Haiti Reconstruction
U.S. Efforts Have Begun, Expanded Oversight Still to Be Implemented Gao ID: GAO-11-415 May 19, 2011On January 12, 2010, an earthquake in Haiti killed an estimated 230,000 people, displaced about 2 million more, and exacerbated longstanding challenges. In July 2010, Congress appropriated more than $1.14 billion in supplemental funds for reconstruction assistance, most of which was provided to the U.S. Agency for International Development (USAID) and the Department of State (State). In April 2010, the Haitian government created the Interim Haiti Recovery Commission (IHRC), a joint Haitian-international entity, for an 18-month term to coordinate donors, conduct strategic planning, approve reconstruction projects, and provide accountability. In this report, GAO addresses (1) the planned uses for U.S. reconstruction assistance and the amounts provided so far, (2) USAID's internal controls for overseeing U.S. funds, and (3) IHRC's progress establishing governance and oversight structures. GAO interviewed U.S. government officials in Washington, D.C., and Haiti, as well as officials from Haitian ministries, the IHRC, and nongovernmental organizations, and reviewed U.S. and IHRC documents.
The U.S. government plans to allocate about $918 million of the $1.14 billion in supplemental Haiti reconstruction funds available through the end of fiscal year 2012 to USAID and State. USAID and State plan to allocate $770 million and $148 million, respectively, to projects in three geographic regions of Haiti, selected for their development potential, and four key sectors: (1) infrastructure and energy; (2) governance and rule of law; (3) health and other basic services; and (4) food and economic security. About half of the total funding is intended for infrastructure and energy projects and an additional third is for governance and rule-of-law programs. State and USAID reported they had obligated over $184.3 million, or about 20 percent of the funding, as of March 2011. USAID provided most of this amount to fulfill the U.S. government's pledge of $120 million to the multidonor Haiti Reconstruction Fund. State and USAID reported that they obligated most of the remaining $64.3 million to a small number of bilateral activities, including projects to restore basic government functions. USAID intends to expand and enhance its internal control framework to address the increased risk factors associated with the almost $650 million of the $770 million in supplemental reconstruction funds allocated to the agency and is at varying stages of implementing new internal controls. The agency plans to (1) augment existing internal controls to provide additional financial management and oversight of reconstruction projects, and (2) establish a new independent monitoring and evaluation unit. As of April 2011, while the agency had taken initial steps to implement some new controls, such as reorganizing staff to address the increase in oversight of supplemental reconstruction funds, it is in planning stages for other controls, particularly the new monitoring and evaluation unit. Additionally, the USAID Office of Inspector General plans to expand its audit and oversight activities and has begun to implement these plans. Although IHRC has established key governance structures and procedures, the commission is not fully operational. IHRC, which State officials said has helped improve transparency and coordination, has made progress setting up a new organization in a challenging environment. However, although the commission's mandate ends in October 2011, IHRC is not fully operational due to delays in staffing the commission and defining the role of its Performance and Anticorruption Office--which IHRC officials cited as key to establishing the commission as a model of good governance. IHRC also has made progress developing project review procedures and approving reconstruction projects, but IHRC's ability to direct funding to Haitian priorities is limited, in part because those priorities have not been clear. As a result, funding for approved projects is uneven across sectors and not necessarily aligned with Haitian priorities. For example, although the Haitian government identified nearly equal 18-month funding requirements for debris removal and agriculture, IHRC has approved about 7 times more funding for agriculture projects. IHRC has recently developed a strategic plan to begin to help clarify Haitian priorities. GAO recommends USAID take steps to ensure planned monitoring and evaluation activities are implemented in a timely manner. We also recommend State work with IHRC to make it fully operational. State agreed with our recommendations and USAID noted steps it is taking in line with our recommendation.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: David B. Gootnick Team: Government Accountability Office: International Affairs and Trade Phone: (202) 512-3149GAO-11-415, Haiti Reconstruction: U.S. Efforts Have Begun, Expanded Oversight Still to Be Implemented
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United States Government Accountability Office:
GAO:
Report to Congressional Committees:
May 2011:
Haiti Reconstruction:
U.S. Efforts Have Begun, Expanded Oversight Still to Be Implemented:
GAO-11-415:
GAO Highlights:
Highlights of GAO-11-415, a report to congressional committees.
Why GAO Did This Study:
On January 12, 2010, an earthquake in Haiti killed an estimated
230,000 people, displaced about 2 million more, and exacerbated
longstanding challenges. In July 2010, Congress appropriated more than
$1.14 billion in supplemental funds for reconstruction assistance,
most of which was provided to the U.S. Agency for International
Development (USAID) and the Department of State (State). In April
2010, the Haitian government created the Interim Haiti Recovery
Commission (IHRC), a joint Haitian-international entity, for an 18-
month term to coordinate donors, conduct strategic planning, approve
reconstruction projects, and provide accountability. In this report,
GAO addresses (1) the planned uses for U.S. reconstruction assistance
and the amounts provided so far, (2) USAID‘s internal controls for
overseeing U.S. funds, and (3) IHRC‘s progress establishing governance
and oversight structures. GAO interviewed U.S. government officials in
Washington, D.C., and Haiti, as well as officials from Haitian
ministries, the IHRC, and nongovernmental organizations, and reviewed
U.S. and IHRC documents.
What GAO Found:
The U.S. government plans to allocate about $918 million of the $1.14
billion in supplemental Haiti reconstruction funds available through
the end of fiscal year 2012 to USAID and State. USAID and State plan
to allocate $770 million and $148 million, respectively, to projects
in three geographic regions of Haiti, selected for their development
potential, and four key sectors: (1) infrastructure and energy; (2)
governance and rule of law; (3) health and other basic services; and
(4) food and economic security. About half of the total funding is
intended for infrastructure and energy projects and an additional
third is for governance and rule-of-law programs. State and USAID
reported they had obligated over $184.3 million, or about 20 percent
of the funding, as of March 2011. USAID provided most of this amount
to fulfill the U.S. government‘s pledge of $120 million to the
multidonor Haiti Reconstruction Fund. State and USAID reported that
they obligated most of the remaining $64.3 million to a small number
of bilateral activities, including projects to restore basic
government functions.
USAID intends to expand and enhance its internal control framework to
address the increased risk factors associated with the almost $650
million of the $770 million in supplemental reconstruction funds
allocated to the agency and is at varying stages of implementing new
internal controls. The agency plans to (1) augment existing internal
controls to provide additional financial management and oversight of
reconstruction projects, and (2) establish a new independent
monitoring and evaluation unit. As of April 2011, while the agency had
taken initial steps to implement some new controls, such as
reorganizing staff to address the increase in oversight of
supplemental reconstruction funds, it is in planning stages for other
controls, particularly the new monitoring and evaluation unit.
Additionally, the USAID Office of Inspector General plans to expand
its audit and oversight activities and has begun to implement these
plans.
Although IHRC has established key governance structures and
procedures, the commission is not fully operational. IHRC, which State
officials said has helped improve transparency and coordination, has
made progress setting up a new organization in a challenging
environment. However, although the commission‘s mandate ends in
October 2011, IHRC is not fully operational due to delays in staffing
the commission and defining the role of its Performance and
Anticorruption Office”which IHRC officials cited as key to
establishing the commission as a model of good governance. IHRC also
has made progress developing project review procedures and approving
reconstruction projects, but IHRC‘s ability to direct funding to
Haitian priorities is limited, in part because those priorities have
not been clear. As a result, funding for approved projects is uneven
across sectors and not necessarily aligned with Haitian priorities.
For example, although the Haitian government identified nearly equal
18-month funding requirements for debris removal and agriculture, IHRC
has approved about 7 times more funding for agriculture projects. IHRC
has recently developed a strategic plan to begin to help clarify
Haitian priorities.
What GAO Recommends:
GAO recommends USAID take steps to ensure planned monitoring and
evaluation activities are implemented in a timely manner. We also
recommend State work with IHRC to make it fully operational. State
agreed with our recommendations and USAID noted steps it is taking in
line with our recommendation.
View [hyperlink, http://www.gao.gov/products/GAO-11-415] or key
components. For more information, contact David Gootnick at (202) 512-
3149 or Gootnickd@gao.gov, or Susan Ragland at (202) 512-8486 or
Raglands@gao.gov.
[End of section]
Contents:
Letter:
Background:
U.S. Government Is Providing Reconstruction Funding to Stimulate
Economic Development, Obligating 20 Percent of Funding as of March
2011:
USAID's Initiatives for Oversight and Monitoring of Reconstruction
Funds Are at Varying Stages of Implementation:
IHRC Has Begun to Establish Governance Structures and Procedures, but
Is Not Fully Operational:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: Humanitarian Relief Spending in Haiti by U.S. Government
Agencies, as of the End of Fiscal Year 2010:
Appendix III: The Government of Haiti's Action Plan for Reconstruction
and Development:
Appendix IV: U.S. Government's Post-Earthquake Haiti Strategy Toward
Renewal and Economic Opportunity:
Appendix V: Timeline of Government of Haiti, the International
Community, and U.S. Government Actions in Response to the 2010 Haitian
Earthquake:
Appendix VI: Priority Sectors and Funding Needs Identified in IHRC's
Strategic Plan:
Appendix VII: Comments from the Department of State:
Appendix VIII: Comments from the U.S. Agency for International
Development:
Appendix IX: GAO Contacts and Staff Acknowledgments:
Tables:
Table 1: Supplemental Funding for Haitian Relief and Reconstruction:
Table 2: U.S. Preferences for Supplemental ESF Funds Provided to HRF:
Table 3: Supplemental U.S. Reconstruction Funds Reported as Obligated,
as of March 2011:
Table 4: Status of Priority Staffing Needs, as of January, 2011:
Table 5: IHRC-Approved Projects, June 2010-March 2011:
Table 6: IHRC-Approved Projects to Be Fully or Partially Funded by the
U.S. Government:
Table 7: Breakout of Funding Sources among U.S. Agencies Providing
Post-Earthquake Humanitarian Assistance to Haiti in Fiscal Year 2010:
Table 8: Breakout of State and USAID Fiscal Year 2010 Humanitarian
Spending among its Implementing Partners:
Table 9: Total Estimated Reconstruction Costs by Haiti Action Plan
Sector for the First 18 Months:
Figures:
Figure 1: Process for Approving and Funding Haiti Reconstruction
Projects Using U.S. Government Supplemental Funds:
Figure 2: U.S. Government's Development Corridors in Haiti:
Figure 3: Fiscal Year 2010 State and USAID Supplemental Reconstruction
by Sector (dollars in millions):
Figure 4: U.S. Infrastructure and Energy Sector Reconstruction:
Figure 5: U.S. Governance and Rule-of-Law Sector Reconstruction:
Figure 6: U.S. Health and Other Basic Services Sector Reconstruction:
Figure 7: U.S. Food and Economic Security Sector Reconstruction:
Figure 8: Organizational Chart of USAID Mission in Haiti:
Figure 9: OFM Structure Following Reorganization, as of October 2010:
Figure 10: Organization of IHRC:
Figure 11: IHRC Project Approvals, by Date:
Figure 12: U.S. Government's Post-Earthquake Haiti Reconstruction
Strategy:
Figure 13: Details of Sector Priorities Established in the U.S.
Reconstruction Strategy for Haiti:
Abbreviations:
AAD: Activity Approval Document:
Action Plan: Action Plan for National Recovery and Development of
Haiti:
ADS: Automated Directives System:
BPA: blanket purchase agreement:
CARICOM: Caribbean Community:
CHF: Cooperative Housing Foundation International:
DAI: Development Alternatives, Incorporated:
ESF: Economic Support Funds:
FMFIA: Federal Managers' Financial Integrity Act of 1982:
FY: fiscal year:
HOP: E2006 Haitian Hemispheric Opportunity through Partnership
Encouragement Act:
HRF: Haiti Reconstruction Fund:
IHRC: Interim Haiti Recovery Commission:
INCLE: International Narcotics Control and Law Enforcement:
MINUSTAH: United Nations Stabilization Mission in Haiti:
Mission: USAID Mission in Haiti:
M&E: monitoring and evaluation:
NGO: nongovernmental organization:
OAA: Office of Acquisition and Assistance:
OFDA: Office of Foreign Disaster Assistance:
OFM: Office of Financial Management:
OIG: Office of the Inspector General:
OMB: Office of Management and Budget:
OTI: Office of Transition Initiatives:
PAO: Performance and Anticorruption Office:
PCPS: Office of Policy Coordination and Program Support:
PEPFAR: U.S. President's Emergency Plan for AIDS Relief:
RIG: Regional Inspector General:
State: Department of State:
T-shelters: transitional shelters:
Treasury: Department of the Treasury:
UN: United Nations:
USAID: U.S. Agency for International Development:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
May 19, 2011:
Congressional Committees:
The January 12, 2010, earthquake centered near Port-au-Prince, Haiti,
was one of the deadliest and most destructive natural disasters in
recent history. The quake is estimated to have killed approximately
230,000 people, injured 300,000, and displaced approximately 2 million
from their homes according to a United Nations (UN) report. The World
Bank estimates the earthquake caused $7.8 billion in damage (over 100
percent of Haiti's 2009 gross domestic product). According to
Department of State (State) and U.S. Agency for International
Development (USAID) officials, the disaster generated the largest
international humanitarian relief effort ever undertaken and prompted
the international community to pledge billions for reconstruction,
including a pledge of $1.15 billion over the first 2 years by the U.S.
government. The amount of this assistance--more than triple the
average annual assistance provided by the U.S. government to Haiti
between 2006 and 2009--has raised concerns by U.S. government
officials about the U.S. and Haitian governments' ability to monitor,
maintain accountability over, and effectively use this funding. The
lack of transparency and accountability in governance and allegations
of pervasive corruption in Haiti could stall the country's economic
and political recovery and undermine U.S. and donor confidence in the
assistance effort.
In July 2010, Congress appropriated supplemental funds for Haiti's
relief and reconstruction and directed GAO to monitor post-earthquake
aid and other expenses related to Haiti.[Footnote 1] This report
addresses (1) the planned uses for U.S. reconstruction assistance and
the amount provided so far; (2) USAID's internal controls for
overseeing and monitoring U.S. funds provided for reconstruction
efforts; and (3) the progress the Interim Haiti Recovery Commission
(IHRC), a joint Haitian-international body, has made in establishing
governance and oversight structures.
To address these objectives, we reviewed reports, documents, and data
from, and obtained the views of officials at, State and USAID in
Washington, D.C., and Haiti. In Haiti, we also met with Haitian
ministry officials and representatives from IHRC, the Haiti
Reconstruction Fund (HRF), a multidonor trust fund organized to help
finance high-priority post-earthquake reconstruction projects, and
international and Haitian nongovernmental organizations (NGO) involved
in the relief and reconstruction efforts. We met with USAID
implementing partners and local recipients of U.S. assistance in Port-
au-Prince, Saint-Marc, and other locations in central Haiti. We
reviewed and analyzed U.S. government documents on allocations and
plans for monitoring and evaluating reconstruction funds, and Haitian
and IHRC documents on their efforts to assess reconstruction needs and
priorities and establish procedures to conduct project selection and
oversight.
We conducted this performance audit from June 2010 through May 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. See appendix I
for a detailed description of our objectives, scope, and methodology.
Background:
Humanitarian Relief:
As part of an unprecedented international humanitarian effort in the
year following the earthquake, U.S. and international relief
activities helped feed more than 4 million people, and removed 2
million cubic meters of rubble. This effort also vaccinated about 1
million internally displaced persons against communicable diseases in
the first 6 months after the quake. The UN reported that as of April
2011, the United States and at least 125 other countries responded to
the earthquake with humanitarian contributions totaling nearly $2
billion in financial and other assistance; and donations from private
individuals, foundations, and corporations totaled over $1.5 billion.
[Footnote 2]
As of the end of fiscal year 2010, U.S. government agencies had
provided more than $1.1 billion within Haiti to meet humanitarian
needs. This aid included food, medical assistance, temporary shelter,
and short-term employment. International earthquake relief efforts
were challenged by other emergencies that occurred in the year after
the earthquake, including (1) Hurricane Tomas in early November 2010,
which caused additional loss of life and severe flooding; (2) a
cholera epidemic that afflicted more than 240,000 people and claimed
at least 4,600 lives between October 2010 and March 2011;[Footnote 3]
and (3) the violence and political turmoil arising from the disputed
results of the November 28, 2010, presidential and legislative
elections. Appendix II provides details on humanitarian-relief
spending in Haiti by U.S. government agencies as of the end of fiscal
year 2010.
Global and U.S. Funding for Haiti's Relief and Reconstruction:
On March 31, 2010, the international community pledged over $9 billion
to meet Haiti's reconstruction and development needs over 10 years; of
this amount, $5.3 billion was directed to the reconstruction effort in
2010 and 2011, including $1.15 billion from the United States. As of
March 2011, total pledges exceeded $10.1 billion.[Footnote 4]
On July 29, 2010, Congress appropriated $2.93 billion in supplemental
funding.[Footnote 5] This amount includes (1) more than $1.64 billion
in relief funds largely used to reimburse U.S. government departments'
emergency and humanitarian activities; and (2) more than $1.14 billon
in reconstruction funds available through the end of fiscal year 2012.
[Footnote 6]
Of the $1.14 billion appropriated for reconstruction, about $918
million was directed to State and USAID, including $770 million in
USAID-administered Economic Support Funds (ESF), which included $120
million for the HRF; and about $148 million in State-administered
International Narcotics Control and Law Enforcement (INCLE) funds.
[Footnote 7] The appropriation also included funding for the
Department of the Treasury (Treasury) for Haitian debt relief, a
Treasury attaché office in the U.S. Embassy in Port-au-Prince, and
technical assistance, as well as funding for the USAID Office of the
Inspector General (OIG) (see table 1).
Table 1: Supplemental Funding for Haitian Relief and Reconstruction:
Recipient: State and USAID;
Relief: $556.5;
Reconstruction: $917.7;
Diplomatic-related expenses[A]: $144.0;
Total: $1,618.2.
