Report Contents
What OIG Audited
The Department of State (Department) allocated approximately $41 million in foreign assistance funding for the Philippines to the Bureau of Counterterrorism and Countering Violent Extremism (CT), the Bureau of International Narcotics and Law Enforcement Affairs (INL), and the Office to Monitor and Combat Trafficking in Persons (J/TIP) from FY 2015 through FY 2018. To ensure that foreign assistance objectives are meeting intended goals and use of funding is transparent, the Department is responsible for implementing Federal and Department guidance for monitoring and evaluating its foreign assistance awards.
The Office of Inspector General (OIG) conducted this audit to determine whether Department-funded foreign assistance programs implemented in the Philippines were monitored and evaluated in accordance with Federal and Department requirements.
What OIG Recommends
OIG made 28 recommendations intended to improve the monitoring and evaluating of foreign assistance in the Philippines. On the basis of the Department’s responses to a draft of this report, OIG considers 23 recommendations resolved pending further action, 4 recommendations unresolved, and 1 recommendation closed. A synopsis of management’s comments to the recommendations and OIG’s reply follow each recommendation in the Audit Results section of this report. Management’s responses to a draft of this report are reprinted in their entirety in Appendices B through F. OIG’s reply to technical comments provided by the Office of U.S. Foreign Assistance Resources is presented in Appendix G.
What OIG Found
Although CT, INL, and J/TIP generally monitored performance for their funded awards, OIG identified deficiencies with some elements that require improvement. For example, CT did not systematically monitor performance or collect and analyze data to inform its monitoring efforts, INL did not document its reviews of award performance, and J/TIP did not have monitoring plans that complied with the Federal Assistance Directive. These deficiencies occurred for various reasons, including the fact that the entities had not ensured that oversight officials followed Department or Federal guidance for monitoring.
Similarly, although CT, INL, and J/TIP generally conducted financial monitoring for their funded awards, OIG also identified deficiencies in this area that require improvement. For example, CT did not require the Bureau of Diplomatic Security to submit financial reports, INL did not review financial reports quarterly, and J/TIP allowed funds to be used to pay for salaries of personnel who were not actively working on J/TIP awards. These deficiencies occurred, in part, because of the lack of staff to provide oversight and because some staff did not follow Department and Federal guidance on financial monitoring. As a result, OIG questioned costs of $109,756 spent on CT’s and J/TIP’s awards.
In addition, CT, INL, and J/TIP did not comply with the Foreign Affairs Manual, 18 FAM 300, when defining the programs subject to evaluation. This occurred, in part, because the Office of U.S. Foreign Assistance Resources allowed bureaus to deviate from the FAM when they defined their programs and did not verify that the bureaus were implementing all required elements of the guidance. Lacking program evaluations, the Department may not be able to ensure that U.S. strategic goals in the Philippines are being achieved.
Finally, based on a limited-scope review of two awards, OIG found that the Department of Justice (DOJ), while implementing one of CT’s awards, did not accurately charge the time of personnel working under CT’s award. In addition, CT allowed DOJ to spend funds after an award ended but prior to formally extending the period of performance. As a result, OIG questioned costs of $417,771 as unallowable costs.
Report Terms
Report Recommendations
OIG recommends that the Bureau of Counterterrorism and Countering Violent Extremism, in coordination with the Bureau of Diplomatic Security (DS), develop and implement performance monitoring plans and collect and analyze relevant monitoring data for the Soft Targets Crisis Response Program and the Manila Airport Security Program awards as agreed to in the 2015 Memorandum of Agreement with DS.
OIG recommends that the Bureau of Counterterrorism and Countering Violent Extremism (CT) establish a new Memorandum of Agreement with the Bureau of Diplomatic Security that reflects the requirements outlined in the Foreign Affairs Manual (FAM), 18 FAM 301, and CT’s 2016 Monitoring and Evaluation Guide.
