US aid cuts to Ukraine make waste and fraud more likely, say watchdogs
USAID is worried that the termination of independent aid monitoring contracts for Ukraine by the Trump administration has raised the possibility of fraud, misuse, and waste, according to three U.S. watchdog groups.
“Inspectors general from the State Department, Pentagon, and USAID stated in a report released Thursday that the termination of third-party monitoring contracts has further limited USAID’s ability to oversee programs.”
For over 60 years, civilian international aid was primarily administered by the U.S. Agency for International Development. It is set to close on September 2 and is being dismantled by the Trump administration.
Every three months, the three inspectors general report to Congress on their supervision of U.S. civilian assistance to Ukraine in its defense against Russia’s full-scale invasion, which began in February 2022.
President Donald Trump ordered the destruction of USAID in July, and he suspended all U.S. foreign assistance programs in January until they were reviewed for compatibility with his “America First” principles.
According to this ruling, 83 percent of USAID initiatives, including several that aided Ukraine, were terminated by billionaire Elon Musk’s Department of Government Efficiency.
According to the assessment by the watchdogs, USAID supplied a guarantee that resulted in a $20 billion loan for Kyiv and managed $30.2 billion in direct support for the Ukrainian government’s budget.
In the three months that ended on June 31, it stated, 25 civilian aid programs for Ukraine were discontinued, while 29 programs remained in operation, five of which were placed under stop-work orders, and four of which were transferred to the State Department with an unidentified status.
Contracts with outside organizations that tracked USAID money independently to make sure they were used as planned and that assisted in “informing both current and future decision-making” were among the initiatives that were canceled, according to the statement.
“USAID said that without independent monitoring, it cannot verify that programs are being implemented in line with award terms, increasing the risk of waste, fraud and abuse,” said the report.
Particularly in countries afflicted by conflict, “where there is a heightened potential for diversion of funds,” it cautioned.
