[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]


 
                       USAID: FOLLOWING THE MONEY 

=======================================================================

                                HEARING

                               before the

                   SUBCOMMITTEE ON NATIONAL SECURITY,
                HOMELAND DEFENSE AND FOREIGN OPERATIONS

                                 of the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 11, 2011

                               __________

                           Serial No. 112-29

                               __________

Printed for the use of the Committee on Oversight and Government Reform


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                      http://www.house.gov/reform

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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 DARRELL E. ISSA, California, Chairman
DAN BURTON, Indiana                  ELIJAH E. CUMMINGS, Maryland, 
JOHN L. MICA, Florida                    Ranking Minority Member
TODD RUSSELL PLATTS, Pennsylvania    EDOLPHUS TOWNS, New York
MICHAEL R. TURNER, Ohio              CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 DENNIS J. KUCINICH, Ohio
CONNIE MACK, Florida                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
ANN MARIE BUERKLE, New York          GERALD E. CONNOLLY, Virginia
PAUL A. GOSAR, Arizona               MIKE QUIGLEY, Illinois
RAUL R. LABRADOR, Idaho              DANNY K. DAVIS, Illinois
PATRICK MEEHAN, Pennsylvania         BRUCE L. BRALEY, Iowa
SCOTT DesJARLAIS, Tennessee          PETER WELCH, Vermont
JOE WALSH, Illinois                  JOHN A. YARMUTH, Kentucky
TREY GOWDY, South Carolina           CHRISTOPHER S. MURPHY, Connecticut
DENNIS A. ROSS, Florida              JACKIE SPEIER, California
FRANK C. GUINTA, New Hampshire
BLAKE FARENTHOLD, Texas
MIKE KELLY, Pennsylvania

                   Lawrence J. Brady, Staff Director
                John D. Cuaderes, Deputy Staff Director
                     Robert Borden, General Counsel
                       Linda A. Good, Chief Clerk
                 David Rapallo, Minority Staff Director

    Subcommittee on National Security, Homeland Defense and Foreign 
                               Operations

                     JASON CHAFFETZ, Utah, Chairman
RAUL R. LABRADOR, Idaho, Vice        JOHN F. TIERNEY, Massachusetts, 
    Chairman                             Ranking Minority Member
DAN BURTON, Indiana                  BRUCE L. BRALEY, Iowa
JOHN L. MICA, Florida                PETER WELCH, Vermont
TODD RUSSELL PLATTS, Pennsylvania    JOHN A. YARMUTH, Kentucky
MICHAEL R. TURNER, Ohio              STEPHEN F. LYNCH, Massachusetts
PAUL A. GOSAR, Arizona               MIKE QUIGLEY, Illinois
BLAKE FARENTHOLD, Texas



























                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on May 11, 2011.....................................     1
Statement of:
    Shah, Rajiv, Administrator, U.S. Agency for International 
      Development; and Donald A. Gambatesa, Inspector General, 
      U.S. Agency for International Development..................     5
        Gambatesa, Donald A......................................    12
        Shah, Rajiv..............................................     5
Letters, statements, etc., submitted for the record by:
    Gambatesa, Donald A., Inspector General, U.S. Agency for 
      International Development, prepared statement of...........    14
    Shah, Rajiv, Administrator, U.S. Agency for International 
      Development, prepared statement of.........................     8


                       USAID: FOLLOWING THE MONEY

                              ----------                              


                        WEDNESDAY, MAY 11, 2011

                  House of Representatives,
Subcommittee on National Security, Homeland Defense 
                            and Foreign Operations,
              Committee on Oversight and Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 3:25 p.m. in 
room 2157, Rayburn House Office Building, Hon. Jason Chaffetz 
(chairman of the subcommittee) presiding.
    Present: Representatives Chaffetz, Labrador, Tierney, and 
Welch.
    Also present: Representative Issa.
    Staff present: Laura Rush, deputy chief clerk; Ali Ahmad, 
deputy press secretary; Thomas A. Alexander, senior counsel; 
Molly Boyl, parliamentarian; Kate Dunbar, staff assistant; 
Christopher Hixon, deputy chief counsel, oversight; Jaron 
Bourke, minority director of administration; Kevin Corbin, 
minority staff assistant; Jennifer Hoffman, minority press 
secretary; Scott Lindsay and Carlos Uriarte, minority counsels; 
and Zeita Merchant, minority LCDR, fellow.
    Mr. Chaffetz. The subcommittee will come to order.
    Good morning and welcome.
    I appreciate the patience of everybody involved here. Given 
the timing of our votes, I know we are quite delayed here by 
almost 2 hours, so I appreciate your patience and the two 
gentlemen who are going to address us today.
    Today's hearing is entitled, ``USAID: Following the 
Money.'' I want to thank both parties for being here today. The 
purpose of the hearing is to examine USAID's efforts to 
measure, monitor and account for taxpayer dollars spent through 
U.S. foreign assistance programs.
    Over the past 10 years, the United States has dramatically 
increased economic and foreign military assistance. Since the 
year 2000, funding in these areas has risen sharply from 
approximately $18 billion to over $45 billion. The United 
States provides foreign assistance to 149 countries around the 
globe. Of this, USAID administers approximately $18 billion to 
over 80 countries.
    In fiscal year 2010, the top three recipients of USAID 
funding were Afghanistan, Pakistan and Haiti. Together, the 
United States expended nearly $5 billion for flood relief, 
earthquake relief, infrastructure projects, political 
assistance and other reconstruction efforts.
    Since USAID does not have internal capability, much of this 
work is carried out by international organizations, for-profit 
contractors, and non-profit, non-governmental organizations, 
often referred to as NGO's.
    To administer and oversee these expenditures, USAID employs 
nearly 10,000 full-time employees and contractors. Despite the 
large number of personnel, USAID appears to have difficulty 
fulfilling its fiduciary responsibility to properly account for 
many of these expenditures.
    According to Inspector General Gambatesa's written 
testimony today, ``Our work has frequently identified planning 
weaknesses and potential improvements in documenting, 
monitoring, evaluating and reporting on program performance. 
For example, OIG audits have often identified inaccurate or 
unsupported results. In fact, more than a third of the 
performance audits and reviews we issued in fiscal year 2010 
noted that data reported by USAID operating units or their 
partners were misstated, unsupported or not validated.'' This 
is a staggering observation. This analysis is consistent with 
some of the things that I have seen, quite frankly, in both 
Afghanistan, Pakistan and Haiti.
    A recent IG memorandum drafted to Administrator Shah 
reported that USAID implementing partners overstated numbers of 
beneficiaries in Iraq. Let me high light a few of them: 262,482 
individuals reportedly benefited from medical supplies that 
were purchased to treat only 100 victims of a specific attack; 
22 individuals attended a 5-day mental health course, yet 1\1/
2\ million were reported as beneficiaries; 123,000 were 
reported as benefiting from water and well activities that did 
not produce potable water; and 280,000 were reported as 
benefiting from $14,246 spent to rehabilitate a morgue. In many 
ways, this is blatant fraud.
    In each country, I requested basic information regarding 
ongoing and completed projects from the local USAID offices. 
Among other things, my request included number of projects, 
projected and actual costs, and whether USAID had verified the 
completion of the projects. Officials in each country could not 
produce this most basic information.
    USAID has since provided some of the information I 
requested. However, I am concerned that it took 8 weeks and a 
formal congressional inquiry to assemble the data. This is data 
that I believe should be readily available to the American 
people. For those of you here in the room, on the slides you 
will see some of the pictures that have been taken along the 
way.
    Americans are paying top dollar for foreign assistance. 
Unfortunately, taxpayers are not getting top dollar results. In 
Haiti, buildings are in shambles. Mounds of trash cover the 
streets and electrical grids are substandard. More than a year 
after the earthquake, only 5 percent of the millions of cubic 
feet of rubble has been removed. As of November 2010, only 22 
percent of shelters had been built. Having been there and seen 
it for myself, I wonder if these numbers are generous.
    The most heart wrenching reality, though, is that many 
residents are still displaced, living among the filth and 
destruction. We are talking about hundreds of thousands of 
people. For those of you in this room looking at this picture, 
that is a classic sign that says ``This rubble has been removed 
by USAID.'' They placed the sign in the rubble. That is what 
they are dealing with in Haiti.
    The bottom line is if the agency cannot accurately pinpoint 
its progress at any given moment, then it is failing to 
adequately oversee its expenditures. Given USAID's own 
challenges, I am increasingly concerned about the Direct Assist 
Program advocated by this administration. Direct Assist 
provides money directly to foreign governments such as 
Afghanistan which ranks, according to some, 179th out of 180 
for the most corrupt countries in the world.
    With recent examples of corruption such as the Kabul Bank, 
as well as complete lack of oversight infrastructure, I would 
like to know why the administration believes it to be a good 
idea to accelerate the direct payments to governments.
    We simply cannot trust that a foreign government will 
provide effective oversight of U.S. money. Necessary oversight 
tools are limited and accountability cannot be assured. If the 
Direct Assist Program is indeed part of the administration's 
foreign policy toward places like Afghanistan, then I urge it 
to stop immediately.
    Part of the oversight discussion should also include an 
analysis of whether the United States is benefiting from these 
investments. It appears that in countries such as Pakistan, 
locals fail to realize that we are even providing assistance. 
USAID's ``from the American people'' message is not widely 
broadcast or, apparently, not very well received.
    I look forward to hearing from Administrator Shah on how we 
can improve in this area. If recipients are not aware that the 
American people are providing the assistance, then it is 
questionable whether the United States is getting proper credit 
for all of its effort.
    With the dramatic increase of U.S. foreign assistance, the 
Federal Government must ensure that it is conducting effective 
oversight each step of the way.
    I look forward to hearing from our panel of witnesses about 
the successes and challenges they face. This subcommittee is 
ready to work with the departments in whatever way possible to 
prevent the waste, fraud and abuse of taxpayer dollars.
    I would like to now recognize the distinguished ranking 
member from Massachusetts, Mr. Tierney.
    Mr. Tierney. Thank you, Mr. Chairman.
    Mr. Shah and Mr. Gambatesa, thank you for waiting so long, 
our apologies on that. Both the chairman and I wish we were 
controlling the floor and it wouldn't be that way.
    I want to thank you, Mr. Chairman, for convening the 
hearing. I want to thank Administrator Shah and Inspector 
General Gambatesa for agreeing to testify here today.
    USAID is a critical tool for U.S. foreign policy and 
international security. In the past decade, we have tasked the 
agency with tremendous responsibilities for development, for 
humanitarian assistance and they have done that in some of the 
most hostile and challenging environments on earth, including 
Afghanistan, Pakistan, Iraq, Haiti and others. The success of 
USAID's mission in each of these countries is significantly 
important.
    Lieutenant General John Allen, the President's nominee to 
be the next Commander of the U.S. forces in Afghanistan, 
recently spoke regarding the importance of USAID. His remarks 
are noteworthy. He stated that in many respects, USAID's 
efforts can do as much over the long term to prevent conflict 
as the deterrent effect of a carrier strike group or a Marine 
expeditionary force.
    There are adversaries in the CENTCOM region who understand 
and respect American hard power, but they genuinely fear 
American soft power frequently wielded in the form of USAID 
projects. While the hard power of the military can create 
trade, space, time and a viable security environment, the soft 
power of USAID and the development community can deliver 
strategic effects and outcomes for decades affecting 
generations.
    While foreign assistance may have no natural constituency 
here at home, it is helpful to hear the strong words of support 
from Secretary Gates, General Patraeus, and Lieutenant General 
Allen, for continued congressional funding of USAID's mission.
    In today's budget crunch, it is easy to pick on USAID as a 
soft target for cuts. Those proposed cuts, I think, are short-
sighted. Aid is the key to building stronger sovereign 
governments that can support their own people in all those 
countries I just cited. While I support fully funding USAID, I 
have also expressed vocal concerns over the past decade as the 
agency has struggled to implement robust accountability 
mechanisms and find appropriate delivery vehicles for aid.
    In particular, I have been concerned that USAID has become 
overly reliant on international contractors as implementing 
partners, has lost too much internal capacity and has 
implemented programs without the necessary monitoring and 
evaluation mechanisms in place. The result has been not only 
disconcerting levels of waste, fraud and abuse in many projects 
in Afghanistan, Pakistan and Iraq, but a lack of vision and 
focus within the agency.
    USAID's mission is so important, we simply cannot afford to 
make these mistakes over and over again, so I am very 
encouraged by Administrator Shah's USAID Forward Program 
agenda. Critically, the agenda directly seeks to address the 
principal concerns that I have raised for many years and that 
have been featured in hearings before this subcommittee over 
and over again.
    Namely, USAID is planning and procurement implementation 
reform that should lessen their reliance on large international 
contractors; USAID is planning to build more internal 
management and policy capability; and USAID is planning to 
significantly strengthen its monitoring and evaluation 
capacity. I look forward to hearing from Administrator Shah 
today about his progress in implementing this reform agenda and 
what Congress can do to support it.
    The USAID Inspector General also plays a critical role in 
providing additional oversight and accountability of USAID. I 
have long advocated that the Inspector General put more 
personnel in the field and contingency operations to monitor 
projects directly.
    I have also advocated that the Inspector General do more to 
help USAID build monitoring and evaluation mechanisms into the 
programs at the beginning of the projects instead of at the 
end. Toward that end, I was glad to see that USAID's 
comprehensive pre-award survey of Pakistani institutions to 
determine their capacity to receive aid and work is 
implementing partners. I encourage USAID to do more to address 
the weaknesses that have been identified in these surveys prior 
to direct funding assistance.
    Thank you again, Chairman Chaffetz, for convening this 
important hearing. I look forward to having the witnesses 
testify so we can support their efforts in transparency and 
accountability.
    Mr. Chaffetz. Thank you.
    Do any other Members wish to make opening statements? Mr. 
Welch.
    Mr. Welch. No.
    Mr. Chaffetz. Members will have 7 days to submit opening 
statements for the record.
    We are now going to recognize the panel.
    We are pleased to be joined by Dr. Shah who is the 
Administrator of the U.S. Agency for International Development 
and Mr. Donald Gambatesa, who is the Inspector General for the 
U.S. Agency for International Development. We appreciate the 
dedication that both of you have to this country, to the good 
practices of this country. I know your heart is in the right 
place and we appreciate you being here today for a candid 
discussion about how we can make the process better.
    Pursuant to committee rule, all witnesses must be sworn 
before they testify. Please rise and raise your right hands.
    [Witnesses sworn.]
    Mr. Chaffetz. Let the record reflect that the witnesses 
answered in the affirmative.
    We will now recognize Mr. Shah for 5 minutes for his 
opening statement. I would remind you that additional comments 
will be inserted into the record. I will now recognize you for 
5 minutes for your verbal opening statement.

