Government waste stories usually focus on either a bureaucrat misspending federal tax dollars or the recipient of the funds doing so. Once in a while, the story involves both, as is the case with $32 million worth of State Department grants to eight recipients for aid to African countries.
The funds were granted by the State Department Bureau of African Affairs between 2010 and 2012.
One of the recipients, Nour International Relief Aid, violated numerous rules administering its grants from 2009 to 2013, according to a recent inspector general report.
But, according to an earlier IG report, neither Nour nor seven other grant recipients got sufficient oversight by the BAA.
“Without appropriate oversight, [BAA] could not ensure that it achieved its mission of supporting African democracy, economic growth, conflict prevention, counterterrorism and of improving global health,” the IG said.
Nour International Relief Aid received $1.56 million in 2009 to provide Somalis with pharmaceuticals and medical supplies until 2010. The State Department extended the grant to October 2013 with a new total of $5.9 million.
The nonprofit claimed ignorance of the abundant grant administration laws it broke.
“However, by signing the grant agreement, the grant recipient assured that it would comply with the terms and conditions of the award,” the report said.
Though ignorance of the law doesn’t provide a sufficient defense, the BAA still either approved Nour’s mistakes or ignored them all together.
Also, Nour’s president, Diana Sufian, received little guidance as a rookie.
“That was my very first experience ever in grants,” Sufian told the Washington Examiner. “There were a lot of things I didn’t know about.”
First-time federal grant recipients are required to be categorized as high-risk, which requires a greater degree of oversight. But BAA officials didn’t evaluate the risk factors associated with any of the eight grant recipients.
“According to [BAA] officials, it was not [their] practice to identify high-risk grant recipients,” the report said. “Further, [BAA] did not have an efficient risk identification and management strategy in place …”
The minimal oversight allowed Nour’s blunders to amount to about $1.6 million of questioned expenditures. All but $100,000 of the misspent funds were spent on goods not authorized by the grant. One invoice alone listed 144 of 201 items, or about 70 percent, as unapproved.
“Despite these items not being included in the grant award or approved by the grants officer, the [State] Department paid the invoice,” the IG said. Nour also exceeded its monthly budget 21 times during the grant period.
An IG spokesman declined to comment on what kinds of pharmaceuticals were instead purchased.
“We are not in a position to characterize what was purchased, except to state that they were unapproved,” said Doug Welty.
Sufian defended the alterations, saying “the list changes depending on what’s needed.”
“The State Department was made aware of every single financial transaction that was withdrawn from the grant,” Sufian said. “I couldn’t do it without approval. That’s illegal.”
Sufian also claimed she had State Department emails that authorized her requests for the use of the funds and the monthly overages, but that she is restricted from sharing the documents.
Regardless, the nonprofit consequently spent its award at an accelerated rate.
As a result, “Nour did not have the funds needed to provide the full complement of monthly supplies,” which possibly resulted in occasional inadequate pharmaceutical supplies to Somalia, the report said.
“Nour underspent its budget in other months,” Welty said. Nour didn’t exceed it’s total allotment, but “there was no money left at the end of the grant period.”
Sufian said that she still had an estimated $270,000 left over as of January 2014.
When the BAA extended Nour’s grant, it was done two years after Sufian was a figure in a scandal that ultimately resulted, she said, in the termination of her contract at an affected charity.
At the beginning of the grant in 2009, Nour non-competitively selected two of the same companies later involved in the scandal to supply pharmaceuticals and medical supplies as sole-sources.
Sufian had a relationship with both companies. Federal law, however, require suppliers to be selected competitively.
“Federal procurement policies require full and open competition to drive down costs, motivate better contractor performance and curb fraud and waste,” the report said. “However, by ignoring competition requirements, Nour cannot ensure that it is achieving the best price for the goods and services being acquired.”
Sufian again blamed poor guidance. “No one ever said I had to go through competitive bidding,” she said. “I didn’t even know that I was supposed to.”
