    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-06-645

    TITLE:     Foreign Assistance: USAID Completed Many Caribbean
    Disaster Recovery Activities, but Several Challenges Hampered Efforts

    DATE:   05/26/2006

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    GAO-06-645

         * Results in Brief
         * Background
              * U.S. Emergency Relief and Immediate Recovery Assistance
              * U.S. Recovery and Reconstruction Assistance
         * USAID Completed Numerous Recovery Efforts within 1 Year but
              * USAID Expended Majority of Recovery Funds within 1 Year
              * USAID Implemented Various Nonconstruction Recovery Activitie
              * USAID Began Many Construction-Related Projects but Did Not C
         * Various Factors Slowed USAID's Implementation and Completion
              * Severe Weather Delayed Program Activities in Jamaica and Hai
              * Coordination Challenges Hindered USAID's Implementation and
              * Construction-Related Challenges Led to Delays in Grenada, Ja
              * Security Problems Disrupted Program Activities in Haiti
         * Lack of Formal Program Guidance, Time Frame, and Staffing Is
              * Lack of Guidance That Includes Lessons Learned Contributed t
              * USAID Applied Some Lessons from Previous Disaster Programs b
                   * USAID Applied Some Lessons Learned from Previous Programs
                   * One-Year Time Frame May Have Limited Impact and Sustainabili
                   * USAID Did Not Implement Some Prior Staffing Recommendations
              * USAID Staff and Contractors Are Recording Lessons Learned
         * Conclusions
         * Recommendations for Executive Action
         * Agency Comments and Our Evaluation
              * Lessons Learned for Program Planning and Implementation
              * Lessons Learned for Staffing
              * Lessons Learned for Recovery Activities
                   * Disaster Preparedness and Mitigation
                   * Construction
                   * Nonconstruction
              * Lessons Learned for Ensuring Accountability
              * Lessons Learned for Monitoring and Evaluation
         * GAO Contact
         * Staff Acknowledgments
         * GAO's Mission
         * Obtaining Copies of GAO Reports and Testimony
              * Order by Mail or Phone
         * To Report Fraud, Waste, and Abuse in Federal Programs
         * Congressional Relations
         * Public Affairs

    Report to the Chairman, Subcommittee on Foreign Operations, Export
    Financing and Related Programs, Committee on Appropriations, House of
    Representatives

    United States Government Accountability Office

    GAO

    May 2006

    FOREIGN ASSISTANCE

    USAID Completed Many Caribbean Disaster Recovery Activities, but Several
    Challenges Hampered Efforts

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    GAO-06-645

    Contents

    Letter 1

    Results in Brief 2
    Background 5
    USAID Completed Numerous Recovery Efforts within 1 Year but Granted
    Extensions for Many Construction Projects 8
    Various Factors Slowed USAID's Implementation and Completion of Program
    Activities 16
    Lack of Formal Program Guidance, Time Frame, and Staffing Issues
    Contributed to Implementation Problems 19
    Conclusions 27
    Recommendations for Executive Action 27
    Agency Comments and Our Evaluation 27
    Appendix I Objectives, Scope, and Methodology 30
    Appendix II Summary of Lessons Learned from USAID Disaster Recovery and
    Reconstruction Efforts 34
    Appendix III Comments from the U.S. Agency for International Development
    42
    Appendix IV GAO Contact and Staff Acknowledgments 45
    Related GAO Products 46

    Tables

    Table 1: USAID Key Nonconstruction-Related Recovery Activities in Grenada,
    Jamaica, and Haiti, as of December 31, 2005 10
    Table 2: USAID Key Construction-Related Recovery Activities in Grenada,
    Jamaica, and Haiti, as of December 31, 2005 13
    Table 3: Number and Types of Activities at Project Sites GAO Visited in
    Grenada, Jamaica, and Haiti 31

    Figures

    Figure 1: Areas and Extent of Hurricane Damage in Grenada, Jamaica, and
    Haiti 6
    Figure 2: Recovery and Reconstruction Allocations by Country 7
    Figure 3: USAID Allocation and Expenditure for Disaster Recovery
    Assistance for Grenada, Jamaica, and Haiti, as of December 31, 2005 9
    Figure 4: USAID-Supported Drainage Canal Cleanup in Haiti 12
    Figure 5: USAID-Funded School Repair in Grenada 15

    Abbreviations

    Hurricane Ivan Program Hurricane Ivan Recovery and Rehabilitation Program
    NGO nongovernmental organization OFDA Office of Foreign Disaster
    Assistance OMB Office of Management and Budget ONR Office of National
    Reconstruction, Jamaica RIG Regional Inspector General Tropical Storm
    Program Tropical Storm Jeanne Recovery Program USAID U.S. Agency for
    International Development

    This is a work of the U.S. government and is not subject to copyright
    protection in the United States. It may be reproduced and distributed in
    its entirety without further permission from GAO. However, because this
    work may contain copyrighted images or other material, permission from the
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    separately.

    United States Government Accountability Office

    Washington, DC 20548

    May 26, 2006

    The Honorable Jim Kolbe Chairman Subcommittee on Foreign Operations,
    Export Financing and Related Programs Committee on Appropriations House of
    Representatives

    Dear Mr. Chairman:

    In September 2004, Hurricane Ivan struck several Caribbean islands,
    including Grenada and Jamaica, where it killed 59 people and inflicted
    damage of about $1.4 billion. In the same month, Tropical Storm Jeanne
    struck parts of Haiti with heavy rains, causing flash floods that killed
    more than 2,000 people, affected an estimated 300,000 others through loss
    of homes, schools, and livelihoods, and caused an estimated $300 million
    in damage. The United States and other donors1 responded initially to
    these disasters by providing emergency relief, such as food, water,
    medical supplies, and temporary shelter. In October 2004, recognizing the
    need for longer-term recovery and reconstruction assistance, Congress
    passed a supplemental appropriation allocating $100 million for additional
    hurricane recovery efforts in the Caribbean.2 The U.S. Agency for
    International Development (USAID), designated to lead the U.S.-funded
    assistance, initiated the Hurricane Ivan Recovery and Rehabilitation
    Program (Hurricane Ivan Program) in Grenada and Jamaica and the Tropical
    Storm Jeanne Recovery Program (Tropical Storm Program) in Haiti in January
    2005.3 Following discussions with the Office of Management and Budget
    (OMB), USAID agreed to complete the programs by December 31, 2005-that is,
    within 1 year of initiating the programs; this time frame is shorter than
    for previous USAID disaster recovery and reconstruction programs, such as
    USAID's program in Central America following Hurricane Mitch. In addition,
    instead of transferring or directly hiring staff, as it has done in the
    past, USAID hired a management firm, Wingerts Consulting, to quickly staff
    and establish the programs in Grenada and Jamaica.

    1Other donors' pledges for recovery assistance amounted to about $177
    million in Grenada and about $23 million in Jamaica. In Haiti, pledges
    amounted to about $16 million.

    2Emergency Hurricane Supplemental Appropriations Act, 2005, Pub. L.
    108-324, Div. B, Chapter 5 (Oct. 13, 2004).

    3USAID allocated most of the appropriated funds to Grenada, Jamaica, and
    Haiti, which sustained the heaviest damage in the storms; this report
    focuses on the agency's work in these countries.

    Having previously examined U.S. efforts to provide disaster recovery
    assistance,4 we were asked to monitor USAID's delivery of the assistance
    in the Caribbean. In this report, we (1) review the recovery and
    reconstruction activities in Grenada, Jamaica, and Haiti, including the
    status of the activities as of December 31, 2005; (2) identify factors
    that affected USAID's ability to implement and complete the programs
    within the 1-year time frame; and (3) assess USAID's use of guidance and
    application of lessons learned from similar previous programs and its
    efforts to draw lessons from the current programs.

    To address these matters, we reviewed USAID's objectives and oversight
    strategy for the Hurricane Ivan and Tropical Storm Programs. We made
    several trips to Grenada and Jamaica and one trip to Haiti.5 In all three
    countries, we reviewed program documents and interviewed USAID staff,
    private contractors, and host government officials. We visited 80 project
    sites, most of them randomly selected, in Jamaica and Grenada as well as
    nine project sites in Haiti that were not randomly selected. We also
    analyzed program expenditure and activity data, having assessed the data's
    reliability and finding it sufficient for our purposes. We conducted our
    work from March 2005 through May 2006 in accordance with generally
    accepted government auditing standards. (See app. I for a more detailed
    discussion of our scope and methodology).

                                    Results in Brief

    USAID completed many of the activities that it implemented in Grenada,
    Jamaica, and Haiti within the 1-year time frame, but the agency required
    additional time to finalize many construction-related projects. Of the
    $92.4 million allocated for recovery and reconstruction in the three
    countries, USAID expended $71.3 million, or about 77 percent. In Grenada
    and Jamaica, USAID completed a range of non-construction-related recovery
    activities, including providing business and agriculture recovery grants,
    technical assistance to farmers, and grants to fisherfolk or artisans. In
    Haiti, USAID's completed nonconstruction activities included restoring
    irrigated farmland and hillsides, removing mud from streets and canals,
    and issuing household support grants. USAID also initiated
    construction-related projects, including repairing houses and public
    facilities and building new homes in Grenada and Jamaica and repairing
    homes, public facilities, and infrastructure in Haiti. However, in part
    because of increases in the cost of materials and labor, USAID lowered
    initial targets for many of these projects-for example, reducing new
    housing targets in Grenada from 150 to 55, house repair targets in Jamaica
    from 3,450 to 932, and house repair targets in Haiti from 3,000 to 600.
    However, USAID contractors did not achieve the adjusted targets for 11 of
    the 14 construction activities. In November 2005, USAID granted the
    contractors in Grenada and Jamaica a 6-month extension to complete
    approximately 240 new houses and finish other construction activities. In
    September 2005, contractors in Haiti received an 18-month extension to
    complete housing and infrastructure repairs but expected to finish these
    projects by June 2006.6

    4For example, see GAO, Foreign Assistance: Disaster Recovery Program
    Addressed Intended Purposes, but USAID Needs Greater Flexibility to
    Improve Its Response Capability, GAO-02-787 (Washington, D.C.: July 24,
    2002); and Foreign Assistance: USAID's Earthquake Recovery Program in El
    Salvador Has Made Progress, but Key Activities Are Behind Schedule,
    GAO-03-656 (Washington, D.C.: May 15, 2003). See Related GAO Products.

    5After our initial trip to Haiti in March-April 2005, the Department of
    State restricted access to emergency personnel because of security
    concerns.