    STATEMENT OF RAJIV SHAH, ADMINISTRATOR, U.S. AGENCY FOR 
 INTERNATIONAL DEVELOPMENT; AND DONALD A. GAMBATESA, INSPECTOR 
       GENERAL, U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT

                    STATEMENT OF RAJIV SHAH

    Mr. Shah. Thank you, Chairman Chaffetz, Ranking Member 
Tierney, and members of the subcommittee.
    I appreciate the chance to be with you today and appreciate 
the chance to have a conversation about our efforts to create a 
more efficient, accountable and transparent government. That 
goal is one President Obama, Secretary Clinton and I have been 
working hard to achieve and it is one I have made a top 
priority when assuming the role of USAID Administrator just 17 
months ago.
    At its core, USAID is responsible for advancing opportunity 
and empowering people throughout the developing world. It is a 
core pillar of our country's national security and foreign 
policy strategy. We strengthen global food security, improve 
global health, lay the groundwork for economic growth. In fact, 
some of our fastest growing trade partners are long time USAID 
recipients.
    We expand democratic rights of disenfranchised citizens 
around the world, especially in places like we are seeing 
throughout the Arab world today and we provide crucial 
humanitarian assistance in response to natural disasters and 
complex crises, with our teams ready to deploy as they are 
currently deployed in and around Libya and some of the most 
dangerous parts of the world.
    In over 100 countries, USAID staff carry out our mission by 
engaging local partners, implementing projects against clear 
multi-year strategies and evaluating our work so we can learn 
and improve our results.
    Two months after joining the agency, I instituted one of 
the most sweeping sets of reforms USAID has ever undergone, a 
package of reforms we call USAID Forward. It is an early 
outcome of Secretary Clinton's comprehensive Quadrennial 
Diplomacy and Development Review.
    This ambitious set of reforms is changing the way we do 
business, with new partnerships and emphasis on transparency 
and accountability and a relentless focus on achieving results 
for our development dollars. Through these efforts we have 
rebuilt the agency's budget and planning policy capabilities at 
no additional cost. At the same time, we have established new 
oversight structures and vetting systems to ensure our 
assistance is more transparent and accountable than ever.
    My goal is to help the American people see in a transparent 
way how we spend our resources and what we get as a result. We 
have started to make this possible by building the Web site, 
foreignassistance.gov, a clear on-line dashboard that allows 
users to easily track foreign affairs spending. Our Policy 
Bureau has created a series of new country development 
cooperation strategies so we can work with our foreign partners 
and with our implementing partners to set clear, defined goals 
sector by sector in programs around the world. We will make 
those public as we are beginning to do with our programs in an 
area we call Feed the Future, our global hunger and food 
security program.
    With congressional support, we are improving our business 
procurement and contracting practices, bringing modern 
practices to improve and update reporting systems and focusing 
on working with more local partners and through smaller, more 
manageable contract mechanisms.
    We have created a board on acquisition and assistance 
review that has already reviewed large programs and broken them 
into smaller pieces to improve management and competition and 
how projects are awarded.
    Finally, we have established a world class monitoring and 
evaluation system, one that gets us away from the traditional 
practice of counting process results and having them reported 
by implementing partners who carry out the programs, as 
referenced previously, and one that uses independent, third 
party evaluations to help us understand what we are getting for 
moneys we invest.
    For example, in 7 of the 15 Presidential malaria initiative 
countries in which we have made investments to save children's 
lives from malaria, we recently found through independent 
evaluation, that we have had a 36 percent reduction in all 
cause child mortality which means we are saving kids under the 
age of 5 from all causes because of our malaria program and 
saving them by the hundreds of thousands of kids a year.
    Over time, these shifts and these improvements in our 
efforts will help us do a better job of managing our programs 
in sub-Saharan Africa, Latin America and Asia and will 
particularly help us working in specifically hard areas such as 
wartime situations in Iraq and Afghanistan. It is precisely in 
those settings where we have focused a number of our newer and 
more aggressive reforms to improve accountability and 
oversight, to expand the number of times our teammates and 
colleagues are out visiting programs and seeing how projects 
perform, and where we have rolled out initiatives like the 
Accountable Assistance for Afghanistan that is helping to 
improve oversight not just of contract partners, but of their 
subcontractors and the results that we are seeking in the 
Afghanistan project.
    Whether we are working in Afghanistan or Zambia, we do so 
for one very clear reason, development is a core part of our 
foreign policy and national security around the world. We help 
by partnering with our troops, in creating exit strategies and 
keeping them safe. We work to prevent famine and food riots 
that are destabilizing around the world and in saving millions 
of children's lives every year, we create the basis for 
stability and economic growth where people believe it is often 
difficult to do.
    That is why Secretary Gates has said doing development is a 
lot cheaper than sending soldiers. Because it is so critical to 
our national security, we look forward to this conversation for 
me to learn your ideas as to how we can do it better, more 
effectively and more efficiently.
    Thank you.
    [The prepared statement of Mr. Shah follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Chaffetz. Thank you.
    I now recognize Mr. Gambatesa for 5 minutes.