Recipient: State;
Relief: $96.5;
Reconstruction: $147.7;
Diplomatic-related expenses[A]: $144.0;
Total: $388.2.
Recipient: USAID;
Relief: $460.0;
Reconstruction: $770.0;
Diplomatic-related expenses[A]: $[Empty];
Total: $1,230.0.
Recipient: Agriculture;
Relief: $150.0;
Reconstruction: [Empty];
Diplomatic-related expenses[A]: [Empty];
Total: $150.0.
Recipient: Defense;
Relief: $655.0;
Reconstruction: [Empty];
Diplomatic-related expenses[A]: [Empty];
Total: $655.0.
Recipient: Treasury;
Relief: [Empty];
Reconstruction: $7.8;
Diplomatic-related expenses[A]: [Empty];
Total: $7.8.
Recipient: Treasury Debt Relief;
Relief: [Empty];
Reconstruction: $212.0;
Diplomatic-related expenses[A]: [Empty];
Total: $212.0.
Recipient: Homeland Security;
Relief: $60.6;
Reconstruction: [Empty];
Diplomatic-related expenses[A]: [Empty];
Total: $60.6.
Recipient: Health and Human Services;
Relief: $220.0;
Reconstruction: [Empty];
Diplomatic-related expenses[A]: [Empty];
Total: $220.0.
Recipient: USAID Inspector General;
Relief: [Empty];
Reconstruction: $4.5;
Diplomatic-related expenses[A]: [Empty];
Total: $4.5.
Recipient: Total;
Relief: $1,642.1;
Reconstruction: $1,142.0[B];
Diplomatic-related expenses[A]: $144.0[C];
Total: $2,928.1.
Source: Congressional Research Service, GAO analyses of U.S.-
government fiscal year 2010 supplementary budget request and final
appropriation in the Supplemental Appropriations Act, 2010 (Pub.L. No.
111-212).
[A] State Department funds under diplomatic-related expenses include
$65 million appropriated for State's diplomatic/consular operations
and $79 million for embassy security, construction, and maintenance.
[B] All reconstruction funds are available through the end of fiscal
year 2012; however, $690,000 in Treasury funds for salaries and
expenses are available until expended.
[C] This total excludes $3 million provided in the supplemental
appropriation for the Broadcasting Board of Governors for emergency
broadcasting support and other expenses related to Haiti. The Board is
an independent agency with a separate appropriation, although the
Secretary of State is one of nine board members.
[End of table]
In addition to the funds specifically provided by this Act for efforts
in Haiti, a March 2011 State report stated that as of December 31,
2010, State and USAID obligated about $468 million from existing base
fiscal year 2009 and 2010 Development Fund appropriations which also
could be attributed as support for the longer-term reconstruction and
economic development of Haiti.[Footnote 8]
Haitian Framework for Reconstruction:
In the year after the earthquake, the Haitian government took three
steps to prioritize its needs and establish a reconstruction framework.
First, the Haitian government (with assistance from the World Bank and
other international organizations) completed a post-earthquake needs
assessment and issued a 10-year Action Plan for National Recovery and
Development of Haiti (Action Plan) in March 2010. The Action Plan
identified about $3.9 billion needed for the initial 18 months of
reconstruction (including almost $1.2 billion in budget support for
the Haitian government). The plan prioritized short-and long-term
reconstruction needs in four areas: (1) territorial rebuilding in Port-
au-Prince and three targeted regions;[Footnote 9] (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
(see appendix III for additional details on the government of Haiti's
Action Plan).
Second, in April 2010, the government of Haiti established IHRC, a
joint Haitian-international commission, under an 18-month mandate that
ends in October 2011.[Footnote 10] IHRC was designed to plan,
coordinate, and oversee all reconstruction projects of bilateral and
multilateral donors, NGOs, and some private-sector projects. Although
donors submit projects to IHRC for approval, IHRC does not directly
fund or implement any reconstruction projects. Nevertheless, U.S.
officials have cited IHRC as the key entity for providing transparency
and accountability over the reconstruction effort. In that regard,
IHRC has established the following mechanisms:
1. IHRC reviews and approves reconstruction projects funded by
bilateral and multilateral donors in an effort to align projects with
the priorities established in the Action Plan.
2. IHRC established the Performance and Anticorruption Office (PAO) to
monitor reconstruction efforts,[Footnote 11] including facilitating
project approval, overseeing IHRC's internal operations, investigating
allegations of corruption, and monitoring project performance.
These mechanisms do not replace any of the financial tracking or
oversight responsibilities of donor countries or project implementers.
As currently envisioned by U.S. and IHRC officials, IHRC's functions
will transfer to a permanent Haitian development agency when its
mandate expires.
Third, the international community, at the request of the Haitian
government, created HRF, a multidonor trust fund, in May 2010 to help
the Haitian government fund IHRC-approved projects that donors may not
otherwise fund.[Footnote 12] IHRC-approved projects sent to HRF are
developed and implemented in conjunction with one of three
participating partners: the Inter-American Development Bank, the World
Bank, or the UN. Donors indicated they would contribute $577 million
of their total reconstruction pledges--about 11 percent of the $5.3
billion in total funds pledged for the first 2 years of reconstruction-
-to HRF. As of April 2011, 17 donors had transferred $282 million into
HRF to fund their pledges, including $120 million from the U.S.
government. Although some donors (including the U.S. government)
expressed preferences for how their contributions would be used, the
donors retain no explicit control over funding once it is transferred
to HRF.
U.S. Government Framework for Reconstruction:
The U.S. government has taken steps to prioritize its actions in
support of the Haitian reconstruction effort. In September 2010, State
and USAID issued a joint spending plan to allocate supplemental
reconstruction funds among projects.[Footnote 13] In accordance with
the plan, USAID directly controls and provides oversight over the bulk
of ESF reconstruction funds--about $650 million--after making $120
million in ESF available for transfer via Treasury to the HRF.
[Footnote 14]
In January 2011, the Obama Administration issued a 5-year plan, the
Post-Earthquake USG Haiti Strategy: Toward Renewal and Economic
Opportunity, which targets resources in geographic areas and economic
sectors to help Haiti implement its Action Plan objectives. The
strategy seeks to concentrate U.S. projects in a small number of
economic sectors in the hope of encouraging private-sector led
sustainable development. The strategy also targets geographic areas
for development and outlines objectives and intermediate results to
guide projects over the life of the strategy (2011 through
2015).[Footnote 15] The strategy encompasses some, but not all, of the
objectives set forth in the Action Plan. See appendix IV for details
on the Post-Earthquake USG Haiti Strategy.
According to USAID officials, USAID is developing one or more Activity
Approval Documents (AAD) for each of the economic sectors in this
strategy. USAID policies require that an AAD describe the project or
activity, including its intended results, implementation methods, and
financing plans. An AAD also certifies that appropriate planning for
the related activities has been completed.[Footnote 16]
Figure 1 depicts the flow of U.S. supplemental funds and
reconstruction projects through the Haitian and U.S. governments'
reconstruction frameworks.
Figure 1: Process for Approving and Funding Haiti Reconstruction
Projects Using U.S. Government Supplemental Funds:
[Refer to PDF for image: illustration]
U.S. oversight of bilateral projects:
State Department; USAID (strategy):
Spending plan and funding: to:
Project Development (Activity Approval Documents).
Spending plan: to Project submissions:
Interim Haiti Recovery Commission (IHRC):
Obligated fund to:
Implementers; and;
Haiti Reconstruction Fund (HRF).
Interim Haiti Recovery Commission (IHRC):
Approved projects:
Implementers; and;
Haiti Reconstruction Fund (HRF).
Implementers:
Government of Haiti;
NGOs/contractors;
Multilaterals (United Nations, World Bank, etc.);
U.S. government agencies.
Haiti Reconstruction Fund (HRF):
Approved projects and funds to:
United Nations;
World Bank;
Inter-American Development Bank;
Funds and approved projects from each of the above to:
Implementers.
Source: GAO analysis.
Notes:
Each bilateral or HRF-funded project may use one or more of the types
of implementers listed. U.S. bilateral projects typically are
implemented by NGOs or contractors. U.S. government agencies may
implement technical assistance projects directly.
Other donors use a similar process to submit project proposals to
IHRC, allocate their reconstruction funds, and implement projects.
[End of figure]
A timeline summarizing the Haitian and U.S. reconstruction frameworks
in response to the earthquake is found in appendix V.
Existing Accountability and Controls Framework for USAID-Administered
Funds:
Funds administered by USAID are subject to an accountability and
internal controls framework[Footnote 17] established by USAID's policy
directives and required procedures, as provided by USAID's ADS.
[Footnote 18] ADS is organized into six function series, which direct
the mission in Haiti (mission) in designing and implementing its
internal controls and any policy or procedural changes that need to be
made.[Footnote 19] ADS delineates a number of required control
functions, including:
* The Office of Financial Management (OFM) is responsible for
supporting the development and implementation of internal controls
over financial activities. According to ADS,[Footnote 20] effective
and efficient internal control includes control activities to help
ensure management directives such as proper execution of financial
transactions and events, accurate and timely recording of such
transactions, and physical control over vulnerable assets, such as
cash, to help ensure that management directives are carried out.
* Reconstruction projects are subject to ADS directives that define
and address the controls needed to monitor and evaluate program
progress and results.[Footnote 21]
Projects are also subject to the monitoring and evaluation functions
discussed in the U.S. government's reconstruction strategy. According
to the strategy, the mission will establish an independent monitoring
and evaluation unit to assess reconstruction progress and impact.
Additionally, USAID issued a revised Evaluation Policy in January 2011
to update the agency's standards and practices. The revised policy is
intended to develop the use of evaluation as a crucial tool to inform
USAID's global development efforts and make management and operational
decisions, and emphasizes the need to collect and establish baseline
data when initiating new projects.
Independent from the mission in Haiti, USAID's OIG conducts and
supervises internal audits and investigations of USAID programs in
Haiti through its regional office located in El Salvador. OIG's
oversight of mission activities includes audits and investigations
based on authority provided through the Inspector General Act of 1978,
as amended.[Footnote 22]
U.S. Government Is Providing Reconstruction Funding to Stimulate
Economic Development, Obligating 20 Percent of Funding as of March
2011:
The U.S. government allocated the $918 million in supplemental
reconstruction funds to stimulate development in three geographic
areas selected for their development potential--referred to as
development corridors--according to the U.S. governmentwide strategy
for Haiti. Within each economic development corridor, State and USAID
will distribute funding among projects in four sectors: (1)
infrastructure and energy, (2) food and economic security, (3) health
and other basic services, and (4) governance and rule of law. Nearly
half of the funding, or about $426 million, is intended for
infrastructure and energy projects. An additional third, or about $293
million, is intended for governance and rule-of-law programs. Over 20
percent of the total amount, or $184.3 million, was reportedly
obligated as of March 2011.[Footnote 23] This total includes the
entire $120 million U.S. government contribution to the HRF.
U.S. Government Strategy Focuses on Three Development Corridors:
The U.S. governmentwide strategy calls for funding to stimulate
economic activity and improve basic services delivery in three
geographic development corridors between 2011 and 2015. According to
the strategy, this is in accordance with the Action Plan's objective
to support new and diverse economic opportunities outside Port-au-
Prince, by focusing on investments in housing, energy, agriculture,
health, security, and national and local governance. State and USAID
officials noted that targeting these three areas, which present a
comparative advantage for growth and a need for stability, is an
attempt to decongest Port-au-Prince by providing economic
opportunities elsewhere in Haiti. Figure 2 identifies the development
corridors.
Figure 2: U.S. Government's Development Corridors in Haiti:
[Refer to PDF for image: illustrated map of Haiti]
Depicted on the map:
Cap-Haïtien Corridor;
Saint-Marc Corridor;
Port-au-Prince Corridor.
Sources: Multiple U.S. Government Agencies, Post-Earthquake USG Haiti
Strategy: Toward Renewal and Economic Opportunity (Washington, D.C.,
January 2011); Map Resources,(map).
Note: A State document notes the Port-au-Prince Corridor is located in
and just to the north of Port-au-Prince, extending east to the
Dominican Republic border and encompassing the entirety of the Cul-de-
Sac watershed; the Saint-Marc Corridor will be anchored by the
municipality of Saint-Marc in the Department of Artibonite and will
continue down the west coast of Haiti encompassing the Cabaret/Saint-
Marc watersheds; the Cap-Haïtien Corridor includes the area around Cap-
Haïtien, and continues to the Haiti-Dominican border in the east and
encompasses the entirety of the Limbe and Cap-Haïtien watershed on the
western end.
[End of figure]
Under the State-USAID spending plan, a portion of supplemental funding
is for corridors outside Port-au-Prince. For example, the spending
plan allocates $137.1 million for roads and ports in development
corridors; USAID officials also indicated that a substantial portion
of the $61.6 million allocated to provide homes and infrastructure to
internally displaced persons will be located in these corridors.
U.S. Government Is Allocating $918 Million in Reconstruction Funding
to Four Core Economic Development Sectors:
The U.S. strategy identifies four sectors as critical to achieving
economic growth and stability. The spending plan allocates: (1) $426
million (46 percent of total funding) for infrastructure and energy;
(2) $293 million (32 percent) for governance and rule of law;[Footnote
24] (3) $118 million (13 percent) for health and other basic services;
and (4) about $64 million (7 percent) for food and economic security.
[Footnote 25] The plan identifies subsectors within each of the four
sectors. Also, under the plan, the $120 million provided to the HRF is
allocated to subsectors within three of the sectors.[Footnote 26]
Figure 3 describes funding for the four sectors, and figures 4 through
7 provide additional sector and subsector details.
Figure 3: Fiscal Year 2010 State and USAID Supplemental Reconstruction
by Sector:
[Refer to PDF for image: table and pie-chart]
Sector: Infrastructure and Energy: $425.85 million (46%);
USAID-Administered Subsectors:
* Shelter and supporting infrastructure;
* Urban upgrading in Port-au-Prince;
* Rubble removal;
* Energy infrastructure;
* Infrastructure for the agricultural and industrial sector.
Sector: Governance and Rule of Law: $292.59 million (16%);
USAID-Administered Subsectors:
* Community stabilization;
* Enabling the government of Haiti to function;
* Supporting dialogue on relief and recovery;
* Public institution and civil-society strengthening;
* Justice reform and human rights;
State-Administered Subsectors:
* Justice reform and human rights;
* Corrections;
* Policing;
* Counternarcotics and anticorruption;
* Trafficking in persons;
* Peacekeeping.
Sector: Health and Other Basic Services: $118.12 million (13%);
USAID-Administered Subsectors:
* Health systems, professional training, and reconstruction;
* Health services to internally displaced persons;
* Assistance for people with disabilities;
* Education.
Sector: Food and Economic Security: $63.61 million (7%);
USAID-Administered Subsectors:
* Rural economic growth and development;
* Market access and value chains;
* Agricultural services and institutional strengthening;
* Natural resource management;
* Partial credit guarantee fund.
Sector: Other: $17.50 million (2%).
USAID-Administered Subsectors:
* USAID operating expenses;
* Budget support to the government of Haiti.
Source: GAO analysis of USAID and State data.
[End of figure]
Figure 4: U.S. Infrastructure and Energy Sector Reconstruction:
[Refer to PDF for image: 2 photos, pie-chart, table]
Infrastructure and Energy $425.85 million (46%):
Subsector: Energy infrastructure;
Allocation[A]: $137.11 million;
Description of reconstruction projects and priorities: Rehabilitate
and expand high-priority infrastructure and power generation as well
as support for regulatory, legal, and sector governance reform.
Subsector: Infrastructure for the agricultural and industrial sectors;
Allocation[A]: $137.11 million;
Description of reconstruction projects and priorities: Primarily for
road and port development to facilitate farm-to-market transportation.
Subsector: Urban upgrade in Port-au-Prince;
Allocation[B]: $65.0 million;
Description of reconstruction projects and priorities: U.S. government
to provide via multi-donor HRF while expressing a preference that this
funding be used to repair housing, construct essential community
infrastructure, and provide technical support to develop local
capacity to manage land claims and ensure the use of safe construction
methods.
Subsector: Permanent housing in the U.S. government development
corridors;
Allocation[A]: $61.63 million;
Description of reconstruction projects and priorities: Provide
permanent housing for internally displaced people in new developments or
upgraded transitional shelters in accessible locations along the
development corridors. Includes technical support for the development
of a national housing strategy, improved building codes, and a housing
finance system.
Subsector: Rubble removal;
Allocation[B]: $25.0 million;
Description of reconstruction projects and priorities: U.S. government
to provide via multi-donor HRF projects while expressing a preference
for rubble removal in residential communities.
Sources: GAO analysis of USAID and State data; photos, GAO.
[A] FY 2010 Haiti supplemental spending plan allocation.
[B] To HRF.
[End of figure]
Figure 5: U.S. Governance and Rule-of-Law Sector Reconstruction:
[Refer to PDF for image: 2 pie-charts, 2 tables]
Governance and Rule of Law: $292.59 million (16%):
USAID-Administered:
Subsector: Public institution and civil society strengthening;
Allocation[A]: $63.89 million;
Description of reconstruction projects and priorities: Strengthen
public administration and improve public sector performance in
priority institutions, including the Office of the Prime Minister and
Ministries of Finance, Planning, Justice & Public Security,
Agriculture, Health, and Public Works.
Subsector: Community stabilization;
Allocation[A]: $48.30 million;
Description of reconstruction projects and priorities: Encourage
people to move out of camps to new communities or back to their
neighborhoods, and to revitalize priority public spaces.
Subsector: Justice reform and human rights;
Allocation[A]: $14.74 million;
Description of reconstruction projects and priorities: The passage and
implementation of new criminal and criminal procedure codes, to
standardize case tracking, and other efforts to improve court
functionality.
Subsector: Enabling the government of Haiti to function;
Allocation[A]: $11.0 million;
Description of reconstruction projects and priorities: Strengthening
the capacity of key national-government ministries and some local
entities to engage in rebuilding operations by providing infrastructure,
office and communications equipment, and technical assistance. Includes
provision of material assistance and short-term technical expertise to
IHRC.
