0.2 The earthquake compounded the Total $98.3 $28.8 $0.5 lack of access to electricity by Source: GAO analysis of USAID data. damaging substations, distribution Note: Other funding includes USAID regular fiscal year 2010 and 2011 funds. Allocations are as of networks, and other components of September 14, 2011 (approval date of the Activity Approval Document for energy) except for the design and supervision of the rehabilitation of 5 electrical substations in the Port-au-Prince area, the sector. Currently, the country’s which is as of September 30, 2011. electrical infrastructure cannot a Obligated funds include both unexpended obligated balances and expenditures. meet the needs of industries, businesses, or residents. Status Haiti’s post-earthquake Action Plan USAID plans to rehabilitate five electrical substations in the Port-au- for National Recovery and Prince area, provide power generation for the North Industrial Park, and Development of Haiti (Action Plan) construct other power generation, transmission, and distribution facilities states that its priorities are to for residential customers. Most of these activities are still in the planning restore damaged power facilities, phase. repair the electricity transmission and distribution network, and Status of USAID Energy Activities, as of September 30, 2010 expand access to electricity in Dollars in millions regions outside Port-au-Prince. The U.S. government’s Post- Activity Allocationa Obligation Status Earthquake USG Haiti Strategy Five electrical substations Toward Renewal and Economic • Design and supervise $0.2 $0.2 • Award date: Opportunity (Haiti Strategy) rehabilitation of 5 electrical November 8, 2010 includes a goal to improve and substations in the Port-au- • Contract end date: Prince area November 9, 2012 modernize Haiti’s electrical sector and bring affordable, reliable power • Rehabilitate 5 electrical 12.7 12.7 • Award date: substations in Port-au-Prince July 28, 2011 to more households and area • Contract end date: businesses. USAID plans to target July 27, 2012 projects that will help make the supply of electricity more efficient Power generation for the North Industrial Park and the power network more • Architect and engineering 0.8 0.8 • Award date: viable. services for short-term power April 7, 2011 generation • Contract end date: April 6, 2012 • Provide 10 megawatts of 19.8 15.0 • Award date: power generation for the North September 15, 2011 Industrial Park’s start-up • Contract end date: electrical needs September 14, 2012 Page 36 GAO-12-68 Haiti Reconstruction  Appendix II: Sector Fact Sheets Activity Allocationa Obligation Status Selected Challenges • Install electrical power 0 • Estimated award — • Haitian government capacity: distribution system to date: December The electricity sector in Haiti, residential customers in the 2011 which is largely government north • Estimated end date: owned, is characterized by January 2014 dramatic power shortages and • Provide an additional 15 to 30 — 0 • Estimated award very low coverage of megawatts of power date: generation for industrial, April 30, 2013 electricity—with only about commercial, and residential • Estimated end date: 12.5 percent of the population uses April 1, 2014 having legal regular access to Feasibility study to assess the — 0 • Estimated award electricity. According to State, ability to design and install date: To be the government of Haiti’s public renewable energy power determined electricity utility suffers from generation • Estimated end date: inefficiencies, is poorly To be determined maintained due to lack of Design and installation of energy — 0 • Estimated award resources, and relies heavily solutions for South Industrial Park date: on subsidies and donor To be determined funding. • Estimated end date: To be determined • Completing energy activities Total $98.3 $28.8 as initially scheduled: USAID awarded a contract to construct Source: GAO analysis of USAID data. a power plant for the new North Note: Only energy infrastructure construction activities (including feasibility and design studies) funded with USAID fiscal year 2010 supplemental funds and fiscal years 2010 and 2011 regular Industrial Park on September funds are included in this table. Amounts may not add to total due to rounding. Allocations are as of 15, 2011, about 6 weeks later September 14, 2011 (approval date of the Activity Approval Document for energy) except for the than planned; however, design and supervision of the rehabilitation of 5 electrical substations in the Port-au-Prince area, which is as of September 30, 2011. according to a USAID official a For activities where an award has not been made, USAID planning documents include a the delay will not affect the "procurement sensitive" cost estimate which is not shown but is included in the table total. opening of the park, because site work being completed by Sustainability Plans others has already delayed the To