    Several factors hampered USAID's ability to implement and complete program
    activities within the 1-year time frame. First, periods of severe weather
    delayed construction and some agriculture activities in Jamaica as well as
    some construction projects in Haiti. Second, coordination challenges in
    Grenada and Jamaica negatively affected USAID's implementation and
    completion of construction projects. For example, the Grenadian government
    lacked a central agency to identify needs and coordinate hurricane
    recovery efforts, and Jamaica's Office of National Reconstruction did not
    complete certain construction activities it had agreed to, delaying
    USAID's completion of new houses. Third, construction-related challenges,
    including difficulty in identifying housing recipients who could
    demonstrate land ownership, delayed construction activities in the three
    countries. Finally, according to USAID officials, ongoing security
    challenges disrupted the work in Haiti, leading, for example, to the
    temporary evacuation of some USAID staff during the summer of 2005.

    6The extensions that USAID granted to contractors in Grenada, Jamaica, and
    Haiti entailed no additional cost to the agency.

    USAID staff reported that a lack of guidance incorporating lessons learned
    from previous USAID recovery and reconstruction programs led to design and
    implementation challenges; further, the agency did not adopt prior
    recommendations regarding time frames and staffing, resulting in
    additional problems. Although USAID has managed several recovery and
    reconstruction programs since 1999, it has not issued guidance that
    incorporates lessons learned from designing and implementing such
    programs. For example, if USAID officials had had access to lessons
    learned regarding likely increases in postdisaster demand for construction
    materials and labor, it might have helped them to establish more realistic
    targets for activities to be achieved within a 1-year time frame. Staff
    who designed the activities told us that they applied some lessons from
    prior reconstruction programs-for example, hiring monitoring firms to
    assist with technical and financial oversight of program activities.
    However, in agreeing to complete activities by December 31, 2005, USAID
    did not take into account lessons learned regarding implementation time
    frames. It also faced trade-offs in trying to complete a broad spectrum of
    activities within 1 year while ensuring that activities had the intended
    impact of helping beneficiaries find jobs in the postdisaster environment
    and could be sustained by host government staff after the programs were
    completed. For instance, to finish activities within the 1-year time
    frame, USAID contractors in Grenada designed job skills training to last 6
    weeks, but participants later reported that the training had been too
    brief to develop some skills, such as those needed for construction work.
    The contractors told us that a longer time frame would have allowed them
    to assess and adjust the training to make it more sustainable. In
    addition, at the time of our review, the agency had not adopted prior GAO
    and USAID recommendations for revising agency procedures to quickly hire
    or reassign staff with technical skills to manage disaster recovery
    activities. In order to quickly staff its program in Grenada, which has no
    USAID mission, the agency hired a management and oversight firm to manage
    program activities. However, USAID staff and contractors told us that the
    use of this firm led to several implementation problems, such as confusion
    about roles and responsibilities and redundant layers of oversight. USAID
    staff and contractors in all three countries are recording lessons learned
    that could be valuable in future efforts.

    We are recommending that, to better facilitate the design and
    implementation of USAID's disaster recovery and reconstruction programs
    and address ongoing staffing issues, the USAID Administrator develop
    guidance that incorporates lessons learned from the Hurricane Ivan,
    Tropical Storm Jeanne, and other USAID recovery and reconstruction
    programs and revise staffing procedures to facilitate the rapid
    reassignment or hiring of needed personnel for longer-term recovery
    programs. We provided a draft of this report to USAID, the Department of
    State, and OMB. We received a formal comment letter from USAID (see app.
    III), in which they agreed with our recommendations. USAID and OMB
    provided technical comments that we incorporated, as appropriate. The
    Department of State provided no comments.

                                       Background

    In September 2004, four major hurricanes and storms, including Ivan and
    Jeanne, caused extensive damage in the Caribbean, particularly in Grenada,
    Jamaica, and Haiti. Figure 1 shows the paths of Hurricane Ivan and
    Tropical Storm Jeanne and describes the extent of damage in the three
    countries.

    Figure 1: Areas and Extent of Hurricane Damage in Grenada, Jamaica, and
    Haiti

    Note: Map is not drawn to scale.

    U.S. Emergency Relief and Immediate Recovery Assistance

    USAID's Office of Foreign Disaster Assistance (OFDA) provided emergency
    relief, such as food, water and sanitation, and shelter, to address the
    urgent needs of those affected by the storms. Following OFDA's relief
    efforts in response to Hurricane Ivan, USAID directed existing agency
    funding to Grenada and Jamaica-$3.2 million and $7.3 million,
    respectively-for immediate recovery activities, including clearing
    farmland, cleaning up communities, and repairing houses and schools, that
    were carried out through June 30, 2005. Soon after Tropical Storm Jeanne
    struck Haiti, the U.S. government provided $11.8 million for immediate
    emergency relief and recovery assistance, including emergency food and
    water, as well as for cleaning up communities.

    U.S. Recovery and Reconstruction Assistance

    Of the $100 million supplemental assistance that Congress approved for
    hurricane recovery and reconstruction activities in the Caribbean, USAID
    allocated $92.4 million to Grenada, Jamaica, and Haiti.7 Figure 2 shows
    the amount and percentage allocated to each country.

    Figure 2: Recovery and Reconstruction Allocations by Country

    Note: Dollar amounts do not add due to rounding.

    Lacking a mission in Grenada, the agency administered the Hurricane Ivan
    Program from its Jamaica mission and Barbados satellite office, and it
    administered the Tropical Storm Program from its Haiti mission. Using a
    new approach to its program staffing, rather than reassign USAID staff or
    hire personal services contractors,8 the agency hired Wingerts Consulting
    to manage and oversee project activities in Grenada and Jamaica.
    Wingerts's responsibilities included monitoring program activities,
    reporting progress to the USAID mission in Jamaica, and coordinating
    USAID's efforts with the Grenadian and Jamaican governments and with other
    donors.

    7USAID also allocated about $5.6 million to OFDA as reimbursement for
    relief efforts and $2 million to the Bahamas, Tobago, and the Caribbean
    Community islands, which sustained some damage from Hurricane Ivan.

    USAID created special objectives for each country that defined the target
    areas for the recovery and reconstruction funding. For Grenada and
    Jamaica, the supplemental funding expanded the initial emergency, or a
    short-term response and aimed to help people quickly rebuild their
    communities, enhance and improve their skills, provide limited income
    support, and resume their path of sustainable development through
    activities that provide immediate income, skills training and employment
    opportunities. In Haiti, supplemental funds aimed to meet the immediate
    needs of Haitians affected by the tropical storm, help them regain sources
    of economic activity, and help them prepare for future natural disaster
    threats. According to USAID, recovery and reconstruction programs are
    essentially development programs with short time frames but share the same
    objectives of sustainable growth and prosperity.

     USAID Completed Numerous Recovery Efforts within 1 Year but Granted Extensions
                             for Many Construction Projects

    USAID completed many activities it implemented in Grenada, Jamaica, and
    Haiti by December 31, 2005. Of the $92.4 million allocated for recovery
    and reconstruction across the three countries, the agency expended $71.3
    million. The agency implemented a variety of non-construction-related
    activities-for example, providing business rehabilitation grants in
    Grenada and Jamaica and implementing community cleanup activities in
    Haiti-and met or exceeded its targets for these projects within the 1-year
    time frame. In addition, it implemented a number of construction-related
    projects, such as repair and building housing and infrastructure. However,
    although USAID reduced targets, in part because of cost increases for
    these projects in all three countries, USAID contractors did not complete
    many of them by December 31, 2005-in particular, new housing
    construction-and required extensions to finish these projects.

    8USAID defines its workforce as comprising individuals with whom it has an
    employer-employee relationship. The Federal Acquisition Regulations define
    a personal services contract as one that makes the contractor appear as a
    government employee by the nature of the relationship that is established.
    USAID is authorized by section 636(a)(3) of the Foreign Assistance Act of
    1961, as amended, to contract with individuals for personal services
    abroad. USAID's personal services contractors may be U.S. citizens, host
    country nationals, or third country nationals.

    USAID Expended Majority of Recovery Funds within 1 Year

    As of December 31, 2005, USAID had expended approximately 77 percent of
    the $92.4 million that it allocated for recovery efforts in the three
    countries. Figure 3 shows program allocation and expenditure by country.

    Figure 3: USAID Allocation and Expenditure for Disaster Recovery
    Assistance for Grenada, Jamaica, and Haiti, as of December 31, 2005

    USAID Implemented Various Nonconstruction Recovery Activities

    USAID implemented a variety of non-construction-related activities to help
    hurricane and storm survivors in Grenada, Jamaica, and Haiti recover from
    the disasters, completing most of them within the 1-year time frame. USAID
    generally reached or exceeded its targets for nonconstruction recovery
    activities, despite having raised many of these targets after initiating
    the activities. We visited a total of 37 non-construction-related sites to
    observe USAID's progress and interview beneficiaries. Table 1 shows a
    selection of USAID's initial and revised nonconstruction targets and its
    completed activities, in Grenada, Jamaica, and Haiti as of December 31,
    2005.

    Table 1: USAID Key Nonconstruction-Related Recovery Activities in Grenada,
    Jamaica, and Haiti, as of December 31, 2005

                                                                        Completed
                                                        Revised activities (as of
    Key nonconstruction       Initial targets targets (as of      December 31,
    recovery activities        (January 2005) December 2005)             2005)
    Grenada                            1,600a          1,800             2,402

    People trained in                     200            200               192
    tourism, construction,
    and other skills                      450          1,327             1,427

    Grants for small and                   35            155               100
    medium-size enterprises
                                              $8             $8                $8
    Grants and technical
    assistance for farmers                 18             21                24

    Grants and technical
    assistance for fisherfolk

    Government supported
    operations (dollars in
    millions)

    Primary schools
    resupplied and
    re-equipped
    Jamaica                             2,500          2,451            11,478

    Grants to small and                 2,300          2,447             2,479
    medium-size enterprisesb
                                           1,500          2,700             2,855
    Technical assistance for
    farmers                               100            100               120

    Grants for fisherfolk                 219             52                56

    Grants for artisans

    Primary schools and
    colleges resupplied and
    re-equipped
    Haitic                        5,600 acres    6,474 acres       5,264 acres

    Irrigated land restored       4,960 acres    4,960 acres       4,975 acres
    to full production
                                              16             16                19
    Land protected with
    conservation methods                   61             51                 0

    Communities trained in          48,000 m3      48,000 m3         69,734 m3
    watershed management
                                           3,000          3,000             3,023
    Water associations
    trained in watershed                   27             21                21
    management

    Mud removed from urban
    streets and canals

    Asset restoration grants

    Communities trained in
    disaster preparedness and

    mitigation

    Source: GAO analysis of USAID data.