Subsector: Supporting dialogue on relief and recovery;
Allocation[A]: $7.0 million;
Description of reconstruction projects and priorities: Support to
media, conducting surveys, and government of Haiti outreach.
State-Administered:
Subsector: Peacekeeping;
Allocation[A]: $45.0 million;
Description of reconstruction projects and priorities: Support UN
peacekeeping operations by doubling the U.S. contingent to 100 police
advisors and 10 corrections advisors, help establish effective
internal displaced-person camp-security measures, and provide
equipment and training to the UN's formed police units.
Subsector: Policing;
Allocation[A]: $35.1 million;
Description of reconstruction projects and priorities: Reconstruct
damaged portions of the Haitian National Police training facility and
provide assistance for training new police recruits.
Subsector: Corrections;
Allocation[B]: $33.36 million;
Description of reconstruction projects and priorities: Support
renovations or rebuilding of damaged prison facilities.
Subsector: Counternarcotics and anticorruption;
Allocation[A]: $14.7 million;
Description of reconstruction projects and priorities: Re-establish
and enhance the Haitian National Police capacity for counternarcotics,
maritime, and transnational anticrime operations.
Subsector: Justice reform and human rights;
Allocation[A]: $7.5 million;
Description of reconstruction projects and priorities: Support the
strategy to address the 85 percent pretrial detention rate in Haiti,
funds will provide a mobile court system to transport judges to
prisons to adjudicate and classify prisoners.
Subsector: Trafficking in persons;
Allocation[A]: $5.5 million;
Description of reconstruction projects and priorities: Supplement
existing programs to support technical assistance on antitrafficking
legislation and address the need for enactment and enforcement of
protection laws and programs to address gender-based violence.
Source: GAO analysis of USAID and State data.
[A] FY 2010 Haiti supplemental spending plan allocation.
[End of figure]
Figure 6: U.S. Health and Other Basic Services Sector Reconstruction:
[Refer to PDF for image: 2 photos, pie-chart, table]
Health and Other Basic Services: $118.12 million (13%):
Subsector: Health systems, professional training, and reconstruction;
Allocation[A]: $70.0 million;
Description of reconstruction projects and priorities: Renovate
damaged infrastructure, including hospitals and medical schools in
Port-au-Prince. Will also renovate or build new health centers and
hospitals in communities targeted for U.S. government development
assistance. Includes technical support for the Ministry of Health.
Subsector: Health services to internally displaced persons;
Allocation[A]: $28.29 million;
Description of reconstruction projects and priorities: Support the
provision of family planning, tuberculosis, and routine immunization
services at health facilities in the Port-au-Prince area. Will also
increase access to basic health care at communal health facilities.
Subsector: Education;
Allocation[B]: $10.0 million;
Description of reconstruction projects and priorities: Provide via
multidonor HRF to support Haiti‘s education system with an expressed
preference to support the IADB‘s plan to build or rehabilitate
schools, improve teacher quality, and promote better enforcement of
education standards.
Subsector: Assistance for people with disabilities;
Allocation[A]: $9.83 million;
Description of reconstruction projects and priorities: Establish or
strengthen services for disabled persons at four to six service
centers, and train rehabilitation technicians and staff. Also support
capacity development for government ministries and the IHRC to improve
access to public facilities for the disabled.
Sources: GAO analysis of USAID and State data; photos, GAO.
[A] FY 2010 Haiti supplemental spending plan allocation.
[B] To HRF.
[End of figure]
Figure 7: U.S. Food and Economic Security Sector Reconstruction:
[Refer to PDF for image: 3 photos, pie-chart, table]
Food and Economic Security: $63.61 million (7%):
Subsector: Natural resource management;
Allocation[A]: $24.57 million;
Description of reconstruction projects and priorities: Improve and
restore watershed areas in support of increasing productivity of
certain staple and export crops in U.S. government development
corridors (includes $7.5 million to provide alternatives for firewood
and charcoal fuel).
Subsector: Partial credit guarantee fund;
Allocation[B]: $12.5 million;
Description of reconstruction projects and priorities: U.S. government
expressed a preference that this funding provided via HRF multidonor
projects be used to refinance distressed or nonperforming loans held
by small and medium-sized businesses negatively affected by the
earthquake by facilitating implementation of a partial credit
guarantee fund to encourage banks to refinance and make new loans.
Subsector: Rural economic growth and development;
Allocation[A]: $11.79 million;
Description of reconstruction projects and priorities: Support effort
to double yields of high-value export crops (mango and cocoa) and staple
crops in selected areas over 5 years.
Subsector: Agricultural services and institutional strengthening;
Allocation[A]: $11.79 million;
Description of reconstruction projects and priorities: Work with
government of Haiti to create cooperative-owned agribusinesses to reduce
dependence on donated seed and fertilizers. Also includes provision of
advisors to support applied agricultural research and extension and
vocational training.
Subsector: Market access and value chains;
Allocation[A]: $4.91 million;
Description of reconstruction projects and priorities: Expand access
to technology and training to rural small and medium enterprises, and
a market-price information system.
Sources: GAO analysis of USAID and State data; photos, GAO.
[A] FY 2010 Haiti supplemental spending plan allocation.
[B] To HRF.
[End of figure]
Twenty Percent of U.S. Supplemental Funding Had Been Obligated by
March 2011:
As of the end of March 2011, USAID and State reported that
approximately $184.3 million, or about 20 percent of $918 million, had
been obligated.[Footnote 27] The obligated amount includes $120
million in ESF funds contributed to HRF through Treasury. The U.S.
government expressed preferences for how HRF would apportion the $120
million among certain subsectors (see table 2). These preferences are
reflected in IHRC-approved projects to date that are funded in whole
or in part by U.S. contributions to HRF.
Table 2: U.S. Preferences for Supplemental ESF Funds Provided to HRF:
Source of funds (by sector): Infrastructure and Energy;
Subsector: Housing;
Amount: $65.0 million.
Source of funds (by sector): Infrastructure and Energy;
Subsector: Rubble removal;
Amount: $25.0 million.
Source of funds (by sector): Food and Economic Security;
Subsector: Partial Credit Guarantee fund;
Amount: $12.5 million.
Source of funds (by sector): Health and Other Basic Services;
Subsector: Education;
Amount: $10.0 million.
Source of funds (by sector): Other;
Subsector: Government of Haiti budget support;
Amount: $7.5 million.
Source of funds (by sector): Total;
Amount: $120.0 million.
Source: U.S. government supplemental spending plan for Haiti.
Note: The $7.5 million in government of Haiti budget support
originally included $6 million to help fund a portion of IHRC's 18-
month operations budget, which the commission estimates will total
nearly $15 million by the end of October 2011. As of April 2011,
however, the U.S. government has not yet finalized an agreement with
the government of Haiti about the specific budgetary line items
against which it will apply this support.
[End of table]
In addition, USAID and State reported they obligated another $64.3
million in supplemental reconstruction funds between December 2010 and
March 2011. USAID reported obligating $44 million in ESF funds for
reconstruction projects and operating requirements. State reported
obligating another $20.3 million in INCLE funding was for a small
number of bilaterally conducted rule-of-law projects (see table 3).
Table 3: Supplemental U.S. Reconstruction Funds Reported as Obligated,
as of March 2011:
Sector (source of funds): Governance and Rule of Law (INCLE);
Priority and project area: Peacekeeping--Support for United Nations
Stabilization Mission in Haiti (MINUSTAH);
Amount: $9.6 million.
Priority and project area: Policing--Repair of police infrastructure;
Amount: Sector (source of funds): $5.5 million.
Priority and project area: Corrections--Renovate and rebuild prisons;
Amount: Sector (source of funds): $0.6 million.
Priority and project area: Trafficking in persons--Strengthen
institutional and civil society capacity to address trafficking, and
protect victims of gender-based violence;
Amount: $4.5 million.
Sector (source of funds): Governance and Rule of Law (ESF);
Priority and project area: Community stabilization through temporary
employment--Includes activities to remove rubble and repair public
infrastructure;
Amount: $26.1 million[A].
Priority and project area: Enabling government of Haiti to function--
Provision of technical assistance, office equipment, and temporary
facilities to the offices of the President and the Prime Minister, and
key Haitian government ministries and IHRC;
Amount: $9.8 million[A].
Priority and project area: Supporting dialogue on relief and recovery--
Promotes greater dialogue and information exchange between the public,
civil society, media, and the government of Haiti. Includes support
for infrastructure and short-term technical assistance to the Ministry
of Culture and Communications;
Amount: [Empty].
Priority and project area: Public institution and civil society
strengthening--Transfer of $2 million to the Smithsonian Institution's
Haiti Cultural Recovery Project to rescue, safeguard, and preserve
Haiti's important collections of art, artifacts, museum collections,
and architecture;
Amount: $2.0 million.
Sector (source of funds): Food and Economic Security (ESF);
Priority and project area: Natural resource management--Watershed
restoration and improvement;
Amount: $5.0 million.
Sector (source of funds): USAID operating expenses;
Priority and project area: [Empty];
Amount: $1.1 million.
Sector (source of funds): Total;
Amount: $64.3 million[B].
Source: GAO analysis of State and USAID data.
[A] According to an OTI official, obligations for OTI's projects will
be distributed among these three project and priority areas in
proportion to their share of the total allocation of $66.3 million in
supplemental funds noted in the spending plan: community stabilization
projects will receive about 73 percent of the obligated funds;
projects enabling the government of Haiti to function will receive 17
percent; and projects supporting dialogue on relief and recovery will
receive approximately 10 percent.
[B] Total differs due to rounding. This total excludes most of the
$6.5 million in supplemental ESF allocated for USAID operating
expenses in fiscal year 2011, but not reported as obligated as of
March 2011. According to USAID officials, $5.5 million of this amount
was distributed to the mission for obligation (but not yet obligated),
and $1 million was withheld for use by USAID's Haiti Task Team in
Washington, D.C.
[End of table]
* The State-administered INCLE obligations contributed to doubling the
number of U.S. police advisors working with MINUSTAH from 55 to 110,
[Footnote 28] replacing some equipment lost in the earthquake by the
U.S. contingent with MINUSTAH, repairing certain Haitian police
facilities, and conducting site surveys and beginning construction or
renovation of prison facilities.
* The USAID-administered ESF amount includes (1) a December 2010
obligation for an agricultural/integrated watershed program in rural
Haiti, to which USAID added some activities for food distribution and
production of locally grown food,[Footnote 29] and (2) grants awarded
in January and March 2011 under two existing and one new contract for
OTI's short-and medium-term activities to support community
revitalization, help restore basic government functions, and provide
technical and other assistance to the Haitian government (including
IHRC).
USAID's Initiatives for Oversight and Monitoring of Reconstruction
Funds Are at Varying Stages of Implementation:
USAID intends to expand and enhance its internal control framework to
address the increased risk factors associated with the increase in
funding USAID will oversee and is at varying stages of implementing
new controls.[Footnote 30] To oversee $648 million of supplemental
reconstruction funds allocated to USAID, the mission plans to (1)
augment existing internal controls to provide additional financial
management and oversight of reconstruction projects by the mission's
OFM; and (2) establish a new independent monitoring and evaluation
(M&E) unit in the mission's Office of Policy Coordination and Program
Support (PCPS). As of April 2011, OFM has taken initial steps to
implement new controls, such as reorganizing staff to address the
increase in oversight of supplemental reconstruction funds; however,
PCPS is in its planning stages. Additionally, the USAID OIG,
independent of the mission, plans to enhance its audit and oversight
activities in Haiti and has begun to implement its plans. USAID plans
to allocate at least $16.5 million in supplemental funding to these
new measures.[Footnote 31] Figure 8 depicts the organization of the
USAID mission in Port-au-Prince and highlights its relationships with
the three offices responsible for maintaining accountability and
internal controls.
Figure 8: Organizational Chart of USAID Mission in Haiti:
[Refer to PDF for image: illustration]
USAID/Haiti Mission Office of Director:
Coordinating function with:
* USAID OIG in San Salvador.
Reporting to USAID/Haiti Mission Office of Director:
* Executive Office;
* Office of Financial Management;
* Office of Policy Coordination and Program Support;
* Office of Acquisition and Assistance;
* Office of Governing Justly and Democratically;
* Office of Health and Education;
* Office of Food Security & Humanitarian Assistance;
* Office of Economic Growth.
Source: GAO analysis of USAID/Haiti data.
[End of figure]
OFM Developed Plans for Expanding and Enhancing Oversight and
Monitoring of Reconstruction Funds and Is in Early Stages of
Implementation:
OFM intends to augment its existing controls to address the heightened
risks associated with the increase in funding, including by providing
additional fiscal oversight over the four development sectors
identified in the U.S. reconstruction strategy, adding staffing
resources, and conducting financial management training. As of April
2011, OFM had developed plans to conduct additional oversight
activities, such as conducting audits specifically of reconstruction
funds used to maintain USAID's fiscal oversight. OFM had also taken
initial steps to reorganize its structure to better align with the
U.S. reconstruction strategy, and initiated the contracting process
for obtaining assistance for OFM to conduct additional financial
oversight activities.
OFM Plans to Conduct Expanded Oversight of Supplemental Fund Grantees:
OFM has developed plans to apply expanded controls over supplemental
reconstruction funds. OFM officials stated that they developed these
plans to address the risks associated with increased amounts of funds
(and the existing risks associated with grants and acquisitions in
Haiti, such as high levels of corruption) and because they had prior
experience implementing similar plans responding to other natural
disasters in Haiti, such as a tropical storm in 2004. These risks
include (1) the substantial increase in the amount of funding USAID
will oversee in fiscal years 2011 and 2012;[Footnote 32] (2) the
increased number of new grantees, particularly Haitian grantees; and
(3) the need to obligate and spend funds quickly to meet pressing
needs. OFM's plans for its additional oversight activities were
included in an April 2010 action memorandum outlining the mission's
financial oversight strategy for the earthquake response and its
Fiscal Year 2011 Yearly Financial Plan, released in November 2010.
The April 2010 action memo was developed by OFM as an oversight plan
to augment the mission's internal control framework by implementing
additional controls over supplemental reconstruction funding and
providing USAID financial management training. The action memo
reflected input from various sources, including the views of the
mission's senior management staff and USAID OIG's oversight strategy
for reconstruction activities.[Footnote 33] It stated the planned
additional controls will provide assurance that supplemental
reconstruction funds will be safeguarded through activities, such as
(1) conducting additional financial reviews of all grantees and
contractors receiving reconstruction funds; (2) developing additional
policies and procedures for local grantees and contractors receiving
reconstruction funds; (3) and performing control environment
assessments and risk assessments[Footnote 34] of grantees with no
previous experience working with the mission. In the action memo, OFM
also identified the need to provide additional USAID financial
management training to grantees.
OFM officials stated their fiscal year 2011 financial plan focuses on
maintaining oversight of all USAID funds, including reconstruction
funds, and aligns OFM's planned oversight activities with the four
development sectors identified in the U.S. government's reconstruction
strategy.[Footnote 35] Under the plan, OFM will provide financial
support services, including audits, financial reviews, payment
verifications, and financial visits in accordance with USAID's ADS to
each development sector in the strategy.[Footnote 36] To help
developmental sector program teams safeguard USAID assets, verify that
assets are used for intended purposes, and provide timely and accurate
financial information to USAID management, OFM will provide
recommendations to each these teams, if necessary. Moreover, OFM
officials developed a schedule of the office's planned financial
audits, which provide oversight for ongoing USAID projects and new
reconstruction projects, for fiscal year 2011.
OFM Reorganized Its Structure and Developed Plans to Add Internal and
External Staffing Resources to Maintain Oversight of Reconstruction
Funds:
To carry out the activities in the action memo, OFM reorganized its
structure in October 2010 to better align with the four development
sectors and has taken steps to implement its plans to increase the
office's staff levels. In particular, OFM officials stated that
financial analysts would be dedicated to the four development sectors
to provide financial management assistance. According to its plan, OFM
will undertake some additional oversight measures, such as conducting
financial reviews and financial visits[Footnote 37] of grantees and
contractors receiving reconstruction funds. According to OFM
officials, they identified the need for additional staff and created
new positions to address the anticipated increase in the workload
associated with implementing OFM's planned oversight procedures. As of
April 2011, OFM officials told us they promoted 2 personnel into two
recently created accounting positions within OFM. Moreover, OFM
officials stated they plan to hire 5 more staff by June 2011,
increasing personnel from 16 to 21. Figure 9 shows the reorganized
OFM, as of October 2010, with oversight and accounting staff to cover
the four key developmental sectors.
Figure 9: OFM Structure Following Reorganization, as of October 2010:
[Refer to PDF for image: illustration]
Office of Financial Management (Controller):
Coordinating function with:
* Regional Inspector General in San Salvador.
Reporting to Office of Financial Management (Controller):
* Financial Analysis Supervisor:
- Contracted local accounting/contracting firms;
- Financial Analysis focused on development sectors;
* Chief Accountant:
- Financial Accounting focused on development sectors;
- Payments and Payroll.
Source: GAO analysis of OFM data.
[End of figure]
In addition to adding OFM staff to help implement planned additional
oversight, OFM plans to contract with local accounting and consulting
firms--four have been identified and certified by USAID OIG--to
conduct most of the financial reviews of local grantees and
contractors, including developing additional policies and procedures
and conducting control environment assessments and risk assessments of
new grantees and contractors. Moreover, the firms will execute annual
financial audits of local private voluntary organizations and local
for-profit contractors that expend $300,000 or more in reconstruction
funding in a fiscal year.[Footnote 38] USAID officials noted that OFM
will review the work completed by these local accounting and
consulting firms and share its findings with USAID OIG and relevant
mission program officials.
OFM Has Initiated Implementation of Planned Additional Controls, but
Further Implementation Is Dependent on Obligation of Reconstruction
Funds:
OFM identified the need to contract with firms to help implement
additional oversight activities and conduct training for grantees and
subgrantees on financial management of reconstruction funds to address
risks associated with spending reconstruction funds in Haiti. OFM has
initiated the implementation of planned additional controls, such as
starting the procurement process to contract with local accounting and
consulting firms to provide additional oversight. However, officials
stated they are waiting for the mission to further obligate
reconstruction funds to execute planned additional oversight
activities, such as performing specific audits and providing training.