                STATEMENT OF DONALD A. GAMBATESA

    Mr. Gambatesa. Good afternoon, Chairman Chaffetz, Ranking 
Member Tierney and members of the subcommittee. Thank you for 
the opportunity to appear before you to testify on behalf of 
the Office of the Inspector General for the U.S. Agency for 
International Development. This afternoon, I will share 
information about our efforts to promote accountability in 
foreign assistance programs.
    As you know, USAID has primary responsibility for managing 
and supervising the implementation of its programs and 
activities. Our role, as Inspector General, is to assist the 
agency in combating waste, fraud and abuse and by promoting 
economy, efficiency and effectiveness.
    We take our role in, as you call it, following the money 
very seriously and draw on our highly skilled Foreign Service 
and Civil Service direct hire employees as well as Foreign 
Service Nationals to perform this function across our 11 
offices in Washington and around the globe.
    Since foreign assistance priorities frequently shift, we 
continually reevaluate our oversight posture and when 
appropriate, make adjustments to better position ourselves to 
address emerging risks and challenges. For instance, in 
critical priority countries and disaster areas, we now have 
staff living and working in Afghanistan, Haiti, Iraq and 
Pakistan. Previously, these countries had been served by 
regional offices.
    Our oversight covers the full portfolio of agency programs 
and extends to more than 100 countries. Our core oversight 
activities include both financial and performance audits and 
reviews to complement these efforts with investigations into 
allegations of criminal, civil and administrative violations.
    In fiscal year 2010, we issued over 410 financial audit 
reports. These audits covered $8.9 billion in funds and 
questioned more than $36 million in costs. Additionally, in 
2010, USAID reported that it sustained $213 million in 
previously identified questioned costs.
    Our performance related reports address program compliance, 
implementation and results. When we identify areas that require 
corrective action, we make recommendations for program 
improvement. Last fiscal year, we issued 66 performance audits 
and reviews with a total of 423 recommendations.
    Additionally, we also have a significant investigative 
portfolio. Our criminal investigators have full law enforcement 
authority and investigate allegations of waste, fraud and abuse 
of U.S. foreign assistance funds and employee misconduct. 
Currently, we have about 200 open investigations.
    In fiscal year 2010, our investigations yielded 12 
convictions, 90 administrative actions--contract or employee 
terminations--and $104 million in savings and recoveries mainly 
from criminal penalties, civil judgments and bills of 
collection. Our criminal investigators also deliver fraud 
awareness briefings to agency personnel, contractors, grantees 
and host country representatives. Last year, over 3,400 
individuals attended our briefings worldwide.
    Agency managers have a positive track record in responding 
to our recommendations and have developed appropriate plans to 
address every recommendation that we made last year. We are 
encouraged that today the agency and its leadership are taking 
steps to further improve its accountability posture.
    USAID has recently worked to improve its performance 
management by building more results orientation into planning 
processes and strengthening its monitoring and evaluation 
programs. To promote sustainability of hard-won development 
gains, USAID is also doing more to increase its use of host 
country systems and partners.
    As you are aware, many accountability challenges the agency 
faces are intensified in critical priority countries and 
disaster areas. Monitoring the progress of these programs in 
such places as Afghanistan, Haiti, Iraq and Pakistan is often 
hampered by security concerns, infrastructure related travel 
restrictions, frequent staff rotations, widespread corruption, 
weak government institutions and diminished rule of law.
    My office is taking a number of steps in response to the 
accountability challenges in these environments. We have 
expanded our on-the-ground presence to provide greater audit 
and investigative oversight, have increased outreach on fraud 
awareness and do more to promote hotline reporting.
    When a program requires enhanced financial scrutiny such as 
cash transactions and disbursements, we conduct concurrent 
financial audits so that we can identify questionable 
expenditures and control weaknesses as soon as possible.
    On the investigative front, we leverage external resources 
by coordinating with other U.S. law enforcement authorities in 
task force settings and working with local officials to 
investigate and prosecute crimes. We also monitor implementing 
partners' internal compliance investigations and do more to 
hold them accountable for reporting fraud.
    Proper stewardship of American tax dollars requires a solid 
accountability framework. We are committed to working with 
agency counterparts to ensure that such a framework is in 
place.
    We appreciate your interest in our work and look forward to 
learning more about your interest and priorities.
    Thank you.
    [The prepared statement of Mr. Gambatesa follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Chaffetz. Thank you. I appreciate that.
    I am now going to recognize myself for 5 minutes.
    The IG is reporting that ``more than one-third of the 
performance audits and reviews we issued in fiscal year 2010 
noted that data reported by USAID operating units or their 
parents were misstated, unsupported or not validated.'' What is 
your reaction to that, Mr. Shah? Is that accurate?
    Mr. Shah. I don't believe so. Let me put it this way. The 
agency and the entire U.S. system of providing foreign 
assistance and collecting thoughts on impact has been heavily 
skewed over the last decade to a set of process indicators and 
reporting against those process indicators the number of people 
who benefit. What does that mean, people benefit--the number of 
visits that were made to a particular farmer, what has that 
accomplished, has that improved yields, has that improved 
incomes?
    In health, the number of insecticide-treated bed nets that 
are distributed in communities, we have very elaborate, very 
costly systems for collecting a huge amount of processed data 
and I believe implementing partners naturally present 
optimistic data on what comes in that way.
    In reaction to that, I, with the Secretary's strong 
support, really restructured how we do evaluation in a pretty 
thorough way. We now approach this by doing what we call impact 
evaluations. That means when you design a program from the 
beginning, you understand what your counterfactual is, you 
collect baseline data and you define what the result you are 
seeking to achieve is and measure against that.
    I would highlight one example if we could put the slide of 
the Pakistani farmers on the board. During the floods in 
Pakistan this past year, that wiped out 60 percent of the 
productive agricultural region and the flood plain around the 
Indus River. It was a tremendous, tremendous challenge. 
Pakistan could easily have missed its winter wheat harvest. 
USAID, working with an organization called the Food and 
Agricultural Organization, our U.N. partner.
    Mr. Chaffetz. I am sorry, my time is so short. You have 
given me 30 minutes of background on this.
    Mr. Shah. I just thought this would be a good example 
because of instead of tracking things like the number of seeds 
that were distributed, we did and evaluation and found that 
because of USAID efforts, we actually saw 60 percent 
improvement in the winter wheat harvest in that context. It was 
specifically targeting those farmers who had lost their farms 
and productive livelihoods.
    Mr. Chaffetz. I have no doubt that the good men and women 
of the USAID are doing a lot of good, but when you have an 
Inspector who says more than one-third of what is being 
reported is inaccurate, to be kind, and at worse, it is 
outright fraud, as the oversight committee we are left 
wondering where is all this money going to.
    Having visited with you, not in a hearing, I know you share 
part of this concern. Do you have anything specifically to 
refute what the Inspector General is coming up with? Can you 
point to something and say he was wrong in this instance? Do 
you have any specific example where that one-third number is 
overstated in itself?
    Mr. Shah. I do. I think the Inspector General would 
probably suggest if we looked at impact evaluations and 
assessed the credibility of our impact evaluations as they 
stand against our evaluation policy that we put in place under 
my leadership, that would not be an accurate statement, to say 
that a third of impact evaluations were fraudulent.
    Mr. Chaffetz. Let us ask him. This is fiscal year 2010 
which you were involved with. Is your one-third number accurate 
or not?
    Mr. Gambatesa. The number is a roll up of various aspects 
of what we do. When we say there is inadequate data, we are 
saying either the data is not there or the implementing partner 
cannot provide the data or the data is inaccurate. The one-
third number is a roll up of a number of different audits. We 
could go back and figure this out.
    Mr. Chaffetz. The concern is it is so overwhelming, it is 
so huge. We have four specific examples I put out there that 
had the appearance of outright fraud. We have to get to the 
bottom of whether or not it is accurate and what are we doing. 
Mr. Gambatesa, let me ask, when you find something that is 
unsubstantiated, when you find something you believe is 
fraudulent, you talked about the convictions, how do you deal 
with that? Is that for the Department of Justice? How does that 
work?
    Mr. Gambatesa. First of all, these weren't necessarily 
fraud.
    Mr. Chaffetz. Some were and some weren't I understand.
    Mr. Gambatesa. That doesn't mean they were all fraud. I 
don't want to overstate the issue there.
    If we have allegations of fraud or develop potential fraud 
in programs, then we have our own investigators that go out and 
investigate this. If we have enough evidence or probable cause 
to go forward, then we will take it to the Department of 
Justice for prosecution. If we can't get prosecution from the 
Department of Justice for whatever reason, we will try local 
prosecution either with the local Afghanis or the local 
Pakistanis.
    Mr. Chaffetz. Thank you.
    My time has expired. I will recognize Mr. Tierney for 5 
minutes.
    Mr. Tierney. Thank you.
    Mr. Gambatesa, were those reports you were just discussing 
all under Mr. Shah's direction that they were cited or were 
they his predecessor's?
    Mr. Gambatesa. They were all issued in fiscal year 2010. 
Some of them may have started before Mr. Shah took office, yes.