    Notes: The table shows USAID's primary nonconstruction-related recovery
    activities in the three countries; the agency conducted other
    nonconstruction-related activities that are not shown.

    aInitial target reflects tourism and construction skills only; other
    skills were added later in the program and are reflected in the revised
    target number.

    bGrants to small and medium-size enterprises included assistance to
    business owners and farmers.

    cInitial targets for Haiti according to USAID's February 2005 Tropical
    Storm Recovery Program report.

    In all three countries, USAID provided assistance to revitalize businesses
    and agriculture. In addition, in Haiti, USAID also helped communities
    clear

    away flood debris and take steps to prevent similar disasters in the
    future. Following are descriptions of several USAID nonconstruction
    activities in the three countries:

               o  In Grenada, USAID provided grants averaging about $6,300 to
               small businesses (those with 5 to 24 employees) and grants
               averaging about $15,000 to medium-sized businesses (those with 25
               to 75 employees) to reimburse them for hurricane-related repairs.
               We visited five grant recipients, each of whom reported using the
               grants to pay for repairs or purchase equipment. According to a
               survey conducted by the contractors that implemented these grants,
               about half of the businesses receiving assistance estimated that
               they reopened at least 6 months sooner than if they had had to
               finance the repairs themselves. Fisherfolk received grants
               averaging about $1,900 to replace fishing gear and equipment and
               repair boats. Many of the farmers and fisherfolk also received
               technical assistance-for example, farmers were taught techniques
               for turning backyard yam production into commercial production.

               o  In Jamaica, USAID grants to poultry farmers allowed them to buy
               egg grading and cold storage equipment, which in turn will enable
               them to increase production and incomes. We visited six
               horticultural farmers who received grants from USAID consisting of
               a technology package, such as seedling nurseries, drip irrigation
               systems, or integrated pest management systems. According to USAID
               staff, they were able to provide an unexpectedly large number of
               grants (11,478 versus the revised target of 2,451) to small and
               medium-size enterprises because the implementing team decided to
               make several grants to individual beneficiaries as an incentive
               for beneficiaries to continue to adopt various new technologies
               and practices. According to a November 2005 USAID report,
               agricultural production for farmers who received grant and
               technical assistance through the program was estimated to have
               increased by 41 percent compared with pre-Hurricane Ivan
               production levels. USAID also conducted workshops that taught
               artisans how to improve and develop products, procure goods and
               services, and package and label their merchandise. In addition,
               fisherfolk in Jamaica received grants and disaster preparedness
               training. For example, training courses in "Safe Seamanship and
               Environmental Management" were delivered to 295 fisherfolk.

               o  In Haiti, USAID cleared streets of mud and improved urban
               drainage that had been damaged from flooding. In addition, USAID
               implemented a cash-for-work program that paid local workers about
               $2 per day for assisting with various activities throughout the
               program, including road and schools repair, mud removal, and
               clearing of urban drains (see fig. 4). Further, USAID funded
               training in disaster preparedness and response that, according to
               a report by a USAID contractor, aimed to "raise disaster
               awareness, reduce risks, and prepare for contingencies in
               vulnerable local communities and municipalities." Among the topics
               covered were forming community emergency response teams,
               designating first responders to coordinate emergency activities,
               and developing risk management and mitigation plans.

               Figure 4: USAID-Supported Drainage Canal Cleanup in Haiti

               USAID initiated construction-related projects to repair or replace
               hurricane and storm-damaged structures in each of the three
               countries. However, USAID contractors did not complete a number of
               these projects, although USAID reduced its targets for many of the
               projects. According to USAID staff and contractors, rising costs
               in all three countries were a factor in USAID's decision to reduce
               construction targets. According to an April 2006 Regional
               Inspector General (RIG) audit of the Hurricane Ivan Program,9 the
               high cost of housing construction was due, in part, to the
               contractor's unfamiliarity with the local market, which led to the
               negotiation of unfavorable subcontracts. The report also indicated
               that the cost of houses financed by USAID in Grenada was 37
               percent to 49 percent higher than comparable houses built by the
               Grenadian Housing Authority; and, in Jamaica, USAID-funded houses
               were more than double the cost of houses built by the Jamaican
               government. In addition, in Haiti, USAID staff indicated that a
               detailed needs survey found that the costs of material and labor
               needed to make repairs had more than doubled since the initial
               estimates. Table 2 shows a selection of USAID's initial and
               revised construction targets and its completed activities, in
               Grenada, Jamaica, and Haiti as of December 31, 2005.

    USAID Began Many Construction-Related Projects but Did Not Complete All

    9USAID, Office of the Inspector General, Audit of USAID/Jamaica's
    Hurricane Recovery and Rehabilitation Activities, Audit Report No.
    1-532-06-004-P (San Salvador, El Salvador, April 2006).

    Table 2: USAID Key Construction-Related Recovery Activities in Grenada,
    Jamaica, and Haiti, as of December 31, 2005

                                                      Revised
                                                      targets
    Key                                             (as of           Completed
    construction-related   Initialtargets(January December   activities (as of
    recovery activities                     2005)    2005)  December 31, 2005)
    Grenada                                 1,675      650               1,100

    Houses repaired or                        150       55                   0
    rebuilt
                                                   3        5                   7
    New houses built
                                                  12       17                  20
    Tourist sites repaired
                                                   1        0                   0
    Schools repaired

    Community colleges
    repaired
    Jamaica                                 3,450      932                 762

    Houses repaired                           200      186                   0

    New houses built                          440      200                  66

    Sanitation and septic                     219       47                  46
    systems repaired
                                                   3        2                   2
    Primary schools and
    colleges repaired

    Teachers colleges
    repaired
    Haiti                                   32 km    32 km                   0

    Roads repaired                              0        2                   0

    Bridges constructed                        20       20                  13

    Schools repaired                        3,000      600                 476

    Houses repaired

    Source: GAO analysis of USAID data.

    Note: The table shows USAID's primary construction-related recovery
    activities in the three countries; the agency conducted other
    construction-related activities that are not shown.

    In Grenada and Jamaica, USAID negotiated 6-month extensions of the
    bilateral agreements with the respective host governments in December 2005
    and, subsequently, granted contractors extensions of varying lengths based
    on the expectation that they could complete activities by June 30, 2006.
    In Haiti, USAID granted the contractor an 18-month extension in September
    2005 to complete major infrastructure repair on a road and bridge;
    however, USAID officials managing the program said they expected to
    complete these activities by June 2006.10

    In Grenada and Jamaica, USAID's construction efforts have focused
    primarily on repairing and rebuilding houses and building new homes, and
    in Haiti, on repairing infrastructure, public facilities, and houses.
    Following are descriptions of several of USAID's construction-related
    projects.

               o  In Grenada, USAID is building 55 new houses on the sites of
               homes that had been destroyed by the hurricane. The new houses
               consist of lumber over a concrete slab and include septic systems
               and electrical connections. Of the 55 homes, 36 have an area of
               400 square feet and 19 have an area of 650 square feet, with the
               size of the house depending on the size of the household. We
               visited 11 housing construction sites in August 2005 and revisited
               five of them in December, at which time, for the most part,
               construction was just beginning. In addition, USAID has initiated
               repairs of houses, tourist sites, and schools, among other
               buildings (see fig. 5).

    10USAID reported that the extensions in all three countries imposed no
    additional program costs.

    Figure 5: USAID-Funded School Repair in Grenada

               o  In Jamaica, USAID is constructing 220-square-foot
               concrete-block houses in two sites provided by the Jamaican
               government. The Jamaican Office of National Reconstruction agreed
               to provide septic systems and electrical connections for the
               houses. Most of the beneficiaries are families whose houses were
               destroyed by the hurricane because they were close to the shore;
               the new housing sites are near the old sites but a safe distance
               from the shoreline. We visited the two sites in the early stages
               of construction and several months later, after construction had
               begun. As of January 2006, construction was well under way in the
               two communities, but none of the houses were complete.

               o  In Haiti, USAID funded the construction of a bridge and the
               repair of a national road that runs from Gonaives to Cap-Haitien.
               According to USAID's contractor implementing infrastructure
               activities, repairs to the road will have a significant impact on
               the local economy by restoring farm-to-market transportation and
               supporting USAID's other rehabilitation projects in the area.
               According to USAID staff, as of December 2005, 60 percent to 70
               percent of the road was completed.

               USAID's implementation and completion of recovery activities in
               Grenada, Jamaica, and Haiti within the 1-year time frame were
               hampered by several factors. Severe weather in 2005 delayed the
               progress of some activities, in particular the reconstruction of
               houses in Jamaica and infrastructure in Haiti. Coordination
               challenges in Grenada and Jamaica contributed to delays in the
               implementation and completion of program activities. In addition,
               USAID contractors encountered various construction-related
               challenges, such as shortages of materials and labor, and
               difficulty in fulfilling USAID requirements. Haiti faced continued
               security challenges that limited access to recovery sites,
               consequently delaying progress.

               Hurricanes and heavy rains in 2005 affected the progress of USAID
               reconstruction and recovery activities in Jamaica and Haiti. In
               Jamaica, two hurricanes during the summer of 2005, as well as
               heavy rain in October and November, contributed to delays in
               housing reconstruction and some agriculture activities, including
               the training of farmers. In Haiti, a heavier than usual rainy
               season delayed some USAID construction activities. Some structures
               that protected ongoing work on riverbank repair and irrigation
               pumps were washed away, and protective dikes had to be rebuilt.
               The heavy rain also damaged roads in many of the project areas,
               making it difficult to transport construction materials and field
               staff.

               USAID faced several coordination challenges in Grenada, owing in
               part to the agency's lack of a permanent presence in the country,
               which affected its ability to implement recovery activities. In
               Jamaica, USAID encountered challenges in coordinating with the
               government, which negatively affected its ability to complete new
               housing.

               o  Coordination challenges in Grenada. Grenada lacked a central
               coordinating agency immediately following the hurricane to
               facilitate disaster recovery within the country. Because USAID has
               no mission in Grenada, staff and contractors had to work with
               various government ministries to initiate the recovery process. To
               address the lack of a central agency, USAID and other donors
               provided funds to help Grenada establish the Agency for
               Reconstruction and Development to coordinate donor hurricane
               recovery efforts; however, establishing the agency took several
               months, contributing to delays in certain activities, such as
               developing criteria for, and identifying, beneficiaries to receive
               housing repairs and reconstruction.

               o  Coordination challenges in Jamaica. The government of Jamaica
               did not complete certain construction activities as agreed with
               USAID, delaying USAID's completion of new houses. Jamaica's Office
               of National Reconstruction (ONR), established by the government to
               coordinate Hurricane Ivan recovery activities, verbally agreed to
               provide, by December 31, 2005, concrete bases and install water,
               roads, and drainage infrastructure at the two sites selected for
               new USAID housing construction. However, USAID did not sign a
               memorandum of agreement with the Jamaican government that clearly
               designated the construction responsibilities of each party and
               deadlines for completion.11 According to USAID officials and our
               observations during site visits, ONR made slow progress in
               fulfilling its part of construction activities and as of January
               2006 had not installed electricity and septic systems, although
               USAID's construction of many houses was close to completion. As of
               March 2006, ONR had not completed the construction activities that
               it had agreed with USAID to complete by December 31, 2005.