In April 2011, OFM officials told us they expect to have contracts in
place no later than June 2011 with local accounting and consulting
firms to provide (1) additional financial reviews assessing local
grantees' and contractors' financial management and (2) financial
management training. These OFM officials stated they had submitted the
draft blanket purchase agreement (BPA),[Footnote 39] to the mission's
Office of Acquisition and Assistance (OAA)--the mission's office
responsible for procuring goods and services, anticipating that OAA
would finalize the BPA in early June,[Footnote 40] prior to further
obligation of supplemental reconstruction funds.[Footnote 41]
According to these officials, the BPA statements of work, which were
finalized in December 2010, include objectives, steps and procedures,
reporting requirements, and terms of performance in such detail that
the contracted firms should be able to begin performing their assigned
oversight responsibilities as firms are identified. However, OFM
officials added that until the mission identifies grantees to receive
reconstruction funds, OFM will not be able to identify grantees to
audit or determine what training may be necessary.
The Mission Plans to Develop a New Monitoring and Evaluation Unit to
Assess Progress and Is in the Early Stages of Planning:
PCPS drafted plans to establish a new, independent M&E unit in
accordance with the U.S. Haiti strategy and USAID's new agency-wide
evaluation policy.[Footnote 42] In response to the U.S. reconstruction
strategy's requirement for an increase in M&E activities, the mission
will dedicate $12 million in supplemental reconstruction funds to
create the new M&E unit. USAID's evaluation policy, issued in January
2011, updated the agency's standards and practices. The revised policy
highlights the use of evaluation as an important tool to inform
USAID's global development effort and make operational
decisions.[Footnote 43] USAID's evaluation policy also clarified the
purposes for and approaches to conducting evaluations, such as
requiring external parties (i.e., a third-party contractor) to conduct
evaluations to mitigate biased reporting or conflicts of interest. For
example, if an evaluation team is composed of USAID staff, the
evaluation policy requires an outside expert to lead the team.
Additionally, the evaluation policy focuses on establishing methods
that ensure credibility, transparency, and high-quality information.
According to PCPS documents, the mission's plans include the following
M&E efforts:
* Collect and track baseline data--or data that establish the
conditions that exist before a project's implementation--and project-
level indicator[Footnote 44] data for all reconstruction projects
through a contract with an external organization; and:
* Evaluate the impact of mission programs, the relevance of program
objectives, the effectiveness of design and implementation, the
efficiency of resource use, and the sustainability of results beyond
donor funding.
The mission plans to use information from the M&E unit to make
adjustments and corrections to its programs, if necessary, and to help
management make informed program decisions and shape long-term
strategies in Haiti.
The M&E unit is in its early planning stages. PCPS developed a broad
outline for the unit, and officials said the mission is working with a
USAID M&E expert to develop the unit's operations. The expert will
help the mission draft a detailed M&E plan, determine a strategy to
coordinate and gather data from each of the development sectors, and
assist the mission on other tasks. PCPS officials said the mission had
identified nine positions to comprise the new M&E unit. Of the nine,
seven team members have been hired or are at the mission, including a
monitoring manager; four M&E specialists, one from each of the four
development sectors; one evaluation manager; and one economist. The
mission is working on hiring a second economist and a mapping
specialist.
According to PCPS officials, collecting baseline data for projects in
each of the four sectors is foundational to the M&E plan. USAID's
evaluation policy also emphasizes the need to establish baseline data
when initiating new projects.[Footnote 45] In particular, the
evaluation policy states that officials should ensure that baseline
data are collected early in the project lifespan, before any
significant project implementation has occurred. As of April 2011,
PCPS was designing its baseline data-collection tool and had not begun
to collect baseline data.[Footnote 46] Mission officials estimated the
mission will start collecting baseline data in the summer of 2011.
According to a PCPS official, after the initial baseline data
collection, data will continue to be collected annually for 5 years.
Mission officials noted the baseline data-collection tool is based on
the mission's AADs,[Footnote 47] which document implementation plans
for reconstruction activities in the four developmental sectors.
According to mission officials, as of March 2011, the mission's
program teams had drafted seven of eight AADs detailing activities for
the four developmental sectors, but none had been finalized. Mission
officials stated they still had time to plan since only one project
that did not use reconstruction funds had been implemented, but
officials did not have a mechanism for coordinating with program teams
to determine when project plans are finalized so that the timing of
baseline data collection aligns with project implementation.
USAID OIG Has Developed and Begun to Implement Plans to Increase
Oversight of Supplemental Funds:
USAID OIG's Regional Inspector General (RIG)[Footnote 48] developed,
independently from the mission, an audit strategy for its post-
earthquake reconstruction activities due to the risk factors
associated with reconstruction in Haiti. According to the RIG, USAID
OIG's strategy was developed based on prior experience and activities
conducted in similar disaster-affected areas. It is designed to
minimize the risk of fraud and corruption to programs in Haiti and
strengthen the internal control systems of USAID, its contractors, and
implementing partners. USAID OIG has created a tentative audit
schedule. The strategy outlines other planned activities, such as
conducting training for USAID staff, grantees, and contractors about
fraud. USAID OIG also will oversee financial audits performed by
contracted private accounting firms or the U.S. Defense Contract Audit
Agency.[Footnote 49] Congress provided $4.5 million in supplemental
appropriations to USAID OIG to carry out its oversight activities.
[Footnote 50]
The USAID OIG has begun to implement its plans to provide increased
oversight of supplemental funds. In February 2011, USAID OIG
officially established its Port-au-Prince office, although a senior
RIG official noted that USAID OIG officials frequently traveled to
Haiti and began working there within weeks of the earthquake. The
senior RIG official stated that it was important for USAID OIG to set
up its office in Haiti before a large amount of supplemental funds
were obligated because of the potential for corruption and uncertainty
about grantees' financial management systems to adequately account for
reconstruction funds. The senior RIG official stated she anticipates a
surge of programs will be implemented with supplemental reconstruction
funds in fiscal year 2012 and that USAID OIG plans to dedicate 50
percent of its total staffing resources for the entire region--Latin
America and the Caribbean--to oversight in Haiti.
USAID OIG has filled two positions--an auditor and an investigator,
planned to deploy a third officer to Haiti in April 2011,[Footnote 51]
and plans for a total staff of seven once the office is fully
operational. In addition, the senior RIG official stated that the
USAID OIG investigator has been conducting fraud-awareness briefings
to grantees and mission officials to educate them and help prevent
fraud. The senior RIG official added that USAID OIG planned to
complete fraud-awareness briefings for all primary grantees, mission
officials, and technical teams by March 2011.
Additionally, USAID OIG has implemented additional oversight through
an increase in the number of audits it conducts in Haiti. As of
February 2011, the RIG official told us that USAID OIG had planned or
initiated six audits in Haiti, most of which involved post-earthquake
activities using supplemental humanitarian funding or reprogrammed
funding appropriated in prior years.[Footnote 52] In comparison, USAID
OIG averaged one audit per year in Haiti from fiscal years 2006
through 2009. USAID OIG issued three audit reports following the
earthquake; one reviewed the cash-for-work program,[Footnote 53]
another involved the use of fiscal year 2009 funding with program
implementation ending May 2011,[Footnote 54] and a third addressed
USAID's post-earthquake transitional shelter program.[Footnote 55]
Another senior RIG official stated that USAID OIG was in the process
of completing an additional audit and planned to initiate five more
audits in fiscal year 2011. Due to their timing, the audits conducted
thus far have not covered the use of supplemental reconstruction
funds.[Footnote 56] USAID OIG anticipates its work to oversee the use
of supplemental reconstruction funding will begin in fiscal year 2012.
According to a senior RIG official, they will adjust the strategy, if
necessary, as the mission implements additional projects.
IHRC Has Begun to Establish Governance Structures and Procedures, but
Is Not Fully Operational:
Although IHRC, the Haitian commission established to oversee
reconstruction efforts, has made progress in establishing key
governance structures and project review procedures, the commission is
not fully operational. IHRC, which U.S. officials stated has improved
transparency and donor coordination, has made progress setting up a
new organization in a challenging environment. However, although the
commission's 18-month tenure ends in October 2011, IHRC is not fully
operational due to delays in staffing the commission and defining
PAO's role. IHRC also has made progress in developing project review
procedures and approving reconstruction projects, but IHRC's ability
to direct funding to Haitian priorities is limited, in part because
those priorities have not been clear. IHRC has taken recent steps,
however, to begin to clarify Haitian priorities.
IHRC Has Made Progress Establishing Key Governance Structures, and
Officials Report It Has Improved Coordination and Transparency:
IHRC was established in a challenging environment in post-earthquake
Haiti. According to the U.S. government, the earthquake killed an
estimated 17 percent of civil service employees and destroyed almost
all ministry buildings. As a result, IHRC was created at a time when
the ministries were operating at low capacity and were trying to re-
establish operations. U.S. officials noted that simply finding a space
out of which IHRC could operate presented an initial challenge.
[Footnote 57] Additionally, IHRC officials noted that the commission
had to establish its administrative structure without having access to
all operational funding. Finally, the massive international response
to the earthquake resulted in an influx of funding to Haiti and an
increase in the number of donors and implementers operating in the
country.
The commission has made progress in establishing some key governance
structures in a challenging environment. In June 2010, within 2 months
of its formation, IHRC established a Board of Directors--co-chaired by
Haitian Prime Minister Jean-Max Bellerive and former U.S. President
Bill Clinton--and held its first Board meeting. The order creating
IHRC requires that at least half of the Board of Directors be Haitian
and allows representation by the bilateral and multilateral donors
pledging at least $100 million in reconstruction funding over 2 years
or at least $200 million in debt relief.[Footnote 58] The Board also
includes nonvoting members who represent local and international NGOs,
the Haitian diaspora,[Footnote 59] and the Organization of American
States. Currently, the Chief of Staff and Counselor to the Secretary
of State serves as the U.S. representative on the IHRC Board. In
total, the commission has held six board meetings through April 2011.
At the first meeting of the Board of Directors, the Board approved the
bylaws of the commission, which outline the general structure of the
Board and the Secretariat and provide a high-level overview of the
responsibilities of various offices and individuals within the
commission. Additionally, IHRC developed an organizational outline,
shown in figure 10, and identified key staffing needs and budget
requirements needed to make the commission fully operational. In July
2010, IHRC appointed an executive director for the commission and it
has begun to fill some staff positions.
Figure 10: Organization of IHRC:
[Refer to PDF for image: illustration]
Board: Co-chairs.
Reporting to the Board:
* Executive Director.
* Performance and Anti-Corruption Office:
- Transparency and Accountability;
- Complaints Investigation;
- Impact Assessment.
Reporting to the Executive Director:
* Director of Strategy and Planning;
* Director of Projects;
* Director of Communications;
* Director of Finance;
* Director of Shared Services.
Reporting to Director of Strategy and Planning:
* Master Planning;
* Territorial Rebuilding;
* Economic Rebuilding;
* Surveys, Data Analysis and Needs Assessment;
* Social Rebuilding;
* Institutional Rebuilding.
Reporting to Director of Projects:
* Policies, Protocols and Standards;
* Project Review and Approval;
* Stakeholder liaison Offices (including private sector, NGOs and
others).
Reporting to Director of Communications:
* External Communications;
* Outreach and Community Relations.
Reporting to Director of Finance:
* Budgeting;
* Accounting;
* Internal procurement.
Reporting to Director of Shared Services:
* Administration and Security;
* IT;
* HR;
* Legal.
Source: IHRC.
Note: The Secretariat consists of the Executive Director, all of the
offices reporting through him, and PAO.
[End of figure]
According to U.S. and IHRC officials, IHRC's operations have
contributed to improved transparency and enhanced coordination among
donors. One of IHRC's primary goals is to provide transparency over
the reconstruction effort. IHRC notes that one way it increases
transparency is to publicize information on all approved
reconstruction projects through its Web site. According to State
officials, meeting regularly with other donors through IHRC Board
meetings ensures that donors are informed of one another's activities,
which promotes increased collaboration. IHRC officials noted the
commission has looked for new opportunities to create partnerships
between donors, implementers, and other stakeholders. For example,
U.S. and IHRC officials both cited an agreement between the French and
U.S. governments to rebuild the general hospital in Port-au-Prince as
an example of such a partnership. U.S. officials noted that these
benefits are less tangible than other outcomes, such as the number of
approved projects, but they are valuable and have resulted in improved
effectiveness of reconstruction efforts.
IHRC Is Not Fully Operational Due to Staffing Shortfalls and PAO's
Unclear Role:
Although progress has been made, IHRC is not yet fully operational.
According to U.S. and NGO officials, staffing shortages affected the
project review process--a process to determine whether project
proposals should be approved for implementation--and communications
with stakeholders, such as the Board of Directors. Additionally, IHRC
has only just begun to carry out its project oversight function
because the role of PAO--the IHRC office responsible for oversight--
has not been fully defined.
Staffing Shortfalls Affected Project Review Processes and
Communications:
Although IHRC has begun to fill staff positions, it experienced delays
in hiring staff and has considerable staffing needs. According to the
Executive Director, staffing the commission has progressed more slowly
than preferred, largely because the commission initially focused on
the project review process to avoid reconstruction delays. As of
December 2010, IHRC filled 53 of the approximately 100 positions the
commission anticipates needing to operate at full capacity.[Footnote
60] Additionally, in June 2010 the commission outlined 34 positions--
including director positions, heads of several offices, and sector
experts--as priority staffing needs. As of January 2011, IHRC filled
12 of these positions, with 22 remaining vacant, as shown in table 4.
Table 4: Status of Priority Staffing Needs, as of January, 2011:
IHRC functional area: Directors;
Priority positions identified: 5;
Positions filled: 2;
Positions not filled: 3.
IHRC functional area: Projects, communications, and other services;
Priority positions identified: 5;
Positions filled: 0;
Positions not filled: 5.
IHRC functional area: Strategy--sectoral pillar managers;
Priority positions identified: 4;
Positions filled: 0;
Positions not filled: 4.
IHRC functional area: Strategy--sectoral experts;
Priority positions identified: 8;
Positions filled: 4;
Positions not filled: 4.
IHRC functional area: Strategy--other positions;
Priority positions identified: 2;
Positions filled: 0;
Positions not filled: 2.
IHRC functional area: Office positions;
Priority positions identified: 10;
Positions filled: 6;
Positions not filled: 4.
IHRC functional area: Total;
Priority positions identified: 34;
Positions filled: 12;
Positions not filled: 22.
Source: GAO analysis of IHRC data.
Note: Both the Executive Director and Director of Shared Services
positions were filled in June 2010 and, therefore, were not included
on IHRC's list of priority hiring needs. Additionally, some positions
not included in the June list of priority needs have been filled.
[End of table]
The absence of staff has affected the project review process and the
timeliness of communications with some stakeholders, such as the Board
of Directors. For example, because IHRC does not have all of the staff
needed to review project proposals, it used a different process for
each of the first three rounds of project review. According to the
Executive Director, IHRC's projects division and sector experts are
critical to the commission's intended project review processes and,
until those staff are in place, IHRC does not have a full internal
project review capability. IHRC has filled some of the commission's
day-to-day staffing needs with consultants and temporary staff from
international donors and has used review panels, consisting of sector
experts from international donors and Haitian ministries, to conduct
technical reviews of submitted projects. Additionally, IHRC
anticipates PAO will contribute to the project review process by
conducting risk analyses of project proponents' and implementers'
ability to self-monitor and provide effective oversight of proposed
projects; however, as of February 2011, these analyses had not been
conducted because that office was not staffed. Stakeholders, including
IHRC Board members and members of the NGO community, also have
criticized some communication from the Secretariat, claiming that
information has not always been provided in a timely manner and the
commission has not conducted sufficient outreach to educate people
about its role and the processes for working with the commission. NGO
and U.S. officials attributed communications issues, in part, to a
lack of staff.
PAO's Intended Operations Are Not Fully Defined:
While IHRC has established a general outline of PAO's role, and
awarded a contract to a major audit firm to further develop PAO,
details about its intended operations remain unclear. The Haitian
presidential order establishing the IHRC requires that the commission
include an office to conduct audits and monitor the performance of
reconstruction projects. IHRC intends that PAO will reinforce IHRC as
a model of good governance and ensure that the reconstruction process
is transparent, accountable, and effective. The specific functions of
the office are subject to the approval of the Board of Directors;
however, according to IHRC officials, Board members held differing
opinions on PAO's appropriate role. For example, some Board members
questioned whether PAO should be responsible for monitoring ongoing
reconstruction projects as this may duplicate donors' existing
monitoring and compliance systems. The Board established a working
group to address these questions and arrive at agreement on a general
outline of PAO's role.
The working group developed a set of implementing guidelines that
broadly defined PAO's role and addressed concerns the Board raised,
such as stating that PAO will leverage donors' monitoring and
compliance resources to the extent possible and focus its monitoring
activities on projects posing higher risks. After these guidelines
were developed, the Board agreed to PAO's creation in October 2010.
According to IHRC documents, PAO will have several responsibilities,
including:
* oversight of IHRC's internal operations;
* monitoring progress and implementation of reconstruction projects;
* investigating and responding to accusations of corruption, fraud,
waste, and abuse and, if necessary, taking corrective action;
* contributing to the project review process by screening proposals
for potential risks and examining donors' and implementers' internal
controls; and:
* communicating reconstruction results and progress to the people of
Haiti.
Additionally, because IHRC intends to transfer a fully operational PAO
to a Haitian development agency that will be created to succeed IHRC
at the end of its 18-month mandate in October 2011, some Board members
noted that building Haitian capacity should be one of the office's top
priorities. As a result, the guidelines state that the office should
be staffed primarily by Haitian nationals and augmented by experts
from international donors and consultants hired by IHRC. Further, the
guidelines highlight PAO's intended knowledge-transfer and capacity-
building functions.
