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What Implementing Partners need to know about the USAID Office of Inspector General

November 17, 2021

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Author

Jessica Walker

Senior Manager, Convenings

Author

Cynthia Smith

Director, Government Affairs & Advocacy

In October 2021, Humentum hosted the USAID Office of the Inspector General (OIG) for a member-only webinar and Q&A. The mission of the OIG is “to safeguard and strengthen U.S. foreign assistance through timely, relevant, and impactful oversight.” The OIG does so primarily through objective and independent audits and investigations. During the Humentum webinar, the OIG outlined its current priorities.

While the OIG is officially housed within USAID, it is an independent federal agency with complete autonomy that does not report to USAID. Instead, it has direct lines of communication to the U.S. Congress and other stakeholders. Given the OIG’s reach and authority, Implementing Partners (IPs) must understand its priorities and approach. These presently include investigating public corruption, misuse of funds, and sexual exploitation, abuse, and harassment (SEAH). In all of this, the OIG encourages IPs to timely and transparently disclose, as per agency standard award provisions, allegations of fraud, waste, abuse, or other criminal conduct to OIG.

Digital Fraud

One of the biggest current threats to USAID IPs is the increasing risk of cyber-attacks. Fraudsters constantly develop new methods to attack vulnerabilities, using spear-phishing and business email compromise schemes that can have a significant negative financial impact—but are easily prevented with simple verification protocols. The simplest protocol: ensure that whoever manages money always verifies requests in multiple ways and always assumes that requests for funds or transfers are phishing/fraud. The OIG encourages IPs to review policies, implement and/or strengthen verification processes, and consider digital vulnerabilities to protect against potential fraud.

Misuse of Funds

Since the outset of the COVID-19 pandemic, the OIG has reportedly seen a rise in aid misuse, which they attribute partially to reduced staff oversight and increased opportunities that come with remote working. The OIG has also posited that where employee disenfranchisement is high, there is an increased risk of corruption and misuse of funds. As such, it is important for IPs to evaluate the effectiveness of their remote oversight and to take steps to minimize opportunity for misconduct. There are two Executive-level efforts OIG is participating in to address this issue from a U.S. law enforcement perspective:

Preventing Sexual Exploitation, Abuse, and Harassment (PSEAH)

The OIG continues to prioritize the prevention of sexual exploitation, abuse, and harassment in the sector. It is current policy that IPs report any credible allegations of SEAH to USAID first, which in turn, shares that information with the OIG. It is anticipated that this protocol will be adjusted to require IPs to concurrently inform the OIG and USAID of any SEAH-related incidences.

The OIG is committed to a survivor-centered approach to SEAH reporting, review, and investigation. For instance, the OIG will not ask for details about the victim/survivor in its review of an initial disclosure. If there is an investigation and/or potential U.S. criminal angle, they may need identifying information, but victim/survivor safety is and should be the priority throughout the initial reporting. It is critical that organizations make disclosures to USAID and USAID OIG as soon as possible, but only after ensuring that the victim/survivor is safe. First, IPs should conduct the necessary due diligence to assess the credibility of any allegations and take immediate steps to mitigate any threat to the victim/survivor and any reporters.

While PSEAH is a top priority for the OIG, investigations and prosecutions may not always be possible, as they may be considered a local crime in the jurisdiction where they transpire. Irrespective, disclosures not only serve to help prevent future abuse, but they also assist OIG’s efforts to prevent the “recycling” of bad actors in the sector.

The Importance of Voluntary Disclosures

An OIG investigation can be triggered by allegations of criminal conduct, audit findings, disclosures, and tips or hotline comments. OIG does not investigate programmatic performance unless the performance potentially violates U.S. criminal code or civil statutes. The OIG strongly encourages IPs to disclose any allegations as they arise and to do so fully and transparently. If the OIG learns of an allegation from another source – be it a whistleblower, constituent, or other party – and not the IP itself, it is not considered a disclosure, but rather a “complaint.” If the OIG receives a complaint, or learns of an allegation through a third-party source, doing so does not absolve the IP from complying with standard award provisions regarding organizational disclosures.

In fact, the longer an IP waits to disclose an allegation, the greater the legal and reputational risk may be to the IP on an organizational level.  Bad actors are present in all organizations, and it is the latter’s obligation to transmit allegations of fraud and other misconduct to USAID and OIG, notwithstanding the personnel involved.

If an IP is disclosing a credible allegation, it is important to notify USAID, the OIG, and the Agreement or Contracting Officer together for a coordinated response. This is critical because the OIG is not the deciding entity; they are fact finders and provide their findings to USAID, prosecutors, and others regarding their investigations.

Here are some key disclosure reminders:

  • Make sure disclosures are timely and transparent
  • There is no legal risk to disclosing something, but there is risk if you wait, conceal, or do not disclose
  • Keep OIG abreast of the progress of internal investigations in response to allegations received
  • Engaging compliance staff, legal counsel, and the OIG can simplify investigations

For more information on the OIG, please visit: https://oig.usaid.gov/

For more information on how to comply with USAID rules and regulations:

Humentum is here to assist you