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In an effort to bring stability to the underdeveloped and vulnerable tribal areas of Pakistan, the U.S. government launched an ambitious $300 million development program in 2008. An audit by the US Agency for International Development reveals how little progress was made in the wake of humanitarian emergencies, deteriorating security and possible misuse of funds.

The FATA region of northwest Pakistan shares a rugged, porous border with Afghanistan and is susceptible to influence by extremists and foreign terrorists. Low literacy rates, unemployment, a weak economy and ineffective government contribute to the poor conditions. The USAID development program focused specifically on job creation, youth programs, and improving public opinion of the Pakistani government.

The inspector general’s audit revealed that the program consistently fell short of its goals. Between 2008 and 2010, the program only met 7 percent to 19 percent of its two—year targets. In 2009, the U.S. government shifted its focus to humanitarian assistance and requested the nongovernmental organization engage in humanitarian aid, like distributing emergency kits to the growing number of displaced families in the region.

“As a result of the setbacks and shifts in implementation, program funds were not used efficiently,” the report said. Only 26 percent, or $7.6 million, of the $29.2 million spent in the first two years went directly to program activities. Indirect costs like labor, fringe benefits, travel and security ate up the rest.

After failing to reach first—year targets, second—year targets were revised or canceled so they could be achieved easily.

Security concerns also presented a huge roadblock. One of the top directors at the nongovernmental organization working for the USAID mission was assassinated. USAID is responsible for providing safety and security support for its mission partners, but the NGO already spent its $500,000 5—year security budget. It has spent another $800,000 on security, but USAID has yet to cover the increased cost.

Security restrictions to monitor the NGO site led USAID to rely on a contractor to make site visits. The contractor issued numerous urgent updates requesting corrective action for faulty construction on a school. In another case, the program funded 2.3 million trees for a reforestation project, and only 1.2 million could be accounted for.

The inspector general recommends the mission “revisit the program’s indicators and targets, improve monitoring and oversight of the program, collaborate more closely with implementing partners regarding the security situation in FATA.”

FAST FACT: $150 million of the FATA Livelihood Development Program was allocated to the lower FATA region and $150 million went to the upper FATA region. The USAID project was terminated in June 2010 after allegations of the NGO’s wrongdoing. The agency has since resumed work in the upper FATA with another NGO.

Following are other new watchdog reports released by the Government Accountability Office (GAO), various federal Offices of Inspector General (OIG), and other government entities.


  • The IRS failed to provide prison officials with prisoner tax return information to help combat tax fraud by inmates, even though the IRS has the authority to disclose the information when fraudulent returns are submitted. Prisoner tax refund fraud doubled from 18,103 fraudulent tax returns in 2004 to 44,944 in 2009. Fraudulent refunds claimed rose from $68.1 million to $295.1 million during the 5—year period. (Treasury Inspector General for Tax Administration)


  • An audit shows Medicare paid twice for services due to improper billing. The mistake adds up to at least $6.6 million in overpayments to surgical centers in nursing facilities. The services provided were incorrectly billed to Medicare Part B, even though they were already included in the payments to the skilled nursing facilities covered in Medicare Part A. The inspector general is requesting that Medicare recover the overpayments. (OIG Department of Health and Human Services)
  • Seven hospitals, located in Florida, Mississippi, Texas, South Carolina, North Carolina and Alabama agreed to pay the U.S. government more than $6.3 million to settle allegations that the hospitals submitted false claims to Medicare. (OIG Department of Justice)

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