Ernst, McCaul Fight for Accountability in Foreign Aid at USAID

Press Release

"As stewards of taxpayer dollars, Members of Congress are responsible for ensuring that such are not unduly wasted on paying for awardee's rent in Geneva or Rome or Paris."

Today, U.S. Senator Joni Ernst (R-Iowa) and U.S. Representative Michael McCaul (R-Texas), chairman of the House Committee on Foreign Affairs, are demanding answers from U.S. Agency for International Development (USAID) Administrator Samantha Power on the agency's lackluster stewardship of taxpayer dollars appropriated for humanitarian assistance abroad.

USAID issues Negotiated Indirect Cost Rate Agreements (NICRAs) for over 300 organizations and companies, many of which are large multinational organizations headquartered outside the United States. Indirect costs, which can include rent for a partner's corporate headquarters, lobbying costs, and other miscellaneous expenses, can easily exceed 25% of an organization's total award. In fiscal year 2022 alone, USAID issued $14.94 billion across 5,788 transactions.

Despite several attempts by Senator Ernst to review NICRA information, USAID persistently blocked access, including by falsely claiming that congressional oversight of NICRAs would violate federal laws. As a result of USAID's obstruction, Senator Ernst has joined forces with Chairman McCaul to send a formal oversight request to USAID to gain access to the rates.

In a letter to Administrator Power, the legislators write, "We understand that some indirect costs are a necessary expense when delivering humanitarian assistance; however, we have serious concerns over the lack of oversight regarding the issuing and review of your agency's NICRAs with USAID's partners. We fear NICRAs have ballooned due to a lack of stewardship and care."

"USAID has been entrusted with record amounts of U.S. taxpayers' hard-earned income over the past year; it is important USAID can show Congress and the American people that it is undertaking every effort to ensure the maximum amount of funds provided to international NGOs, United Nations agencies, and contractors are being used to actually deliver urgently needed assistance to impoverished and developing communities which your agency is charged with assisting."

"As stewards of taxpayer dollars, Members of Congress are responsible for ensuring that such are not unduly wasted on paying for awardee's rent in Geneva or Rome or Paris…We implore you to work with us to ensure that the good will of the American people is not squandered on excessive NICRAs."

Source