               USAID contractors encountered several challenges that slowed the
               agency's implementation and completion of construction projects in
               all three countries. These challenges included shortages of
               materials, USAID's policies regarding land titles and bank
               guarantees, and difficulties working with nongovernmental
               organizations (NGO) and subcontractors.

               o  Materials shortages. In Grenada, disruptions following the
               hurricane, as well as the island's relatively remote location, led
               to shortages of construction materials that periodically delayed
               housing repairs and new housing construction. According to USAID,
               obtaining building materials in Grenada became more challenging
               following Hurricane Emily in 2005. In Jamaica, according to USAID,
               increased duties on imported cement, heavy rains that soaked the
               cement quarries, and a labor strike that occurred in the country's
               only cement factory led to shortages that delayed housing repairs
               and construction. As of March 2006, USAID reported that
               construction in Jamaica continued to be slowed by a shortage of
               cement because the production site that supplies the region shut
               down after producing low-quality cement.

               o  Difficulty in establishing land titles. In Grenada,
               difficulties in establishing land title or ownership caused
               construction delays. A USAID housing contractor in Grenada told us
               that although it originally identified 400 to 500 prospective
               beneficiaries who met selection criteria established by the
               Grenadian government, many of these people lacked the land titles
               or proof of ownership, which USAID required of new-housing
               beneficiaries.12 Because the process of verifying ownership was so
               time consuming, the contractor eventually ran advertisements
               soliciting respondents who met the selection criteria and had
               proof of land ownership.

               o  Delays in obtaining bank guarantees. In Haiti, delays
               encountered by contractors seeking bank guarantees contributed to
               implementation delays of some construction projects. USAID staff
               in Haiti explained that the agency requires construction
               contractors to provide a bank guarantee in order to receive
               advance disbursements to buy materials and pay for labor, which
               USAID officials said is common commercial practice. However,
               Haiti's economic situation made it difficult for local contractors
               to obtain bank guarantees, even when the contractors were
               reputable and had a valid contract with an international
               organization. Because contractors could not begin work without the
               guarantees, some construction activities were delayed. For
               example, according to USAID officials, one highway construction
               contractor lost a month and a half of work time and another
               contractor lost 2 months while obtaining bank guarantees.

               o  NGO-related and subcontractor challenges. In Grenada,
               contractors encountered challenges in working with local NGOs and
               subcontractors. The implementing contractor in Grenada relied on
               NGOs to help identify people who met government criteria to
               receive housing support. However, according to the contractor, the
               NGOs had difficulty quickly selecting beneficiaries and, as a
               result, housing construction was delayed. In Jamaica, USAID worked
               with NGOs to perform housing repairs. According to USAID staff, it
               was difficult to attract NGOs that could fulfill the agency's
               documentation and reporting requirements in order to receive
               grants for the housing repairs. In addition, according to an April
               2006 RIG report, the sole subcontractor hired to build houses
               performed poorly, which also contributed to construction delays.

               In Haiti, kidnappings and continued violence in areas affected by
               the tropical storm presented security challenges that disrupted
               USAID's recovery work. According to USAID officials, most security
               issues that delayed program activities occurred in Haiti's
               capital, Port-au-Prince, where frequent kidnappings and violence
               made the port zone extremely dangerous. In addition, attacks on
               port officials prompted them to strike for better security, and
               sometimes delayed distribution of materials. USAID officials told
               us that the lack of security required USAID's contractors to take
               precautionary measures, such as daily monitoring of the security
               situation, and invest additional resources to protect staff and
               activity sites before undertaking activities. In addition,
               security concerns led to the temporary evacuation of most
               direct-hire USAID staff from Haiti during the summer of 2005.
               Security concerns also limited USAID staff's and contractors'
               access to project sites and ability to provide assistance in
               certain areas. For example, U.S. embassy security policies
               required special approval for travel to Gonaives-one of the areas
               most affected by the tropical storm and a target for USAID
               assistance-because of continued violence there.

               USAID has not issued recovery and reconstruction program guidance
               that incorporates lessons learned from previous programs; as a
               result, USAID staff were challenged to find information to guide
               the design and implementation of the Hurricane Ivan Program,
               leading to an ad hoc design process and implementation delays. In
               addition, although it applied some lessons learned from its
               Hurricane Mitch and other past programs, USAID did not apply
               lessons and recommendations regarding time frames and staffing,
               and as a result, USAID staff tasked with managing the Caribbean
               disaster recovery programs faced challenges similar to those
               encountered in prior programs. USAID staff and contractors stated
               that they are currently recording lessons learned from the
               Hurricane Ivan and Tropical Storm Programs.

               Although USAID has managed several large disaster recovery and
               reconstruction programs since 1999,13 USAID has not provided
               guidance specific to these programs that includes lessons learned
               from previous programs. USAID has issued guidance for OFDA
               emergency assistance14 that serves as a reference both for OFDA
               staff and for the private and public organizations that work with
               OFDA in providing emergency assistance. However, this guidance
               does not address the design and implementation of the recovery and
               reconstruction activities that USAID provides following OFDA's
               emergency response. In addition, the agency has not issued
               guidance that incorporates lessons learned from designing and
               implementing its prior recovery and reconstruction programs. For
               example, for our 2002 report on USAID's assistance after
               Hurricanes Mitch and Georges,15 USAID staff and other federal
               agencies involved in the recovery efforts in Latin America
               provided us with some lessons learned and ideas for improving the
               delivery of future disaster recovery assistance, such as the need
               to establish accountability mechanisms as part of program design,
               hire firms to provide technical oversight, and develop
               fixed-amount reimbursable contracts. Although USAID recorded some
               lessons learned from its Hurricanes Mitch and Georges recovery
               program, this document, unlike its OFDA guidance, has remained in
               draft form since 2002, has not been formally issued or approved by
               the agency, and may not be readily available to all staff.16

               USAID staff assigned to manage the Hurricane Ivan Program, who did
               not have prior experience in managing recovery and reconstruction
               activities, reported that the lack of guidance and access to
               lessons learned created challenges in planning and managing a wide
               range of activities. According to USAID staff designing the
               Hurricane Ivan Program, the lack of ready access to lessons
               learned from previous recovery and reconstruction programs
               resulted in an ad hoc approach to planning recovery activities.
               USAID headquarters officials told us that no formal agency
               guidance was available to assist them in planning the recovery
               effort; consequently, they had to search for documents and contact
               staff involved in previous USAID disaster recovery efforts to
               understand how previous programs were implemented.

               Officials at USAID headquarters told us that some program planning
               during disaster recovery situations is by necessity country
               specific and based on the political, economic, and disaster
               situation in the affected country. However, a USAID official
               stated that operational guidance would have facilitated the design
               process and that ready access to lessons learned could have
               prevented some mistakes. For example, if USAID officials had had
               access to lessons learned regarding likely increases in
               postdisaster demand for construction materials and labor, it might
               have helped them to establish more realistic targets for
               activities to be achieved within a 1-year time frame. With regard
               to construction and repair, important lessons from prior USAID
               disaster recovery programs include the need to account for the
               difficulties involved with hiring and supervising contractors
               unfamiliar with USAID requirements, selecting beneficiaries and
               verifying land titles.

               In designing and implementing recovery efforts in Grenada,
               Jamaica, and Haiti, USAID applied some lessons from previous
               disaster recovery programs. However, the agency did not apply
               lessons and recommendations regarding time frames and staffing for
               recovery programs. As a result, USAID staff tasked with managing
               the Caribbean disaster recovery programs faced challenges that
               could have been avoided if they had had access to lessons learned
               from prior programs; in addition, staffing issues remain
               unaddressed.

               Despite lacking ready access to lessons learned, USAID
               headquarters officials that designed the recovery programs gained
               access to draft documents that they said allowed them to apply
               some lessons learned from USAID's Hurricane Mitch recovery
               program. For instance, referring to lessons regarding
               accountability and sustainability, officials involved the Regional
               Inspector General to ensure that appropriate accountability
               mechanisms were in place and incorporated the concept of "build
               back better," such as rebuilding hurricane-affected infrastructure
               to better withstand future natural disasters. According to USAID,
               the team implementing business, agriculture, and training
               activities in Jamaica followed lessons learned from Hurricane
               Mitch regarding hiring contractors with proven track records.
               USAID staff in Haiti also reported that some lessons learned from
               the Hurricane Georges recovery program, which included projects in
               Haiti, had been incorporated into their program's design,
               including

               o  simplifying the task order approval process for hiring
               contractors,

               o  working with community-based organizations to implement
               recovery activities, and

               o  hiring monitoring firms to assist with technical and financial
               oversight of program activities.

               In agreeing to a 1-year time frame for the Hurricane Ivan and
               Tropical Storm Programs, USAID may have limited the impact and
               sustainability of some activities and did not take into account
               lessons learned from the Hurricanes Mitch and Georges effort.
               According to OMB officials responsible for foreign affairs
               programs, the 1-year time frame was developed to speed its
               completion of recovery activities relative to previous USAID
               disaster recovery efforts and, in response to concerns expressed
               by members of Congress that these emergency supplemental resources
               be expended in a timely manner, to assist with recovery efforts
               and not divert funds to regular long term development programs.17
               However, our recent interviews with USAID staff and contractors,
               as well as previous GAO work, suggests that in agreeing to the
               December 31, 2005, deadline, USAID faced a trade-off in trying to
               complete a broad spectrum of activities within the 1-year time
               frame and ensure that activities supported through these programs
               have the intended impact in helping beneficiaries recover,
               rebuild, and find jobs in the postdisaster environment and can be
               sustained by host government staff after the programs end.

               o  In Grenada, USAID provided training in various trades and also
               paid participants a stipend while they attended 6-week courses.
               However, in a later evaluation of this program component, the
               contractors conducting the training reported that participants had
               commented that 6 weeks was too short to fully develop some skills,
               such as those needed for construction; however, because the
               contractor did not assess the training until the end of the 1-year
               time frame, they were unable to modify the training design. The
               contractor reported that a longer program time frame, such as 18
               months, would have allowed them to assess the training's
               results-for instance, by tracking the number of people that found
               jobs after being trained-and adjust the design to increase its
               impact. The contractors also found that the time frame limited
               their ability to assess the results of training in hotel services,
               because many of the islands' hotels were still closed for repair
               during the year that training was provided. We interviewed 19
               persons who participated in USAID's skills training in Grenada and
               found that fewer than half were employed 3 to 6 months after
               completing it.18

               o  In Haiti, USAID officials said that although they tried to
               select projects that fit the needs of affected areas, the 1-year
               time frame had implications for the sustainability of some program
               activities. For example, the officials explained that their
               activities included hillside stabilization and the development of
               an early warning system to be transferred to the government of
               Haiti at the program's conclusion. However, the USAID officials
               said that 1 year was not enough time to implement and test some
               activities, and train government staff to take them over. USAID
               officials said that 2 years would have been a more reasonable time
               frame.