enhance overall sustainability, USAID awarded a $10.9 million, 2-year opening. contract in April 2011 to help the Haiti electrical utility manage electricity USAID awarded a contract to loss reduction. USAID plans to award a 3-year management contract in rehabilitate five electrical early 2012 to support the operation of the North Industrial Park and other substations in July 2011. utility operations in northern Haiti. However, the award was However, USAID planning documents state that the sustainability of the protested and a “stop work” electrical system as a whole, and particularly after the loss reduction order was issued. As of management contract ends, depends on, among other things, the November 15, 2011, work had achievement of important legal and regulatory reforms to improve the not started. commercial viability of the system and provide necessary resources for proper operations and maintenance of the electrical infrastructure. USAID has delayed its initial USAID also acknowledged that the government of Haiti must take award of a contract for the necessary but politically challenging steps to do so. expansion of the North Industrial Park power Damaged Transformer at an Electrical Power Plant in the Port-au-Prince Corridor generation facility from November 2011 until April 2013 to better determine the demand for power at the location and the most efficient means to provide electricity when it is needed. Page 37 GAO-12-68 Haiti Reconstruction  Appendix II: Sector Fact Sheets Ports Sector HAITI RECONSTRUCTION Designing and Building a New Port Introduction Funding for Infrastructure As an island nation with depleted USAID allocated $77.7 million in fiscal year 2010 ESF supplemental natural resources, ports are crucial appropriations to infrastructure activities in the ports sector. to Haiti’s economic viability and growth. However, for many years Funding of Port Activities, as of September 30, 2011 (Dollars in millions) prior to the January 2010 earthquake, Haiti’s major Allocated Obligateda Expended international port in Port-au-Prince FY10 ESF Supplemental $77.7 $2.8 0 had deteriorated and lacked the Other 0 0 0 capability to meet the country’s Total $77.7 $2.8 0 cargo and shipping needs. The earthquake caused significant Source: GAO analysis of USAID data. damage to the Port-au-Prince port, Note: No other funding such as USAID fiscal year 2010 or 2011 regular funding is currently planned for ports activities. further reducing its capabilities. a Obligated funds include both unexpended obligated balances and expenditures. Haiti’s post-earthquake Action Plan states that, as part of its overall Status effort to deconcentrate economic USAID is conducting a feasibility study and, depending on the results of activities in Port-au-Prince, new the study, plans to construct a new port in the Cap-Haïtien development deep water ports, including a new large-capacity port and harbor corridor. In addition, USAID plans smaller port rehabilitation and facility, need to be constructed in construction in other areas. During our review, we visited an existing port Haiti’s northern region. The U.S. facility in Cap-Haïtien and a potential site in Fort-Liberte. The new port government’s Haiti Strategy states would be less than 20 miles from the site of the North Industrial Park—a that the United States is post-earthquake public-private project scheduled to begin operation in considering investing in the design April 2012. and development of a major port on the northern coast. Status of USAID Port Activities, as of September 30, 2011 Dollars in millions Activity Allocationa Obligation Status New port in northern Haiti • Feasibility study for the $2.5 $2.8 • Award date: design of a new port September 22, 2011 • Contract end date: May 31, 2012 • Construction of a new port — 0 • Estimated award date: To be determined • Estimated end date: To be determined Design and oversight of a new — 0 • Estimated award date: port and the Cap-Haïtien port To be determined • Estimated end date: To be determined Rehabilitation of the Cap- — 0 • Estimated award date: Haïtien port To be determined • Estimated end date: To be determined Contribution to port — 0 • Estimated award date: construction in the Port-au- To be determined Prince metropolitan area • Estimated end date: To be determined Page 38 GAO-12-68 Haiti Reconstruction  Appendix II: Sector Fact Sheets Activity Allocationa Obligation Status Selected Challenges Grant to Haiti (Council for the 0 • Estimated award date: — • Lack of staff with relevant Modernization of State-Owned To be determined technical expertise: USAID’s Enterprises) for port • Estimated end date: program in Haiti has not construction To be determined previously involved port Total $77.7 $2.8 construction activities. With no Source: GAO analysis of USAID data. staff who have port Note: Only infrastructure port construction activities (including feasibility and design studies) funded