1-521-25-001-A: Haiti: Risks to U.S. Foreign Assistance

OFFICE OF INSPECTOR GENERAL February 2025 Report 1-521-25-001-A U.S. Agency for International Development Haiti: Risks to U.S. Foreign Assistance A Complex Crisis: Haiti continues to experience catastrophic political, security, and humanitarian crises. The 2021 assassination of President Jovenel Moïse sparked a wave of violence, and by early 2024 competing gangs controlled an estimated 80 percent of Haiti’s capital. By the end of September 2024, nearly half of Haiti’s population, 5.4 million people, was projected to face acute food insecurity at crisis level or worse due to safety threats, high prices, and reduced agricultural production. In addition, more than 1 million Haitians were internally displaced as of December 2024, marking a threefold increase since 2023. USAID Support: The U.S. government committed over $1.1 billion in foreign assistance to Haiti between fiscal years 2021 and 2024 with humanitarian assistance funding increasing steadily since October 2022. At the same time, USAID has continued longstanding development programs across the country that provide basic healthcare and education, create jobs, and support government and civil society. The Congressional Research Service has reported that the United States is the largest humanitarian donor to Haiti and that congressional appropriations support Haiti’s recovery from recurrent natural disasters and foster long-term stability in one of the United States’ closest neighbors. Vulnerabilities: The volatile environment in Haiti presents significant challenges to ensuring U.S. foreign assistance is used for its intended purposes. Risks are elevated for fraud, corruption, and diversion; sexual exploitation and abuse; and program waste and mismanagement. In addition to reports of theft and losses of USAID-funded aid, freedom of movement and program oversight remain severely constricted due to ongoing insecurity. Since July 2023, USAID’s in-person presence in Haiti has fluctuated, with U.S. direct hires and personal services contractors facing multiple mandatory evacuations to the United States and at least one-third of locally employed Haitian staff departing for new opportunities, safer areas, and family needs. By December 2024, USAID senior leadership filled just one position in Haiti on a rotating basis to guide the mission’s budget, which reached nearly $400 million in fiscal year 2024. Meanwhile, USAID’s remaining U.S. direct hires and personal services contractors managed Haiti programs remotely from the United States. Haitian staff followed U.S. Embassy guidance to work in-person when deemed safe to do so or from their homes during periods of heightened insecurity, where staff reported experiencing unstable electricity and internet connectivity. Independent Oversight: The Office of Inspector General (OIG)—drawing on lessons from its oversight of USAID’s humanitarian and development work in similar contexts and OIG Hotline reports—initiated an audit in December 2024 to examine how USAID monitors its ongoing development activities in Haiti given the country’s complex crisis environment. We plan to report our findings in 2025. This briefer presents observations as of December 2024. Trends in USAID Programming to Haiti USAID Funding to Haiti, Fiscal Years 2021–2024 USAID Funding to Haiti by Program Area, Fiscal Years 2021–2024 10% 5% Humanitarian Assistance Health 10% 43% Democracy, Human Rights, and Governance Economic Growth, Agriculture, and Environment 6% 26% Program Administration and Operating Expenses Other Program Areas Source: OIG generated from USAID data. Program administration includes program design, oversight, and evaluation. Based on USAID OIG’s oversight work and information from USAID and public sources. Key Considerations From USAID OIG’s Prior Oversight Work

