The U.S. State Department’s quick assumption of aid programs from the shuttered U.S. Agency for International Development (USAID) last year was hindered by insufficient staffing, information technology challenges and late-arriving guidance, according to an internal report released by the department’s Office of Inspector General (OIG).
President Donald Trump ordered the closure of USAID shortly after resuming office in January 2025. More than 10,000 personnel were terminated and thousands of programs were canceled, disrupting U.S.-funded assistance that supported millions of people globally.
The OIG report notes that aid projects carrying $51.5 billion in obligated funds were transferred to the State Department at the same time the department was conducting its own internal reorganization. A roster of awards that remained active after USAID’s closure - referred to in the report as the "Green List" - included 1,504 awards. Those awards covered activities in multiple regions, including projects operating in conflict-affected areas such as Ukraine, Israel and the Palestinian territories.
Officials quoted in the report described the handover as rapid and marked by changing directives. "The transition happened extremely fast, with evolving guidance," one bureau told the inspector general, according to the document.
The report further found that the State Department had not implemented recommendations previously issued by the inspector general that were intended to ease the transfer process. The department’s top office for management told the OIG that work to implement the watchdog’s recommendations was underway, the report said. The State Department did not immediately respond to a request for comment.
Staffing was a central shortfall. About one-third of the State Department offices assigned to manage former USAID awards had no prior experience overseeing foreign assistance projects, OIG investigators were told. To administer the incoming awards, the department created 838 new positions, a total substantially below the number bureaus had requested.
Africa emerged as the continent with the largest number of awards transferred to the department. The report records 639 awards on the continent carrying $17 billion in obligated funds. The Bureau of African Affairs, which assumed responsibility for most of those awards, sought 732 new positions but ultimately filled only 232 roles, the majority of which were locally employed staff based at U.S. missions overseas.
Operational guidance also lagged. The OIG report states that comprehensive guidance on how to update the terms of transferred aid awards was not fully in place until December. In addition, an artificial intelligence-driven data management tool deployed to assist with the transition experienced data problems that hindered its effectiveness.
Context and implications
The report portrays a transition that paired a high volume of financial obligations and program responsibilities with limited experienced personnel and imperfect data tools, while the department was simultaneously reorganizing. The combination of those factors, the watchdog concluded, created notable management and operational risks for continuity of U.S. foreign assistance.