               Our prior assessments of the agency's Hurricane Mitch recovery
               program highlighted some of the trade-offs in trying to design
               activities that are sustainable and can be completed within a
               short time frame. In our 2002 assessment of USAID's administration
               of disaster recovery assistance after Hurricanes Mitch and
               Georges,19 we reported, based on responses from USAID staff and
               other agencies involved in providing the assistance, that "the
               December 31, 2001, deadline was a major factor in how they
               planned, designed, and implemented their disaster recovery
               activities, and it also affected the extent to which
               sustainability could be built into the program." For example, one
               agency involved in the Mitch recovery reported that the deadline
               limited project sustainability because it did not allow enough
               time to complete training for local entities. Another agency said
               future projects should have follow-on activities to assess the
               implementation of technical guidance and training provided. USAID
               officials in the Dominican Republic acknowledged that they
               selected some activities because they knew they could complete
               them by the program deadline, despite recognizing that other
               activities might have achieved greater sustainability.

               USAID did not adopt several prior recommendations that could have
               helped it to more rapidly hire and transfer staff in response to
               recovery and reconstruction needs, and as a result of hiring
               Wingerts Consulting to quickly staff the Hurricane Ivan Program in
               Grenada and Jamaica, the agency encountered additional challenges.
               In our 2002 report,20 we observed that USAID did not have the
               "surge capacity" to quickly design and initiate a large-scale
               infrastructure and development program with relatively short-range
               deadlines (2.5 years) while providing emergency relief and initial
               reconstruction assistance and managing its regular development
               program. Based on these findings, we recommended that USAID
               develop and implement procedures that would (1) allow it to
               quickly reassign key personnel in postemergency and postcrisis
               situations and (2) allow missions to hire personal services
               contractors to augment staff on an expedited basis.21 In addition,
               USAID's draft document outlining lessons learned from its
               Hurricane Mitch program indicates that a shortage of qualified
               engineering and technical staff constrained the implementation of
               the program; the document recommends designating an official to
               identify staffing needs quickly and take action to address them.22
               USAID agreed with the recommendations in our 2002 report but as of
               April 2006 had not taken steps to respond to them; it also had not
               implemented the recommendations in its 2002 draft lessons-learned
               report. In addition, we recently reported that USAID had not
               staffed several positions that it considered critical to essential
               technical oversight of its tsunami reconstruction programs in
               Indonesia and Sri Lanka, indicating that staffing these types of
               programs remains a challenge.23

               USAID decided to hire Wingerts Consulting to manage and oversee
               the program in Grenada, where USAID has no permanent presence, and
               assist with oversight in Jamaica. According to USAID's Mission
               Director in Jamaica and other staff, factors influencing the
               decision included the following:

               o  The mission needed assistance in initiating recovery activities
               and personnel with technical skills to oversee disaster recovery
               activities, particularly construction.

               o  The agency's process for hiring personal services contractors
               can take up to 6 months, and given the 1-year time frame, staff
               were needed quickly.

               o  Hiring a consulting firm provided the agency the flexibility to
               acquire short-term staff with skills needed for specific program
               activities as well as to replace staff when their skills were no
               longer needed.

               According to USAID's Regional Inspector General, USAID staff, and
               contractors, the agency's decision to hire Wingerts Consulting to
               oversee the program in Grenada and Jamaica led to additional
               challenges.

               o  In its April 2005 report, USAID's RIG found that Wingerts's
               roles and responsibilities in monitoring the program's
               implementation had not been clearly defined, making it difficult
               for contractors to implement the program, and for USAID staff to
               manage program activities. USAID subsequently refocused Wingerts's
               responsibilities primarily on providing technical oversight and
               supporting the USAID permanent staff responsible for various
               program components in Grenada and Jamaica. It took two months
               after the Wingerts contract was signed to more clearly define each
               party's roles and responsibilities.24

               o  USAID staff and contractors told us that they were uncertain
               about Wingerts's role in managing the program. In addition,
               according to USAID contractors, the added layer of oversight that
               Wingerts provided sometimes created tension and confusion because
               contractors were still required to report to USAID staff
               overseeing their program activities in Jamaica and Barbados. In
               its April 2006 follow-up audit, the RIG noted that the Wingerts
               oversight model was problematic in that USAID's other contractors
               were not accustomed to having Wingerts perform functions that
               USAID staff would normally perform, and as a result, working
               relationships were uncomfortable.25

               Although USAID staff and contractors reported some challenges in
               working with Wingerts, USAID officials in Jamaica noted that the
               mission has benefited by engaging a contracting firm to fulfill
               specific functions, rather than hiring staff. According to USAID,
               by using a contractor to provide a range of management and
               oversight support, the mission created a structure that was highly
               flexible and allowed for quick responses to changing needs
               throughout the program. USAID also noted that in Grenada, where
               USAID has no presence, the contracting firm served an essential
               function of handling day-to-day interaction with the government in
               addition to managing the $8 million allocated for direct
               government support. While the use of Wingerts provided USAID with
               flexibility, USAID staff and the U.S. embassy in Grenada said that
               temporarily relocating USAID permanent staff or personal services
               contractors to manage recovery efforts in the country would have
               been more efficient than using the management firm.

               As part of its internal evaluation of the Hurricane Ivan
               reconstruction, USAID staff and contractors are recording lessons
               learned, including an assessment of the program's economic impact
               and whether the program helped the countries to "build back
               better" and prepare for future disasters. The staff and
               contractors told us in December 2005 that they would incorporate
               this information into their final program summary, which they
               expected to complete in May 2006. Staff at the Haiti mission told
               us that they were recording lessons learned from the Tropical
               Storm Program disaster mitigation activities and that overall
               lessons learned will be included in the final program report.
               However, we have not yet learned whether USAID headquarters
               intends to incorporate lessons learned from the Caribbean programs
               into guidance that would be available to staff implementing future
               recovery and reconstruction programs. (See app. II for our summary
               of lessons learned reported by U.S. officials and contractors
               involved in the Hurricane Ivan and Tropical Storm Programs as well
               as for lessons culled from our and USAID's reviews of its previous
               disaster recovery programs.)

               Disaster recovery and reconstruction assistance is an important
               component of USAID's development assistance portfolio, providing a
               bridge between its emergency relief efforts and its long-term
               development assistance. In responding to the Caribbean disasters,
               USAID provided a wide range of recovery and reconstruction
               support. However, despite having administered several large-scale
               disaster recovery programs in Latin America, the Caribbean, and
               Asia since 1999, USAID has not issued guidance for recovery and
               reconstruction programs that incorporates lessons learned from its
               prior efforts, leading to challenges in designing and implementing
               the recovery and reconstruction activities discussed in this
               report. In addition, although USAID and GAO have previously
               documented USAID's difficulties in quickly staffing its recovery
               and reconstruction programs and have made recommendations to
               assist USAID in correcting these problems, these issues remain
               unaddressed. As a result, the agency is likely to be unprepared to
               rapidly recruit and mobilize technically skilled staff for its
               next disaster recovery program.

               To better facilitate USAID's ability to design and implement
               future disaster recovery programs and address its previously
               documented recurring staffing challenges, we recommend that the
               USAID Administrator take the following two actions:

               o  Develop disaster recovery and reconstruction program guidance
               that incorporates lessons learned from the Hurricane Ivan Recovery
               and Reconstruction Program and Tropical Storm Jeanne Recovery
               Program as well as previous disaster recovery programs.

               o  Revise staffing procedures to allow the agency to more quickly
               reassign or hire key personnel, either to augment staff
               responsible for disaster recovery efforts in countries with a
               USAID mission or to manage efforts in countries where USAID does
               not maintain a permanent presence.

               We provided a draft of this report to USAID, the Department of
               State and OMB. We received a formal comment letter from USAID (see
               app. III), in which they agreed with our recommendations. USAID
               and OMB provided technical comments that we incorporated into the
               report, as appropriate. The Department of State had no comments.

               USAID agreed with our first recommendation and indicated it has
               established an agency task force for complex emergency and
               stabilization responses to allow it and other U.S. government
               agencies to undertake a structural approach based on past
               experience to provide an integrated and effective response to
               future disasters. Further, as part of its technical comments,
               USAID indicated that the Jamaica Mission has taken steps to
               document a draft list of lessons learned that will be included in
               the final report at the conclusion of the Hurricane Ivan program.
               USAID said these reports will be shared with USAID officials in
               Washington for developing guidelines for future disaster recovery
               programs and for inclusion in USAID's Center for Development and
               Evaluation databases.

               USAID also agreed with our second recommendation. The agency
               acknowledged that recent large-scale natural disaster and complex
               emergencies, including the Asian tsunami and conflicts in
               Afghanistan and Iraq, have revealed glaring gaps in the U.S.
               capacity to respond effectively, particularly for stabilization
               and reconstruction programs. In technical comments, USAID's
               Jamaica mission noted that its use of a management and oversight
               firm provided a highly flexible structure to respond quickly to
               changes in staffing needs throughout the program; however, USAID
               further recommended that any adjustment to the agency's policy
               address ongoing urgent needs to change staffing under projects
               with a short time horizon. To respond to staffing challenges,
               USAID has proposed the development of a "civilian surge capacity,"
               which, if approved and funded, would give USAID over a 3-year time
               period to develop short- to long-term staff on an as-needed basis,
               focusing on skill sets that USAID has identified as lacking
               sufficient capacity.

               We are sending copies of this report to interested congressional
               committees as well as the Administrator, USAID; Acting Director,
               OMB; and the Secretary of State. We will also make copies
               available to others upon request. In addition, this report will be
               available at no charge on the GAO Web site at http://www.gao.gov.

               If you or your staff have any questions about this report, please
               contact me at (202) 512-3149 or gootnickd@gao.gov. Contact points
               for our Offices of Congressional Relations and Public Affairs may
               be found on the last page of this report. GAO staff who made major
               contributions to this report are listed in appendix IV.

               Sincerely yours,

               David Gootnick Director International Affairs and Trade

               We were asked to periodically monitor the delivery of assistance
               under USAID's Hurricane Ivan Recovery and Reconstruction Program
               (Hurricane Ivan Program) and Tropical Storm Jeanne Recovery
               Program (Tropical Storm Program). In this report, we (1) review
               the recovery and reconstruction activities in Grenada, Jamaica,
               and Haiti, including the status of activities as of December 31,
               2005; (2) identify factors that affected USAID's ability to
               implement and complete the programs within the 1-year time frame;
               and (3) assess USAID's use of guidance and application of lessons
               learned from similar previous programs as well as its efforts to
               draw lessons from the current programs.