OIG provides independent oversight of U.S. foreign assistance worldwide, including in nonpermissive environments such as Ukraine, Gaza, and Syria. OIG’s prior audits, investigations, and other oversight activities have highlighted vulnerabilities in USAID’s accountability mechanisms. The Agency can consider outcomes from OIG’s work in similar contexts to help reduce risks to its programs and operations in Haiti. 1. Reinforcing implementer accountability. USAID primarily executes foreign assistance programs through awards to implementing organizations, such as contractors, nongovernmental organizations, and United Nations (UN) agencies. In Haiti, implementers range from the UN World Food Programme to U.S.-based forprofit companies such as Chemonics to Haitian organizations such as Group Croissance S.A. To ensure program integrity, OIG has previously identified the need for USAID to: • Conduct due diligence of public international organizations, including UN agencies. Actions such as pre-award organizational capacity reviews can identify areas of weakness in policy, organizational framework, operations, and management to inform project design and funding decisions. • Design awards to enable the United States to bring suit against foreign nongovernmental organizations in U.S. court. • Expand pre-award certifications to capture whether prospective awardees have engaged with entities subject to U.S. anticorruption and human rights sanctions. • Ensure awardees fully understand accountability and reporting requirements. 2. Continuing efforts to prevent, detect, and report exploitation and abuse. Humanitarian crises exacerbate conditions that enable sexual predators working for aid organizations to prey on vulnerable populations. OIG has previously identified the need for USAID to: • Standardize code-of-conduct requirements for implementers to reduce confusion on acceptable behavior. • Standardize reporting requirements and educate implementers on when and how to report allegations of sexual exploitation and abuse. • Engage with implementers and other donors to prevent the recirculation of perpetrators through the international aid sector. • Ensure pre-award risk assessments include reasonable measures to protect beneficiaries from bad actors. • Reiterate internal processes and responsibilities for USAID staff, such as those stated in the USAID’s Counter Trafficking in Persons Code of Conduct. 3. Maintaining vigilance against fraud and corruption. Organized criminal enterprises can use their influence to steer procurements for personal gain and steal commodities meant for individuals in need. OIG’s work has previously identified the need for USAID to: • Strengthen controls that facilitate timely reporting by USAID-funded implementers of criminal activity, such as by clarifying expectations, processes, and timeframes. • Recognize red flags of emerging fraud schemes. Examples include business email compromises, conflicts of interest, currency arbitrage (buying a currency in one market and selling it at a higher rate in another market), and using the USAID brand to defraud prospective applicants pursuing U.S. government jobs, grants, and visas. • Take proactive measures to appropriately safeguard staff, beneficiaries, and in-kind assistance, such as by increasing security and controls around the transport, storage, and distribution of material aid. 4. Adapting approaches for monitoring risks and progress. Conflict and instability can make it unsafe for USAID to physically monitor and verify aid and development programs. Furthermore, restricted movement in-country leaves gaps in traditional management and oversight methods. OIG’s work has previously identified the need for USAID to: • Systematically assess risks and develop appropriate response plans for evolving scenarios. Based on USAID OIG’s oversight work and information from USAID and public sources. Key Considerations From USAID OIG’s Prior Oversight Work, Continued

• Adjust staffing footprints and implement workplace flexibilities to maintain continuity of operations. • Establish processes to deploy qualified thirdparty monitors to supplement Agency oversight efforts. • Formally address third-party monitor recommendations and track them through resolution. 5. Strengthening transition planning and local capacity. An immediate crisis response can overshadow longer term stabilization and development efforts, particularly if the crisis becomes protracted like it has in Haiti. OIG’s work has previously identified the need for USAID to: • Establish processes and offer clear guidance to staff for transition planning. • Bolster opportunities to coordinate humanitarian assistance with longer term development programs to complement efforts and reduce risks of duplication and redundancy. • Understand local capacity strengths and weaknesses and develop a plan to address deficits, particularly when local organizations are intended to be part of the long-term solution. Recognize and Report Fraud, Waste, Corruption, and Abuse OIG receives reports of theft and looting, violence, and interference from gangs and other unlawful groups impacting USAID-funded programs in Haiti. Over the last few years, OIG has opened 5 Haiti-related investigations and provided fraud awareness briefings to over 260 USAID and implementer staff working on USAID programs in Haiti. OIG Hotline Reports Related to USAID Programs in Haiti, Fiscal Years 2021–2024 (third quarter) Source: OIG generated from OIG Hotline data from October 1, 2021, to July 30, 2024. Report Fraud, Waste, Corruption, and Abuse USAID OIG Hotline Portal Request a Fraud Awareness Briefing Contact Assistant Special Agent in Charge over Haiti programs Recognize Fraud Schemes Business Email Compromise Conflicts of Interest Currency Arbitrage USAID Brand Misuse OIG prepared this brief in accordance with its policies and procedures for agile products, which are aligned with CIGIE’s Quality Standards for Federal Offices of Inspector General and other audit, inspection, and evaluation policies and guidance. For more information, visit http://oig.usaid.gov.