Breaking Open the Black Box:


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Breaking Open the Black Box:

 

Increasing Aid Transparency and Accountability

 

in Haiti

 

Jake Johnston and Alexander Main

April 2013

 

Center for Economic and Policy Research

 

1611 Connecticut Avenue, NW, Suite 400

Washington, D.C. 20009

202–‐‑93–‐‑380

http://www.cepr.net

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Contents

Introduction ……………………………………………………………………………………………………………………………………. 3

Is U.S. Assistance to Haiti Working? ……………………………………………………………………………………………….. 3

What We Know and Don’t Know About U.S. Assistance to Haiti ………………………………………………….. 5

Moving USAID Forward in Haiti …………………………………………………………………………………………………….. 9

Conclusion and Recommendations ………………………………………………………………………………………………… 12

References ……………………………………………………………………………………………………………………………………… 13

 

Acknowledgements

 

The authors would like to Dan Beeton and Sara Kozameh for editing and helpful comments.

 

About the Authors

 

Jake Johnston is a Research Associate and Alexander Main is a Senior Associate for International

Policy at the Center for Economic and Policy Research, in Washington D.C.

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Introduction

 

In January of 2010, the Republic of Haiti was struck by a devastating earthquake that killed hundreds

of thousands and laid waste to countless homes and other buildings, resulting in an estimated $7.8

billion in damages.

1 The tragic scenes of destruction and human suffering generated an

unprecedented wave of international support, culminating in a March 2010 donor conference. The

U.S. government pledged $1.15 billion for relief and reconstruction projects, and overall donors

pledged over $6 billion for the first three years of the response.

2 Key U.S. actors, like the State

Department’s Cheryl Mills, acknowledged a “unique opportunity to ‘build back better’” and “an

obligation to ensure that aid is actually effective.”

3

That same year the United States Agency for International Development (USAID) launched a farreaching

set of reforms called “USAID Forward,” which aims to “change the way the Agency does

business.” The reforms include plans for “strengthening evaluation and transparency” and

“increased investment directly to partner governments and local organizations.”

4 The large amount

of new U.S. government funding allocated to Haiti assistance appeared to provide a timely

opportunity to put the reforms into action and to indeed “build back better.”

Over three years have passed since Haiti’s earthquake and, despite USAID’s stated commitment to

greater transparency and accountability, the question “where has the money gone?” echoes

throughout the country. It remains unclear how exactly the billions of dollars that the U.S. has spent

on assistance to Haiti have been used and whether this funding has had a sustainable impact. With

few exceptions, Haitians and U.S. taxpayers are unable to verify how U.S. aid funds are being used

on the ground in Haiti. USAID and its implementing partners have generally failed to make public

the basic data identifying where funds go and how they are spent.

5

In the following issue brief we take a look at the effectiveness of U.S. assistance to Haiti: what we

know about how it is being administered, to what extent U.S. assistance in Haiti is adhering to the

USAID Forward reform agenda and what steps can be taken to ensure more effective and

transparent delivery of aid to Haiti.

 

Is U.S. Assistance to Haiti Working?

 

Since the earthquake, the U.S. has obligated $3.6 billion for assistance to Haiti, of which $2.5 billion

had been disbursed as of September 2012, primarily through USAID.

6 The few audits and

evaluations of USAID’s programs in Haiti since the earthquake present a troubling picture of the

manner in which U.S. relief and reconstruction efforts have been conducted so far. Lack of

effective oversight and a failure to meet, or even apply, basic benchmarks are among frequently

noted problems:

1 PDNA (2010).

2 OSE (2012).

3 Romano (2010).

4 USAID (2013).

5 For more information see Walz and Ramachandran (2013 and 2013b).

6 U.S. Department of State (2013).

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In December 2010, USAID’s Office of Inspector General (OIG) issued a report on Cash-for-Work

programs, which found that:

–

Contractors hired just 8,000 Haitians per day, compared to a planned 25,000.

–

There was a lack of community involvement in beneficiary selection.

–

USAID had not performed internal financial reviews of the contractors despite

“expending millions of dollars rapidly.”

7

In May of 2011, the OIG found significant problems with the provision of housing, including:

–

Grantees completed just 6 percent of planned transitional shelters by the onset of the

2010 hurricane season.

–

The bidding process excluded Haitian businesses.