The daily operations of PAO have not been defined, however, and its
role has not been fully clarified. For example, although PAO's
implementing guidelines state that its monitoring activities will
focus on projects posing higher risks, IHRC has not yet developed
procedures for assessing a project's risk level or guidelines
outlining how IHRC will use risk assessments to select projects for
monitoring. In March 2011, IHRC began to take initial actions to
clarify the role of PAO. IHRC hired a PAO Director, who started work
in late March, and hired a consulting firm to provide technical
assistance to establish and implement PAO, which also began work in
March. According to a request for proposals that IHRC issued in
January, the consulting firm will be responsible for developing
protocols and procedures for PAO. According to IHRC, no other PAO
staff have been hired as of March 2011.
IHRC Has Developed Initial Project Review Procedures and Approved Over
$3 Billion in Reconstruction Projects, but Its Initial Process Was
Challenged by Unclear Strategic Priorities:
IHRC also has made progress developing criteria and procedures for
reviewing reconstruction projects and has approved over $3 billion in
projects as of March 2011. However, IHRC's ability to direct projects
to Haitian priorities is limited, in part because those priorities
have been unclear. Although IHRC has recently taken steps to begin
clarifying Haitian priorities, it is too soon to determine whether
these actions will result in a better alignment between approved
projects and Haitian priorities.
IHRC Has Developed Initial Project Review Procedures and Approved Over
$3 Billion in Reconstruction Projects:
IHRC has established an initial set of project review procedures. To
avoid reconstruction delays, IHRC decided to focus its early efforts
on a framework for reviewing and approving reconstruction project
proposals to ensure they are aligned with the Haitian government's
Action Plan. IHRC has developed criteria and initial project review
procedures and has approved 86 projects that would require about $3.2
billion--or about one-third of the approximately $10 billion pledged
by international donors over 10 years--through March 2011.
Using the following criteria, IHRC determines if a submitted project:
* is aligned with the Action Plan and government of Haiti sector
strategies;
* addresses a clear gap in the Action Plan or sector plan(s);
* provides desirable social and economic benefit;
* has donors and implementers with the capacity to carry out the
project effectively;
* has an appropriate budget;
* has been sufficiently coordinated with the Haitian government;
* has been assessed for its social and environmental impact;
* was also submitted to affected communities for input;
* makes a sustainable change;
* maximizes use of local labor and local resources; and:
* promotes gender equality.
IHRC decided not to include the extent to which a project had secured
funding as one of its review criteria. According to the Executive
Director, this allowed IHRC to highlight projects that met all the
commission's criteria, but otherwise lacked complete funding. He noted
that IHRC hoped to encourage donors to work together to fund projects
deemed important.
From June 2010 through March 2011, IHRC approved 86 reconstruction
projects, requiring over $3.2 billion, at five board meetings, as
shown in figure 11.
Figure 11: IHRC Project Approvals, by Date:
[Refer to PDF for image: 2 vertical bar graphs]
Date: June 2010;
Number of projects: 2;
Cost of projects: $56 million.
Date: August 2010;
Number of projects: 29;
Cost of projects: $1.722 billion.
Date: October 2010;
Number of projects: 18;
Cost of projects: $777.2 million.
Date: December 2010;
Number of projects: 24;
Cost of projects: $429.6 million.
Date: February 2011;
Number of projects: 13;
Cost of projects: $251.5 million.
Source: GAO analysis.
[End of figure]
Of the over $3.2 billion in total estimated project costs, donors
committed to fund about $2.1 billion at the time the projects were
approved. IHRC has outlined approved projects by sector, a summary of
which is provided in table 5.
Table 5: IHRC-Approved Projects, June 2010-March 2011:
Sector: Agriculture;
Number of projects: 6;
Estimated cost of projects: $373 million;
Funding committed: $336 million.
Sector: Budget support;
Number of projects: 1;
Estimated cost of projects: $55 million;
Funding committed: $55 million.
Sector: Capacity building;
Number of projects: 2;
Estimated cost of projects: $13 million;
Funding committed: $13 million.
Sector: Cross-sectoral;
Number of projects: 2;
Estimated cost of projects: $35 million;
Funding committed: $18 million.
Sector: Debris removal;
Number of projects: 2;
Estimated cost of projects: $27 million;
Funding committed: $10 million.
Sector: Development;
Number of projects: 1;
Estimated cost of projects: $14 million;
Funding committed: $6 million.
Sector: Disaster preparedness;
Number of projects: 1;
Estimated cost of projects: $20 million;
Funding committed: $20 million.
Sector: Education;
Number of projects: 4;
Estimated cost of projects: $202 million;
Funding committed: $43 million.
Sector: Energy;
Number of projects: 4;
Estimated cost of projects: $208 million;
Funding committed: $12 million.
Sector: Environment;
Number of projects: 1;
Estimated cost of projects: $1 million;
Funding committed: $1 million.
Sector: Finance and investment;
Number of projects: 2;
Estimated cost of projects: $509 million;
Funding committed: $280 million.
Sector: Health;
Number of projects: 20;
Estimated cost of projects: $332 million;
Funding committed: $269 million.
Sector: Housing;
Number of projects: 12;
Estimated cost of projects: $263 million;
Funding committed: $211 million.
Sector: Infrastructure;
Number of projects: 9;
Estimated cost of projects: $619 million;
Funding committed: $487 million.
Sector: Institutional;
Number of projects: 8;
Estimated cost of projects: $8 million;
Funding committed: $7 million.
Sector: Job creation;
Number of projects: 6;
Estimated cost of projects: $280 million;
Funding committed: $188 million.
Sector: Shelter;
Number of projects: 3;
Estimated cost of projects: $67 million;
Funding committed: $51 million.
Sector: Water/sanitation;
Number of projects: 1;
Estimated cost of projects: $200 million;
Funding committed: $115 million.
Sector: Women and children;
Number of projects: 1;
Estimated cost of projects: $11 million;
Funding committed: $1 million.
Sector: Total;
Number of projects: 86;
Estimated cost of projects: $3.236 billion;
Funding committed: $2.123 billion.
Source: GAO analysis of IHRC data.
Note: The Funding committed column lists the funding available at the
time of IHRC approval. Some projects have subsequently received
additional funding.
[End of table]
Fourteen of the 86 projects approved by IHRC as of March 2011 will be
fully or partially funded by the United States, either bilaterally or
through the U.S. contribution to HRF. These 14 projects have a total
U.S. contribution of more than $330 million, or about 10 percent of
the estimated $3.2 billion in projects approved by the
commission.[Footnote 61] The largest U.S. project--to develop an
industrial park in the northern part of Haiti in conjunction with the
Inter-American Development Bank and the government of Haiti--
constitutes over one-third of the cost of approved U.S. projects.
Table 6 lists the U.S. projects approved by IHRC through March 2011.
Table 6: IHRC-Approved Projects to Be Fully or Partially Funded by the
U.S. Government:
Project title: Northern industrial park;
U.S. contribution: $124.0 million.
Project title: New settlements in the Port-au-Prince and Cap-Haïtien
development corridors[A];
U.S. contribution: $23.0 million.
Project title: Building demolition and debris removal with heavy
equipment[B];
U.S. contribution: $25.0 million.
Project title: Port-au-Prince neighborhood upgrading[B];
U.S. contribution: $65.0 million.
Project title: Rehabilitation and reintegration of persons with
disabilities program;
U.S. contribution: $10.0 million.
Project title: Development Credit Authority;
U.S. contribution: $8.5 million.
Project title: Building demolition and debris removal with heavy
equipment;
U.S. contribution: $10.0 million.
Project title: New Millet Bridge construction;
U.S. contribution: $1.6 million.
Project title: Seven technical assistance projects involving
government of Haiti central administration[C];
U.S. contribution: $7.0 million.
Project title: Reconstruction of the University Hospital;
U.S. contribution: $25.0 million.
Project title: Reconstruction of education sector[B];
U.S. contribution: $10.0 million.
Project title: Rehabilitate priority electricity substations in the
Port-au-Prince area;
U.S. contribution: $8.0 million.
Project title: Emergency community assistance and planning for shelter
and settlement;
U.S. contribution: $3.0 million.
Project title: Partial credit guarantee fund[B];
U.S. contribution: $12.5 million.
Project title: Total;
U.S. contribution: $332.6 million.
Source: State.
[A] Funding for new settlements in Port-au-Prince and Cap-Haïtien was
originally reported as $53 million. However, the northern industrial
park project accounts for $30 million of funding initially counted in
this item. We have adjusted this item to eliminate double counting
between the two projects.
[B] Projects to be funded through the U.S. contribution to HRF.
[C] While IHRC counts this as seven separate projects, State reports
them as one project because they all involve technical assistance from
Treasury to the government of Haiti.
[End of table]
IHRC's Ability to Direct Funding to Haitian Government Priorities Is
Limited:
According to IHRC, funding for reconstruction projects is unevenly
spread among sectors and does not necessarily reflect Haitian
government priorities. Since IHRC does not directly control any
reconstruction funds, officials noted the commission's ability to
direct funding to priority areas is somewhat limited. IHRC can only
approve those projects submitted to the commission, and donors
determine how much funding they are willing to provide in each
priority area. IHRC and U.S. officials noted it can be difficult to
convince donors to fund some priority areas, such as rubble removal,
when doing so requires that donors reduce their intended contributions
to other sectors, such as health or education. HRF provides some
flexibility for IHRC to direct resources to priority areas, but HRF
and IHRC officials noted that some donors' practice of attaching
preferences to their HRF contributions effectively limits the fund's
ability to respond to Haitian priorities.[Footnote 62]
IHRC's ability to ensure that approved projects are consistent with
the government of Haiti's priorities also has been complicated by a
lack of clarity about those priorities. The Action Plan, which is the
core document for laying out reconstruction needs and IHRC's primary
criteria for reviewing reconstruction projects, is broad and does not
provide detailed guidance on project-level requirements. Additionally,
it outlines 18-month budget needs for all sectors, but does not
establish explicit priorities across sectors. Sector strategic plans
developed by Haitian government ministries provide more specificity
regarding the government's priorities within a sector, but not all
priority sectors have strategic plans. For example, the Ministries of
Health and Agriculture developed detailed sector plans after the
earthquake, but the government of Haiti does not have a housing
strategy. Developing this strategy is challenging because at least
five agencies have some responsibilities related to housing. In
addition, there is no lead housing agency, and the agencies involved
have overlapping competencies and limited policy enforcement, making
it difficult to reach agreement on a comprehensive strategy. The
government of Haiti also does not have sector strategies for debris
removal or energy.
According to IHRC's Executive Director, the lack of specificity in the
Action Plan and the absence of some sector plans have challenged the
commission's ability to ensure that approved projects are aligned with
the government's reconstruction priorities. He noted it can be
difficult to approve projects in sectors without strategic plans
because it is difficult to demonstrate that projects are consistent
with the government's priorities. According to the Executive Director,
by approving projects in sectors with no strategic plans, IHRC is
effectively establishing the government's priorities for that sector.
The Secretariat has been hesitant to recommend approval of many
projects in such sectors without explicit direction from the Board of
Directors that setting such priorities for the government is an
appropriate role for the commission.
While all projects approved by IHRC address needs outlined in the
Action Plan, our analysis confirms that approved projects have
directed substantially more funding to some sectors, relative to the
needs outlined in the Action Plan, than others.[Footnote 63] We
compared the 86 projects approved by IHRC through March 2011 with the
Action Plan's 18-month budgetary requirements. We found that approved
projects exceed the total 18-month needs outlined in the Action Plan
in some sectors, while other sectors received only a fraction of the
18-month requirements in the Action Plan. For example:
* Debris removal. The Action Plan outlines an 18-month need of $265
million for debris removal, but as of March 2011, IHRC approved an
estimated $52 million for debris removal projects.
* Agriculture. The Action Plan outlines an 18-month need of $260
million for agricultural production. However, IHRC has approved
projects in the agricultural sector totaling about $380 million.
* Institutional rebuilding. The Action Plan identifies an 18-month
need for more than $800 million to rebuild and improve Haitian
government institutions; IHRC has approved about $113 million in
projects to address this challenge.
* Transportation network. The Action Plan identified an 18-month need
of $180 million to improve the national transportation network. As of
February 2011, IHRC has approved road-construction projects totaling
more than $680 million.
IHRC Has Recently Taken Steps to Begin Clarifying Reconstruction
Priorities:
IHRC has recently taken steps to begin clarifying reconstruction
priorities across sectors, but it is too early to determine whether
IHRC's steps will result in a better alignment between project
approvals and stated priorities. At the December 2010 Board meeting,
the Secretariat presented a strategic plan for the remainder of IHRC's
18-month term, which identifies eight sectors as priorities on which
IHRC will focus through the end of its mandate in October 2011. The
strategy lists target outcomes to be achieved by October 2011, as well
as programs that can contribute to achieving those targets, an
estimate of the funding necessary, and policy or institutional
decisions that can aid in program implementation. To meet IHRC's
targets, the strategy outlines about $780 million in additional needs
beyond those areas in which donors have already committed funding.
Appendix VI summarizes the sectors, target outcomes, and additional
funding needs outlined in the strategic plan.
U.S. officials stated that the targets IHRC established appear to be
reasonable goals that are achievable by October 2011. While we did not
assess the feasibility of implementing the strategy, it outlines
additional actions IHRC, donors, implementers, and the government of
Haiti will need to take to achieve the targets. IHRC intends to (1)
work with implementers to map ongoing projects against the target
outcomes in the plan; (2) work with Haitian ministries to develop
requests for precise projects and programs for donors and
implementers; and (3) publicize the targets, request relevant
projects, and work with proponents to refine project concepts.
Additionally, IHRC requested that donors and implementers support the
strategy by (1) considering funding projects in line with the
strategic plan;[Footnote 64] (2) operationalizing and implementing
projects in accordance with the targets laid out in the plan; and (3)
to the extent possible, adapting current projects to address outcomes
presented in the strategic plan. IHRC also requested that the
government of Haiti help resolve policy and institutional impediments
to project implementation and answer public-policy questions in a
timely manner.
According to U.S. officials, strategic planning is one of IHRC's most
valuable roles and the strategy is an important step in identifying
Haiti's reconstruction priorities and the resources needed to address
those priorities. However, as IHRC and donors need to take additional
actions to implement the strategy, it is too soon to determine whether
the strategy will result in a better alignment between project
approvals and stated priorities. Additionally, IHRC's strategy does
not fully clarify Haitian priorities in all sectors because it only
focuses on a subset of the sectors included in the Action Plan.
Further, it does not outline priorities and goals beyond October 2011,
when IHRC's mandate ends. IHRC notes that the Haitian government has
begun to prepare a Poverty Reduction Strategy,[Footnote 65] based on
the Action Plan, which may help to further clarify Haitian priorities.
Conclusions:
Haiti's disaster resulted in an unprecedented international
humanitarian and reconstruction effort, with donors pledging more than
$10 billion over 10 years. USAID has begun expanding oversight and
monitoring of the $648 million in U.S. supplemental reconstruction
funding for which it is directly responsible. Only a small amount of
these funds were obligated as of March 2011 (with most of that amount
targeted for HRF rather than bilateral projects). USAID has identified
risks associated with obligating and expending supplemental
reconstruction funding, such as the increased level of funding and
number of grantees compared to past years. To address these risks,
USAID has several oversight and monitoring initiatives in varying
stages of progress where implementation of the planned controls is
dependent on reconstruction project activities. Further, USAID has
placed importance on the mission's new M&E unit to collect and analyze
accurate project data, particularly collecting baseline data before
initiating reconstruction projects. However, as the mission finalizes
planning for its projects, USAID will need to monitor this progress to
ensure that the timing of baseline data collection aligns with the
initiation of reconstruction projects and USAID retains its
opportunity to collect baseline data before a new reconstruction
project can make an impact on reconstruction efforts.
In addition, IHRC, which is responsible for coordinating and providing
oversight of international reconstruction assistance, has approved
projects estimated at $3 billion--or about 30 percent of total donor
pledges--and has made an important contribution to getting the
reconstruction effort under way. IHRC's mandate ends in October 2011,
however, and limited time remains to fully staff its operations and
those of PAO, IHRC's oversight office, which has been cited as key to
building the Haitian government's capacity and furthering
accountability and good governance. As a result, IHRC's project
approval process does not fully possess an internal evaluation
capability that could strengthen IHRC project approval decision making
and monitoring. Moreover, the projects IHRC has approved are not
necessarily aligned with Haiti's most pressing needs because strategic
priorities have not been clear and donor proposals have not
necessarily reflected the most immediate needs. Therefore, even though
numerous valuable efforts are now under way, these current projects
may not be providing the assistance that is most urgently needed.
Although IHRC has begun to clarify Haitian priorities through a
strategic plan, it is too soon to determine whether this will result
in a better alignment between Haitian priorities and approved
projects. IHRC intends to take additional actions to implement the
strategy, such as determining the extent to which target outcomes in
the strategy are being addressed by ongoing projects and provided
further details on projects and programs that would be consistent with
the strategy's priorities. Finally, the role and operations of PAO
have not been clearly defined. Without clear goals, procedures, or
structures, it is unclear how PAO can contribute to IHRC operations or
eventually serve as an oversight body in a Haitian development agency.
Recommendations for Executive Action:
To help strengthen ongoing efforts to monitor and evaluate the use of
supplemental reconstruction funds and prepare for when reconstruction
funds are further obligated in Haiti, we recommend the USAID Mission
Director in Haiti, in collaboration with USAID officials in
headquarters and the field, develop mechanisms within PCPS for
coordinating with development sector staff to determine when project
plans are finalized so the timing of baseline data collection aligns
with project implementation.
To strengthen IHRC capacity to coordinate and oversee international
donor assistance, ensure the consideration of Haitian priorities in
planning projects, and assist with IHRC's transfer to a Haitian
development agency, we recommend the Secretary of State, in
consultation with the USAID Administrator, encourage IHRC leadership
to take the following three actions:
* ensure that priority staffing needs are met, including staffing the
projects division with sector experts and hiring PAO staff who can
provide technical guidance and analysis during upcoming project
selection rounds;
* determine the specific goals and structure of PAO and ensure
oversight procedures and staff are in place before the end of IHRC's
term so monitoring and oversight functions can be transferred to a
successor agency; and:
* continue to take steps to implement IHRC's strategic plan by, for
example, finalizing more detailed plans for projects and programs that
address the goals laid out in the plan.