               To determine the status of the programs, we initially reviewed the
               supplemental appropriation language passed in 2004 and USAID
               documents that outline special objectives for each country and
               interviewed program officials regarding program goals. We also
               made three monitoring trips to Grenada, two trips to Jamaica, and
               one trip to Haiti.1 The information on foreign law in this report
               does not reflect our independent legal analysis but is based on
               interviews and secondary sources. After our initial monitoring
               trip to Haiti, our ability to travel there was curtailed when,
               because of security concerns, the U.S. Department of State
               restricted country access to emergency personnel only. Therefore,
               after the initial trip, we reviewed monthly reports and held
               periodic conference calls with USAID staff and contractors to
               discuss the status of the recovery program in that country. During
               our monitoring trips to Grenada and Jamaica, we conducted document
               reviews and held interviews with USAID staff as well as
               contractors to discuss program progress, determine compliance with
               established requirements set by audit entities, and learn how
               funding allocation decisions were made and tracked. We also met
               with private contractors and subcontractors, and host government
               officials involved in the recovery efforts to discuss program
               implementation and progress. In Grenada, we interviewed 19
               attendees of the skills training program to get a sense for the
               skills that were taught and the extent to which the training
               provided employment opportunities for the attendees. In addition,
               we conducted field visits to various project sites to observe the
               progress of activities and verify the extent to which objectives
               and timelines were being met. We visited a random selection of 80
               project sites in Jamaica and Grenada, and 9 project sites in Haiti
               that were not randomly selected due to security restrictions and
               our inability to visit following our initial information gathering
               trip. (See table 3.)

               Table 3: Number and Types of Activities at Project Sites GAO
               Visited in Grenada, Jamaica, and Haiti

               Source: GAO.

               aWe visited 11 sites in August 2005 and revisited 5 of these sites
               during December 2005 to assess progress.

               bWe randomly selected housing repair sites, which then were used
               by USAID to coordinate visits based on their proximity to
               Kingston.

               cTwo of these sites were not randomly selected.

               dSite visits in Haiti were not randomly selected.

               We assessed factors affecting the implementation and completion of
               program activities by reviewing USAID monthly reports and
               interviewing USAID staff, contractors, and host government
               officials overseeing the various program activities during our
               monitoring trips to Grenada and Jamaica. For Haiti, during our
               periodic conference calls, we discussed implementation and
               completion challenges with USAID staff and contractors with
               oversight responsibility for the various program components.

               To assess USAID's application of lessons learned from previous
               disaster recovery programs, we reviewed reports from prior USAID
               recovery efforts and interviewed agency officials in Washington,
               D.C., Grenada, Jamaica, and Haiti as well as contractors. We
               reviewed documentation on lessons learned that USAID officials had
               compiled following the Hurricane Mitch recovery program in Central
               America. We further reviewed reports on disaster relief from
               various international organizations, such as the World Bank, that
               detailed lessons learned from other disaster recovery efforts. Two
               members of our audit team also attended a Caribbean Basin
               conference that highlighted disaster preparedness and mitigation
               strategies, including strategies for funding reconstruction,
               whether building codes should be regionally or nationally applied,
               and how the private sector can contribute to effective disaster
               preparedness and mitigation strategies. Finally, we collated
               lessons learned in a separate appendix (see app. II) based on
               interviews with staff and contractors administering the Hurricane
               Ivan and Tropical Storm Jeanne Programs and lessons documented in
               previous GAO and USAID assessments of disaster recovery programs
               in Latin America, the Caribbean, and Asia.

               To ensure that appropriate internal controls were established to
               account for program funds, we interviewed USAID financial
               management staff in Jamaica and reviewed program documents that
               described USAID's mechanisms for ensuring accountability. We also
               coordinated with USAID's Regional Inspector General to determine
               the Inspector General's involvement with establishing internal
               controls and monitoring how well USAID maintained controls
               throughout the program.

               For this report, we relied primarily on USAID's data reported to
               date in the agency's monthly reports on expenditures and progress
               in each country. We assessed the reliability of this data by (1)
               interviewing USAID program staff and its contractors to determine
               how data were collected and reported and what quality assurance
               mechanisms were in place, (2) reviewing a sample of USAID's
               program files as well as its contractors' files in Grenada and
               Jamaica, and (3) collaborating with USAID's Regional Inspector
               General on the reliability of expenditure data. During our trip to
               Grenada in August 2005, we found errors and a misrepresentation of
               data in USAID's monthly reports, which we reported to USAID staff
               and contractors responsible for the collating the data. USAID
               corrected the data errors and made changes to certain indicators
               that we had found to be misleading. Overall, we found that USAID's
               data as corrected were sufficiently reliable for the purposes of
               addressing our reporting objectives. We conducted our work from
               March 2005 through May 2006 in accordance with generally accepted
               government auditing standards.

               We reviewed USAID's recovery efforts following the 1998 hurricanes
               in Latin America and 2001 earthquakes in El Salvador, as well as
               its ongoing efforts in response to the 2004 tsunami in Asia.
               Following is a compilation of lessons reported by U.S. officials
               and contractors involved in USAID's Hurricane Ivan Recovery and
               Rehabilitation Program and Tropical Storm Jeanne Recovery Program
               as well as lessons from GAO and USAID reviews of previous disaster
               recovery programs. Although this list is by no means exhaustive,
               it summarizes some common lessons and examples of USAID's efforts
               to address disaster recovery challenges and is intended as a tool
               for future disaster recovery programs.

               o  Set appropriate time frames. Disaster recovery program time
               frames should be based on a needs assessment of the activities
               that best aid recovery and should be undertaken in phases, if
               necessary. In our 2002 report on USAID's Hurricane Mitch and
               Georges recovery program, various agency officials said the
               program's time frame influenced how planning, design, and
               implementation of recovery activities affected program
               sustainability. For example, the Dominican Republic mission
               reported that it selected some activities it knew could be
               completed by the expenditure deadline despite recognizing that
               other activities may have achieved greater sustainability,
               especially those with more cost sharing with the host government
               and other implementing organizations. Other agency officials
               involved in the recovery suggested that future efforts include
               time for follow-on activities, such as training, to ensure better
               sustainability. USAID staff and contractors implementing the
               Caribbean programs' activities discussed in this report stated
               that the 1-year time frame influenced the types of activities they
               selected and may have limited the sustainability of some projects.
               One contractor explained that in a previous program, activities
               were divided into different phases (e.g., immediate recovery
               activities were implemented in less than 1 year, while road
               construction was given a 1.5-year time frame and railroad
               reconstruction was planned for 2 years but completed in 3). In the
               Hurricane Ivan Program, USAID was able to identify beneficiaries
               for business and agriculture recovery grants and expend the
               majority of program funds allocated to these activities within a
               1-year time frame, while reconstruction of houses in Jamaica and
               Grenada required an extension several months beyond December 31,
               2005. Based on their experience in the Hurricane Mitch and Georges
               recovery program, USAID officials designing and implementing the
               Tropical Storm Program in Haiti said that program staff should not
               attempt to complete activities in an arbitrarily short time frame.
               USAID staff and contractors we interviewed stated that 15 to 18
               months is a more reasonable time frame for reconstruction
               activities.
               o  Conduct thorough cost assessments. USAID should ensure that
               initial cost estimates are based on specific information about
               site conditions. Due to inadequate estimates in the Caribbean
               programs regarding the cost of labor and materials for
               reconstruction activities, USAID originally targeted an
               unrealistically high number of activities that later had to be
               reduced. Part of this lesson includes anticipating increases in
               construction materials and labor due to increases in demand for
               construction after a disaster. For example, in Indonesia, USAID's
               initial cost estimates for a road to be rebuilt after the tsunami
               were based on limited information about site conditions. Because
               of the uncertainty about the site conditions, the Army Corps of
               Engineers included a 20 percent contingency in its cost estimate.
               However, actual costs may still exceed this estimate because plans
               for the road have changed.

               o  Look beyond restoration of the status quo and aim to improve
               infrastructure and livelihood opportunities. In the planning of
               Hurricanes Mitch and Georges recovery efforts, the U.S. and its
               international partners agreed on an approach that would not simply
               replace what was destroyed, but would "build back better" with a
               lasting impact. This approach was adopted in the Caribbean
               programs. For example, in the rehabilitation of schools, USAID
               repaired schools to their pre-Ivan condition or better in
               compliance with the building codes and hurricane resistance
               standards. In Haiti, USAID also provided household restoration
               grants as well as created a cash-for-work program to help those
               affected by the storm to rebuild their livelihoods and decrease
               their vulnerability to future floods.

               o  Establish a host government agency to coordinate the
               international response to the disaster. USAID worked with the
               governments of Grenada and Jamaica to establish independent
               coordination entities separate from those countries' ministries to
               facilitate the recovery process and streamline working with the
               government. A central agency to coordinate disaster recovery
               between donors is important for ensuring that activities are not
               duplicated; however, USAID and other donors should take into
               account the time needed to establish these agencies when
               developing implementation schedules and setting program completion
               time frames. For example, USAID reported that the Agency for
               Reconstruction in Development in Grenada, funded by USAID and
               other donors, did not take over coordination responsibilities
               until March 2005, about 3 months into USAID's program. In Jamaica,
               USAID coordinated with the Office for National Reconstruction to
               identify recipients for recovery assistance as well as to build
               new housing communities. The Indonesian government established the
               Rehabilitation and Reconstruction Agency to coordinate the
               international response to the tsunami. The entity has produced a
               master plan for reconstruction that it has used to attempt to
               control and track organizations involved in reconstruction.

               o  Channel assistance through organizations and contractors with
               proven track records and a history of working in the affected
               country. USAID officials administering Haiti's Tropical Storm
               Jeanne Recovery Program reported that they selected contractors
               that had a history of working there as a means of strengthening
               coordination and ensuring implementation of program activities.
               This was particularly critical given Haiti's security challenges
               and USAID's inability to travel to many of the project sites
               regularly. In El Salvador, USAID contracted with at least five
               private voluntary organizations that it had previously worked with
               to implement earthquake recovery projects. According to USAID
               officials, using organizations that have proven to be capable and
               reliable reduces the likelihood of misuse of funds and corruption.