    Mr. Tierney. Mr. Gambatesa, let me ask you about the Gardes 
Coast Road Project in Afghanistan. Are you familiar with that?
    Mr. Gambatesa. Yes.
    Mr. Tierney. So you are familiar with the New York Times 
report recently that the contractors on that project in eastern 
Afghanistan were making protection payments to the Akani 
affiliated individuals for security?
    Mr. Gambatesa. That was the allegation, yes.
    Mr. Tierney. Are you investigating those allegations?
    Mr. Gambatesa. Yes. Let me say this. We have looked into 
those allegations. We are looking into other allegations. That 
specific allegation you addressed, we have looked into. 
However, we have not been able to affirm that. We are not going 
to get a Taliban individual to testify about that sort of 
thing.
    Mr. Tierney. Interestingly, we did. If you read the report 
that had to do with the trucking contract, we did just that, so 
if we can be helpful in any way or if you want to talk to our 
staff, we would be happy to do that.
    Administrator Shah, what kind of visibility do you have 
into the operations of the security contracts?
    Mr. Shah. Let me offer three or four thoughts on that. 
First, under this administration, we have more than tripled our 
physical staff presence in Afghanistan in order to make sure we 
had enough support on the ground to improve oversight and 
accountability. Today, we have more people outside of Kabul, in 
the field, visiting projects, than we did when I started, in 
all of Afghanistan.
    Two, we have expanded our accountability efforts through a 
program we call Accountable Assistance for Afghanistan. That 
includes improved project monitoring and oversight, it improves 
an effort to put in place 100 percent local cost auditing, it 
includes an effort to expand partner vetting and it includes 
efforts to do program design in a manner that enables more 
access to information. All of those things are helping us do a 
better job of being transparent and accountable in the 
assistance program there.
    I do want to highlight that this is a war zone and the 
Gardes Coast Road is a good example of a place where I believe 
19 of the workers on the road have died in the process of 
helping to construct it. There have been 364 security 
incidents.
    The priority to do that project is part of a civilian-
military integrated plan that this is part of our campaign 
plan.
    Mr. Tierney. If I can interrupt you, that is all 
understood, as were the trucking contracts, but the bottom line 
comes down to when you start contracting and subcontracting, 
there is a real question of visibility and a policy question, 
is this good policy. Everyone wants to be safe, but is this 
good policy that somebody is paying off people and that money 
might be used detrimental to our men and women.
    I appreciate your answer on that, but what steps are you 
using to reduce the reliance on contractors, what steps are you 
taking to make sure you have visibility into the contractor and 
the subcontractors in those instances, and what steps are you 
taking to improve the accountability in the performance of that 
and the avoidance of fraud?
    Mr. Shah. That is a great question with respect to private 
security contractors. We have actually taken a number of steps 
in conjunction with the government in Afghanistan to provide 
more regulation and transparency of private security 
contractors' behavior and where resources go.
    In many cases, we have broken down awards into smaller 
components so we have more reporting visibility on both primary 
contracts and subcontracts including private security 
contracts. We have put a pretty aggressive vetting system in 
place together with the intelligence and defense communities in 
Afghanistan in order to make sure we are collecting all 
information possible on potential actors that are risks and 
then taking action as we did in the situation where we have 
information that is actionable.
    We have expanded our accountability efforts so that we do 
100 percent local cost auditing so we can track as much of that 
money as possible. All of these efforts have uncovered real 
cases and resulted in very specific actions that we have taken 
including the Coast Gardes Road.
    Mr. Tierney. The Inspector General made what I thought was 
a very good recommendation about increasing the number of 
direct hire personnel, particularly for those things inherently 
governmental in nature. How is your progress on that and what 
are your plans in the future for that?
    Mr. Shah. If we could put up the process slide, I could 
share that in more detail. There are a number of steps in our 
processes that I believe are important that direct hire 
personnel conduct or do that USAID staffs. Among them are 
program design, partner selection, some degree of monitoring. 
Often you can extend your capacity to monitor with third 
parties and with Foreign Service Nationals staff, but some 
participation and monitoring, then accountability and 
oversight.
    We have actually done that very aggressively. We have been 
executing a program called The Development Leadership 
Initiative designed to increase the number of Foreign Service 
officers at USAID. We have brought in about 650 new Foreign 
Service officers between the last year of the Bush 
administration and the first 2 years of the Obama 
administration.
    I think on a bipartisan basis, together with the military, 
there has been recognition that we needed to reverse a 15-year, 
37 percent attrition in the basic human resources of the 
agency. We are well on our way to accomplishing that.
    Mr. Tierney. Thank you.
    Thank you, Mr. Chairman.
    Mr. Chaffetz. I will recognize the gentleman from Idaho, 
Mr. Labrador, for 5 minutes.
    Mr. Labrador. Thank you, Mr. Chairman.
    Thank you for being here, both of you.
    I am a freshman Member of Congress, I am new to all these 
things. I am new to learning about USAID and all the things 
that you do. I can tell you I have never been more frustrated 
in my life as when I was in Afghanistan and were asking a 
single question, a simple question to the USAID workers: How 
many projects have you started with the money we spent and how 
many projects have you completed? We spent about 45 minutes 
asking that question and we could not get an answer. The 
numbers were being thrown out, it was 70, it was 50. They 
didn't know how many projects they had started.
    We told them that we wanted that information. We wanted to 
know how many projects had been started, how many projects had 
been completed and we did receive quite an extensive response, 
but we still didn't get the final information we were asking 
for.
    How do you actually know the project has been completed? We 
know when the start date was, we know when the end date was and 
we know how much money was spent.
    One of things that I was most frustrated about was when we 
asked what were your results, the answer was the result was we 
spent X amount of money. That is all they knew, how much money 
had actually been spent. This was the beginning of this year, 
so this was not something done under the prior administration. 
This was something recent, the beginning of this year.
    You say that you have gone through a different process. I 
think you said before they were using a process result and now 
you are using a different process, but at the beginning of this 
year, they still did not know and they did not know how they 
could verify. Can you explain that to me, Mr. Shah?
    Mr. Shah. Thank you for that point. I take very seriously 
your point about results. I think at the end of the day we have 
to be able to articulate what we are getting for the resources 
we have spent.
    In Afghanistan, since 2002, for example, there was a 
situation where there were 900,000 boys in school, no girls. 
Today, there are 7 million kids in school, 35 percent are girls 
in large part because of programs we have put in place. We can 
go into the next layer of detail to identify how many teachers 
we have trained and what the outcomes are related to that.
    In health, we have seen a 22 percent drop in infant 
mortality as a result of expanding a basic package of health 
services which used to reach 9 percent of the population. Now 
it reaches 64 percent of the population and it has been a 
longstanding USAID program with the Ministry of Public Health 
that has delivered that result.
    In energy, which is a difficult sector, we have gone from 6 
percent of Afghans with access to electricity to more than 14 
percent today, including providing around the clock power in 
Kabul, and including providing enough technical assistance to 
the local electricity authority so that we have been able to 
double revenue collections on an annualized basis so they have 
a sustainability plan for those efforts.
    To me, it is very important that we can go sector by sector 
like that and document how much we are spending and what we are 
getting as results. We do have systems that allow for that.
    Mr. Labrador. So why wasn't that system in place 3 months 
ago when we asked that simple question. It was not like we came 
in the dead of night without any announcement that we were 
coming. They knew we were coming.
    Mr. Shah. I don't know why. That is the kind of data that 
we collect on a regular basis.
    Mr. Labrador. We don't' even have that information now. We 
asked for those specific results. They told us how much money 
they are spending, they told us when they started the project, 
they told us when they ended the project, but we did not get to 
this point, they knew you were going to be testifying here, we 
still don't have that information.
    Mr. Shah. I just shared some of that information. We can do 
that sector by sector. I think what you are looking at is some 
version of this spreadsheet which is how we basically track 
projects and programs against strategic priorities. We do that 
mission by mission.
    The reality is, when we get a request with a great deal of 
specificity, it may or may not be this data pulled that does it 
and we have to construct something else, but I would just step 
back and validate your point that I think it is important that 
sector by sector, we can describe a specific set of results or 
aspirational results. We should be able to do that.
    I am not sure who you specifically spoke to and in what 
context, but our education team is the one that tells me this 
and we have our leader for the program sitting right behind me. 
Who talks to them on a weekly basis and we do regular reviews 
so we know we are on track. A lot of times we are not on track 
and we make changes and course corrections in that process.
    Mr. Labrador. Thank you. My time is up.
    Mr. Chaffetz. I recognize myself for another 5 minutes.
    Do you have a list of schools in Afghanistan that we have 
helped build, yes or no? You gave us some substantial numbers. 
When can I get a copy of that list?
    Mr. Shah. An actual list, school by school?
    Mr. Chaffetz. Yes.