Agency Comments and Our Evaluation:
State and USAID provided written comments on a draft of this report,
which are reprinted in appendixes VII and VIII. State and USAID also
provided technical comments that we incorporated where appropriate.
State concurred with our recommendations and noted it will continue to
work with IHRC leadership to address them. State also noted that an
IHRC projects director had been hired by the Board of Directors at its
April 2011 meeting. The Director has announced plans to focus on
linking sector ministries of the government of Haiti with the project
approval process and build its capacity to review projects before the
end of the IHRC mandate in 2011. We modified our recommendations
accordingly.
USAID acknowledged our recommendation and outlined steps it has taken,
or will take, to establish its M&E unit and begin baseline data
collection. USAID stated that the M&E unit has been created and it
expects to complete a baseline data collection scope of work by May
2011, commence baseline data collection by July 2011, and provide
ongoing data collection for projects initiated after that. USAID
asserts that project implementation under the U.S government strategy
will not be far enough along at that time to significantly affect the
baseline data. We acknowledge USAID's intent to collect baseline data
prior to the significant implementation of projects and look forward
to continued progress in implementing this recommendation.
We are sending copies of this report to interested congressional
committees, the Secretary of State, and the USAID Administrator. In
addition, the report will be available at no charge on the GAO Web
site at [hyperlink, http://www.gao.gov].
If you or any of your staffs have any question about this report,
please contact David Gootnick at (202) 512-3149 or gootnickd@gao.gov
or Susan Ragland at (202) 512-8486 or raglands@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
contributions to this report are listed in Appendix IX.
Signed by:
David Gootnick:
Director, International Affairs and Trade:
Signed by:
Susan Ragland:
Director, Financial Management and Assurance:
List of Congressional Committees:
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 John Kerry:
Chairman:
The Honorable Richard Lugar:
Ranking Member:
Committee on Foreign Relations:
United States Senate:
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:
The Honorable Ileana Ros-Lehtinen:
Chairman:
The Honorable Howard L. Berman:
Ranking Member:
Committee on Foreign Affairs:
House of Representatives:
[End of section]
Appendix I: Objectives, Scope, and Methodology:
The objectives of this report were to: (1) describe the planned uses
for U.S. reconstruction assistance and the amounts provided so far;
(2) identify the U.S. Agency for International Development's (USAID)
internal controls for overseeing and monitoring U.S. funds provided
for reconstruction efforts; and (3) assess the progress the Interim
Haiti Recovery Commission (IHRC) has made in establishing governance
and oversight structures. This work was mandated in the Supplemental
Appropriations Act, 2010, which provides funding for our effort to
review U.S. efforts in Haiti following the 2010 earthquake.[Footnote
66]
Our scope included the $918 million in reconstruction funding provided
to USAID and the Department of State (State) in the fiscal year 2010
supplemental appropriation legislation, with the agencies receiving
about $770 million and $148 million, respectively. We did not review
in depth the approximately $220 million in reconstruction assistance
provided to the Department of the Treasury (Treasury) for debt relief
and technical assistance. 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 $148 million in U.S. embassy-related funding included in
the law, all of which was also included in the supplemental
appropriations law. Further, our scope included the identification of
expanded internal controls that USAID is currently planning and
implementing to provide oversight over supplemental reconstruction
funding; we did not evaluate these controls as they have not been
fully planned and implemented and, therefore, cannot be tested. In
addition, we did not review USAID's existing and standard internal-
control structure other than to provide a brief background
description. Finally, we reviewed the structure and procedures of IHRC
as it had been established as of March 2011, with an understanding
that the operations of this commission are still incomplete and
evolving, although the entity is more than halfway through its
established term of 18 months (which began in April 2010).
To obtain information on the intended uses of U.S. reconstruction
funding for Haiti, we reviewed the Supplemental Appropriations Act,
2010; the FY 2010 Supplemental Appropriations Spending Plan (September
2010), prepared by State; and the interagency Post-Earthquake USG
Haiti Strategy: Toward Renewal and Economic Opportunity (January
2011). We also reviewed documents prepared by the Haitian government,
such as the Post-Disaster Needs Assessment and the Action Plan for
National Recovery and Development of Haiti (Action Plan) from March
2010. We also met with officials from State, Treasury, the Department
of Justice, and USAID, as well as representatives of nongovernmental
organizations and USAID-implementing partners receiving U.S.
government funding in Washington, D.C., and in Port-au-Prince, Haiti.
To determine the amount of funding provided to date, we included
obligations data reported by State and USAID as of March 31, 2011, to
determine the levels of USAID's Economic Support Fund (ESF) funding
and State's International Narcotics and Law Enforcement (INCLE)
supplementary funding being allocated to reconstruction projects. The
obligations totals reported by State and USAID include both
expenditures and unexpended obligated balances. These data included
information on obligations of supplemental appropriation funding
overall, as well as amounts provided for particular projects. We
discussed intended uses and funding provided with officials from
State, USAID, and Treasury. We did not conduct an independent data-
reliability assessment of the obligations reported by USAID and State.
However, because the data are limited in volume, pegged to specific
projects, and came from the users responsible for collecting and
compiling the data, we determined the data to be sufficiently reliable
for the purposes of this report.
To identify USAID's plans to expand and enhance internal controls over
supplemental reconstruction funding, we reviewed portions of USAID's
Automated Directives System (ADS) and USAID's new agency-wide
evaluation policy, issued in January 2011, that are relevant for
internal controls. We also examined Haiti-specific documentation that
describe new and expanded oversight efforts such as the Office of the
Inspector General's Oversight Framework for USAID/Haiti Earthquake
Response, Recovery, and Rebuilding Efforts, as well as the Fiscal Year
2011 Yearly Financial Plan. We discussed increased oversight with and
reviewed relevant documents provided by the USAID mission's Office of
Financial Management and Office of Policy Coordination and Program
Support, as well as the Regional Inspector General's office in San
Salvador, El Salvador. Finally, we reviewed the activities and plans
of these organizations to reorganize their offices and augment their
staffing levels in anticipation of maintaining accountability and
control over the expanded levels of USAID funding for Haitian
reconstruction and development programs.
To assess the progress of IHRC in establishing governance and
oversight structures, we reviewed IHRC documentation such as an IHRC
strategic plan, a 1-year report, Board documentation, presentations,
and internal documentation regarding the Performance and
Accountability Office (PAO), and project approval listings. We
discussed the operations and progress of IHRC with the commission's
Executive Director and other key staff, and also discussed IHRC
progress with State's Office of the Haiti Special Coordinator, and
USAID officials. We were unable to speak with consultants hired to
assist with the establishment of IHRC as they stated that their work
was proprietary and could not be disclosed to outside parties. To
determine the extent to which projects approved by IHRC align with the
priorities of the Action Plan, we conducted a limited content
analysis, in which two analysts independently reviewed descriptions of
all 86 projects approved by IHRC through March 2011 and assigned each
project to the priority sector(s) in the Action Plan addressed by the
project. We then reconciled the two lists. If the analysts'
independent assignments of a project to priority sectors did not
match, they discussed how the project addressed the key elements of
each sector in more detail and agreed upon the project's assignment in
one or more of the Action Plan's priority sectors.
To provide insights into all objectives, we traveled to Haiti in
August and September 2010 and met with U.S. officials from USAID,
State, Treasury, and the Department of Defense, as well as
representatives of some of USAID's international and local
implementing partners for humanitarian, development, and
reconstruction programs--including Catholic Relief Services;
Chemonics; Development Alternatives, Incorporated (DAI); and the
Cooperative Housing Foundation (CHF) International. We also met with
officials from IHRC; the Haiti Reconstruction Fund (HRF); the Haitian
ministries of Finance, Health, Interior, and Public Works; and the
Haitian Supreme Audit Institution, the Cour Supérieure des Comptes et
du Contentieux administratif. We visited camps for internally
displaced people and sites and neighborhoods in and around Port-au-
Prince that demonstrated the extent of the earthquake destruction, as
well as ongoing efforts to provide humanitarian aid, build
transitional shelters and services, and begin the rebuilding process.
We also visited the Haiti Apparel Center, a USAID-funded project to
train garment workers to meet the demand for employees for an industry
seen as a key to Haiti's economic recovery as the apparel
manufacturers are serving Haiti's growing export market to the United
States.[Footnote 67] We also made site visits in one of the
development corridors targeted for supplementary reconstruction
assistance in and around the town of Saint-Marc. There, we observed
and discussed with implementers and local Haitians the results of
completed and ongoing U.S.-funded development programs, including a
community bank, a hospital, and a number of agricultural and watershed
management projects. We also met with representatives from HRF and the
International Organization for Migration to discuss multilateral post-
earthquake assistance.
We conducted this performance audit from June 2010 to May 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.
[End of section]
Appendix II: Humanitarian Relief Spending in Haiti by U.S. Government
Agencies, as of the End of Fiscal Year 2010:
As of the end of fiscal year 2010, U.S. government agencies had spent
more than $1.1 billion within Haiti to meet humanitarian needs arising
from the January 2010 earthquake.[Footnote 68] U.S. government and
international agencies reported that U.S. efforts included the
following results:
* Immediate response. The U.S. military provided more than 22,000
personnel for critical security, transportation, and logistics tasks;
moreover, State and other agencies deployed about 1,000 additional
U.S. and Haitian staff on a temporary basis to the U.S. Embassy in
Port-au-Prince.
* Food. The U.S. government participated in an international food-
distribution operation that fed more than 4 million people; in
addition, USAID provided seed, fertilizer, and tools to boost crop
production in selected areas in 2010.
* Medical. U.S. government medical personnel provided aid for 31,000
patients and administered vaccines for 1 million people that helped
prevent widespread disease outbreaks.
* Shelter. USAID humanitarian programs provided temporary shelter for
1.5 million internally displaced persons. This included funding 33,000
"shelter solutions" as part of the ongoing effort to move these
internally displaced persons from temporary tent camps to more durable
shelter.[Footnote 69] The mission reported its grantees completed
18,000 transitional shelters (T-shelters) capable of accommodating an
estimated 90,000 people as of March 31, 2011. This is approximately 32
percent of the 57,000 T-shelters built by the international community.
Moreover, USAID grantees helped the government of Haiti assess over
380,000 buildings and completed repairs to earthquake-damaged
buildings sufficient to accommodate 3,900 households, as of March
2011.[Footnote 70]
* Employment. U.S. humanitarian efforts funded a number of employment
projects for internally displaced persons, particularly cash-for-work
programs conducted by several USAID implementers, including Catholic
Relief Services, and CHF International. By January 2011, U.S. cash-for-
work programs had cumulatively employed over 350,000 people and were
providing wages for 8,000 persons per day to remove rubble and help
with the response to the cholera epidemic.
Six U.S. Government Agencies Were Involved in Post-Earthquake
Humanitarian Assistance:
DOD and USAID spent approximately 99 percent of the U.S. post-
earthquake humanitarian assistance provided to Haiti in fiscal year
2010. The remainder of assistance within Haiti was spent by State's
Bureau of Population, Refugees, and Migration. Other agencies,
including the Departments of Health and Human Services, Homeland
Security, Interior, and Agriculture, acted as USAID implementing
partners within Haiti.[Footnote 71] Table 7 depicts the value of the
humanitarian funding provided by three departments.
Table 7: Breakout of Funding Sources among U.S. Agencies Providing
Post-Earthquake Humanitarian Assistance to Haiti in Fiscal Year 2010:
Department/agency: USAID;
FY 2010 Humanitarian funding total: $662,686,000[A];
Percentage of total: 58%.
Department/agency: DOD;
FY 2010 Humanitarian funding total: $464,080,000;
Percentage of total: 41%.
Department/agency: State[B];
FY 2010 Humanitarian funding total: $14,600,000;
Percentage of total: 1%.
Department/agency: Total;
FY 2010 Humanitarian funding total: $1,141,366,000;
Percentage of total: 100%.
Source: USAID, Haiti-Earthquake Fact Sheet #73 Fiscal Year (FY) 2010,
(Washington, D.C., Sept. 24, 2010):
[A] Includes funding provided via OFDA,Office of Food for Peace,
Office of Transition Initiatives (OTI), the USAID mission in Haiti
(mission),and the USAID mission in the Dominican Republic.
[B] Funding provided via State's Bureau of Population, Refugees, and
Migration.
[End of table]
The implementing partners for the U.S.-government humanitarian effort
include: (1) 40 nongovernmental organizations (NGO); (2) UN, UN-
affiliated, and other international organizations; (3) six departments
of the U.S. government, plus the Peace Corps; and (4) two local U.S.
governments.[Footnote 72] Table 8 provides a breakout of USAID and
State humanitarian funding among its implementing partners.
Table 8: Breakout of State and USAID Fiscal Year 2010 Humanitarian
Spending among its Implementing Partners:
Organization type: Top 15 NGOs[A];
Funding: $319.2 billion;
Percentage of total humanitarian spending: 47%;
Funding source: USAID.
Organization type: Other 24 NGOs;
Funding: $46.2 billion;
Percentage of total humanitarian spending: 7%;
Funding source: USAID.
Organization type: International agencies;
Funding: $187.8 billion;
Percentage of total humanitarian spending: 28%;
Funding source: USAID;
State.
Organization type: U.S. federal government agencies;
Funding: $115.4 billion;
Percentage of total humanitarian spending: 17%;
Funding source: USAID.
Organization type: Local U.S. government;
Funding: $8.7 billion;
Percentage of total humanitarian spending: 1%;
Funding source: USAID.
Organization type: Total;
Funding: $677.3 billion;
Percentage of total humanitarian spending: 100%;
Funding source: [Empty].
Source: GAO analysis of data from USAID, Haiti-Earthquake Fact Sheet
#73.
Note: Totals may differ due to rounding.
[A] NGOs receiving $5 million or more in U.S.-government humanitarian
funding for earthquake relief.
[End of table]
U.S. Private Donors Provided More than $1 Billion in Post-Earthquake
Relief Funding:
According to State and USAID officials, the earthquake generated an
unprecedented response by the U.S. and international NGOs. The UN
reported that, as of April 2011, the United States and at least 125
other countries responded to the earthquake with humanitarian
contributions totaling nearly $2 billion in financial and other
assistance; and donations from private individuals, foundations, and
corporations was over $1.5 billion. A State report estimates that one
out of every two households in the United States contributed to the
Haiti assistance effort. InterAction, an organization representing
many U.S.-based humanitarian and development NGOs, estimated that 66
of its member NGOs working in Haiti in the wake of the earthquake
received about $1.3 billion in private contributions, and had expended
$531 million as of January 2011.
[End of section]
Appendix III: The Government of Haiti's Action Plan for Reconstruction
and Development:
In the aftermath of the earthquake, the government of Haiti convened
teams of local and international experts to conduct a postdisaster
needs assessment, which mapped and quantified the destruction suffered
by Haiti's social, economic, and administrative structures. The study
estimated that overall damage and losses totaled approximately $7.8
billion--more than the country's entire gross domestic product in
2009. On the basis of the assessment, the government of Haiti produced
the Action Plan for National Recovery and Development of Haiti (Action
Plan) and presented it at the March 31, 2010, Donors Conference in New
York City. This plan, which envisions nearly $3.9 billion in new
development projects to be funded by international donors over the
next 18 months,[Footnote 73] seeks to mobilize efforts and resources
to achieve a qualitative change in Haiti within 20 years.
The Action Plan concentrated on four priority areas:
(1) Territorial rebuilding ($1.2 billion). In addition to Port-au-
Prince, three new regional poles of development--Cap-Haïtien, Saint-
Marc, and Les Cayes--are proposed. The majority of the needs outlined
in this priority area are oriented toward the reconstruction of Port-
au-Prince and other earthquake-affected areas by, among other things,
clearing debris and rebuilding critical infrastructure such as
electricity and rainwater drainage systems.
Key investments include. Repairs to the airport in Port-au-Prince, as
well as the construction of two new international airports in Les
Cayes and Cap-Haïtien and two new deep-water ports outside of Port-au-
Prince; 600 kilometers of roads and bridges for the development of a
national highway system connecting all major cities; and disaster-risk
mitigation in Gonaïves, Jacmel, and Cabaret.
(2) Economic rebuilding ($0.4 billion). Recovery investments will
target four key sectors: agriculture, construction, manufacturing, and
tourism.
Key initiatives include. Creating 500,000 new jobs in construction,
agribusiness, and manufacturing; creating a new land register;
construction of new thermal and renewable/hydropower plants; and
increasing the tax base to 18 percent.
(3) Social rebuilding ($1.4 billion). Providing shelter is both an
immediate and long-term priority. An expanded primary-care health
network and education system, including vocational and higher
education, is deemed critical for rebuilding.
Key initiatives include. Reconstruction of housing, school feeding for
2.2 million children, and reconstruction of 30 hospitals.
(4) Institutional rebuilding ($0.8 billion). Focuses on establishing
and rebuilding public administration, justice, and security;
supporting democratic institutions through elections support;
redefining the legal and regulatory framework; and establishing a
governmental institution to manage the reconstruction.
The Action Plan identified 20 project areas with accompanying cost
estimates for initial projects. See Table 9 for project descriptions
and total estimated costs.
Table 9: Total Estimated Reconstruction Costs by Haiti Action Plan
Sector for the First 18 Months:
Sector: Reconstruction of devastated areas;
Total investments: $780 million;
Budgetary support[A]: $150 million;
Other funding: $0.
Sector: National transport network;
Total investments: $180 million;
Budgetary support[A]: $50 million;
Other funding: $114 million.
Sector: Hurricane season and disaster-risk management;
Total investments: $130 million;
Budgetary support[A]: $75 million;
Other funding: 0.
Sector: Regional hubs and urban renovation;
Total investments: $75 million;
Budgetary support[A]: 0;
Other funding: 0.
