Audit of Department of State Foreign Assistance Grants and Cooperative Agreements in Somalia

AUD-MERO-20-45
    Report Contents
    Unclassified
    Unclassified


    What OIG Audited
    The Department of State (Department) allocated approximately $57 million in foreign assistance grants and cooperative agreements in support of Somalia to the Bureau of African Affairs (AF), and the Bureau of Counterterrorism (CT) from FY 2017 through FY 2019. The Department is responsible for regularly conducting and implementing risk assessment and mitigation efforts to ensure that foreign assistance grants and cooperative agreements are meeting goals and objectives, and funds are used as intended.

    The Office of Inspector General (OIG) conducted this audit to determine whether the Department assessed potential risks associated with the implementation of foreign assistance awards in Somalia and executed compensating controls to mitigate those risks. OIG reviewed four awards, including one grant and three cooperative agreements, totaling $51.5 million. Two awards were issued by AF and two awards were issued by CT.

    What OIG Recommends
    OIG made 10 recommendations that are intended to improve risk assessments, risk mitigation procedures, and vetting of foreign assistance grants and cooperative agreements in Somalia. On the basis of the management’s response to a draft of this report, OIG considers eight recommendations resolved, pending further action, and two recommendations implemented and closed. A synopsis of management’s comments to the recommendations offered and OIG’s reply follow each recommendation in the Audit Results section of this report. Management’s response to a draft of this report is reprinted in its entirety in Appendices C through E.

    What OIG Found
    Although AF and CT assessed general risks associated with foreign assistance awards in Somalia and executed some compensating controls to mitigate those risks, OIG identified areas for improvement. Specifically, OIG found that AF and CT oversight officials did not designate their four awards as high risk even though they were implemented in a country where travel is restricted due to political instability and terrorism. This occurred because the current Risk Assessment Worksheet weighs country/region-specific risks lower than organizational and programmatic risk.

    OIG also found that CT did not update risk assessments annually for its two awards. This occurred because CT’s standard operating procedures did not align with Department requirements. When risk assessments are not accurate and kept current, bureaus operating in high-threat environments may not fully develop mitigation plans tailored to address foreseeable risks that may impede program implementation. OIG also found that AF and CT did not (a) establish standard operating procedures or document controls for managing risks, (b) document reviews of performance reports to demonstrate adherence with award terms, or (c) require documentation to be maintained in official award files. This occurred primarily because AF and CT officials were not following Department requirements, such as documenting risk management processes, and because they did not effectively use the award file checklist to ensure completeness. Without a documented process to identify and mitigate risks, AF and CT are at an increased risk for waste, fraud, and mismanagement, and both will have limited assurance that their awards comply with Department requirements and achieve their intended purposes.

    Finally, OIG found that while CT generally followed Department guidance for Leahy vetting(a) , AF did not, nor did it include the “State Department Leahy Vetting Requirements” section in one of its awards. This occurred because AF officials were not applying the vetting requirements, and because an AF official imprudently removed vetting requirements from one award at the implementor’s request. Excluding Leahy vetting requirements from the award and failure to properly vet award participants are contrary to Department policy and increases the likelihood that funds could be inadvertently provided to individuals who have committed gross violations of human rights.

    (a) Leahy vetting requires the Department to assess units or individuals proposed for training or other assistance for credible information regarding the commission of gross violations of human rights.

    Recommendation Number
    1
    Closed Implemented Significant

    OIG recommends that the Bureau of Administration, Office of the Procurement Executive reevaluate the weighting in the Risk Assessment Worksheet and the standardized questions to better account for the unique risks posed by certain high-threat environments.

    Recommendation Number
    2
    Closed Implemented

    OIG recommends that the Bureau of Counterterrorism review and update the annual risk assessments for the Somali Law Enforcement: Local Policing and Protection award (SLMAQM18CA2066) and the Building an Effective, Fit-for-Purpose Financial Reporting Centre in Somalia award (SLMAQM17CA2025) as required by the Federal Assistance Directive.

    Recommendation Number
    3
    Closed Implemented

    OIG recommends that the Bureau of Counterterrorism develop and implement a risk management process, including administrative responsibilities and internal control procedures to mitigate risks, and document this risk management process in its Standard Operating Procedures: Grants and Cooperative Agreements, as required by the Federal Assistance Directive.

    Recommendation Number
    4
    Closed Implemented

    OIG recommends that the Bureau of African Affairs document the official Federal award file to indicate the review and approval of the Performance Progress Report within 30 days of receipt, as required by the Federal Assistance Directive, for the Mentorship and Training for the Somali National Army and the African Union Mission in Somalia award (SLMAQM17CA1018) and the Stipends Support for the Somali National Army award (SLMAQM18GR2254).

    Recommendation Number
    5
    Closed Implemented

    OIG recommends that the Bureau of Counterterrorism (a) develop and implement a process to verify implementation of its Standard Operating Procedure 20.2 “Review Quarterly Programmatic Report,” which requires Grants Officer Representatives to review quarterly programmatic reports within 30 days of receipt and document their reviews in the official award file, and (b) document the official Federal award file to indicate the review and approval of the Performance Progress Report within 30 days of receipt, as required by the Federal Assistance Directive, for the Somali Law Enforcement: Local Policing award (SLMAQM18CA2066) and the Building an Effective, Fit-for-Purpose Financial Reporting Centre in Somalia award (SLMAQM17CA2025).

    Recommendation Number
    6
    Closed Implemented

    OIG recommends that the Grants Officer from the Bureau of Administration, Office of the Procurement Executive, in coordination with the Grants Officer Representative from the Bureau of African Affairs, complete the Award File Checklist and update the official Federal award files with all required documentation for the Mentorship and Training for the Somali National Army and the African Union Mission in Somalia award (SLMAQM17CA1018) and Stipends Support for the Somali National Army award (SLMAQM18GR2254).

    Recommendation Number
    7
    Closed Implemented

    OIG recommends that the Grants Officer from the Bureau of Administration, Office of the Procurement Executive, in coordination with the Grants Officer Representative from the Bureau of Counterterrorism, complete the Award File Checklist and update the official Federal award file with all required documentation for the Somali Law Enforcement: Local Policing award (SLMAQM18CA2066).

    Recommendation Number
    8
    Closed Implemented

    OIG recommends that the Bureau of African Affairs (a) conduct a review of awards that provide Federal funds to Somali National Army units with participants whose Leahy vetting has lapsed, (b) determine whether any participants received Federal funds while in violation of the Leahy Law, and (c) take corrective actions, as necessary.

    Recommendation Number
    9
    Closed Implemented

    OIG recommends that the Bureau of African Affairs develop and implement procedures for the execution of Leahy vetting requirements, to include annual vetting procedures, that are consistent with established Department of State policies.

    Recommendation Number
    10
    Closed Implemented

    OIG recommends that the Bureau of African Affairs update the terms of the Stipends Support for the Somali National Army award (SLMAQM18GR2254) to include the “State Department Leahy Vetting Requirements” or coordinate with the Bureau of Administration, Office of Procurement Executive and Bureau of Democracy, Human Rights, and Labor to make alternate arrangements for compliance, in accordance with the Federal Assistance Directive.