The nonprofit International Relief and Development —
once the U.S. Agency
for International Development’s largest contractor in Iraq and
Afghanistan — responded today to USAID’s suspension of its projects over
allegations that IRD misused U.S. taxpayer funds and engaged in “serious
misconduct.”
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IRD staff carry emergency
supplies for hospital across a downed bridge
in the Luhansk region of Eastern
Ukraine. The nonprofit has responded
to the U.S. aid agency’s
allegations of funds mismanagement. Photo by: IRD
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The last
month has seen an overhaul at IRD — 21 employees were laid off last week and
the entire board of directors was dismissed — following the resignation of
several top executives, including founder and former President Arthur Keys.
While many question whether the organization will be able to survive the
fallout, those left standing continue to look forward and plan for the future.
“This is a
pretty unprecedented situation,” an IRD representative told Devex, “and an
extraordinary opportunity going forward to build a 21st century
[nongovernmental organization] that is really going to be setting some new
standards in the development landscape.”
USAID
raised three areas of concern when it suspended IRD
from receiving any new U.S. government contracts: questionable
expenses, accountability of senior management and the organization’s oversight
capacity. IRD’s “very, very comprehensive” response takes each of them on in
turn, according to the representative.
Regarding
“questionable expenses,” the response includes details from an “expedited
audit,” which IRD claims shows half of those expenses were actually allowable
IRD addresses the issue of senior
management directly. The organization’s decision to dissolve its board of
directors was made to ensure those responsible for financial mismanagement are
no longer part of the organization.
USAID took
issue with the fact that senior managers responsible for misconduct were still
part of the organization at the time of its suspension.
“None of
them are now,” the representative told Devex.
“Going
forward, I will work with our new senior management team and reconstituted
board of directors to make the new IRD a model of transparency, accountability
and impact,” recently appointed IRD President and CEO Roger Ervin said in a
statement.
Finally,
IRD points to an independent audit it commissioned from the consulting firm
Ernst and Young in its response to USAID concerns about systems and oversight
capacity. The details of that audit’s findings are included in the response
and, according to the representative, provide “ample evidence” of IRD’s capacity
and the adequacy of its internal controls.
USAID will
now have 45 days to submit a final debarment decision, according to regulations
for nonprocurement debarment. IRD leaders hope the process will move quickly,
and that USAID will help to avoid an “ambiguous” situation regarding the
organization’s ability to continue its programs, many of which operate in
time-sensitive, crisis situations like the Syrian border.
“This is
not something that can remain unresolved for any period of time without having
a significant impact well beyond IRD headquarters or inside the beltway,” the
representative said.
The
deadline for a response — originally Feb. 25 — was already extended once by
USAID, due to inclement weather in Washington, D.C.
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