By Simon Lewis
WASHINGTON, July 27 (Reuters) – The U.S. State Department’s hurried takeover of aid programs from the shuttered U.S. Agency for International Development (USAID) last year was hampered by staffing shortages, IT issues and delayed guidance, an internal watchdog said in a report released on Monday.
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President Donald Trump ordered the closure of USAID shortly after resuming office in January 2025. Well over 10,000 people were fired and thousands of programs canceled, throwing into turmoil U.S.-funded aid operations on which millions of the world’s poorest people depended.
The State Department’s Office of Inspector General said in its report that aid projects carrying $51.5 billion in obligated funds were transferred just as the department was undergoing its own reorganization. The so-called “Green List” of awards that survived the shutdown of USAID comprised 1,504 aid awards, including projects in conflict zones like Ukraine and Israel and the Palestinian territories, it said.
“The transition happened extremely fast, with evolving guidance,” the Office of Inspector General cited officials from one bureau as saying. The report found that the department had not implemented the inspector general’s earlier recommendations aimed at smoothing the transition.
The State Department did not immediately respond to a Reuters request for comment. The department’s top office for management told the authors that implementation of the watchdog’s recommendations was underway, the report said.
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About a third of the State Department offices that had to take on USAID awards had no prior experience managing foreign assistance projects, staff told the watchdog. The department hired 838 new positions to administer the awards, but this was far fewer than bureaus requested, it found.
Guidance on how to update the terms of aid awards was not fully in place until December, and an artificial intelligence-driven data management tool introduced to help with the transition was beset by data problems, the report said.
The continent with largest number of different awards transferred to the State Department was Africa, with 639 awards carrying $17 billion of obligated funds.
The Bureau of African Affairs, which took on a majority of those awards, requested 732 new positions to administer the awards, but ultimately only hired 232 people, the vast majority of them locally employed staff based out of U.S. missions.
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(Reporting by Simon Lewis; Editing by Aurora Ellis)
Copyright 2026 Thomson Reuters.