construction expertise or with USAID fiscal year 2010 supplemental funds are included in this table. Allocations are as of experience, USAID will rely on August 1, 2011 (date of the draft Activity Approval Document for ports). (1) a private firm to conduct a a For activities where an award has not been made, USAID planning documents include a feasibility study and make "procurement sensitive" cost estimate which is not shown but is included in the table total. recommendations regarding, among other things, port Sustainability Plans design, economic feasibility, According to USAID’s current plans, the new port is to be constructed by a and financial viability; and (2) a public-private partnership and operated by private firms when completed. public private partnership to These plans assume that the government of Haiti, particularly Haitian port construct a new port. officials, will efficiently collect import duties and that sufficient port revenues • Potential funding shortfall: will be generated to fund recurring costs for port maintenance. USAID’s current estimated cost When completed, the economic viability of the port will depend on the of constructing the northern amount of income generated. According to USAID officials, the income is port is $105 million: Since projected to be derived from two broad sources, the growth in cargo USAID has allocated only generated by business activity related to the planned North Industrial Park about $68 million, the and the increased cargo diverted from other ports to the new port as the remaining $37 million must be result of it being a modern well managed port. In addition, they stated only obtained from other sources. one manufacturing firm is currently committed to operating in the North According to USAID officials, Industrial Park, however discussions are underway with other possible the northern port feasibility tenants. The economic viability of the port is one of the issues being study includes an analysis of addressed in the feasibility study. financing options under a public-private partnership to Wharf at an Existing Port in Cap-Haïtien provide the additional required funding. • Delayed port feasibility study: The northern port feasibility study, originally planned to be awarded in June 2011, was awarded in September 2011. The study is expected to take approximately 8 months to complete. Page 39 GAO-12-68 Haiti Reconstruction  Appendix II: Sector Fact Sheets Selected Challenges • Land tenure: According to Shelter Sector USAID, Haiti HAITIlacks a comprehensive, functional RECONSTRUCTION Developing and Building New Residential Settlements system for recording land ownership as well as an effective national cadastre. Prior to the earthquake, Introduction Funding for Infrastructure customary arrangements and Prior to the January 2010 USAID allocated $55.1 million in fiscal year 2010 ESF supplemental knowledge characterized land earthquake, a majority of Port-au- appropriations and other funding for the development and construction of tenure with only 40 percent of Prince’s more than 2 million new residential settlements. landowners possessing inhabitants lived in crowded and documentation such as a legal poorly constructed housing, with Funding of Shelter Activities, as of September 30, 2011 title or transaction receipt. inadequate basic infrastructure and Furthermore, a large proportion Dollars in millions unclear land tenure status. of displaced persons were Allocated Obligateda Expended Therenting earthquakeproperty prior to the destroyed FY10 ESF Supplemental $55.1 $9.6 $0.4 earthquake—with approximately 115,000the plots of homes and b Other 1.6 0.6 0.6 land on severely which they damaged morelivedthanoften informally 208,000, settledover displacing and2 million Total $56.7 $10.1 $0.9 haphazardly people. delineated—and The International Source: GAO analysis of USAID data. many will for Organization have difficulty Migration Note: Amounts may not add to total due to rounding. a provingthat, estimated clear, legal as of Julytenancy 2011, Obligated funds include both unexpended obligated balances and expenditures. b Other funding includes regular fiscal year appropriations. overdue to document 590,000 discrepancies Haitians displaced by the or lack earthquakeof documents. continued to live at sites for internally displaced • Haitian government capacity: Status persons. USAID is planning to develop new residential settlements in the Port-au- The government of Haiti’s limited Haiti’s legislative, Action post-earthquake regulatory, Plan Prince and Cap-Haïtien development corridors that will provide notesand institutional that housing is thecapacitysectorto approximately 15,000 households with plots of land, permanent housing, mostmanage affected by urban thedevelopment earthquake. and access to essential services. USAID will manage construction of severelyPlan The Action constrains proposes theto 4,000 houses. Nongovernmental organizations will