WASHINGTON — A federal watchdog report released Monday reveals that the State Department’s rushed takeover of foreign aid programs from the now-defunct U.S. Agency for International Development was riddled with problems, including too few staff, computer system failures, and guidance that arrived too late to be useful.
President Donald Trump directed USAID to close shortly after returning to office in January 2025. The shutdown resulted in the dismissal of more than 10,000 employees and the cancellation of thousands of programs that millions of the world’s most vulnerable people had relied upon.
The State Department’s Office of Inspector General reported that aid projects with $51.5 billion in committed funds were handed over to the department at the very same time it was going through its own internal reorganization. A total of 1,504 aid awards survived the USAID shutdown — a group referred to as the “Green List” — and included programs operating in conflict zones such as Ukraine, Israel, and the Palestinian territories.
Officials from one department bureau told the watchdog that “the transition happened extremely fast, with evolving guidance.” The report also found that the State Department had failed to act on earlier recommendations from the inspector general that were designed to make the transition smoother.
The State Department did not respond to a request for comment from Reuters. However, the department’s top management office told the report’s authors that work to carry out the watchdog’s recommendations was already in progress.
Staff told the inspector general that roughly one-third of the State Department offices that inherited USAID programs had never previously managed foreign assistance work. While the department brought on 838 new employees to handle the awards, that number fell well short of what individual bureaus had asked for.
Instructions on how to update the terms of aid agreements weren’t fully available until December, and an artificial intelligence-based data management tool introduced to support the transition was plagued by data accuracy issues, according to the report.
Africa saw the highest number of transferred aid awards of any continent, with 639 programs carrying $17 billion in obligated funds moving to State Department oversight. The Bureau of African Affairs, which absorbed the bulk of those awards, had requested 732 new positions to manage them — but ended up hiring only 232 people, most of whom were locally employed staff working out of U.S. diplomatic missions.