    Mr. Shah. We could construct that. I don't know that we 
have that.
    Mr. Chaffetz. So how do you come up with the metric if you 
don't even have the list?
    Mr. Shah. I don't have it right in front of me.
    Mr. Chaffetz. I know, but I am asking how long will it take 
for you to produce that and give that to this committee? Ronald 
Reagan once said, trust but verify. You throw out some 
spectacular statistics. I want to see it, I want to actually 
see the schools. I want to know where they are, because quite 
frankly, I don't believe you, because based on the statistics 
that I am hearing from the IG, a third of what you have 
reported in the past is fraudulent. Can you give me that list 
and when will I have it on my desk?
    Mr. Shah. We can get you the list and I will find out how 
long it will take us and let you know.
    Mr. Chaffetz. A month? Is that fair, 30 days?
    Mr. Shah. Yes, a month is probably fair, but let me come 
back and verify that.
    Mr. Chaffetz. Let me ask, Mr. Gambatesa, how do you react 
to the metrics he talked about, particularly for Afghanistan?
    Mr. Gambatesa. We do our audits based on risk, so we don't 
audit every program or every dollar in every program. As I said 
earlier, when we make a statement that a third, it is a third 
of the things we have looked at.
    Also, I wouldn't say that every one was fraud. You used the 
fraud and I would not say that every one is fraudulent. They 
could be just mis-charged and the agency is getting the money 
back, so I wouldn't use the word fraud.
    Mr. Chaffetz. Or unsubstantiated. What I worry about is we 
have all these metrics thrown out, we have done this and we 
have 7 million people in school, but there is nothing to verify 
that. That is what we are supposed to be doing.
    Let me specifically address Haiti because that is one of 
the biggest human atrocities I have ever seen in my life. It is 
the saddest thing I have ever seen.
    The IG is saying that only 5 percent of the rubble, in an 
optimistic case, has actually been cleared. Do you dispute that 
number, Mr. Shah?
    Mr. Shah. The latest numbers I have seen are between 10 and 
20 percent. They are validated by the International Haitian 
Relief Coordinating Committee, so I think that is the most 
updated version.
    Mr. Chaffetz. I was there, I couldn't see any of it, if 
they are clearing it.
    Mr. Shah. We can put up a slide on rubble removal.
    Mr. Chaffetz. Go ahead. I would like you to show this slide 
because I have a point about this slide as well.
    Mr. Shah. OK. I would just make the point.
    Mr. Chaffetz. Is this the slide you were hoping for?
    Mr. Shah. Yes.
    Mr. Chaffetz. I want everyone to look closely at this 
slide. If I cleaned the garage growing up, my mom would have 
kicked my butt. That is not cleaned up, you scooted it over. 
Half that picture is rubble that is still there.
    Mr. Shah. I have been to Haiti probably 10 times, including 
prior to being in this job, prior to the earthquake and then 
many times after the earthquake. There were 10 plus metric tons 
of rubble created because Haiti is fundamentally the poorest 
country in the western hemisphere.
    Mr. Chaffetz. I think the estimate was 20 to 30.
    Mr. Shah. That is not pushing it aside, sir, I think that 
really is clearing roads and walkways. I will say the team we 
asked to create the rubble removal plan for Haiti worked with a 
range of international partners. It was the same team led by a 
gentleman named Mike Burn who led the effort in New York City 
after the World Trade Center.
    Mr. Chaffetz. Let us keep going. Five percent results after 
16 months is totally unacceptable. When I visited with the 
Ambassador, he said we weren't going to participate in any more 
rubble cleanup.
    Based on the spreadsheet that we got there, which didn't 
feel very complete to me, there were six contractors that 
received over $16 million. Three of those six contractors, 
based on the spreadsheet that was handed to me when I was in 
Haiti, said that the work has been complete.
    How can we justify 5 percent of the rubble being cleaned 
up, having spent tens of millions of dollars and three of our 
contractors saying, yes, I am done, I did what I was supposed 
to do?
    Mr. Shah. Actually, the new numbers are 10 percent and in 
that context, the actual amount of rubble that has been removed 
is more than was removed 2 years after the Aceh tsunami 
situation. When you look at it compared to situations like the 
World Trade Center or Aceh in Indonesia, it is a standard 
result.
    Mr. Chaffetz. What percentage of the rubble would you think 
was actually cleaned up by us, by the United States?
    Mr. Shah. In general, we are about 10 percent of total 
commitments in the overall reconstruction. We have been about 
25 percent of the realized spending, so the commitments are 
what donors pledged and the realized are what donors spent.
    Mr. Chaffetz. How much money is that total? I know there is 
money that comes from various agencies. How much money are we 
putting into Haiti? How much has been spent?
    Mr. Shah. In total, the supplemental is about $770 million 
and in addition to that is about $220 million a year in 
standard funding through ESF.
    Mr. Chaffetz. Plus we have outside donors, right, the Red 
Cross and others?
    Mr. Shah. Outside donors, yes.
    Mr. Chaffetz. You are close to a billion, plus the Red 
Cross, plus what else, a bunch of celebrities from Sting to 
Bono to everybody?
    Mr. Shah. Yes, but celebrities don't spend as much money. 
Other countries have made big commitments.
    Mr. Chaffetz. I read one report that they raised $50 
million plus in some telethon.
    Mr. Shah. Yes, presumably.
    Mr. Chaffetz. There has been over a billion spent and you 
say 10, the IG says 5 percent of the rubble has been cleaned 
up.
    Mr. Shah. First of all, all this money is not for rubble 
removal. In fact, we have worked very hard to try and get other 
donors and other partners to participate in rubble removal 
because frankly, it is a less sexy thing than some of the other 
potential investments.
    I would say overall, it is important to recognize that 
Haiti is the poorest country in this hemisphere. Before the 
earthquake, the rates of access to clean drinking water or 
safe, modern sanitation were very low. The number of children 
stunted in Haiti was over 50 percent. That means kids go to bed 
hungry, grow up with chronic deprivation, not getting enough 
protein.
    Mr. Chaffetz. I have gone well beyond my time. I recognize 
what a difficult situation this is.
    One last very quick answer, how many USAID people work full 
time on Haiti?
    Mr. Shah. Probably around 200.
    Mr. Chaffetz. I will now recognize Mr. Tierney for 5 
minutes.
    Mr. Tierney. Tell us a bit about what is being done in 
Haiti with the 200 people and the resources we are spending 
there and how it is structured, who has the lead, what is the 
role of USAID in comparison to the other organizations that 
might be involved?
    Mr. Shah. In terms of what has been done, we actually are 
very proud of the fact that USAID was able to coordinate a 
major interagency, whole of government response to what was the 
largest natural disaster we have ever experienced. More than 
230,000 people lost their lives. In that context, we mounted 
the largest and most effective humanitarian response ever. We 
fed more than 4 million people during those first few months 
when there were real challenges in access to food and security.
    We worked together with the international partners to help 
provide emergency shelter to 1\1/2\ million people. We 
supported, together with others, more than 1 million people 
getting access to specific vaccines. Today, more people have 
access to clean drinking water in Haiti than they did before 
the earthquake because of some data base decisions we made to 
make sure that as water was distributed, chlorine tablets and 
basic education was provided to help people protect themselves.
    Of the rubble, we think between 10 and 20 percent has been 
removed. In sectors like agriculture and health, we have 
pursued a very strategic focus. In agriculture, for example, 
which is 60 percent of the total employment in Haiti, we 
focused on four very specific areas of production.
    We have worked with private partners like Monsanto and 
others to help get improved hybrid seed varieties to those 
farmers and we have seen in many different instances, a 
doubling of actual crop yields, measured and verified, that 
leads us to believe that the Haiti agricultural sector can 
become a more vibrant sector going into the future.
    We also helped establish an industrial park in the north 
that will create 5,000 jobs next year on the way to creating 
20,000 jobs by attracting a Korean company and others for 
manufacturing. We have worked with partners like Coca-Cola to 
help create a juice industry, in that case with mango juice in 
particular, so that the core productive assets of the country 
are contributing to the economy and employment.
    You can't judge the effort in Haiti in 1 or 2 years. It 
will be a longer term effort. Haiti has been a very poor 
country for a long time. We have been very focused on taking 
the time to do deliberate planning and coordination in order to 
make sure this time around the results are much, much better.
    Mr. Tierney. Is USAID the lead in this overall project?
    Mr. Shah. USAID works in coordination with the Department 
of State and other agencies.
    Mr. Tierney. Who, what country, person, entity is in charge 
of the bottom line on whatever might be the overall strategy of 
where we are going to try to let this country take itself?
    Mr. Shah. We have a special coordinator at the State 
Department, Tom Adams and Cheryl Mills.
    Mr. Tierney. The United States has taken on the 
responsibility of heading this whole thing?
    Mr. Shah. No, I shouldn't say that. The government of Haiti 
is responsible for their reconstruction. There is an Interim 
Haiti Reconstruction Commission that has been created that is 
co-chaired by the Prime Minister of Haiti and by former 
President Clinton, that has been incredibly helpful in bringing 
all the donors together under the government of Haiti's plan.
    Mr. Tierney. What kind of technical expertise does this 
group have in terms of people that can work with these donors, 
can plan where the future of this country is going in terms of 
employment, sustainability and things of that nature?
    Mr. Shah. It has some specific technical expertise and it 
draws on resources inside the government, at USAID and other 
partners to do exactly those tasks.
    I will note that during the earthquake, 28 of 29 ministries 
collapsed, 15 percent of the senior level work force.
    Mr. Tierney. I am trying to get a figure on that. After 
this, obviously everyone was trying to survive, get people 
going and keep them alive and make ends meet. Are we at the 
stage now where we think we have stabilized a little bit and 