–

There was inadequate supervision of grantees.8

In November of 2011, the Government Accountability Office issued a report on U.S. government

funded reconstruction efforts, finding:

–

Significant delays in USAID-funded infrastructure projects, with only $3 million spent

out of $412 million obligated.

–

Lack of on-the-ground staff, and no mechanism to expand staff contributed to the

delays.

9

In September 2012, the OIG issued a report on the Haiti Recovery Initiative, a program

implemented by Chemonics, the largest single recipient of post-quake funds from USAID. The audit

found that:

–

The contractor was “not on track” to meet program objectives.

–

Performance indicators were not well defined, making it difficult for the OIG to evaluate

the program’s impact.

–

There was a lack of community involvement so as to ensure sustainability.10

These OIG and GAO reports only look at a small fraction of the activities that USAID funds in

Haiti, yet clearly demonstrate that significant problems persist with the provision of aid to the

country. They also suggest that basic data required to monitor and evaluate projects is often lacking.

An independent general evaluation of the U.S. government response in Haiti, conducted by a large

USAID contractor, came to the conclusion that “a disquieting lack of data on baselines against

which to measure progress or even impact” prevented an evaluation of the quality or impact of U.S.

government aid.

11

In order to form a more complete assessment of how aid is being administered in Haiti and whether

U.S. government funds are being used effectively and in accordance with set objectives, some basic

7 OIG (2010).

8 OIG (2011).

9 GAO (2011).

10 OIG (2012).

11 Walz and Ramachandran (2012).

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information is required. For instance, it’s important to know what the various projects are that

USAID is funding, how much funding each of these projects are receiving, what are the project

goals and benchmarks and what implementing partners are tasked with executing the projects. As

we’ll see in the next section, we may have a broad idea of where most USAID funding to Haiti is

initially channeled, but it’s not currently possible to track where and how it is being spent at the

project level.

 

What We Know and Don’t Know About U.S. Assistance

 

to Haiti

 

Based on an analysis of publicly available records in the Federal Procurement Database System and

from USASpending.gov, and as can be seen in

Figure 1, USAID has awarded $1.15 billion in

contracts and grants since the earthquake of 2010.

 

FIGURE 1

 

Haiti: Total USAID Obligations in Millions of USD

 

Source: USASpending.gov, FPDS, Authors’ Calculations

These figures only include funds awarded by USAID to service providers or for the direct

procurement of goods -they do not include administrative expenses and other costs borne directly

 

$614.0

 

$540.3

 

Grants

Contracts

 

Total

 

Obligations:

 

$1,154.3

 

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by USAID. As can be seen above, $607.8 million was obligated in the form of grants, while $540.3

million was in the form of contracts. Typically grants are awarded to non-governmental

organizations (NGOs) and international organizations, while contracts encompass awards to private

contractors.

Over half of the $1,148.1 million went to the top ten recipients of USAID awards, as can be seen in

 

Figure 2

. The largest, by far, is Chemonics International Inc., a for-profit international development

company based in Washington D.C. Outside of the World Bank and United Nations, Chemonics is

the single largest recipient of USAID funds worldwide

12, having received over $680 million in fiscal

year 2012 alone. In Haiti, since 2010, Chemonics has received more than the next three largest

recipients combined.

 

FIGURE 2

 

Haiti: Top Ten USAID Awardees (in Millions of USD)

 

Source: USASpending.gov, FPDS, Author’s Calculations

As nearly all of USAID’s funding for Haiti assistance is channeled to private contractors and

grantees it is important to know what this funding is for and how it is being administered by these

private entities. Are these implementing partners achieving the goals that have been set and are they

meeting benchmarks within appropriate time frames?

Clearly, as can be seen above in Figure 2, it is possible to track who the primary recipients of

USAID funds are, yet on what are these NGOs and contractors spending the money? What percent

goes to overhead, to staff, vehicles, housing, etc.? What percent has actually been spent on the

ground in Haiti?

12 USAID (2013b).

$196

$76

$57

$54

$46

$43

$40

$35

$35

$29

$- $50 $100 $150 $200 $250

Chemonics International Inc.

(International Organization for Migration

Catholic Relief Services

World Vision Inc.

CHF International

FHI 360

Management Sciences for Health

DAI/Nathan Group

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