               o  Involve community-based organizations in program
               implementation. Noting that this was a successful approach in
               Hurricane Georges, USAID officials in Haiti worked with
               community-based organizations in implementing the Tropical Storm
               Jeanne Recovery Program. For example, one contractor worked with
               local management committees it had worked with during a previous
               program in Gonaives several years before. These groups were one of
               the few functioning civil society organizations in Gonaives
               immediately after the flooding and served as program partners and
               liaisons on community issues, security, and sustainable
               maintenance efforts. Another contractor worked with already
               existing water user groups organized around irrigated parcels in
               the Plaine des Gonaives and Trois Rivieres areas. The use of
               community-based organizations also allowed the contractor to
               mobilize the local population rapidly to execute short-term
               employment generation activities, such as tertiary roads and
               ravine protection structures. In addition, school rehabilitation
               frequently was organized around parent and teacher groups that
               supported the school in preflood periods.

               o  Avoid overlap between host governments and community-based
               organizations to avoid inefficiencies. To avert potential future
               overlap with nongovernmental organizations in Sri Lanka during
               tsunami reconstruction, USAID participated in weekly meetings with
               the government coordinating entity and NGOs, among others, to
               designate responsibility for different geographic areas.

               o  Identify staffing needs quickly and designate someone to manage
               the staffing process. USAID officials involved in Hurricane Mitch
               recovery activities drafted lessons learned recommending that,
               when responding to disaster recovery, USAID mission and Washington
               officials need to quickly identify staffing needs and that an
               appropriate official should be charged with tracking staff issues
               to facilitate the response. For example, in our 2002 report of
               Hurricane Mitch and Georges, we reported that the number of USAID
               direct-hire staff in general, and contracts officers in
               particular, has declined and USAID had difficulty finding
               qualified personnel to manage the large-scale emergency program on
               an expedited basis. In the same report, USAID's Honduran mission
               reported serious constraints due to the absence of a contracts and
               grants officer needed to negotiate and sign agreements and ensure
               that implementation and acquisition mechanisms are in place. The
               mission in the Dominican Republic reported that the majority of
               staff hired for its reconstruction effort had no prior USAID
               experience and that implementation slowed as new staff learned the
               agency's management system. As stated earlier in this report, the
               lack of experienced staff was also a challenge in the Hurricane
               Ivan program.

               o  Create a mechanism to quickly hire staff for recovery and
               reconstruction programs. In addition, a draft document in which
               contractors assessed USAID's Hurricane Mitch program reported that
               lengthy personal service contract hiring practices added to
               staffing bottlenecks, and some USAID staff recommended that waiver
               authorities should be made available to hire staff quickly on a
               noncompetitive basis. In addition, the Honduras Mission stated
               that USAID needs to do a better job of immediately identifying
               staff with the skills needed for reconstruction activities rather
               than relying on staff within the mission or region. In the tsunami
               program, to establish technical oversight, USAID reassigned and
               hired experienced staff, such as engineers, and acquired
               additional technical expertise through interagency agreements but
               had difficulty filling some positions it considered critical to
               technical oversight.

               o  Provide disaster preparedness and mitigation training to
               communities. In Haiti, 222 participants in seven communities were
               trained in disaster preparedness and mitigation, including the
               designation of emergency responders and the development of local
               action plans focused on risk assessment, disaster mitigation, and
               preparedness. In Jamaica, fisherfolk received training in "Safe
               Seamanship and Environmental Management." USAID also developed
               training to ensure sustainability and provide local capacity
               building through a course on "General Safety and Survival at Sea,"
               which was taught to 60 participants from three local NGOs, in
               coordination with the Caribbean Maritime Institute. Participants
               received safety equipment and an emergency response guide
               developed for the fisheries sector, including specific measures to
               reduce vulnerability with regard to small boat safety, search and
               rescue, sinking vessels, fires, bad weather, and survival at sea
               under different distress situations.

               o  Ensure quality control of construction and follow building
               codes appropriate to type of disaster sustained. USAID has
               difficulty ensuring that contractors build houses correctly and
               completely. For example, in our review of the El Salvador
               earthquake program, we reported problems such as roof supports
               that were improperly connected to walls, and metal windows and
               doors that were not functioning properly. Following the GAO visit,
               USAID issued detailed procedures that Army Corps of Engineers
               Officials and contractors were required to complete following
               their work. USAID also conducted additional quality control
               training that contractors, NGOs, and other entities involved in
               implementing the program were required to attend. USAID officials
               stated that the training was useful in reinforcing the principle
               of "building back better" and that, following the training, the
               quality of construction improved. Contractors in the Hurricane
               Ivan program followed local building and hurricane resistance
               codes, including the use of hurricane straps and Caribbean
               Disaster Mitigation Standards for wood and concrete houses.

               o  Understand the local land tenure system. In El Salvador, many
               Salvadorans whose houses were destroyed had no legal proof that
               they owned the property on which their house had stood. Housing
               starts were delayed because contractors had to wait weeks for
               approvals to begin construction. The USAID contractor responsible
               for housing in Grenada also encountered challenges due to land
               title issues. The contractor told us that although it originally
               identified 400 to 500 prospective beneficiaries who met selection
               criteria established by the Grenadian government, many of these
               people lacked the land titles or proof of ownership that USAID
               required of new-housing beneficiaries. Because the process of
               verifying ownership was so time consuming, the contractor
               eventually ran advertisements soliciting respondents who met the
               selection criteria and had proof of land ownership.

               o  Establish memorandums of understanding or formal agreements if
               reconstruction efforts are shared with the host government. In
               Haiti, USAID officials established a memorandum of understanding
               with the government for road and bridge construction activities.
               Conversely, in Jamaica, USAID did not establish a memorandum of
               understanding with the government in its coordination for
               new-housing construction. According to USAID, when the Jamaican
               government did not fulfill its obligation to install electricity
               and septic systems and to provide other infrastructure for the
               housing communities, USAID had to grant extensions to complete
               activities that were impacted by the delays and, as a result,
               delayed the delivery of new housing to beneficiaries.

               o  Address warranties and liabilities for construction projects
               before building. Warranty and liability responsibilities should be
               detailed in the contract agreements and determined prior to
               construction. In the Hurricane Ivan Program, USAID did not
               determine who would fulfill warranty and defects liability
               responsibility early on in the program, and such issues were still
               being resolved, in some cases, after construction of schools and
               other buildings were already completed and the contractor
               considered the project closed.

               o  Coordinate with local industry boards and organizations to
               identify recipients and community leaders. USAID contractors in
               Grenada worked to improve tourism services after Hurricane Ivan
               left 50 percent of the persons previously working in this sector
               unemployed and another 40 percent underemployed. The contractor
               formed partnerships with several local tourism associations,
               including hotel, airport, taxi, and small-business organizations.
               The contractors developed skills training courses to improve
               hospitality and tourist services. For example, after some
               participants were trained in craft making, the contractors
               organized a "Buy Grenada" fair to showcase the participants' work.
               In addition, the contractors partnered with several
               community-based organizations to deliver training in small
               business management, food vending, ecotourism, and professional
               tour guiding.

               o  Coordinate with government for education or skills training.
               USAID's skills training program in Grenada provided needed income
               support and skills development, but was not designed in
               consultation with the government's Ministry of Education.
               Moreover, the government does not recognize the training
               certificates issued to participants. Also, contractors and
               participants recognized that the 6-week training period was not
               long enough to develop certain skills, such as construction, and
               that it would have made more sense to develop fewer, but longer,
               courses to adequately train participants.

               o  Establish accountability mechanisms. Concerns over public and
               private corruption due to the wide dispersion of activities
               following Hurricane Mitch influenced USAID to take extra
               precautions to safeguard program funds. USAID's Regional Inspector
               General (RIG) and GAO monitored the Hurricane Mitch and El
               Salvador earthquake reconstruction programs and briefed USAID
               staff as well as Congress on a regular basis on key issues that
               USAID needed to correct. In the Caribbean program, USAID involved
               RIG officials early in the design to ensure proper accountability
               mechanisms were established and audits were performed early in the
               program.

               o  Hire third-party monitoring firms. USAID officials in Haiti
               contracted with an engineering firm to monitor construction
               activities and with a financial management firm to validate
               performance reports, report on the quality of activities executed
               by the contractor, and identify problem areas, and ensure
               flexibility in implementation. USAID officials reported that the
               oversight and recommendations from the two firms have proven to be
               invaluable. Specifically, the engineering firm was instrumental in
               providing several good recommendations on urgent needs that had
               not been identified in the damage survey; additionally, the firm
               provided early warning on a number of occasions where work needed
               immediate correction and collaborated closely with the
               implementing firms and quickly gained their confidence for sound
               recommendations. It served as a capable arbiter on several
               disputes between implementers and their subcontractors. Both the
               engineering and financial firms served a critical function at a
               time when USAID direct hires were unable to travel freely in Haiti
               to monitor progress due to poor security. In its El Salvador
               earthquake recovery program, USAID required that a private
               accounting firm conduct a concurrent audit of a USAID-funded
               health clinic being implemented by AmeriCares, a U.S.-based
               private voluntary organization that provides medical supplies
               overseas. This was done because AmeriCares had no experience
               implementing a USAID-funded program and was working through a
               Salvadoran nongovernmental organization to carry out the
               construction.

               In Grenada and Jamaica, USAID also contracted engineering
               expertise to monitor the completion and quality of implementing
               contractors' construction activities. The USAID Mission in Jamaica
               obtained these services by augmenting the engineering staff of
               Wingerts Consulting. The work of the engineers engaged through
               Wingerts was similar to that typically performed by a USAID staff
               engineer, including monitoring and reviewing the processes
               utilized by the implementing contractor to assure reasonable
               costs, quality control, and delivery of a final product that is
               consistent with the expected results specified in the contract.
               According to USAID, the Wingerts staff served as an extension of
               the mission, given that the mission needed to move swiftly to
               implement construction and renovation activities and the mission
               did not have internal staff with sufficient expertise to
               effectively implement the activities under a short time frame. The
               engineers engaged by the Jamaica Mission through Wingerts worked
               collaboratively with USAID's technical staff and the implementing
               contractors to provide technical approval of contract award
               processes and certifications and to perform site visits and
               environmental monitoring during execution of construction
               contracts and grants.

               o  Conduct monthly progress reviews and provide interim reports.
               In its April 2005 report, the Regional Inspector General
               recommended that USAID staff responsible for the Hurricane Ivan
               Program monitor the program by maintaining a spreadsheet of target
               due dates for each activity and verify that all activities are
               completed on time. USAID provided monthly reports of its Caribbean
               recovery efforts that summarized the progress of program
               activities, challenges in implementing and completing activities,
               and the programs' expenditures to date. According to USAID
               officials responsible for the Hurricane Ivan Program, the
               contractor hired to assist with oversight, Wingerts Consulting,
               played a role in ensuring regular and timely progress reporting
               and program analysis, including capturing cross-country and
               cross-program implementation issues, and providing program-level
               financial analyses. USAID also reported that Wingerts conducted
               various site visits and served as a liaison between USAID's
               technical staff and implementing contractors to better assess the
               status of activities "on the ground" and report back to the
               mission, the bureau, and other stakeholders. USAID officials
               acknowledged that these reports might have been prepared by
               mission staff rather than Wingerts if USAID had a mission in
               Grenada or had sufficient staff in Jamaica to compile and produce
               the reports.

