Report: 'Weaknesses' and 'unusual increases' found in management of Ukrainian aid

Audio By Carbonatix

(The Center Square) – Some of the $45 billion in American taxpayer dollars sent to the Ukrainian government as foreign aid may have been mishandled, according to a new report by the Government Accountability Office. 

Since July 2022, the U.S. government has sent roughly $45.2 billion to Ukraine for direct budget support alone – that is, money to help keep Ukraine’s government open and personnel funded. 

The United States Agency for International Development (USAID) oversaw the distribution of about $30 billion of that aid through the World Bank Group’s Public Expenditures for Administrative Capacity Endurance in Ukraine (PEACE) project.

The GAO’s 110-page analysis, released Wednesday, showed that despite aid contractors finding “weaknesses” in Ukraine’s internal controls for managing U.S. foreign aid, USAID neglected to ensure that the country adopted better oversight measures. 

Among other discrepancies, Ukraine had underreported to the World Bank nearly $4 billion in expenditures funded by direct budget support. 

USAID also failed to review the detailed data in Ukraine’s expenditure verification reports. When GAO analyzed 5,121 instances of aid spending changes, it found 161 “unusual increases” in expenditures throughout certain regions and institutions.

The GAO said the anomalies “merit examination to determine whether any of the expenditure changes indicate potential reporting errors, fraud, or other issues that may warrant greater oversight.”

It recommended that USAID submit the overdue required reports to Congress detailing how Ukraine used direct budget support funds, particularly given that some of the reports it did submit “may include inaccurate information.” Additionally, USAID “did not update this reporting once new data became available,” GAO found.

The World Bank Group responded to the GAO’s report, promising to “remain actively engaged in monitoring and addressing potential risks for the duration of the [PEACE] project.”

“The Bank affirms its readiness to continue collaborating with U.S. entities in the ongoing monitoring and oversight of that funding,” it said.