OIG recommends that the Bureau of International Narcotics and Law Enforcement Affairs require the U.S. Coast Guard to develop an implementation plan, establish program management support, and submit all required quarterly Program Progress Reports in accordance with the terms and conditions of the United States Coast Guard Support to Philippine Coast Guard Maritime Law Enforcement Capability Development interagency agreement.
OIG recommends that the Bureau of International Narcotics and Law Enforcement Affairs (INL) document its reviews and analyses of all Program Progress Reports as required by INL’s Agreement Officer’s Representative Handbook.
OIG recommends that the Bureau of International Narcotics and Law Enforcement Affairs require the U.S. Coast Guard to collect and report data to measure performance against the objectives outlined in the United States Coast Guard Support to Philippine Coast Guard Maritime Law Enforcement Capability Development interagency agreement.
OIG recommends that the Bureau of Administration, Office of the Procurement Executive, assess and update the Federal Assistance Directive to ensure monitoring plan requirements align with the mandatory monitoring plan template.
OIG recommends that the Office to Monitor and Combat Trafficking in Persons review performance progress reports within 30 days of receipt in the official Federal award files, as required by the Federal Assistance Directive, for both the Child Protection Compact–Improving the Government of the Philippines’ Responses to Online Sexual Exploitation of Children and Child Labor Trafficking and the Protecting At-risk children Vulnerable to Exploitation cooperative agreements.
OIG recommends that the Office to Monitor and Combat Trafficking in Persons (J/TIP) determine whether the objective to “provide short-term emergency shelter for up to 44 minor boys and girls with a high/therapeutic caregiver to child ratio” in the Protecting At-risk children Vulnerable to Exploitation cooperative agreement should be revised. If so, J/TIP should request that the Grants Officer (a) update the cooperative agreement accordingly and (b) ensure that the amount of funding disbursed to the award recipient is consistent with the services received.
OIG recommends that the Bureau of Counterterrorism and Countering Violent Extremism require the Bureau of Diplomatic Security to submit quarterly financial reports as agreed to in the 2015 Memorandum of Agreement for both the Soft Targets Crisis Response Program and the Manila Airport Security Program.
OIG recommends that the Bureau of Counterterrorism and Countering Violent Extremism, in coordination with the Bureau of Diplomatic Security, review the invoices for the five completed Soft Targets Crisis Response Program and Manila Airport Security Program courses reviewed in this audit and (a) determine the allowability of the costs of $13,700 OIG identified, (b) recoup those funds from the contractor if they are determined to be unallowable, and (c) withhold payments on all future invoices submitted by the contractor until invoices have appropriate supporting documentation.
OIG recommends that the Bureau of Counterterrorism and Countering Violent Extremism (CT) require the Department of Justice to pay the salary of the Resident Legal Advisor in a manner that reflects the actual amount of time spent working on CT’s behalf on the Resident Legal Advisor Program.
OIG recommends that the Bureau of Counterterrorism and Countering Violent Extremism (a) determine the allowability of the $70,000 in funds identified by OIG from the Resident Legal Advisor Program expended in FY 2018, (b) obtain a refund for those payments determined to be unallowable, and (c) verify that the funds have been returned.
OIG recommends that the Bureau of Counterterrorism and Countering Violent Extremism document its reviews of quarterly financial reports and obtain, review, and document supporting financial documentation for the Resident Legal Advisor Program for reconciliation purposes, in accordance with Procurement Information Bulletin No 2014-05.
OIG recommends that the Bureau of Counterterrorism and Countering Violent Extremism (a) determine the allowability of costs of $18,556 identified by OIG that were obligated beyond the budgeted amount for the Resident Legal Advisor Program without authorization in FY 2018, (b) obtain a refund for those payments determined to be unallowable, and (c) verify that the funds have been returned.
OIG recommends that the Bureau of Counterterrorism and Countering Violent Extremism develop and implement procedures to verify that all award recipients comply with approved budget plans or obtain permission via formal amendments or written agreements to deviate from approved budget plans.