               David Gootnick, (202) 512-3149 or gootnickd@gao.gov

               In addition to the contact named above, Phillip Herr (Assistant
               Director), Francisco Enriquez, Adrienne Spahr, Reid Lowe, Shana
               Wallace, and Mark Dowling made key contributions to this report.

               Foreign Assistance: USAID Has Begun Tsunami Reconstruction in
               Indonesia and Sri Lanka, but Key Projects May Exceed Initial Cost
               and Schedule Estimates. GAO-06-488 . Washington, D.C.: April 14,
               2006.

               Foreign Assistance: Strategic Workforce Planning Can Help USAID
               Address Current and Future Challenges. GAO-03-946 . Washington,
               D.C., August 22, 2003.

               Foreign Assistance: USAID's Earthquake Recovery Program in El
               Salvador Has Made Progress, but Key Activities Are behind
               Schedule. GAO-03-656 . Washington, D.C.: May 15, 2003.

               Foreign Assistance: Disaster Recovery Program Addressed Intended
               Purposes, but USAID Needs Greater Flexibility to Improve Its
               Response Capability. GAO-02-787 . Washington, D.C.: July 24, 2002.

               Foreign Assistance: AID Strategic Direction and Continued
               Management Improvements Needed. GAO/NSIAD-93-106 . Washington:
               D.C.: June 11, 1993.

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        Various Factors Slowed USAID's Implementation and Completion of Program
                                       Activities

    Severe Weather Delayed Program Activities in Jamaica and Haiti

    Coordination Challenges Hindered USAID's Implementation and Completion of
    Activities in Grenada and Jamaica

    Construction-Related Challenges Led to Delays in Grenada, Jamaica, and Haiti

    11In responding to a draft of this report in May 2006, USAID commented
    that, in response to issues raised by GAO and USAID's RIG, the Jamaica
    Mission was in the process of developing a memorandum of understanding for
    negotiation and signature with the government of Jamaica's Office of
    National Reconstruction.

    12According to USAID officials, agency policy does not prohibit
    beneficiaries without land titles from receiving recovery assistance;
    however, USAID staff managing the Caribbean programs determined that to
    avoid land disputes, land titles were necessary for beneficiaries of
    new-housing construction.

    Security Problems Disrupted Program Activities in Haiti

    Lack of Formal Program Guidance, Time Frame, and Staffing Issues Contributed to
                                Implementation Problems

    Lack of Guidance That Includes Lessons Learned Contributed to Program Design and
    Implementation Challenges

    13In addition to administering the $100 million that Congress appropriated
    for Caribbean disaster recovery in 2004, USAID administered about $525
    million for disaster recovery assistance following Hurricanes Mitch and
    Georges in 1999 and $159 million for recovery assistance in El Salvador
    following the 2001 earthquakes. USAID's efforts to assist with
    reconstruction in Asia following the 2004 tsunami, which are ongoing,
    received $908 million in funding.

    14USAID, Office of Foreign Disaster Assistance, Bureau for Democracy,
    Conflict, and Humanitarian Assistance, Disaster Reduction: A
    Practitioner's Guide (Washington, D.C., November 2002).

    15 GAO-02-787 .

    16USAID, Lessons Learned from Planning and Implementation of the Hurricane
    Mitch Supplemental Reconstruction Program (draft report) (Washington,
    D.C., June 27, 2000).

    USAID Applied Some Lessons from Previous Disaster Programs but Did Not Follow
    Prior Recommendations on Time Frame and Staffing

      USAID Applied Some Lessons Learned from Previous Programs

      One-Year Time Frame May Have Limited Impact and Sustainability of Some
      Activities and Conflicted with Prior Lessons Learned

    17OMB staff indicated that they encourage USAID to consult with OMB on any
    difficulties the 1-year time frame may have posed on program
    implementation, but USAID did not seek additional consultation.

    18This was partially owing to limited employment opportunities for women
    who took construction courses but had difficulty obtaining jobs in this
    field.

    19USAID had agreed to expend all of the appropriated funds by December 31,
    2001, about 30 months from enactment of the supplemental appropriation.
    See GAO-02-787 .

      USAID Did Not Implement Some Prior Staffing Recommendations and Encountered
      Challenges Related to Use of Management Firm

    20 GAO-02-787 .

    21 GAO-02-787 .

    22Lessons Learned from Planning and Implementation of the Hurricane Mitch
    Supplemental Reconstruction Program.

    23GAO, Foreign Assistance: USAID Has Begun Tsunami Reconstruction in
    Indonesia and Sri Lanka, but Key Projects May Exceed Initial Cost and
    Schedule Estimates, GAO-06-488 (Washington, D.C.: Apr. 14, 2006).

    24USAID, Office of the Inspector General, Audit of USAID/Jamaica's
    Hurricane Recovery and Rehabilitation Activities, Audit Report No.
    1-532-05-008-P (San Salvador, El Salvador, April 2005).

    USAID Staff and Contractors Are Recording Lessons Learned

    25USAID, Office of the Inspector General, Audit of USAID/Jamaica's
    Hurricane Recovery and Rehabilitation Activities, Audit Report No.
    1-532-06-004-P (San Salvador, El Salvador, April 2006).

                                      Conclusions

                          Recommendations for Executive Action

                           Agency Comments and Our Evaluation

    Appendix I: Objectives, Scope, and Methodology Appendix I: Objectives,
    Scope, and Methodology

    1GAO did not visit the Caribbean islands of Bahamas, Tobago, and Caribbean
    Community islands, which received a total of $2 million for small-scale
    hurricane recovery efforts.

    Country Type of activity at project site     Number
    Grenada Community rehabilitation             8 recipients

               Housing repairs                      11a recipients

               New housing construction             2 projects

               Community centers                    1 project

               Water and sanitation
               School repairs                       10 schools
               Business recovery                    4 recipients

               Agriculture grants                   2 recipients

               Fishery grants                       5 recipients

               Small to medium-size business grants 4 centers

               Skills training
    Jamaica Community rehabilitation             10b recipients

               Housing repairs                      2 sites with total of 186
                                                    houses
               New housing construction
               School repairs                       7 schools
               Business recovery                    10c recipients

               Agriculture grants                   1 community

               Fishery grants                       3 recipients

               Craft grants
    Haiti   Community revitalizationd            1 school

               School repairs                       1 community

               Disaster preparedness training       5 recipients

               Asset restoration grants             1 project

               River-widening project               1 project

               Canal cleanup
    Total                                        89

    Afrom USAID Disaster RecoRec Appendix II: Summary of Lessons Learned from
    USAID Disaster Recovery and Reconstruction Efforts

    Lessons Learned for Program Planning and Implementation

    Lessons Learned for Staffing

    essons Learned for Recovery Activities

      L

      Disaster Preparedness and Mitigation

      Construction

      Nonconstruction

    Lessons Learned for Ensuring Accountability

    Lessons Learned for Monitoring and Evaluation

    Appendix III: Comments from the U.S. Agency for International Develop
    Appendix III: Comments from the U.S. Agency for International Development

    Appendix IV: A Appendix IV: GAO Contact and Staff Acknowledgments

                                      GAO Contact

                                 Staff Acknowledgments

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    Highlights of GAO-06-645 , a report to the Chairman, Subcommittee on
    Foreign Operations, Export Financing and Related Programs, Committee on
    Appropriations, House of Representatives

    May 2006

    FOREIGN ASSISTANCE

    USAID Completed Many Caribbean Disaster Recovery Activities, but Several
    Challenges Hampered Efforts

    As of December 31, 2005, USAID had spent about 77 percent of funds
    allocated for assistance in Grenada, Jamaica, and Haiti and completed many
    disaster recovery activities, such as providing business and agriculture
    grants. However, the agency significantly reduced its targets for building
    and repairing houses, in part because of cost increases, and granted
    contractors extensions to complete some of these projects.

    Severe weather delayed the progress of recovery activities in Jamaica and
    Haiti-for example, two hurricanes in the summer of 2005 disrupted Jamaican
    housing repairs. In addition, difficulty coordinating activities with the
    Grenadian and Jamaican governments hampered housing construction. Further,
    other construction-related challenges-for example, shortages of
    cement-delayed projects in Grenada and Jamaica. Finally, frequent security
    problems in Haiti hindered contractors' progress.

    USAID has not issued guidance that incorporates lessons learned from
    previous recovery and reconstruction programs, such as ways to mitigate
    challenges commonly faced in rebuilding after disasters. USAID staff
    inexperienced with disaster recovery efforts said that this made it
    difficult to design and implement the programs. Further, in agreeing to
    complete the programs within 1 year, USAID faced challenges in designing a
    broad spectrum of activities that would help rebuild residents' lives and
    that could be sustained after the programs ended. In addition, the agency
    did not adopt recommendations from GAO and USAID reviews of past recovery
    programs that could have helped it more rapidly hire and transfer staff
    for the Caribbean programs. Although the agency contracted with a
    management firm to quickly staff its program in Grenada and Jamaica, this
    led to additional challenges, such as confusion about the management
    firm's roles and responsibilities in relation to USAID staff and other
    contractors. USAID staff and contractors are recording lessons learned
    from the programs in each country.

    New Housing Construction in Jamaica (left) and Grenada

    In September 2004, Hurricane Ivan and Tropical Storm Jeanne passed through
    the Caribbean, taking lives and causing widespread damage in several
    countries. After initial U.S. emergency relief, in October 2004 Congress
    appropriated $100 million in supplemental funding, primarily for Grenada,
    Jamaica, and Haiti, which were significantly affected. The U.S. Agency for
    International Development (USAID), leader of the U.S. recovery programs,
    agreed, in consultation with the Office of Management and Budget, to
    complete the programs by December 31, 2005, giving the agency a 1-year
    time frame. GAO was asked to (1) review the nature and status of the
    programs in Grenada, Jamaica, and Haiti as of December 31, 2005; (2)
    identify factors that affected the programs' progress; and (3) assess
    USAID's use of guidance and lessons learned from previous similar programs
    and efforts to draw lessons from the current programs.

    What GAO Recommends

    GAO recommends that the USAID Administrator (1) develop disaster recovery
    and reconstruction guidance that incorporates lessons learned from the
    current and previous programs and (2) revise staffing procedures to
    facilitate the rapid reassignment or hiring of needed personnel for
    postdisaster recovery and reconstruction programs. USAID agreed with our
    recommendations.
    *** End of document. ***