Sector: National planning and local development;
Total investments: $50 million;
Budgetary support[A]: 0;
Other funding: 0.
Sector: Watershed management;
Total investments: 0;
Budgetary support[A]: 0;
Other funding: 0.
Sector: National production;
Total investments: $260 million;
Budgetary support[A]: $40 million;
Other funding: 0.
Sector: Relaunch of economic and financial channels;
Total investments: 0;
Budgetary support[A]: 0;
Other funding: $400 million.
Sector: Electricity;
Total investments: $157 million;
Budgetary support[A]: $90 million;
Other funding: 0.
Sector: Housing of the population;
Total investments: 0;
Budgetary support[A]: 0;
Other funding: $295 million.
Sector: Creation of high-intensity labor jobs;
Total investments: $200 million;
Budgetary support[A]: $50 million;
Other funding: 0.
Sector: Social protection;
Total investments: $70 million;
Budgetary support[A]: $30 million;
Other funding: 0.
Sector: Education: return to school and construction of schools;
Total investments: $470 million;
Budgetary support[A]: $150 million;
Other funding: 0.
Sector: Healthcare;
Total investments: $390 million;
Budgetary support[A]: $120 million;
Other funding: 0.
Sector: Food security;
Total investments: $140 million;
Budgetary support[A]: $35 million;
Other funding: 0.
Sector: Water and sanitation;
Total investments: $160 million;
Budgetary support[A]: $60 million;
Other funding: 0.
Sector: Democratic institutions;
Total investments: $155 million;
Budgetary support[A]: $20 million;
Other funding: 0.
Sector: Relaunching the administration;
Total investments: $372 million;
Budgetary support[A]: $250 million;
Other funding: 0.
Sector: Support to Parliament[B];
Total investments: $20 million;
Budgetary support[A]: $10 million;
Other funding: 0.
Sector: Justice and security;
Total investments: $255 million;
Budgetary support[A]: 50 million;
Other funding: 0.
Sector: Total;
Total investments: $3.9 billion;
Budgetary support[A]: $1.2 billion;
Other funding: $809 million.
Source: Government of Haiti's Action Plan for National Recovery and
Development of Haiti (Port-au-Prince, Haiti, 2010).
[A] Budgetary support is included in total investments and includes
$350 million requested to complete the 2009-2010 budget year.
[B] In a summary page, the Action Plan lists this as a separate line
item; however, it is included as part of the "Democratic institutions"
sector within the plan, so it may be double counted.
[End of table]
[End of section]
Appendix IV: U.S. Government's Post-Earthquake Haiti Strategy: Toward
Renewal and Economic Opportunity:
The new strategy's goal is to create a stable and economically viable
Haiti, based upon two broad objectives. Figure 12 lays out the
strategic framework of the U.S. government's interagency 2011-2015
development strategy for Haiti.
Figure 12: U.S. Government's Post-Earthquake Haiti Reconstruction
Strategy:
Strategic Framework:
5 Principles;
* USG assistance will be country-led and build country capacity;
* USG assistance will be comprehensive and integrated;
* USG assistance will leverage and be coordinated with the resources
of other partners;
* USG assistance will leverage multilateral mechanisms wherever
appropriate;
* USG assistance will be sustained and accountable.
4 Core Development Pillars:
* Infrastructure and Energy;
* Food and Economic Security;
* Health and Other Basic Services;
* Governance and Rule of Law.
3 Development Corridors:
* Port-au-Prince Corridor;
* Saint Marc Corridor;
* Cap Haïtien Corridor.
2 Objectives:
* To catalyze economic growth through investments in agriculture,
energy, and infrastructure;
* To ensure long-term stability through investments in public
institutions.
1 Goal:
* A stable and economically viable Haiti.
Source: Multiple U.S. Government Agencies, Post-Earthquake USG Haiti
Strategy: Toward Renewal and Economic Opportunity (Washington, D.C.,
January 2011).
[End of figure]
The strategy identified four core development pillars where investment
is critical to achieving economic growth and stability. The strategy
also outlines a set of objectives and intermediate results to guide
efforts over the life of the 5-year strategy. Figure 13 depicts the
objectives, expected results, and some of the numerical targets
associated with each of the four core development sectors.
Figure 13: Details of Sector Priorities Established in the U.S.
Reconstruction Strategy for Haiti:
[Refer to PDF for image: illustration]
Assistance Objective: A Stable and Economically Viable Haiti:
Infrastructure and Energy Intermediate Result 1: Improved
infrastructure that supports community and commercial development:
Subintermediate results:
1.1 Increased access to housing and community services;
1.2 Improved access and reliability of electricity;
1.3 Increased access to international markets via secondary port;
1.4 Increased domestic mobility via improved roads and bridges;
1.5 Stronger government of Haiti capabilities and housing policies;
1.6 Reduced charcoal and firewood for cooking.
Targets (18 months to 5 years):
* Fund relocation of IDPs to 100,000 repaired/rebuilt homes;
* 250,000 people in 47,500 shelter solutions;
* Resolve 40,000 to 80,000 occupancy claims in Port-au-Prince;
* Support improved housing management plans for Port-au-Prince and
development corridors;
* Develop an energy-sector reform model to modernize regulations, reduce
subsidies, and attract private investment.
Food and Economic Security Intermediate Result 2: Increased food and
economic security:
Subintermediate results:
2.1 Improved performance of the agriculture sector;
2.2 Improved nutritional status of women and children;
2.3 Increased employment.
Targets (within 5 years):
* Invest in comprehensive agricultural development for competitive
commodities in four watersheds;
* Sustained improvement of 100,000 smallholder farm households;
* Improved business environment for small and medium enterprises
addressing lending, taxes, and land titles;
* Job creation in target sectors.
Health and Other Basic Services Intermediate Result 3: Improved health
status and learning environment:
Subintermediate results:
3.1 Increased access to health and nutrition services;
3.2 Improved services for people with disabilities;
3.3 Strengthened Ministry of Health capabilities in provision of
health services;
3.4 Strengthened government of Haiti capabilities in governing school
systems and maintaining universal standards;
3.5 Increased services for vulnerable youth.
Targets (18 months):
* Invest in 3 community health networks;
* Establish guidelines and train technicians for disability services;
* Help create and equip Haitian government offices for education
management;
Targets (Within 5 years):
* Support all 12 expanded health networks within the development
corridors;
* 4 to 6 disability service centers.
Governance and Rule of Law Intermediate Result 4: More responsive
government and improved rule of law:
Subintermediate results:
4.1. Strengthened representative, effective, and transparent
governance;
4.2. Strengthened rule of law and human rights,
Targets (18 months):
* Manual case-tracking system in 3 jurisdictions;
* Significant drop in pretrial detention rates;
* Stand up Superior Judicial Council;
Targets (Within 5 years):
* Civil and criminal databases developed;
* 30 percent reduction in pretrial detention;
* Ministry of Justice and Public Security offices rebuilt.
Source: GAO analysis of U.S. government data.
Note: Each health network consists of five to eight community clinics
and one communal hospital. Each network is to serve 40,000 to 80,000
people.
[End of figure]
[End of section]
Appendix V: Timeline of Government of Haiti, the International
Community, and U.S. Government Actions in Response to the 2010 Haitian
Earthquake:
Government of Haiti/International Community:
1/12/2010:
Earthquake.
3/31/2010:
International Donors Conference;
United States pledges $1.15 billion for reconstruction.
4/21/2010:
IHRC created.
5/11/2010:
HRF established.
7/29/2010:
Congress appropriates supplemental funds.
September 2010:
State-USAID reconstruction spending plan issued.
October 2010:
Cholera outbreak.
November 2010:
U.S. government disburses $120 million to HRF and $204 million for
debt relief.
11/28/2010:
Inconclusive Haiti national elections.
December 2010:
Strategy for remainder of IHRC mandate released.
1/3/2011:
U.S. government reconstruction strategy issued.
3/20/2011:
Runoff elections.
5/14/2011:
Michel Martelly inaugurated as President.
Source: GAO analysis of U.S. government, government of Haiti, and HRF
documents.
[End of section]
Appendix VI: Priority Sectors and Funding Needs Identified in IHRC's
Strategic Plan:
Priority sector[A]: Housing;
Main targets through October 2011:
* Reduce camp population by 400,000 people;
Additional funding needed to meet targets: $210 million[B].
Priority sector[A]: Debris removal and management;
Main targets through October 2011:
* Remove 40 percent of debris in a way that is environmentally sound;
Additional funding needed to meet targets: $160 million.
Priority sector[A]: Education;
Main targets through October 2011:
* Build and staff 250 temporary structures;
* Build and staff 60 primary schools in areas where no public schools
exist;
* Equip up to 3000 schools (public and private);
* Feed 250,000 children;
* Provide up to 500,000 children with an education kit (manuals and
uniforms);
* Provide up to 500,000 children with financial assistance in private
schools;
* Train 5,000 teachers;
Additional funding needed to meet targets: $152.6 million.
Priority sector[A]: Energy;
Main targets through October 2011:
* Increase hours of service for 30,000 urban households by 20 percent;
* Expand electricity service to 10,000 rural households;
Additional funding needed to meet targets: $65 million.
Priority sector[A]: Health;
Main targets through October 2011:
* Improve service delivery through targeted reconstruction and
construction of 40 hospitals, 75 clinics, and an ambulance network to
connect communities to health care services;
* Increase the health care workforce through the reconstruction or
reinforcement of four medical schools, four nursing schools, and
training programs to reach 4,000 allied-health professionals;
* Pilot and expand approaches to health care financing, including
ensuring access to care for children under 5 years old and expanding
access for pregnant women;
Additional funding needed to meet targets: $154.5 million.
Priority sector[A]: Job creation;
Main targets through October 2011:
* Provide full-time employment to hundreds of thousands of Haitians;
* Outside Port-au-Prince, jobs will be mainly created in agriculture,
watershed management, and road construction;
* Within Port-au-Prince jobs will mainly be created housing and debris-
related development activities;
* Begin construction of two public and three private industrial parks;
Additional funding needed to meet targets: (no specific funding needs
are identified).
Priority sector[A]: Water and sanitation;
Main targets through October 2011:
* Increase sustainable access rate to potable water from 2 percent to
50 percent;
* Increase the access rate to toilets or latrines to meet
international standards, from 10 percent to at least 27 percent;
Additional funding needed to meet targets: $19 million.
Priority sector[A]: Capacity building of Haitian institutions;
Main targets through October 2011:
* Reinforce or create necessary sector tables[C];
* Assist ministries in developing strategies and investment plans;
Additional funding needed to meet targets: $16.5 million[D].
Source: IHRC.
[A] IHRC's Strategic Plan focuses on eight priority sectors. These
sectors are a subset of the sectors listed in table 5; however, the
Strategic Plan uses slightly different names for some sectors.
[B] IHRC identifies a total estimated need of $350 million to meet the
housing targets for 2011 and notes that, of that amount, about 40
percent is committed by donors, but that it is programmed to be spent
over a longer period of time. We only included the 60 percent of
funding that is not yet committed, but did not account for the
extended time frames of donors' existing commitments.
[C] Sector tables are groups consisting of representatives from the
Haitian government and civil society, donors, implementers, and the
private sector that are intended to improve coordination within a
sector. IHRC envisions that sector tables will be led by Haitian
ministries and supported by a dedicated Secretariat.
[D] The IHRC strategy does not lay out a specific total funding need
to support capacity building of Haitian institutions. However, it
notes that donors should fund the operations of a Secretariat to
support sector tables in each of 11 sectors. The strategy also
estimates an average annual cost of $1.5 million per Secretariat,
which would result in a total funding need of approximately $16.5
million.
[End of table]
[End of section]
Appendix VII: Comments from the Department of State:
United States Department of State:
Chief Financial Officer:
Washington, D.C. 20520:
April 26, 2011:
Ms. Jacquelyn Williams-Bridgers:
Managing Director:
International Affairs and Trade:
Government Accountability Office:
441 G Street, N.W.
Washington, D.C. 20548-0001:
Dear Ms. Williams-Bridgers:
We appreciate the opportunity to review your draft report,
"Haiti Reconstruction: U.S. Efforts Have Begun, Expanded
Oversight Still to Be Implemented," GAO Job Code 320782.
The enclosed Department of State comments are provided for
incorporation with this letter as an appendix to the final report.
If you have any questions concerning this response, please contact
Shamin Kazemi, Economic Officer, Office of the Haiti Special
Coordinator at (202) 647-9467.
Sincerely,
Signed by:
James L. Millette:
cc: GAO ” David Gootnick:
S/HSC ” Thomas C. Adams:
State/OIG ” Evelyn Klemstine:
[End of letter]
Department of State Comments on GAO Draft Report:
Haiti Reconstruction: U.S. Efforts Have Begun, Expanded Oversight
Still to be Implemented (GA0-11-415, Job Code 320782):
The Department of State appreciates the opportunity to comment on
GAO's draft report entitled "Haiti Reconstruction: U.S. Efforts Have
Begun, Expanded Oversight Still to be Implemented."
Recommendation: To strengthen IHRC capacity to coordinate and oversee
international donor assistance, ensure the consideration of Haiti
priorities in planning projects, and help with IHRC's transfer to a
Haitian development agency, we recommend that the Secretary of State,
in consultation with the USAID Administrator, encourage IHRC
leadership to:
* Ensure that priority staffing needs are met, including staffing the
projects division with a director of projects and sector experts, and
hiring PAO staff that can provide technical guidance and analysis
during upcoming project selection rounds;
Response: The Department agrees with this recommendation, and will
continue to follow up with the IHRC both at the expert-level and at
the Board of Directors. A projects director had been hired by the
April Board of Directors meeting. The new projects director announced
plans to focus on linking sector ministries of the Government of Haiti
with the project approval process, and building their capacity to
review projects before the end of the IHRC mandate in 2011.
Recommendation:
* ...Determine the specific goals and structure of the PAO and ensure
oversight procedures and staff are in place before the end of the
IHRC's term so monitoring and oversight functions could be transferred
to a successor agency;
Response: The Department agrees with this recommendation, and will
continue to follow up with the IHRC both at the expert-level and at
the Board of Directors. The PAO has begun its initial work of
collecting information about the implementation status of IHRC-
approved projects, but has not yet clarified its approach to assessing
project risk, or its approach to develop an institution that could
play an audit role after the end of the IHRC mandate.
Recommendation:
* ...Continue to take steps to implement the IHRC's strategic plan by,
for example, finalizing more detailed plans for projects and programs
that address the goals laid out in the plan.
Response: The Department agrees with this recommendation, and will
continue to follow up with the IHRC both at the expert-level and at
the Board of Directors.
[End of section]
Appendix VIII: Comments from the U.S. Agency for International
Development:
USAID:
From The American People:
April 29, 2011:
David Gootnick:
Director, International Affairs and Trade:
U.S. Government Accountability Office:
Washington, DC 20548:
Dear Mr. Gootnick,
I am pleased to provide the U.S. Agency for International Development's
formal response to the GAO draft report entitled: "Haiti
Reconstruction: U.S. Efforts Have Begun, Expanded Oversight Still to
be Implemented" (GAO-11-415).
The enclosed USAID comments are provided for incorporation with this
letter as an appendix to the final report.
Thank you for the opportunity to respond to the GAO draft report and
for the courtesies extended by your staff in the conduct of this audit
review.
Sincerely,
Signed by:
Sean Carrol:
Chief Operating Officer:
U.S. Agency for International Development:
Enclosure: a/s:
[End of letter]
USAID Comments On GAO Draft Report No. GAO-11-415:
Thank you for allowing the Agency for International Development the
opportunity to comment on the draft report, "Haiti Reconstruction:
U.S. Efforts Have Begun, Expanded Oversight Still to be Implemented."
We appreciate the recommendations offered by the GAO.
Recommendation 1: To help strengthen ongoing efforts to monitor and
evaluate the use of supplemental reconstruction funds, and be prepared
when reconstruction funds are further obligated in Haiti, we recommend
that the USAID Mission Director in Haiti, in collaboration with USAID
officials in headquarters and the field, develop mechanisms within
PCPS for coordinating with development sector staff to determine when
project plans are finalized so that the timing of baseline collection
aligns with project implementation.
Response: The USAID Mission Monitoring and Evaluation (M&E) team in up
and running, and has begun the ongoing task of coordinating with
development sector staff to initiate baseline data collection as new
projects come on stream.
A baseline data collection scope of work will be completed in May
2011. This is timely for data collection this June or July. Project
implementation under the U.S Government Strategy (approved in January
2011) will not be far enough along at that time to significantly
affect the baseline data.
Internally, the Mission is in the process of increasing the amount of
data provided by implementing partners. The Mission's M&E plan is to
work with multiple. sources of data for monitoring and evaluation, in
addition to the collection of baseline data.
Final Action Target Date:
* Creation of the M&E team: completed.
* Collection of baseline data; Commencing by July 2011 and ongoing for
new projects coming on stream after that.
[End of section]
Appendix IX: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
David Gootnick (202) 512-3149 or Gootnickd@gao.gov:
Susan Ragland (202) 512-8486 or Raglands@gao.gov:
Staff Acknowledgments:
In addition to the contacts named above, Leslie Holen, Assistant
Director; B. Patrick Hickey; Kara Marshall; Kimberly McGatlin; Bonnie
Derby; Sunny Chang; David Dornisch; Ashley Alley; Lynn Cothern; Etana
Finkler; Reid L. Lowe; Gena Evans; and Cheron Green made key
contributions to this report.
[End of section]
Footnotes:
[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.
[2] Twenty-two of these 125 other countries provided in-kind
assistance, but did not report the monetary value of these relief
contributions, according to a UN report. Two additional countries had
pledged to provide assistance but had not committed funds as of April
2011.
[3] According to a USAID document, the U.S. government provided nearly
$40 million in cholera assistance as of December 14, 2010, including
the provision of disaster-relief teams, chlorine for safe drinking
water, and support for cholera treatment facilities, particularly in
underserved and rural areas.