manage construction establishment establish new, of a viable permanent of 11,000 houses using a combination of USAID and other funding. shelter neighborhoods sector. According on sites to identified USAID, by the Haitianthe absence government. of a single Status of USAID Shelter Activities, as of September 30, 2011 national Displaced entity will persons responsible first move for Dollars in millions into overseeing provisional the shelter shelters that will be Activity Allocationa Obligation Status provision replaced with process permanent is he most housing, Shelter demonstration project — $0 • Estimated award important limitation. sustainable Currently, infrastructure, and date: December near Port-au-Prince basictheservices. entities The involved Action in Plan 2011 Construction of 200 houses for managing also states different that the aspects of government internally displaced persons in the • Estimated end date: shelter intends include to set up a the Ministries security fund tof Croix-des-Bouquets municipality August 2012 Economy support and Finance, reconstruction Public activities in Up to 8 new settlements in the 23.6 9.8 • Award date: neighborhoods Works, Planning, and Interior communities. and Cap-Haïtien development corridor June 17, 2011b Socialthe Similarly, Affairs, U.S. as well as the government’s Development of 5,000 plots for • Estimated end date: HaitiCentral Strategy Bank and themoving prioritizes inter- 25,000-30,000 people and June 15, 2013 ministerial displaced Committee persons to for Land provisional construction of 2,500 core shelters, Use. providing permanent houses by USAID in up to 5 municipalities housing and services, and strengthening institutional capacity Up to 12 new settlements in the 29.6 0.3 • Award date: May 26, Port-au-Prince development 2010c and access to financing. corridor • Estimated end date: Development of 10,000 plots for September 15, 2013 50,000-60,000 people and construction of 1,500 core houses by USAID in the Croix- des-Bouquets and Cabaret municipalities Total $56.7 $10.1 Source: GAO analysis of USAID data. Page 40 GAO-12-68 Haiti Reconstruction Appendix II: Sector Fact Sheets Note: Only shelter infrastructure construction activities (including design studies) funded with USAID fiscal year 2010 supplemental funds and fiscal year 2010 regular funds are included in this table. Amounts may not add to total due to rounding. a For activities where an award has not been made, USAID planning documents include a “procurement sensitive” cost estimate which is not shown but is included in this table total. b Award date for engineering and design and environmental assessment, additional contracts will be awarded for remaining site development. c Award date for engineering and design, additional contracts will be awarded for remaining site development. Sustainability Plans According to USAID’s plans, site locations are being selected in areas where residents have access to jobs and/or transportation. USAID is planning to fund technical assistance programs to improve the capacity of the national government to improve urban management, and will seek possible solutions to policy challenges such as the absence of legislation to guide housing, land-use, and urban planning; lack of an independent regulatory body for the construction sector; and lack of institutional capacity in urban planning. At the local level, USAID plans to provide technical assistance to municipalities in areas such as land use planning, building standards, and enforcement mechanisms; and to establish community management committees to guide community development. USAID recognizes that the sustainability of the new settlements depends on the ability of Haitians to pay taxes and the ability of the Haitian government to manage and maintain infrastructure and services over the long term. This, in turn, depends on whether the Haitian economy can provide adequate job opportunities and whether the Haitian government can effectively govern. Neighborhood in Port-au-Prince Page 41 GAO-12-68 Haiti Reconstruction  Appendix II: Sector Fact Sheets Health Sector HAITI RECONSTRUCTION Building and Rehabilitating Health Facilities Introduction Funding for Infrastructure Prior to the January 2010 USAID allocated $90.5 million for construction in the health sector, of earthquake, a significant portion of which $50.5 million is allocated from the fiscal year 2010 ESF the Haitian population had no supplemental appropriations. An additional $40.0 million in funding from access to basic health services. other accounts is allocated for work on the HUEH and the National Currently, only 12 of the 63 health Campus for Health Sciences. networks created by the Haitian government in the 1990s are Funding of Health Activities, as of September 30, 2011 operational. (Dollars in millions) The earthquake destroyed Allocated Obligateda Expended infrastructure such as hospitals, FY10 ESF Supplemental $50.5 $0.4 