What to Make of AED’s Demise? Until the IG Report Is Released, We Have No Idea

I have avoided writing on the topic of AED's suspension from receiving government grants for some time. The lack of information on the USAID Inspector General (IG) investigation meant that my comments would be uninformed and unhelpful.  When the suspension was first announced, the predominant belief was that whatever went wrong, as something clearly did in the difficult environments of Pakistan and Afghanistan, would be corrected, perhaps with some fines, and then AED would be reinstated.  Most observers did not foresee that AED would fold before the IG's report was even completed.For me, that's now the story - AED is selling off its assets and we still don't know why it was initially suspended. Here's what we know:

• On December 8, 2010, USAID announced that AED was being suspended from receiving any new U.S. government awards based on irregularities in certain Pakistan and Afghanistan grants.
• On March 3, 2011, AED announced that, being cash-starved, it would begin selling its assets. After 50 years in existence, AED will cease to exist. It implements more than 300 human and social development programs in all 50 U.S. states and over 150 countries.

And that's about all we know despite the passage of over three months since the first announcement.Here is what we don't know, but would need to, in order to make informed comments:

• Where is the IG report that would explain the reasons behind the USAID decision to suspend?
• Why was AED suspended from all government grants and not just USAID, or even USAID grants in the two countries in question?
• Did AED provide full and timely information to the IG during its investigation?
• What does this mean for other grantees and contractors?

It should be noted that in 2009 the IG criticized USAID for not availing itself of the suspension and debarment options in the past. In February 2011 testimony before the Commission on Wartime Contracting, the IG reported a notable increase in sanctions within the last year.  One such sanction was recently announced against Deloitte.  In that case USAID terminated Deloitte’s contract providing technical assistance to the Kabul Bank but did not bar it from other government contracts. And an IG report was issued in the Deloitte case.On one hand, I am pleased that USAID is taking grant monitoring and accountability so seriously.  On the other hand, I am disappointed by the apparent lack of transparency of a process that had grave consequences for one respected organization and possible repercussions for others. The lack of information and clarity does not serve the interests of USAID, AED, and other grantees and contractors. I urge the USAID IG to complete its report and promptly release it.  It also would be helpful if USAID would better explain the basis for the sanction it imposed on AED.