On AED & aid appropriations

Last week, on Wednesday, USAID officially suspended the Academy for Educational Development (AED) from receiving future USG funds. AED released a statement the following day, and the news broke in different media outlets, including the Washington Post. With a portfolio of approximately $640 million in USAID contracts and projects in over 150 different countries, AED is a major player in development projects and has been held in high regard by many of my friends and colleagues who work in global health. The company has $109 million in contracts in Afghanistan alone, and has now been identified as the contractor that had issues with illicit use of funds/overpayment in a project in Pakistan this past summer; the investigation has focused on projects in Afghanistan and Pakistan, according to the Washington Post.

Development work is never going to be easy, straightforward, or without its leakages or corruption: no industry is perfect, least of all one working to alleviate global poverty and improve the lives of people overseas. No easy task. And some may argue that under-the-table payments and inflated financial incentives are simply a price paid for getting work done and saving lives: if a few extra dollars (or thousands) is what it takes to get a maternity ward built, will the number of lives saved be worth it? Ethics and decision making in aid, at a local level, are shades of gray, not black and white.

That said, to suspend a major contractor like AED after an investigation spanning nearly a year and a half, there must be systematic, high-level corruption, not simply mismanagement of funds on one specific project. USAID stated the suspension was due to “evidence of serious corporate misconduct, mismanagement, and a lack of internal controls, and raise serious concerns of corporate integrity.” It is my understanding that more specifics about the investigations findings will be released eventually, though I don’t have a great familiarity with the rules governing this kind of investigation or suspension.

While I feel sympathetic for the thousands of AED staff affected by this suspension who had no part in any sort of corruption, I commend USAID for taking action to prevent misuse of funds, and think this kind of accountability will only be more important in the coming two years. With Republicans – who have historically been less supportive of foreign aid – controlling the House for the coming Congress, and continued economic challenges domestically, I feel less than confident that the US will step up to meet the challenge of appropriating adequate funds to meet development goals overseas, and documentation of corruption and misuse of funds will certainly be used in next years appropriations hearings by those arguing aid dollars would be better spent here at home.

The ambitious (but still ambiguous) goals of the Global Health Initiative, the need to scale up to follow revised recommendations from the WHO for when an HIV-positive individual should initiate ART, and the continued challenge of to support developing countries aiming to meet the MDGs all require resources. Great Britain has stepped up and committed to meeting the target of 0.7% of GDP spent on overseas development assistance, but I sincerely doubt the US will be making a similar commitment anytime soon, especially under a Republican controlled House.

I would be interested in hearing thoughts and reflections from those working in this industry longer than I on what the long term fall out from the AED suspension will be.

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