somebody is saying, here is the grand plan going forward or are 
we not there yet, are we still putting tourniquets on bleeding 
problems?
    Mr. Shah. At this point, we are in the phase of 
reconstruction. It will be a long and challenging process, but 
we is one where we really do have to focus on trying to build 
better.
    Mr. Tierney. The design is an overarching design of what we 
are constructing toward?
    Mr. Shah. Absolutely. The Haitian government strategy is 
about decentralized economic development in specific targeted 
regions to restart the agricultural economy and to promote 
industrialization and jobs, and to do it in a way that helps 
people have economic opportunities outside of Port-au-Prince so 
it takes more demographic pressure off of Port-au-Prince. That 
type of strategy is one we support fully and our programs are 
aligned against that strategy and our programs are limited to 
those areas where we might be the lead donor or partner 
creating space for other partners to lead in other sectors, 
other international donors and partners.
    As I mentioned before, overall, we are about 10 percent of 
the total commitments to Haiti and about 25 percent of current 
realized expenditures in terms of donor participation.
    Mr. Tierney. Thank you.
    Mr. Chaffetz. I now recognize the gentleman from Idaho, Mr. 
Labrador for 5 minutes.
    Mr. Labrador. Mr. Shah, according to a recent memorandum 
from Mr. Gambatesa, he stated that monitoring the progress of 
USAID programs in Afghanistan and Pakistan has become more and 
more difficult as funding is directed to the areas that are 
most insecure. In Pakistan, for example, much of USAID's 
assistance is directed to the federally administered tribal 
areas where USAID employees cannot travel.
    Audit work in Afghanistan and Pakistan, the Office of the 
Inspector General has reported that security conditions have 
either hindered program accomplishment or has the potential to 
create implementation problems. We actually made that same 
observation when we were there. We were told by USAID workers 
there that we had a lot of difficulty going into those areas. 
To conduct many of its audits, the IG's office will employ 
locally owned contractors to conduct oversight.
    The question to you is, do you agree with those assessments 
and what specifically are you doing to fix this problem?
    Mr. Shah. When I started, I certainly felt that we needed 
to get out and see our projects in a more effective manner. 
There are two or three strategies we have deployed in Pakistan 
to accomplish that task.
    The first is we worked on security to make sure we have 
security as we go, but taking risks in getting out there. In 
fact, even in Fatah and neighboring areas, we have had more 
than 160 staff visits to the sites and projects over the last 6 
months.
    Second, we have built some mechanisms that use third party 
monitoring and evaluation personnel, mostly local but often 
very highly qualified engineers that can look at road projects 
and conduct a specific assessment or educational specialists 
that can go into a school and make a careful assessment of what 
is taking place. We are increasingly getting more data and 
information from those types of partners out there doing that.
    Third, as I mentioned previously, is to make sure in 
project design, we are collecting baseline data against certain 
types of counter factual situations so we can say in a 
statistically validated and verified way that kids are learning 
more because of the following programs.
    In Fatah and in some of the contested areas, we use a 
mechanism called the Office of Transition initiatives that has 
been able to get out and support quite a lot of activity from 
building roads to improving schools. They actually are able to 
produce GIS maps that will document where their projects and 
programs are in the community. That has also been a very 
helpful strategy to accomplish that task.
    Mr. Labrador. Do you visit the actual projects in those 
areas?
    Mr. Shah. Yes, our staff would visit those projects and our 
Pakistani third party partners would also visit when they might 
have more time to conduct careful assessments.
    Mr. Labrador. How do you verify completion of the projects?
    Mr. Shah. We do visits, we rely on reporting from 
implementing partners, we rely on the third party evaluation 
mechanisms to make those assessments as well.
    Mr. Labrador. Mr. Gambatesa, do you agree with the 
statement just made by Mr. Shah? Could you please address to 
what extend has inadequate contractor oversight or activities 
resulted in money lost to the American people?
    Mr. Gambatesa. We have the same problem, obviously, in 
getting out to Fatah and some of the regions to the north. We 
haven't been able to get out into some areas like Punjab and 
places south. Obviously, the agency has the same issue. We also 
use, as you mentioned in your remarks, third parties, other 
audit firms that we will hire, local audit firms, to go out and 
help us with our review and doing our audit work. The Agency is 
doing the same thing basically, so I agree that they are doing 
that.
    Mr. Labrador. To what extent has the inadequate contract 
oversight or activities management resulted in money lost to 
the American taxpayers?
    Mr. Gambatesa. It is difficult to quantify that but 
obviously without proper oversight, it is difficult to 
determine that, both our inability to get out there and 
sometimes the agency's inability to get out there and verify. 
To put a dollar value on it, I am not sure I could do that. I 
imagine we could probably come up with something like that.
    As I said earlier, when we go out and do audit reviews, we 
are not looking at every program or every dollar of every 
program. We are taking a slice of it and actually looking at it 
at a point in time. It is sort of a snapshot in time from when 
the program began to when it ended. If it is a 5-year program, 
it would not be very worthwhile for us to look at it during the 
first year. We have to give it time to mature and we look at it 
at a point in time.
    Talking about the rubble earlier, we looked at it at a 
point in time where the rubble in Haiti was only 5 percent. 
Now, the Administrator says that has improved. I cannot confirm 
or deny that because we haven't gone back and looked at it 
again. I am certain if that is what he is saying, that is true. 
To put an actual dollar value on that, I can't do that. I don't 
think we can.
    Mr. Labrador. Thank you.
    Mr. Shah. Can I add a thought? When I joined the comment 
about the morgue, I read that and Don and I had a conversation 
about it. I actually read it out loud to my senior staff and 
said, this is exactly why we are launching USAID Forward 
because we are not going to rely on these sort of processed 
indicators that were reported by the very partners that do the 
implementation.
    When I say that in Pakistan we have reached 620,000 farmers 
through the flood relief efforts, or that we have built 280 
schools through our stabilization program in Fatah and those 
areas, that is information that is coming to us now from third 
party monitors.
    It would be ideal to always have U.S. direct hires able to 
be out there assessing all of these specific things, but that 
is not always possible and are pursuing this work because it is 
a core part of an integrated national security strategy. We 
need to do it to help keep our country safe and to help in some 
dangerous parts of the world provide opportunities to people to 
have an alternative to a path that is threatening to us.
    I just want to say that because I think that is an 
important shift in how we think about monitoring evaluation and 
results reporting that is highly relevant to our reform agenda.
    Mr. Chaffetz. Thank you. I now recognize myself again for 5 
minutes.
    I want to go back to Haiti and talk specifically about 
shelters and the lack of progress there. I am referring to the 
Office of Inspector General audit of USAID's efforts to provide 
shelter in Haiti, an audit report issued April 19th of this 
year.
    Mr. Gambatesa, that report says as of January 6, 2011, 
grantees had repaired 1,875 houses but their goal was 14,375. 
Can you help me understand what the lack of progress is due to?
    Mr. Gambatesa. Our audit report made several findings and 
recommendations to solve the findings. It seemed some of the 
problem had to do with variations in cost, quality standards 
were different. Also, there was an issue with customs and 8 out 
of 11 grantees experienced delays clearing customs from 6 weeks 
up to 5 months. So they couldn't get the parts in.
    Mr. Chaffetz. Let us put it in perspective. There are home 
repairs but there are also the shelters. The shelters that I 
saw, and this is where I am asking for clarification, roughly 
12 feet x 12 feet. These are not some big, massive apartment 
complexes, this is a very, very basic slab of cement, four 
walls and a tin roof. Those are the same shelters I was looking 
at that you are talking about here. The report says USAID, OFDA 
has the projected shortfall of 65 percent in meeting its goal.
    Mr. Shah, these numbers are so off base. They are so short 
of the nearly a million people there living amongst waste, 
feces, I saw rats running around the school. We are so short of 
the goals, how do we answer that to the American people who 
have poured their hearts and about a billion dollars into such 
lack of progress?
    Mr. Shah. Two things I think are noteworthy about that. 
First, the initial strategy was to build as much temporary 
shelter as possible. I think that is what you are referring to.
    Mr. Chaffetz. How many temporary shelters have we built?
    Mr. Shah. We have currently built 20,000 on the way to 
getting to 33,000 but the initial strategy was to build many 
more which I acknowledge. As we were in the process of doing 
what they call assessments of just over 400,000 structures that 
were home structures, they found a certain percentage were red 
homes that needed to be demolished.
    Mr. Chaffetz. Can I go back for a second? The audit report 
says by June 30, 2010, grantees had completed only 1,883 
shelters. That number is a bit old. You are now saying that 
number is over 20,000?
    Mr. Shah. It is 20,000, yes.
    Mr. Chaffetz. Is that your finding of the number of 
shelters that have been completed, 20,000?
    Mr. Gambatesa. Again, we haven't gone back and looked at 
it.
    Mr. Shah. It has been a year pretty much.
    Mr. Chaffetz. It says as of November 15th, grantees had 
built only 7,179 transition shelters, 22 percent of USAID's 
target.
    Mr. Shah. Right, so you can see the rate.
    Mr. Chaffetz. What is the difference between a transition 
shelter?
    Mr. Shah. I think this conversation so far has all been 
about transitional shelters. They are structures with plywood 
supports that start with tarp and over time you can put 
corrugated tin and other materials to make it a longer term 