[4] The donors conference, held in New York City, involved more than
150 countries and international organizations. Pledged donations
included about $874 million of funds reprogrammed from projects
initiated before the earthquake. The U.S. pledge did not include
reprogrammed funds.
[5] Supplemental Appropriations Act, 2010, Pub. L. No. 111-212, 124
Stat. 2302 (July 29, 2010).
[6] While the U.S. government pledged $1.15 billion for Haiti's
reconstruction, the Act appropriated $1.14 billion in supplemental
funding for reconstruction. The Act also made available for Haitian
debt relief up to $40 million in prior year State appropriations. This
report defines all supplemental funds made available to State and
USAID up through the end of fiscal year 2012 for new Haitian recovery,
reform, and development activities as reconstruction funds, including
the $66.3 million made available to recovery programs conducted by
State's Office of Transition Initiatives (OTI).
[7] The ESF furnishes assistance to countries and organizations to
promote economic or political stability. INCLE funds are provided to
help foreign countries and international organizations develop and
implement policies and programs to strengthen institutional law
enforcement and judicial capabilities, including countering drug
flows, combating transnational crime, and establishing rule of law.
[8] State issued this report in response to a request from the Senate
Committee on Appropriations. In addition to ESF and INCLE funding,
this reported total includes funding from USAID's Food for Peace Title
II funds; State's Foreign Military Financing and International
Military Education and Training funds; and State and USAID's combined
Global Health/Child Survival programs.
[9] The targeted regions are Cap-Haïtien, Saint-Marc, and Les Cayes.
[10] IHRC is governed by a Board of Directors comprised of Haitian
officials and members of the international community. An Executive
Director and a Secretariat, which was originally expected to total
approximately 100 staff, carry out the daily operations of IHRC. To be
enforceable, the decisions of IHRC must be confirmed by the Haitian
President; any IHRC decisions that are not vetoed by the President
within 10 business days are deemed to be confirmed.
[11] The order establishing IHRC, issued by the President of Haiti on
April 21, 2010, mandates that IHRC include an audit and performance
office to ensure accountability and transparency.
[12] While the World Bank established HRF at Haiti's request in March
2010, Haiti's Minister of Finance and key advisors to Haiti's
President did not validate it until May 2010. The World Bank signed
its first HRF donor agreement with Brazil in that month.
[13] State, in consultation with USAID and Broadcasting Board of
Governors, was required to follow notification procedures and submit a
spending plan to the appropriations committees within 45 days of the
Supplemental Appropriations Act's enactment. According to State and
USAID officials, they were able to obligate the supplemental funding
beginning in November 2010, after the congressional review of the
spending plan had been completed.
[14] This total dropped to $648 million after a further $2 million in
ESF funding was made available to the Smithsonian Institution to fund
a bilateral cultural preservation project in Haiti.
[15] State also appointed a Special Coordinator for Haiti in September
2010 to oversee the implementation of the reconstruction strategy in
partnership with the government of Haiti.
[16] USAID's Automated Directives System (ADS), Planning, ADS 201.3.8
and 201.3.11.16 (Washington, D.C., rev. Mar. 17, 2011).
[17] Accountability represents the processes, mechanisms, and other
means--including financial reporting and internal controls--by which
an entity's management carries out its stewardship and responsibility
for resources and performance. Internal control is an internal
component of an organization's management, which is comprised of the
plans, methods, and procedures used to meet missions, goals, and
objectives, and thereby support performance-based management.
[18] USAID uses ADS to implement its existing internal-control duties
under 31.U.S.C. §3512(c).d, commonly referred to as the Federal
Managers' Financial Integrity Act of 1982 (FMFIA), which provides the
statutory basis for USAID management's responsibility for and
assessment of internal control. Office of Management and Budget (OMB),
Management's Responsibility for Internal Control OMB Circular No. A-
123, (Washington, D.C., rev. Dec. 21, 2004), sets out the guidance for
implementing the statute's provisions, including agencies' assessment
of internal control under the standards prescribed by the Comptroller
General in GAO, Standards for Internal Control in the Federal
Government, [hyperlink,
http://www.gao.gov/products/GAO/AIMD-00-21.3.1] (Washington, D.C.:
November 1999).
[19] For example, the mission in Haiti used the ADS regulation Chapter
591: Financial Audits of USAID Contractors, Grantees, and Host
Government Entities to develop its Fiscal Year 2011 Yearly Financial
Plan. Specifically, ADS 591.3.4.2 Foreign Contractors and Recipients
states that missions must develop an audit plan that completely covers
direct awards to foreign recipients on an annual basis. See USAID ADS,
Foreign Contractors and Recipients, ADS 591.3.4.2 (Washington, D.C.,
rev. Apr. 14, 2010).
[20] USAID ADS, Management's Responsibility for Internal Control, ADS
596.3.1.(c) (Washington, D.C., March 2010).
[21] In particular, USAID ADS, Assessing and Learning, ADS 203
(Washington, D.C., rev. Apr. 2, 2010) defines monitoring as measuring
progress made toward planned results throughout the life of the
program. Moreover, ADS Chapter 200: Introduction to Programming
Policy, defines evaluation as the systematic collection of information
about the characteristics and outcomes of programs in order to make
judgments, improve effectiveness, and/or inform decisions about
current and future programming. See USAID ADS, Introduction to
Programming Policy, ADS 200 (Washington, D.C., rev. Apr. 2, 2010).
[22] Codified, as amended, at 5 U.S.C. Appendix. USAID OIG is an
independent office (5 U.S.C. app. § 2). The IG is appointed and
removed by the President and the IG's pay is determined by statute (§
3). The office's budget is also not controlled by the agency (§ 6).
[23] State and USAID obligations include both expenditures and
unexpended obligated balances.
[24] Of this $293 million, $66.3 million in ESF was allocated for
USAID's transitional programs, which are conducted by OTI.
[25] The State-USAID spending plan assigns the remaining $17.5 million
(2 percent) for USAID operating expenses and budget support for the
government of Haiti.
[26] The plan also includes $2 million in ESF to the Smithsonian
Institution for projects not directly overseen by USAID.
[27] 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 (GAO-05-734SP). 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. This report defines obligations as
amounts 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. According to USAID officials at the mission in Haiti,
they will consider the supplemental ESF funding allocated to the
mission "obligated" once the U.S. government enters into a bilateral
agreement with the government of Haiti, which they expect will be
finalized in June 2011. In addition to bilateral agreements, agencies
also incur obligations when they sign contracts and award grants.
According to an official from OTI in Washington, D.C., OTI reported
supplemental ESF funding allocated to its projects as obligated when
it was awarded under new and existing contracts. The $184.3 million
includes both the obligations incurred by the signing of bilateral
agreements and the obligations incurred by the award of OTI contracts.
[28] Total contribution will include 100 police and 10 corrections
officers.
[29] The goal of this program is to improve the livelihoods of rural
populations and reduce the risks posed by environmental degradation
through rehabilitation of rural infrastructure, good governance of
natural resources, public-private partnerships, and enhanced
agricultural productivity.
[30] Of the $770 million in supplemental ESF allocated to USAID, $120
million was obligated by Treasury and transferred to the HRF and $2
million was allocated to the Smithsonian Institution. Therefore, $648
million of the supplemental ESF allocation will be subject to USAID
project oversight.
[31] This amount consists of an allocation of $12 million to develop a
monitoring and evaluation unit and $4.5 million to support the USAID
OIG.
[32] According to OFM officials, their office provided oversight over
USAID funding totaling about $407 million in fiscal years 2009 and
2010.
[33] This strategy is documented in USAID OIG, Oversight Framework for
Haiti Earthquake Response, Recovery and Rebuilding Efforts
(Washington, D.C., Jan. 29, 2010).
[34] Under GAO's Standards for Internal Control in the Federal
Government, the "control environment" is the foundation for internal
control, which provides discipline, structure, and climate throughout
the organization to set a positive and supportive attitude toward
internal control and conscientious management. "Risk assessment" is
the identification and analysis of relevant internal and external
risks the agency faces that could prevent it from achieving its
objectives and forms a basis for determining how risks should be
managed. See [hyperlink,
http://www.gao.gov/products/GAO/AIMD-00-21.3.1], pages 8, 10.
[35] USAID OFM, Post-Earthquake USG Haiti Strategy: Toward Renewal and
Economic Opportunity (Washington, D.C., January 2011).
[36] According to OFM's Fiscal Year 2011 Yearly Financial Plan, audits
are conducted to provide reasonable assurance that USAID grantees have
used USAID funds for the purposes stated in their financial assistance
award (grant agreements, cooperative agreements, contracts, etc.), and
established and maintained financial systems in conformity with
Generally Accepted Accounting Principles. Payment verification reviews
determine if grantees and contractors receiving USAID funding are
maintaining an acceptable financial management system to account for
funds, as determined by OFM officials. Finally, OFM officials noted
they will perform financial visits of all grantees receiving USAID
funding to determine whether they are maintaining adequate financial
management systems. These visits are less detailed than payment
verification reviews.
[37] According to OFM, a financial review is conducted of foreign
nonprofit grantees and for-profit contractors expending less than
$300,000 in reconstruction funding in a fiscal year and is more
comprehensive than a financial visit, which covers all grantees and
contractors receiving reconstruction funding.
[38] Under the Single Audit Act, as amended and implemented by OMB,
each nonfederal entity that expends $500,000 or more in federal awards
within their fiscal year shall have a single or program-specific
audit. In its implementing directives, USAID has imposed the annual
audit requirement on foreign grantees expending $300,000 or more. See
the Single Audit Act, codified, as amended, in part at 31 U.S.C. §
7502; OMB, Audits of States, Local Governments and Non-Profit
Organizations OMB Circular No. A-133, (Washington, D.C., rev. June 26,
2007); USAID ADS, Financial Audits of USAID Contractors, Recipients,
and Host Government Entities, ADS 591 (Washington, D.C., rev. Apr. 14,
2010).
[39] The blanket purchase agreement is a simplified method supported
by the U.S. General Services Administration to fill recurring
services, take advantage of quantity discounts, save administrative
time, and reduce paperwork. See the Federal Acquisition Regulation,
codified at 48 C.F.R. subpart 13.303.
[40] According to OFM officials, after the blanket purchase agreement
is finalized, it would take about 3 weeks for OFM to select an
accounting or consulting firm to procure planned financial oversight
services and complete a contract.
[41] In April 2011, OFM officials stated that the mission would not
start obligating reconstruction funds to award to new grantees until
the mission enters a bilateral agreement with Haiti (estimated to be
executed in June 2011) to deliver reconstruction assistance. Officials
added that once the mission started to obligate awards to new
grantees, OFM would be able to monitor the activity because the
mission's OAA notifies OFM when the mission submits a request to award
USAID funds, including supplemental reconstruction funds, to a new or
existing grantee.
[42] Additionally, internal control standards state that ongoing
monitoring should generally occur in the course of normal operations.
See [hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1], page
20.
[43] According to the new evaluation policy, USAID revised its past
evaluation policies to address the decline in the quantity and quality
of evaluation practices within USAID in the recent past. Additionally,
USAID's overall monitoring and evaluation policies are based on the
Government Performance and Results Act of 1993, as amended.
[44] As defined by USAID, indicators are used to observe progress and
measure actual results compared with expected results.
[45] Specifically, the evaluation policy states that when a project
subject to evaluation is initiated, baseline data, including variables
that correspond to key outcomes and impacts, are to be collected using
high-quality methods and analyzed to establish a reference point. To
obtain needed baseline data, the policy notes that household or
individual surveys are often valuable baseline data sources and can be
replicated toward the conclusion of implementation to assess changes.
[46] In addition to this data collection, officials noted they will
use data from a number of other sources, including a demographic
health survey to be conducted by the mission's health team and data
collected by entities such as the Haitian Bureau of Statistics.
[47] AADs certify that appropriate planning for the activities covered
in the document has been completed. Different types of documentation
may be included, but AADs must provide a project or activity
description, including intended results, implementation methods, and
financing plans.
[48] The RIG in San Salvador is responsible for oversight of USAID
foreign assistance to 34 countries and territories, including Haiti.
[49] According to USAID OIG's audit strategy, OIG will contract
private accounting firms to audit local NGOs. The U.S. Defense
Contract Audit Agency, which audits U.S. for-profit firms, will
perform audits of firms contracted by the mission to implement
reconstruction activities.
[50] This amount, as discussed earlier, is included in the $16.5
million in supplemental funding dedicated to the mission's oversight
effort but is not included in the $648 million in supplemental ESF
funding available for program implementation.
[51] According to a senior USAID OIG official, oversight efforts may
be affected as new staff may need time for training.
[52] An agency reprograms funding when it shifts funds within an
appropriation or funds account to use them for purposes other than
those contemplated at the time of appropriation. See GAO-05-734SP,
page 85.
[53] USAID OIG, Audit of USAID's Cash-For-Work Activities in Haiti,
1-521-10-009-P (Washington, D.C., Sept. 24, 2010).
[54] USAID OIG, Review of Fondation Sogebank's Activities Financed by
USAID/Haiti, 1-521-11-001-S (Washington, D.C., Oct. 29, 2010).
[55] USAID OIG, Audit of USAID's Efforts to Provide Shelter in Haiti,
1-521-11-003-P (Washington, D.C., Apr. 19, 2011).
[56] Although most supplemental reconstruction funds had not been
obligated, USAID OIG officials stated that this fact alone would not
alter the intent of the audit strategy.
[57] IHRC operates out of a temporary structure, provided by the
Canadian government, on the grounds of the former U.S. embassy.
[58] IHRC has 27 voting members on its board: 2 co-chairs; 13 Haitian
officials representing the Haitian national and local governments, the
private sector, and labor unions; and 12 members of the international
community, including 1 representative of the Caribbean Community
(CARICOM) and 11 representatives from bilateral and multilateral
donors meeting the pledge requirements.
[59] The Haitian diaspora refers to Haitian nationals residing outside
the country.
[60] The 53 filled positions constitute a variety of employment
arrangements. For example, about 25 are permanent IHRC employees,
while the other half is made up of technical assistants from
international donors, temporary employees, consultants, and Haitian
government officials.
[61] The U.S.-funded projects approved by IHRC do not necessarily
reflect U.S. government obligations of supplemental reconstruction
funds. First, according to State officials, U.S. projects are
submitted to IHRC for approval at various states of development; some
projects are submitted to IHRC after they are well developed and the
U.S. government is prepared to obligate funds, while others are
submitted to IHRC at an earlier stage, and the U.S. government may not
obligate funds to the project for some time. Second, officials stated
that IHRC does not need to review supplemental funds obligated to
existing projects. Finally, some U.S. projects approved by IHRC will
use reprogrammed funds from prior appropriations instead of fiscal
year 2010 supplemental appropriations.
[62] While HRF is not required to direct funding according to donor
preferences, IHRC and HRF officials stated that they intended to
follow donor preferences, if possible.
[63] The UN conducted a related analysis comparing donors' intended
funding with Haitian government 18-month budget needs--based on the
Action Plan--and found that gaps exist. For example, the UN's
analysis, which does not include U.S. plans for allocating
reconstruction funding because they were not yet finalized, estimates
that donors have committed to funding just 12 percent--or $96 million
out of an anticipated need of $780 million--for projects the Action
Plan categorizes as Reconstruction of Devastated Zones, which includes
activities such as rubble removal and reconstruction of basic
infrastructure--for example, rainwater drainage and drinking water
supply systems.
[64] According to U.S. officials, the U.S. government does not intend
to change the priorities outlined in the spending plan in response to
the IHRC strategy because the spending plan is consistent with the
goals presented in IHRC's strategic plan.
[65] A Poverty Reduction Strategy paper describes the macroeconomic,
structural, and social policies and programs a country will pursue
over several years to promote growth and reduce poverty, as well as
external financing needs and the associated sources of financing. They
are prepared by governments in low-income countries through a
participatory process involving domestic stakeholders and external
development partners, including the International Monetary Fund and
the World Bank.
[66] Supplemental Appropriations Act, 2010, Pub. L. No. 111-212, 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.
[67] We reported that Haitian apparel exports to the United States
increased steadily in the 10 years prior to the earthquake, from $251
million in 2000 to $512 million in 2009, in part because of the
preferential access given to U.S. imports of Haitian apparel under the
terms of the 2006 Haitian Hemispheric Opportunity through Partnership
Encouragement Act (HOPE). This preferential access was increased under
a 2008 amendment to the act. See GAO, International Trade: Exporters'
Use of the Earned Import Allowance Program for Haiti Is Negligible
because They Favor Other Trade Provisions, GAO-10-654 (Washington,
D.C.: June 16, 2010).
[68] This total excludes U.S. government assistance to address the
outbreak of cholera in areas outside of Port-au-Prince beginning in
October 2010. As of January 2011, the U.S. government had provided an
additional $42 million in aid to address the epidemic (which had
killed more than 3,800 persons and infected over 185,000 more by that
time). This aid helped establish and equip 33 treatment centers and
provide rehydration salts and other medicines.
[69] Overall, the international community planned, as of March 2011,
to provide a total of 133,000 shelter solutions by August 2011.
[70] USAID officials describe T-shelters as single-family housing
units built with timber framing and concrete foundations covered with
plywood or corrugated sheeting designed to last 3 to 5 years; the
framing and foundations can serve for a more permanent structure.
[71] Agencies from three other U.S. government departments acted as
USAID-implementing partners within Haiti using USAID/Office of Foreign
Disaster Assistance (OFDA) funding: (1) the Department of Homeland
Security's Federal Emergency Management Agency; (2) the Department of
Health & Human Services' Centers for Disease Control and Prevention;
and (3) the Department of Agriculture's U.S. Forestry Service. The
Centers for Disease Control and Prevention also provided both
emergency and ongoing care at 109 sites across Haiti established by
the U.S. President's Emergency Plan for AIDS Relief (PEPFAR) funding.
[72] Emergency services were provided by the County Governments of Los
Angeles, California, and Fairfax, Virginia.
[73] Of the $3.9 billion, $1.2 billion was identified as needed for
budget support. Additionally, the plan outlines a request for $800
million from the private sector or through public-private partnerships.
[End of section]
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