0 clinics, medical schools, and b Other 40.0 0 0 Ministry of Health buildings. For example, the State University Total $90.5 $0.4 0 Hospital (HUEH) was damaged Source: GAO analysis of USAID data. during the earthquake and services Note: Allocations are as of March 2011 (finalized Activity Approval Document for health) and July such as surgery, and pre- and 2011 (USAID procurement plan); obligations and expenditures are as of July 2011 (the most recent data provided by USAID). post-operation work are still being a performed in temporary buildings. Obligated funds include both unexpended obligated balances and expenditures. b The earthquake also destroyed 90 Other funding is from the fiscal year 2010 base Global Health and Child Survival—State appropriation. percent of the State Faculty of Medicine. Status Haiti’s post-earthquake Action Plan emphasizes rebuilding hospitals USAID is planning five construction activities in the health sector. and training facilities in the Although these activities are still in the planning stages, USAID began earthquake-affected regions and needs assessments of health facilities in the Port-au-Prince, Cap-Haϊtien, construction of new hospitals in the and Saint-Marc corridors and an environmental assessment of the HUEH department capitals. The U.S. campus. The HUEH reconstruction is a joint activity between the U.S., government’s Haiti Strategy French, and Haitian governments. The three governments signed a includes a 5-year goal to rebuild memorandum of understanding in September 2010. and reform management of public health infrastructure, including Status of USAID Health Activities, as of September 30, 2011 earthquake-damaged structures (Dollars in millions) and clinics, dispensaries, and Activity Allocationa Obligation Status hospitals in 9 to 12 health networks. The Haiti Strategy also State University Hospital in Port-au-Prince (HUEH)— specifies that the State University U.S. portion Hospital will be rebuilt and fully • Environmental $0.4 $0.4 • Environmental operational in 5 years and have assessment of the assessment contract rehabilitation and award date: July 12, 2011 clearly defined responsibility for reconstruction of the • Environmental assessment maintenance and operational hospital estimated end date: costs. October 28, 2011 • Rehabilitation and — 0 • Construction estimated reconstruction of HUEH award date: November/ facilities December 2011 • Construction estimated end date: June 30, 2013 Page 42 GAO-12-68 Haiti Reconstruction  Appendix II: Sector Fact Sheets Activity Allocationa Obligation Status Selected Challenges Health facilities in St. Michel — 0 • Estimated award date: • Haitian government capacity: de L’Attalaye November 1, 2011 According to USAID officials, all Construction of a new • Estimated end date: health planning needs to be community reference October 31, 2013 hospital and dispensary done in coordination with the Haitian Ministry of Health, Health facilities: Cap-Haϊtien — 0 • Estimated award date: and Saint-Marc March 12, 2012 which was consumed for development corridors • Estimated end date: significant parts of 2010 and Construction and expansion April 30, 2015 2011 by the cholera epidemic of dispensaries, and uncertainty about the refurbishment and upgrading of hospitals presidential election. USAID officials are working with the National Campus for Health — 0 • Estimated award date: Sciences in Port-au-Prince April 1, 2012 Ministry of Health to identify Reconstruction of State • Estimated end date: and prioritize health facilities for Faculty of Medicine March 31, 2014 repair and construction. buildings destroyed in the earthquake • USAID Haiti mission’s lack of Facilities for persons with — 0 • Estimated award date: staff: USAID’s AAD indicates disabilities To be determined that several months following Construction and equipment • Estimated end date: the earthquake, the health of facilities for the disable May 30, 2014 office was extremely short Total $90.5 $0.4 staffed with only 11 of 21 Source: GAO analysis of USAID data. positions filled. USAID officials Note: Only health infrastructure construction activities funded with USAID fiscal year 2010 also said that delays in staffing supplemental funds and fiscal year 2010 base Global Health and Child Survival—State the Haiti mission, including the appropriations are included in this table. Allocations are as of March 2011 (finalized Activity Approval Document for health) and July 2011 (USAID procurement plan); obligations and expenditures are as Office of Infrastructure, Energy, of July 2011 (the most recent available from USAID). and Engineering have been a challenging and have resulted For activities where an award has not been made, USAID planning documents include a "procurement sensitive" cost estimate which is not shown but is included in the table total. in staff responding to demands outside of their usual areas of Sustainability Plans responsibility. USAID