shelter but they start as transitional shelters.
    Mr. Chaffetz. Part of my frustration was part of what I saw 
was a bunch of tarps. They said USAID on them, but these are 
not some Coleman tent that you would buy, these are literally a 
tarp on four pieces of plywood.
    Mr. Shah. Right. They are transitional shelters. The tarp 
actually meets a certain set of what we call sphere standards 
that can withstand wind and rain and other things.
    Mr. Chaffetz. The more permanent shelters, which I 
understand having read the material, are intended to only last 
3 years, how many of those have been completed?
    Mr. Shah. The transitional shelters can last 3 years as 
they are built up with tin and other building materials.
    Mr. Chaffetz. My question is, how many of the more semi-
permanent structures have been built because there are shelters 
and then there are temporary shelters? How many of the shelters 
have been built? The IG put them in two different categories.
    Mr. Shah. The two categories I would use, and I don't want 
to answer in the wrong way, are temporary shelters that are 
tarp and plywood-based structures that can be improved over 
time that can last for 1, 2 to 3 years. The primary strategy of 
repairing the yellow and green homes so they can be permanent 
structures for families or building homes, they could be 
permanent structures for families. We have those three primary 
strategies.
    This particular IG report refers to the Office of Foreign 
Disaster Assistance that was doing just the temporary shelters. 
In a strategic shift we made sometime last year based on the 
data that there were many more homes that could be fixed that 
people could go back to than we initially thought was to say we 
would do fewer temporary shelters and more yellow house repairs 
and green house returns because that was more cost efficient.
    Mr. Chaffetz. That is the number I am citing in this 
report. The commitment from USAID was 14,375 houses but it only 
completed 1,800. Is there an updated number?
    Mr. Shah. I don't have it at my fingertips, but we can get 
it to you.
    Mr. Chaffetz. That would be most appreciated because we are 
talking about a magnitude of a million people, are we not?
    Mr. Shah. We have come down from having 1\1/2\ million 
people in tarps, tents and temporary shelters to now 680,000. I 
would note there are two important factors to think about. One 
of the roadblocks on rubble removal has been the inability to 
get enough staging sites from the government of Haiti, so we 
continue to work with the government. I think we are optimistic 
that they will manage to find sites that would allow the 
international community and the Haitians to accelerate the 
rubble removal and create the space for the new housing.
    Mr. Chaffetz. My time has more than expired.
    I now recognize the chairman of the full committee, Mr. 
Issa, of California.
    Mr. Issa. Thank you, Mr. Chairman.
    I will followup on that. I have been following USAID for 11 
years from when I was on the Foreign Affairs Committee. If you 
don't have the cooperation of the host country, why is it you 
don't come back to the committee with jurisdiction and say, we 
are being impeded from meeting our goals because you are 
talking about abysmally failing.
    If this were New Orleans, you would be fired. FEMA got 
fired for doing a better job than you are doing in Haiti, 
didn't they, as far as accomplishment? I am not talking about 
your effort.
    Mr. Shah. I would just note that in Haiti, we are somewhere 
between 10 and 25 percent of the effort and I don't think we 
want to assume, as we might if we were in a domestic situation, 
assume total responsibility.
    Mr. Issa. Let us go another way. Haiti is the poorest 
country in the western hemisphere, $1,000 in Haiti is a whole 
year's money; a billion dollars for a million people is $1,000 
a person. Am I off by a factor of 10 or am I right, a thousand 
thousands is a million and a million thousands is a billion.
    You spent $1,000 per capita if you looked at a million 
people, and I realize I am using loose numbers and so on, but 
you spent a whole year's salary per person and you tell me you 
haven't been able to clear away most of the rubble away. I want 
to know is when you do not have the cooperation of the host 
country to a sufficient level, even if we are 10 percent, the 
other 90 percent have the same concern.
    Why is it you don't come back to the Congress and obviously 
to the State Department that you work with and say, we are 
unable to meet our mission, we are wasting money, we are having 
people, 680,000 by your own number, still suffering more than a 
year out without homes?
    Mr. Shah. First, I would just say, on the money, of the 
billion dollars that has been spent, about $700 million was 
spent in the first 3 or 4 months as part of the response. 
Certainly, giving each person a certain amount of cash in that 
context would not have met the needs we were able to meet, food 
distribution to 4 million people, thousands of surgeries that 
saved hundreds of lives.
    Mr. Issa. We are talking about a billion dollars is our 10 
percent?
    Mr. Shah. Right. That money hasn't been spent yet. Some of 
it has been obligated, but that billion dollars has not been 
spent.
    Mr. Issa. Let me switch gears for a moment to the IG. This 
is the closest we could be to a disaster outside our United 
States, virtually. Haiti is about as close as anywhere you are 
going to get except maybe Canada or Tijuana. If we can't do 
better in Haiti, what does that say about our ability to have a 
poor country that needs 10 or 20 million people taken care of, 
whether it is us by ourselves or the world? Are we organized 
for success on this scale, based on what you have seen in 
Haiti? You can just say no and I would be happy.
    Mr. Gambatesa. It is difficult to answer that question.
    Mr. Issa. Let me ask it another way. I was in the Army, I 
put up temporary shelters. Whether they are canvas or they have 
some plywood, I have certainly seen them in Afghanistan and 
Iraq, our soldiers are often living in something similar.
    In your estimation, we go in and if we want to put a 
million people in those types of temporary shelters, isn't this 
a goal that America should be able to meet in a matter of, if 
not weeks, a couple of months when you look at the sub-
components and the fact that the human beings you are trying to 
help are the work force to put them up? It doesn't take special 
machinery, it doesn't take bulldozers, it doesn't take heavy 
lift. All it takes is the delivery of the materials and once 
the port was operational, could have been delivered enough for 
everyone. Isn't that true?
    Mr. Gambatesa. I would think so, in a perfect world.
    Mr. Issa. Haiti is not a perfect world, we get that, but 
once the port was opened and our President committed to provide 
real relief, what went wrong that we are here talking about 
various numbers, but ultimately we are debating about how big a 
failure to bring relief in appropriate numbers to Haiti? Did 
you lack money? Did you lack resources that America could have 
supplied? Did you lack the willingness of the government to 
cooperate? Was there great waste? Was there an absence of 
people willing to put up their own shelters? I certainly think 
the last one we can assume, there were plenty of people willing 
to put up their own shelters.
    Mr. Shah. I would step back and suggest that characterizing 
the large scale humanitarian resource as a failure would be 
something I would take great issue with.
    Mr. Issa. Wait a second. I appreciate that, I wasn't 
talking about that, although to be honest, media did a very 
good job of telling the world that it wasn't so good, but that 
was a televised event where the cameras were on. Today's 
hearing is really about the inability to accomplish, with the 
moneys given, what the goal was in a timely fashion after the 
camera lights went off. If you would limit your answer to that, 
I would appreciate it.
    Mr. Shah. Right now we are pursuing a comprehensive 
reconstruction strategy with the government of Haiti. We are 
primarily taking the lead in a few specific sectors, 
agriculture, health and energy.
    Mr. Issa. With the indulgence of the Chair who is 
temporarily out, because I am not getting the answer. There you 
are, you leaned forward. With the indulgence of the Chair who 
is here, but leaning back in his chair, you have mission creep 
right here. I think what I have seen in the reports, in the 
IG's reporting, and you agree to in a way, is you didn't 
accomplish the originally stated mission, you have gone from 
soft housing to working on hard housing, but you are not 
dealing with 1\1/2\ million in totality because before you ever 
got everyone into soft housing, you have made shifts through 
the process, so you are always working on a next program that 
is different than the one you didn't accomplish. Would that be 
even a little bit fair?
    Mr. Shah. No, I don't think so, not with respect to 
housing. It was never our goal, as Americans, to directly build 
temporary shelters for the 1\1/2\ million displaced Haitians. A 
big part of the strategy was to enable as many returns as 
possible to rural communities, to other cities and to de-
intensify Port-au-Prince. We supported that effort and had 
400,000 to 500,000 people leaving Port-au-Prince into host 
country arrangements. We provided a lot of support for that and 
logistics for that which was very important, but that was a 
government decision that we supported.
    Mr. Issa. Because my time has expired and they have been 
very indulgent, let me ask for a yes or no. Are you satisfied 
with the work you have done as a model for the effort of USAID 
in the western hemisphere?
    Mr. Shah. Sir, I am never satisfied with anything. I always 
think in this business and this industry of saving lives and 
helping people who are vulnerable.
    Mr. Issa. Give yourself an A through F score, please.
    Mr. Shah. I would say the initial humanitarian response was 
tremendous.
    Mr. Issa. You give yourself an A for the original response. 
What about today?
    Mr. Shah. I don't know that I would ever use an A for 
anything but I would say that was a tremendous initial 
response. I think we would generally have had more success with 
more rapid rubble removal and housing type issues if we had a 
confluence of factors including more specific support from our 
partners and the government of Haiti to identify land for 
staging sites and to support some of the issues that were faced 
at the port and with respect to customs. In general, we respect 
the fact that we are not in charge of Haiti, we operate in a 
bilateral partnership with the elected Government of Hati and 
we respect that and work within that framework.
    Mr. Issa. Thank you. Mr. Chairman, thank you for your 
indulgence.
    Mr. Chaffetz. Thank you.
    I would now recognize the gentleman from Massachusetts, Mr. 
Tierney.
    Mr. Tierney. Thank you.
