Office of Inspector General’s Role and Foreign Assistance Reform

Thank you, Don, for that kind introduction and thank you all for being here. It is a pleasure to be with you at the OIG Management and Planning Conference. I look upon this afternoon as an opportunity.

As you know, one of my intents as our nation’s first Director of Foreign Assistance was straightforward: to increase transparency, accountability, and coherence of strategy in the allocation of our precious foreign assistance resources. This is vital to fulfilling our role as good stewards of US taxpayer dollars. And it is essential to taking a sustainable approach to poverty reduction and transformation.

Transparency and accountability are precisely what your mission is as Inspectors General—and it puts what you do every day at heart of transformational diplomacy and the reform effort. That is why I want to hear from you directly about what you need to carry out your mission. I am looking forward to taking your questions and listening to your suggestions this afternoon.

But before I do, I want to take just a few moments to tell you precisely why and how what you do matters to the success of our reform, our agency, our government, and our country. This is a time of unprecedented commitment and attention to foreign assistance and poverty. TV and movie stars are joining forces with academics, NGOs and the government to raise awareness about poverty issues. Corporate philanthropy dedicated to poverty alleviation is at an all-time high. College campuses across the United States are uniting to address humanitarian crises. There is a heightened awareness of the role development plays in U.S. Foreign Policy.

As such, we’ve seen a near threefold increase in Official Development Assistance since the start of the Bush Administration. People across this country are beginning to understand and appreciate the undeniable positive contribution foreign assistance makes to national security.

And, as a result, the American people rightfully expect us to deliver that assistance in an efficient manner. Any time our actions or decisions result in wasted resources, unmet deadlines, and cost overruns, the consequence extends beyond negative headlines.

When we fail to meet expectations, it hurts our credibility both at home and abroad—not just as an agency, or even a government, but as Americans. The work you do as Inspectors General—helping us identify where shortcomings exist in our processes—can help us avoid such failures.

I believe we have one of the best OIG offices in the USG and one of the best IG’s in Don Gambatesa. This is not a “gotcha” organization. That’s why I want to tap the knowledge and insight of people housed here to improve management and enhance accountability.

In this regard, I would like to encourage a more proactive mindset in the Office as something as fully important as your retroactive auditing. No one in my position relishes reading your reports.

But much gain derives from the pain you inflict. Let me cite just a couple of examples where the OIG’s work has saved American taxpayers hundreds of millions of dollars and improved our work as an Agency.

One example, two senior Harvard University advisors were paid under a USAID grant to lead a project to provide advice to the nascent Russian economy on privatization following the fall of communism and the creation of fair and open markets and the rule of law.

The United States alleged that instead of carrying out their mission on behalf of the U.S. Government, these individuals used their positions and influence to advance their own and their spouses’ private financial interests. As a result of OIG investigative work, a settlement of over $31M was reached, and USAID reviewed and updated its policy and standard contract language as it relates to conflicts of interest by contractor personnel.

Another, not quite as exciting, but equally important example—OIG’s 2001 and 2004 follow-on audits of “cargo preference reimbursement” under the Merchant Marine Act of 1936 not only resulted in the recovery of approximately $193 million in outstanding reimbursements, but led to increased management controls over the cargo preference reimbursement process.

As your Administrator and the Director of Foreign Assistance, I salute you for the work you day each day on behalf of the American people. In brief, you are making USAID a better and more efficient Agency and one more capable of handling its awesome responsibilities in the future.

As we look to the future, I stand ready, beyond today’s meeting, to hear your advice on a number of matters. Our new business model seeks to maximize impact by bringing the maximum amount of resources and decision-making down to the country level. Do you have the staff and wherewithal in the field to meet country-level needs? I am also interested in hearing about the challenges of simultaneous auditing you faced in Iraq.

As we increase our involvement in major rebuilding initiatives in war-torn and post-conflict societies, what are some of the lessons learned? Pitfalls to avoid? I look forward to hearing your comments. Together, we can continue to strengthen this agency, build upon its many accomplishments, and broaden its ability to contribute to our transformation and security goals.

Thank you very much.