Central America: USAID Should Strengthen Staffing and Fraud Risk Management for Initiative Addressing Migration to the U.S.
Fast Facts
In 2021, USAID announced Centroamérica Local, a 5-year, $300 million initiative that is empowering local organizations in El Salvador, Guatemala, and Honduras to address the root causes of migration to the U.S.—such as poverty, corruption, and violence.
Our review of the initiative found:
USAID's offices in the 3 countries asked for more staff but haven't yet gotten what they need
USAID has taken steps to manage risks to the initiative
USAID doesn't require certain helpful practices—such as training staff to detect and reduce fraud risks
We recommended USAID strengthen the offices' staffing and the agency's fraud risk management.
Farmer demonstrating coffee-bean processing supported by the Centroamérica Local Initiative
Highlights
What GAO Found
In November 2021, the U.S. Agency for International Development (USAID) announced Centroamérica Local (CL), an initiative to empower local organizations in El Salvador, Guatemala, and Honduras to implement programs addressing root causes of migration to the U.S. GAO's review of all 18 CL grants and other awards from August 2021 through June 2023 found each included elements aligning with at least one of five pillars of the U.S. Strategy for Addressing the Root Causes of Migration in Central America (Root Causes Strategy). GAO also found USAID consulted with local stakeholders, including implementing partners and mission staff, in developing CL. Stakeholders told GAO that USAID's CL project development process—“co-creation”—is more collaborative than prior localization efforts and better addresses local needs.
U.S. Agency for International Development (USAID) Application and Co-Creation Process
The El Salvador, Guatemala, and Honduras missions assessed staffing levels and requested additional positions to support localization. However, their staffing to oversee CL and other localization efforts has gaps resulting from resource constraints, such as space limitations. For example, in Guatemala, the new embassy compound is too small to accommodate all USAID mission staff. USAID has taken short-term measures, such as allowing one mission to hire short-term contractors. However, mission officials said they will need to hire additional staff to oversee the growing number of smaller awards for CL. Identifying long-term solutions to the missions' staffing shortages would help ensure adequate oversight of CL.
The El Salvador, Guatemala, and Honduras missions have taken steps to identify and mitigate risks, including fiduciary, programmatic, reputational, and fraud risks that could affect CL. However, the missions have not followed GAO's leading practices for assessing fraud risk. The missions considered and documented some fraud risk through annual risk management processes but have not examined program-specific fraud risks. Also, missions and implementing partners have access to fraud awareness training, but attendance is not mandated or tracked because USAID does not require it agencywide. As a result, USAID lacks assurance that its missions and partners know how to identify and mitigate key fraud risks to CL-related programs.
Why GAO Did This Study
Hundreds of thousands of Salvadoran, Guatemalan, and Honduran nationals are encountered at the southwest U.S. land border each year. In July 2021, the White House launched the Root Causes Strategy to address economic, governance, and security factors driving migration to the U.S. from Central America. In November 2021, USAID announced CL, a 5-year, $300 million initiative. Through CL, USAID seeks to empower local organizations in El Salvador, Guatemala, and Honduras to address root causes of migration by, among other things, advancing economic growth, improving governance, and strengthening security.
GAO was asked to review USAID's implementation of CL. Although the initiative is too new for an evaluation of its effectiveness, this report examines, among other things, the extent to which USAID (1) integrated elements of the Root Causes Strategy and consulted local stakeholders in developing CL; (2) assessed and adjusted its staffing levels for grant management and program oversight; and (3) identified risks to CL, including fraud risks. GAO reviewed USAID documents, analyzed USAID data, and interviewed USAID officials in Central America and Washington, D.C. GAO also interviewed local stakeholders in El Salvador, Guatemala, and Honduras.
Recommendations
GAO is making three recommendations to USAID to address staffing shortages at the selected missions and help improve USAID's fraud risk assessments and training. The agency concurred with these recommendations.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| U.S. Agency for International Development | The Administrator of USAID should work with the Secretary of State to institute long-term human capital solutions to address FSN staffing shortages in carrying out Centroamérica Local. (Recommendation 1) |
In commenting on the report, USAID agreed with this recommendation and said it was working with State to develop solutions. USAID indicated in its required 6-month status update letter on Sept. 16, 2024, that it targets completing actions to close this recommendation by 12/31/2024.
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| U.S. Agency for International Development |
Priority Rec.
The Administrator of USAID should ensure that agencywide guidance requires regular fraud risk assessments for its programs—including programs supporting USAID initiatives—as well as documentation of program-specific fraud risk profiles in accordance with leading practices in the Fraud Risk Framework. (Recommendation 2) |
USAID agreed with the recommendation. In March 2024, USAID said it was working to amend agencywide policies to highlight the need for annual fraud risk assessments for its programs in accordance with leading practices. To fully implement this recommendation, USAID needs to show that it has amended agencywide guidance to require regular fraud assessments for its programs that align with GAO's leading practices for assessing fraud risk. By taking this action, USAID will strengthen its ability to manage the risk of fraud in its programs. USAID indicated in its required 6-month status update letter on Sept. 16, 2024, that it targets completing actions to close this recommendation by 6/30/25.
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| U.S. Agency for International Development |
Priority Rec.
The Administrator of USAID should ensure that agencywide guidance requires the regular provision of, and tracking of participation in, mandatory fraud awareness training for USAID staff involved in administering foreign assistance as well as for representatives of all partner organizations implementing the assistance. (Recommendation 3) |
USAID agreed with this recommendation. In March 2024, USAID said it was working to communicate the need for mandatory fraud awareness training for program staff and implementing partners. To fully implement this recommendation, USAID needs to show that it has amended agencywide guidance to require mandatory fraud training for program staff and implementing partners. By taking this action, USAID will have greater assurance that its staff and implementing partners know how to properly prevent, detect, and respond to fraud risk in its programs. USAID indicated in its required 6-month status update letter on Sept. 16, 2024, that it targets completing actions to close this recommendation by 6/30/25.
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