Foreign Assistance: Disaster Recovery Program Addressed Intended Purposes, but USAID Needs Greater Flexibility to Improve Its Response Capability

In the fall of 1998, when hurricanes Mitch and Georges struck Central America and the Caribbean, the United States and other donors responded by providing emergency relief, such as food, water, medical supplies, and temporary shelter. Also, In May 1999, Congress passed emergency supplemental legislation that provided $621 million for a disaster recovery and reconstruction fund for the affected countries, as well as reimbursement for costs incurred by U.S. departments and agencies during the immediate relief phase. The U.S. Agency for International Development (USAID) and other departments and agencies made significant achievements in helping the affected countries rebuild their infrastructure and recover from the hurricanes. USAID and others used the disaster recovery assistance to bring about economic recovery, improve public health and access to education, provide permanent housing for displaced families, and improve disaster mitigation and preparedness. To achieve these broad objectives, USAID funded infrastructure construction and repair, technical assistance and training, loans for farmers and small businesses, and some equipment. In addition to its normal controls, USAID ensured that the funds were spent for intended purposes. USAID coordinated its activities with 12 other departments and agencies that were allocated $96 million for disaster recovery efforts. USAID also coordinated with other bilateral and multilateral donors through formal consultative group meetings and informal contacts among mission staff and other donors. USAID attempted to strengthen the capacity of host government audit in situations as a means to resist corruption. However, USAID was not successful in this area, mostly due to country conditions. USAID did not begin expending the supplemental funds until January 2000, 7 months after the appropriation was enacted. Some of the factors that added time included arranging for additional program staff and contractor support; ensuring that financial controls and other oversight measures were in place; coordinating with and planning for the involvement of numerous other departments and agencies; and providing for U.S. contractors and other organizations to compete for most of the contracts, grants, and cooperative agreements that were awarded.