plans to make infrastructure investments only where there is a business plan agreed to with the Haitian Ministry of Health in which the USAID portion of operations and maintenance costs is reduced to zero at the end of 3 to 5 years. USAID’s plans state that U.S. investments in infrastructure will likely include some support for post-construction operation and maintenance costs. Earthquake-damaged Building at the HUEH Page 43 GAO-12-68 Haiti Reconstruction  Appendix II: Sector Fact Sheets Food Security Sector HAITI RECONSTRUCTION Building and Rehabilitating Irrigation Canals and Farm-to- Market Roads Introduction Funding for Infrastructure Before the earthquake, Haiti USAID allocated $42.6 million for activities with a construction already had one of the heaviest component in the food security sector. burdens of hunger and malnutrition in the Western Hemisphere: 40 Funding of Food Security Activities, as of September 30, 2011 percent of households were Dollars in millions undernourished (3.8 million people) and 30 percent of children suffered Allocated Obligateda Expended from chronic malnutrition, FY10 ESF Supplemental $42.6 $0.5 0 according to the U.S. government’s Other b 0 0 0 Haiti Strategy. To address this Total $42.6 $0.5 0 need, USAID had several food security activities under way in Source: GAO analysis of USAID data. Haiti. Note: Planned allocation, obligated, and expended amounts for infrastructure and construction components only. Allocations are as of October 2011 data provided by USAID; obligations and Agriculture generates nearly 25 expenditures are as of June 30, 2011 (the most recent provided by USAID). a percent of Haiti’s gross domestic Obligated funds include both unexpended balances and expenditures. b product, employs approximately 65 Other funding is regular fiscal year appropriations. USAID plans to provide $55.5 million during fiscal years 2011 through 2014 for these food security activities; however, we did not include this amount percent of the population, and because USAID did not provide the funding data by fiscal year. serves as the primary source of income in rural areas. However, the earthquake exacerbated the Status already significant challenges in USAID plans two new activities with construction components. USAID the agricultural sector by damaging has additional activities with construction projects in the food and distribution centers, food economic security sectors that began implementation before the processing facilities, warehouses, earthquake. 1 However, one of these activities, the Watershed Initiative irrigation canals, and the Ministry of for Natural Environmental Resources (WINNER), received fiscal year Agriculture’s Natural Resources 2010 supplemental funding. and Rural Development headquarters. Haiti’s post- Status of USAID Food Security Activities, as of September 30, 2011 earthquake Action Plan includes five agriculture-related programs, Dollars in millions including building irrigation Activity Allocationa Obligation Status networks and rural roads to open Watershed Initiative for Natural $13.7 $0.5 • Award date: June up agricultural areas. Aligned with Environmental Resources 1, 2009b the Haitian government’s priorities, (WINNER) • Contract end date: the U.S. government’s Haiti Erosion prevention, irrigation May 31, 2014 Strategy includes a goal of restoration, and rebuilding and agriculture sector growth in the repair of transportation infrastructure. U.S. development corridors through improvements in (1) core Production Plus — 0 • Estimated award Erosion prevention, irrigation date: March 31, infrastructure and management, 2012 such as rebuilding canals; (2) on- construction and repair, and farm-to-market road construction • Estimated end farm productivity, such as use of and maintenance. date: March 31, commercially produced seeds; and 2015 (3) post-harvest and market access support, such as farm-to-market roads. 1 These activities include projects such as rehabilitation of irrigation canals and transportation infrastructure. Page 44 GAO-12-68 Haiti Reconstruction  Appendix II: Sector Fact Sheets Activity Allocationa Obligation Status Selected Challenges 0 • Estimated award: Rural Transportation — • Land tenure: According to Infrastructure To be determined USAID officials, many large • Estimated end tracts of land are owned by date: To be landlords who rent land tracts determined to farmers. However, many Total $42.6 $0.5 landlords cannot produce proof Source: GAO analysis of USAID data. of ownership. Uncertainty over Note: Only infrastructure and construction activities funded with USAID fiscal year 2010 land ownership may reduce supplemental funds appropriations are included in this table. USAID plans to provide $55.5 million agriculture investment in Haiti during fiscal years 2011 through 2014 for these food security activities; however, we did not include this amount because USAID did not provide the funding data by fiscal