Report Contents
What OIG Audited
Prior to Russia’s 2022 invasion of Ukraine, Russia was the single largest oil and gas supplier to Europe and Eurasia. Russia’s war of aggression in Ukraine has highlighted the need to accelerate Europe’s transition away from fossil fuels and dependence on Russian oil. The priorities that the Department of State (Department) identified include addressing vulnerabilities in the Black Sea region, addressing growing challenges in the region, and supporting efforts to transition the region away from a dependence on Russian energy sources. Specifically, from September 2021 through September 2024, the Bureau of Energy Resources (ENR) and the Bureau of International Security and Nonproliferation (ISN) have each implemented a number of foreign assistance awards intended to support energy security and diversification efforts in the Black Sea region. OIG conducted this audit to determine whether Department efforts to coordinate and advance energy security and diversification initiatives in the Black Sea region have achieved desired results.
What OIG Found
OIG found that the Department bureaus implementing Black Sea energy security and diversification initiatives appropriately aligned their respective strategies and award-level goals and objectives with Department, bureau, and mission-level strategic plans in place from 2022 to 2024. While the Department continued to implement these programs and initiatives, at the time of OIG’s review, the Department had not updated pertinent strategic guidance to help ensure that the implementation of these programs and initiatives continued to align with the current administration’s strategy and priorities in these areas. OIG examined nine Department awards that supported energy security and diversification initiatives in the Black Sea region and found that improvements were needed to demonstrate that the awards were on track to achieve intended results. Specifically, ISN had not consistently developed short-term indicators at the award level that would contribute to the progress of long-term program indicators. In the absence of developing indicators at the award level, ISN is limited in its ability to determine whether individual awards are helping to make meaningful progress toward program goals and objectives. In addition, although ISN completed monitoring plans for each applicable award in OIG’s audit sample, the monitoring plans did not include information on the specific types of monitoring activities that would be performed in accordance with requirements. With respect to ENR, OIG found that one of the three awards reviewed lacked a monitoring plan, and another award lacked evidence that bureau officials collected and reported on progress against established performance indicators. Without documented monitoring plans or documenting progress toward meeting established performance indicators, as prescribed in the Toolkit and the FAM, ENR risks the loss of monitoring data that can be used to effectively measure the progress of these awards, and the ultimate benefit the assistance provided. The existence of documentation is important to maintain institutional knowledge, especially considering the Department’s recent reorganization.
What OIG Recommends
OIG made six recommendations to improve the planning and monitoring of foreign assistance to advance energy security and diversification initiatives in the Black Sea region. Based on the responses to a draft of this report, OIG considers one recommendation closed; three recommendations resolved, pending further action; and two recommendations unresolved. A synopsis of the Department’s comments and OIG’s reply follows each recommendation in the Audit Results section of this report. The Department’s responses are reprinted in their entirety in Appendices B, C, and D.
Report Terms
Report Recommendations
OIG recommends that the Bureau of European and Eurasian Affairs ensure that the updated Regional Bureau Strategy, as well as Integrated Country Strategies for Armenia, Bulgaria, Romania, and Ukraine reflect the Department’s current priorities with respect to energy security and diversification in the Black Sea Region.
OIG recommends that the Bureau of Arms Control and Nonproliferation establish internal controls to ensure that measurable performance indicators are incorporated into the final negotiated scope of work for individual foreign assistance awards to assess progress against established long-term program goals related to energy security and diversification in the Black Sea region.
OIG recommends that the Bureau of Economic, Energy, and Business Affairs develop a monitoring plan for Award 19AQMM24F7486 in accordance with 18 Foreign Assistance Manual 301.4-3.
OIG recommends that the Bureau of Economic, Energy, and Business Affairs establish internal controls to ensure that bureau officials are conducting and reporting data collection against established performance indicators in accordance with 18 Foreign Assistance Manual 301.4-3.
OIG recommends that the Bureau of Arms Control and Nonproliferation revise the monitoring plans for the five foreign assistance awards included in the scope of this audit to include details about the specific monitoring activities to be performed throughout the life of the award in accordance with the Federal Assistance Directive.
OIG recommends that the Bureau of Arms Control and Nonproliferation establish internal controls to ensure that bureau officials are conducting data collection against performance indicators in accordance with 18 Foreign Assistance Manual 301.4-3.