    I think we are all trying to get at the same thing here in 
different ways and it is a bit why I asked the question earlier 
about whether or not there is an overarching plan of what 
everybody hopes to accomplish long term, and if that plan would 
then identify which country or entity is responsible for what 
aspects of it and then an idea of how much money each entity or 
aspect of a country would be expected to expend to accomplish 
that end, and how do we measure where we are going against it.
    Is there a set of documents you could present to the 
committee that would show us that?
    Mr. Shah. Yes.
    Mr. Tierney. OK. If you would do that, I would appreciate 
that and we would put that on the record, Mr. Chairman.
    The other thing is I know you say the initial response was 
tremendous. It was an incredible burden on everyone and the 
response on that. There was a period of time after that when 
there was some difficulty determining who in the Haitian 
government was going to respond to give direction, is that 
correct?
    Mr. Shah. President Preval ultimately is and was 
accountable for those decisions and we have been in constant 
direct communication with him and with his Prime Minister.
    Mr. Tierney. I think you mentioned there were 29 ministries 
that were in pretty sad shape after the earthquake?
    Mr. Shah. Twenty-eight out of 29 ministries had collapsed.
    Mr. Tierney. I would assume that gave some level of 
difficulty in getting organized and getting direction for a 
number of things?
    Mr. Shah. That is correct.
    Mr. Tierney. I think that, in and of itself, would probably 
cause some waste or misspent money at some point in time, not 
for intention to be wasteful, but for circumstances.
    Mr. Shah. That is also why we helped set up the interim 
Haiti Recovery Commission which is co-chaired by the Haitian 
Prime Minister and President Clinton. It includes as board 
members a number of major donors and multilateral partners. 
That was a mechanism that helped bring together people at 
precisely a time when the Haitian government was clearly 
recovering from a tragedy that we can only begin to imagine.
    Mr. Tierney. If I can step back from Haiti and look at the 
broader picture of what USAID is doing, you have talked about 
some of the aggressive reform agenda items that you want to 
implement. A lot of them address some of the concerns this 
committee and I have had personally on accountability, on 
transparency, on trying to bring in-house those inherent 
governmental functions, bringing in people trained and if we 
have to have contractors, people who at least can manage the 
contractors and monitor them and hold them accountable. It 
seems to me you are progressing in that area.
    If the budget were cut to the extent that has been proposed 
for the 2012 budget to $37 billion and within 4 years after 
that, down to $29 billion, is that something that is workable 
to continue that reform agenda and get that accomplished while 
your budget is shrinking? How do you assure people, if not, I 
assume you are going to say not since you put in the budget, 
how do you assure us that money is well spent and not running 
into some of the difficulties we have heard here today?
    Mr. Shah. No, sir, if we were to face the almost 30 percent 
across the board cut, we would not be able to continue any of 
our reform effort. In fact, the most important, in my mind, is 
our procurement and contracting reforms that is very consistent 
with your writings and public speeches about this subject.
    We are relying very much on our ability to invest in 
expanding our procurement work force, to hire 70 specific civil 
servants who have the expertise to help us shift from cost 
reimbursement to fixed price contracting and to use more 
milestone-based performance award mechanisms, which we have 
built and are now propagating out, but it takes unique 
expertise to put that in place and to make that work.
    We are on a path. It is important to maintain that path in 
order to be able to achieve the vision we are talking about.
    Mr. Tierney. Mr. Chairman, I am not going to ask anymore 
questions. I would like to look at the material that Mr. Shah 
is going to provide. We have a history of over a decade now, 
probably two decades of hollowing out USAID and eviscerating 
the personnel who had the experience, the training and the 
capacity to not only get US aid out to countries and have them 
work well, but also to monitor the money, do the accounting and 
make us feel more comfortable.
    On the one hand, we have hollowed it, on the other hand, we 
are complaining that we are not getting the accountability and 
transparency that we want. It seems to me if we continue down 
the path of hollowing it out and not providing the resources, 
we are just creating the situation we say we want to solve.
    On the other hand, Mr. Shah, I do think there is a 
responsibility to show this committee in real time that 
improvements are being made and a lot of these concerns are 
being addressed, and that there are substantial savings on that 
basis moving forward. I don't think the patience level is going 
to last forever, notwithstanding how important some of us think 
development and aid is in terms of our national security 
picture.
    Thank you. I yield back.
    Mr. Chaffetz. Thank you.
    In closing, Mr. Gambatesa, I just want to give you a last 
opportunity. Is there something else you wanted to share with 
the committee that you planned to share but didn't have an 
opportunity to address?
    Mr. Gambatesa. No. The only thing I would like to say is 
that most of our audit work comes up and inherently it points 
to negative. We do accentuate the positive when it is there, 
but primarily we are looking at ways to improve programs, so 
for improving programs, we are saying it isn't working 
properly.
    I have to admit that many of the issues Mr. Tierney 
mentioned, the issue of staffing, many of our audit reports 
have indicated that the staffing is a significant issue at 
USAID. The issue of procurement reform, I am very heartened by 
Dr. Shah's movement toward fixing some of these problems and I 
hope they will work. I think they will with his leadership. I 
believe he is pushing the agency in the right direction and I 
think with the proper support and proper budget support, many 
of these issues we have identified in the past can be fixed.
    Mr. Chaffetz. I appreciate that. To the men and women who 
work specifically with you, I know they are small in number and 
you go into some of the most difficult situations on the face 
of the planet. We appreciate their efforts and I want them to 
recognize the value Congress places upon their work. I know it 
is hard for them to be away from their families and whatnot.
    The same would be said for the people around the world 
serving in USAID, a lot of good people with the right heart, 
dedicating their time and talents, away from their families, 
difficult security situations, difficult living arrangements. I 
don't want to detract from their good efforts.
    It is the responsibility of the Congress to hold people 
accountable and to provide that data and information. To that 
end, I do think the agency is failing to provide data to this 
body in a timely fashion. Members of Congress spend a great 
deal of time flying, at great taxpayer expense, to visit these 
situations around the world. Uniformly, we have the most 
difficult time getting the most basic information.
    I just want to have your ongoing commitment that we are 
going to be able to access that real time data, what has been 
accomplished, what are we spending and then be able to see what 
is actually being spent. I think the American taxpayer should 
know where their billions of dollars are being spent.
    Mr. Shah. You certainly have my commitment. I would invite 
you personally and other members of the committee to come 
potentially with me on some of these trips. I appreciate your 
deep interest in the reform effort we are taking. I think we 
are implementing the most aggressive reform across any Federal 
agency. I think it is very important and I welcome you ideas 
and thoughts on how to make it better.
    To the extent that you are continually interested in this, 
I would also like the opportunity to demonstrate some of our 
programs like Feed the Future which is working in 20 countries 
targeting moving 18 million people, including 7 million kids, 
out of the state of poverty and hunger which really does bring 
together so many of the best practices of what we have learned 
about development in terms of private sector engagement, 
accountability and conditionality and putting in place the kind 
of measurement systems that let us know in a very, verified 
way, that we are saving lives and improving livelihoods around 
the world.
    Mr. Chaffetz. I appreciate that. I think I speak for 
Members on both sides of the aisle in saying we want you to be 
successful. We have human lives depending on it. We allocate a 
lot of resources in order to do this.
    With that said, I need to say one more time because there 
have been good relief efforts, probably the immediacy of what 
happened in Haiti, but having seen it myself, having read this 
report, having gone through it, my own personal assessment, 16 
months after that devastating earthquake in Haiti, I think the 
totality of the U.S. response has been pathetic and 
disappointing, despite a lot of money moving in that direction 
and undoubtedly a number of lives that have been saved, but we 
still have hundreds of thousands of people living in conditions 
no American could probably even fathom how bad it is.
    When you have metrics that say a third of the performance 
audits for the Department were either misstated, unsupported or 
not validated, that raises a lot of red flags. When we are 
arguing about whether or not the rubble removal is 5 or 10 
percent, that is a stunning number that is shocking 16 months 
after the effort.
    When we are missing our goal by 65 percent in terms of 
building the shelters, when we say we have only achieved less 
than 25 percent of the goal, it is just stunning and 
disappointing because the resources of the United States being 
brought to bear, the support you personally got from the 
President to make this stuff happen and then see those results, 
again, just looking at the metrics, is devastating. It is 
disappointing and it is unacceptable. That is my concern.
    If we can help moving forward, I look forward to working 
with you. I appreciate your commitment and your tenacity. I 
know your heart is in the right place. I appreciate you coming 
before this committee and spending time with us. There is lots 
to improve. I appreciate your attitude saying we can always 
improve.
    At this point, we will hold this committee in adjournment. 
Thank you.
    [Whereupon, at 4:45 p.m., the subcommittee was adjourned.]

                                 
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