year. WINNER and Production due to the risk of losing that Plus included technical assistance activities that are not included in this table. Allocations are as of investment. Additionally, the October 2011 data provided by USAID; obligations and expenditures are as of June 30, 2011 (the renting of land provides little most recent available from USAID). Funding amounts may not add to total due to rounding. a incentive for people to invest in For activities where an award has not been made, USAID planning documents include a "procurement sensitive" cost estimate which is not shown but is included in the table total. their farms. b WINNER was awarded pre-earthquake, but received fiscal year 2010 supplemental funding; • Haitian government capacity: amounts are being obligated incrementally. According to USAID’s food security AAD, the role and Sustainability Plans mission of the Haitian Ministry USAID’s plans state that the U.S. government and other donors regularly of Agriculture, Natural meet with the Haitian government and private sector to discuss progress Resources, and Rural and reforms needed to accelerate agriculture investments in Haiti. In Development has not been addition, the Haitian government has demonstrated commitment and clearly defined, causing leadership in agriculture, food security, and economic security program confusion over the ministry’s planning and coordination, according to USAID’s planning document. policy goals. Critical policy questions of whether the Soil Conservation Project in Bassin Zim (Central Plateau) ministry should be focused on strengthening food security, increasing farm income, building and maintaining infrastructure, or focusing on another priority have not been answered. • Local technical capacity: Poor infrastructure, few technically skilled companies and people, lack of a maintenance culture, and health-related issues all pose challenges to successful reconstruction in Haiti, according to USAID officials. Page 45 GAO-12-68 Haiti Reconstruction  Appendix II: Sector Fact Sheets Governance and Rule of Law Sector HAITI RECONSTRUCTION Building and Rehabilitating Correctional, Police, and Counternarcotics Facilities Introduction Funding for Infrastructure Prior to the January 2010 State allocated $45.7 million in fiscal year 2010 INCLE supplemental earthquake, much of Haiti’s justice funds for governance and rule of law construction activities. infrastructure, including police stations, police training facilities, Funding of Governance and Rule of Law Activities, as of September 30, 2011 and prisons, were in need of repair. Many facilities were too small to Dollars in millions meet the needs of Haitian law Allocated Obligateda Expended enforcement and corrections FY10 INCLE Supplemental $45.7 $5.6 $1.7 systems. The earthquake caused Other 0.2 0.2 0 additional destruction and damage, Total $45.9 $5.8 $1.7 increasing the need to rebuild many facilities. Source: GAO analysis of State data. Note: Other funding is prior fiscal year appropriations. Allocations, obligations and expenditures are Haiti’s post-earthquake Action Plan as of September 2011. states the need to rebuild a Obligated funds include both unexpended obligated balances and expenditures. correctional facilities, build and expand police stations, and Status complete construction of the State is planning several construction activities in the governance and National Police Academy. The rule of law sector. Some activities are under way and others are still Department of State (State) being planned. received fiscal year 2010 supplemental funding in the Status of State’s Governance and Rule of Law Activities, as of International Narcotics Control and September 30, 2011 Law Enforcement (INCLE) account to meet these reconstruction needs Dollars in millions in Haiti. In the U.S. government’s Activity Allocation Obligation Status Haiti Strategy, State presents plans Correctional facilities $25.5 to use some INCLE funds for post-  Construction advisors 0.3 0.3  Award date: Unknown earthquake infrastructure  Estimated end date: rehabilitation and construction  Rebuild of Carrefour Unknown activities in the democracy and men’s and Petionville 1.4 0.2  Award date: Unknown women’s prisons  Estimated end date: governance sector, to be managed Unknown by State’s Bureau of International  Construct a new TBD 0  Estimated award date: Narcotics and Law Enforcement women’s prison in Unknown (State/INL). Ganthier  Estimated end date: Unknown  Repair the National 0.2 0.2  Award date: Unknown Penitentiary  Estimated end date: Unknown  Expand inmate capacity TBD 0  Estimated award date: Unknown  Estimated end date: Unknown Police facilities $8.7  Rehabilitate facilities at 5.0 5.0  Award date: Unknown the Haitian National  Estimated end date: Police Academy Unknown  Rehabilitate and TBD 0  Estimate award date: construct police stations Unknown and barracks  Estimated end date: Unknown Page 46 GAO-12-68 Haiti