Haiti Reconstruction:

U.S. Efforts Have Begun, Expanded Oversight Still to Be Implemented

GAO-11-415: Published: May 19, 2011. Publicly Released: May 19, 2011.

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On January 12, 2010, an earthquake in Haiti killed an estimated 230,000 people, displaced about 2 million more, and exacerbated longstanding challenges. In July 2010, Congress appropriated more than $1.14 billion in supplemental funds for reconstruction assistance, most of which was provided to the U.S. Agency for International Development (USAID) and the Department of State (State). In April 2010, the Haitian government created the Interim Haiti Recovery Commission (IHRC), a joint Haitian-international entity, for an 18-month term to coordinate donors, conduct strategic planning, approve reconstruction projects, and provide accountability. In this report, GAO addresses (1) the planned uses for U.S. reconstruction assistance and the amounts provided so far, (2) USAID's internal controls for overseeing U.S. funds, and (3) IHRC's progress establishing governance and oversight structures. GAO interviewed U.S. government officials in Washington, D.C., and Haiti, as well as officials from Haitian ministries, the IHRC, and nongovernmental organizations, and reviewed U.S. and IHRC documents.

The U.S. government plans to allocate about $918 million of the $1.14 billion in supplemental Haiti reconstruction funds available through the end of fiscal year 2012 to USAID and State. USAID and State plan to allocate $770 million and $148 million, respectively, to projects in three geographic regions of Haiti, selected for their development potential, and four key sectors: (1) infrastructure and energy; (2) governance and rule of law; (3) health and other basic services; and (4) food and economic security. About half of the total funding is intended for infrastructure and energy projects and an additional third is for governance and rule-of-law programs. State and USAID reported they had obligated over $184.3 million, or about 20 percent of the funding, as of March 2011. USAID provided most of this amount to fulfill the U.S. government's pledge of $120 million to the multidonor Haiti Reconstruction Fund. State and USAID reported that they obligated most of the remaining $64.3 million to a small number of bilateral activities, including projects to restore basic government functions. USAID intends to expand and enhance its internal control framework to address the increased risk factors associated with the almost $650 million of the $770 million in supplemental reconstruction funds allocated to the agency and is at varying stages of implementing new internal controls. The agency plans to (1) augment existing internal controls to provide additional financial management and oversight of reconstruction projects, and (2) establish a new independent monitoring and evaluation unit. As of April 2011, while the agency had taken initial steps to implement some new controls, such as reorganizing staff to address the increase in oversight of supplemental reconstruction funds, it is in planning stages for other controls, particularly the new monitoring and evaluation unit. Additionally, the USAID Office of Inspector General plans to expand its audit and oversight activities and has begun to implement these plans. Although IHRC has established key governance structures and procedures, the commission is not fully operational. IHRC, which State officials said has helped improve transparency and coordination, has made progress setting up a new organization in a challenging environment. However, although the commission's mandate ends in October 2011, IHRC is not fully operational due to delays in staffing the commission and defining the role of its Performance and Anticorruption Office--which IHRC officials cited as key to establishing the commission as a model of good governance. IHRC also has made progress developing project review procedures and approving reconstruction projects, but IHRC's ability to direct funding to Haitian priorities is limited, in part because those priorities have not been clear. As a result, funding for approved projects is uneven across sectors and not necessarily aligned with Haitian priorities. For example, although the Haitian government identified nearly equal 18-month funding requirements for debris removal and agriculture, IHRC has approved about 7 times more funding for agriculture projects. IHRC has recently developed a strategic plan to begin to help clarify Haitian priorities. GAO recommends USAID take steps to ensure planned monitoring and evaluation activities are implemented in a timely manner. We also recommend State work with IHRC to make it fully operational. State agreed with our recommendations and USAID noted steps it is taking in line with our recommendation.

Recommendations for Executive Action

  1. Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: To strengthen IHRC capacity to coordinate and oversee international donor assistance, ensure the consideration of Haitian priorities in planning projects, and assist with IHRC's transfer to a Haitian development agency, the Secretary of State, in consultation with the USAID Administrator, should encourage IHRC leadership to ensure that priority staffing needs are met, including staffing the projects division with sector experts and hiring Performance and Anticorruption Office (PAO) staff who can provide technical guidance and analysis during upcoming project selection rounds.

    Agency Affected: Department of State

  2. Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: To strengthen IHRC capacity to coordinate and oversee international donor assistance, ensure the consideration of Haitian priorities in planning projects, and assist with IHRC's transfer to a Haitian development agency, the Secretary of State, in consultation with the USAID Administrator, should encourage IHRC leadership to determine the specific goals and structure of PAO and ensure oversight procedures and staff are in place before the end of IHRC's term so monitoring and oversight functions can be transferred to a successor agency.

    Agency Affected: Department of State

  3. Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: To strengthen IHRC capacity to coordinate and oversee international donor assistance, ensure the consideration of Haitian priorities in planning projects, and assist with IHRC's transfer to a Haitian development agency, the Secretary of State, in consultation with the USAID Administrator, should encourage IHRC leadership to continue to take steps to implement IHRC's strategic plan by, for example, finalizing more detailed plans for projects and programs that address the goals laid out in the plan.

    Agency Affected: Department of State

  4. Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: To help strengthen ongoing efforts to monitor and evaluate the use of supplemental reconstruction funds and prepare for when reconstruction funds are further obligated in Haiti, the USAID Mission Director in Haiti, in collaboration with USAID officials in headquarters and the field, should develop mechanisms within the (Office of Policy Coordination and Program Support) PCPS for coordinating with development sector staff to determine when project plans are finalized so the timing of baseline data collection aligns with project implementation.

    Agency Affected: United States Agency for International Development: Bureau for Latin America and the Caribbean: Office of Caribbean Affairs: USAID Haiti

 

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