OIG recommends that the Bureau of International Narcotics and Law Enforcement Affairs require the U.S. Coast Guard to submit financial reports on a quarterly basis that are in alignment with the budget categories established in the United States Coast Guard Support to Philippines Coast Guard Maritime Law Enforcement Capability Development interagency agreement.
OIG recommends that the Bureau of International Narcotics and Law Enforcement Affairs review supporting documentation for expenditures to verify that funds are “expended only on activities, services, or materials that contribute to meeting project objectives.”
OIG recommends that the Office to Monitor and Combat Trafficking in Persons review the Protecting At-risk children Vulnerable to Exploitation cooperative agreement and correct any deficiencies identified with the budget amendment processes, such as requiring all amendments to be approved and signed in the State Assistance Management System.
OIG recommends that the Office to Monitor and Combat Trafficking in Persons develop policies and procedures to ensure that the budget amendment approval process for all future awards is completed in accordance with the Federal Assistance Directive.
OIG recommends that the Office to Monitor and Combat Trafficking in Persons conduct and document reviews of quarterly financial reports for the Child Protection Compact–Improving the Government of the Philippines’ Responses to Online Sexual Exploitation of Children and Child Labor Trafficking and Protecting At-risk children Vulnerable to Exploitation awards in the official files, as required by the Federal Assistance Directive.
OIG recommends that the Office to Monitor and Combat Trafficking in Persons (a) determine the allowability of the costs of $7,500 identified that were used to pay salaries for staff who were not supporting the Protecting At-risk children Vulnerable to Exploitation cooperative agreement, (b) recover any costs determined to be unallowable, and (c) verify that the funds have been returned.
OIG recommends that the Office to Monitor and Combat Trafficking in Persons (a) conduct a review of all expenditures invoiced under the Protecting At-risk children Vulnerable to Exploitation cooperative agreement to date and (b) identify and recover all expenditures determined to be unallowable.
OIG recommends that the Office to Monitor and Combat Trafficking in Persons develop and implement policies and procedures in accordance with the Federal Assistance Directive to employ a robust financial monitoring process including a review of supporting financial documentation when potential misuse of award funds is identified.
OIG recommends that the Office of U.S. Foreign Assistance Resources enforce evaluation policies by developing and implementing an oversight plan to verify that bureaus and offices that are administering foreign assistance funding are implementing and adhering to the Foreign Aid Transparency and Accountability Act of 2016, the Foreign Affairs Manual (18 FAM 301.4), and the corresponding Guidance for the Design, Monitoring and Evaluation Policy at the Department of State, January 2018. This plan should include, at a minimum, a requirement to verify that definitions of “programs” and “large programs” are consistent with the FAM and a requirement to verify that Bureau Evaluation Plans are developed and implemented in accordance with existing guidance and by the established deadlines.
OIG recommends that the Office to Monitor and Combat Trafficking in Persons identify and implement minimum training and education requirements on the Department of State’s monitoring and evaluation policy and concepts for the Bureau Evaluation Coordinator position.
OIG recommends that the Bureau of International Narcotics and Law Enforcement Affairs (INL) review its interagency agreement with the Department of Justice for the Resident Legal Advisor Program and (a) determine the amounts paid with INL funds beyond the 50 percent of the Resident Legal Advisor’s salary for FYs 2015 and 2017, (b) determine whether these amounts are allowable and liquidated in accordance with Federal appropriations law, (c) obtain a refund for all payments determined to be unallowable, and (d) verify that the funds have been returned.
OIG recommends that the Bureau of Counterterrorism and Countering Violent Extremism (a) determine the allowability of the $417,771 in questioned costs expended from October 1, 2017, through September 30, 2018, identified by OIG, (b) obtain a refund for all payments to the Department of Justice determined to be unallowable, and (c) verify that the funds have been returned.
OIG recommends that the Procurement Executive at the Bureau of Administration, Office of the Procurement Executive, review the interagency agreement between the Bureau of Counterterrorism and Countering Violent Extremism and the Department of Justice to determine if ratification is warranted, and if so, ratify accordingly.