Reconstruction  Appendix II: Sector Fact Sheets Activity Allocation Obligation Status Selected Challenges  Police station repair 0.2 0.2  Award date: Unknown  Lack of staff with relevant  Estimated end date: technical expertise: State/INL Unknown has been involved in Counternarcotics facilities $11.7 counternarcotics programs in  Renovate and construct 6.7 0  Estimated award date: counternarcotics Unknown Haiti for decades. However, outposts  Estimated end date: during that period, it has Unknown focused on infrastructure  Refurbish a maritime $5.0 $0  Estimated award date: activities and has had no U.S. base Unknown direct-hire engineers or other  Estimated end date: personnel with construction Unknown expertise on its staff. Total $45.9 $5.8 State/INL’s programs have Source: GAO analysis of State data. focused on institutional Note: State provided funding data; State did not provide estimated award dates, award dates, capacity building, such as estimated end dates, and end dates. Only infrastructure construction activities funded with State/INL fiscal year 2010 supplemental funds and prior year funds are included in this table. Amounts may not training Haiti’s law enforcement add to total due to rounding. Allocations, obligations, and expenditures are as of September 2011. and corrections personnel. For its post-earthquake infrastructure activities, Sustainability Plans State/INL plans to hire (1) In the January 2011 5-year Haiti Strategy, State includes plans to provide private firms to develop infrastructure plans, designs, training programs, introduce needed procurement and maintenance and estimates for costs, systems, and establish an independent Haitian Directorate of Prisons in schedules, and scopes of work; an effort to achieve sustainability. and (2) contractors to provide However, State acknowledges that investments in construction and construction; and (3) personal rehabilitation of infrastructure will require some degree of U.S. commitment services contractors to monitor to support operations and maintenance costs “in the out years.” and oversee its activities.  Land tenure: For several State-Funded Rehabilitation of a Pavilion at the Haitian National Police Academy years before the earthquake, State/INL had attempted to acquire clear land title from the Haitian government for several proposed sites for a new women’s prison, according to State officials. Despite ongoing efforts, as of October 2011, State/INL officials noted that State still had not obtained land title.  Initial scope of work may be reduced: Estimated costs, schedules, and scopes of work for planned infrastructure activities were developed in 2010 by State/INL and early 2011 by private firms contracted by the agency. Since then, estimated costs for materials have risen and estimated schedules have been extended due to land Source: GAO (April 2011). titling issues. As a result, it is unclear whether State/INL will construct all planned activities as initially scheduled. Page 47 GAO-12-68 Haiti Reconstruction Appendix III: Comments from the U.S. Appendix III: Comments from the U.S. Agency for International Development Agency for International Development Page  GAO-12-68 Haiti Reconstruction Appendix III: Comments from the U.S. Agency for International Development Page  GAO-12-68 Haiti Reconstruction Appendix III: Comments from the U.S. Agency for International Development Page  GAO-12-68 Haiti Reconstruction Appendix III: Comments from the U.S. Agency for International Development Page  GAO-12-68 Haiti Reconstruction Appendix IV: GAO Contact and Staff Appendix IV: GAO Contact and Staff Acknowledgments Acknowledgments GAO Contact David Gootnick, (202) 512-3149 or gootnickd@gao.gov Staff In addition to the contact named above, Leslie Holen (Assistant Director), Michael Armes (Assistant Director), Sada Aksartova, Lynn Cothern, Acknowledgments Rachel Girshick, Leslie Locke, and George Taylor made key contributions to this report. Ashley Alley, Douglas Cole, Martin De Alteriis, Cheron Green, Courtney Lafountain, Jeremy Sebest, and Jena Sinkfield provided technical assistance. (320823) Page  GAO-12-68 Haiti Reconstruction GAO’s Mission The Government Accountability Office, the audit, evaluation, and investigative arm of Congress, exists to support Congress in meeting its constitutional responsibilities and to help improve the performance and accountability of the federal government for the American people. GAO examines the use of public funds; evaluates federal programs and policies; and provides analyses, recommendations, and other assistance to help Congress make informed oversight, policy, and funding decisions. GAO’s commitment to good government is reflected in its core values of accountability, integrity, and reliability. Obtaining Copies of The fastest and easiest way to obtain copies of GAO documents at no cost is through GAO’s website (www.gao.gov). 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