Cuban YouTuber and activist Boris Sancho earlier this month started a petition on Change.org asking for U.S. government Cuba grants to be audited. He wrote:
From 2001 to 2020, according to IRS public records, more than $407 million has been spent. When accessing the tax forms of these tax-exempt organizations, they declare absurd expenses in travel, office supplies, and salaries, questioning the correct use of funds.
We Cubans need these organizations to be transparent. While they use the pain of Cubans and play with feelings and desire for freedom, the executives of these tax-exempt corporations have very high salaries and have not even managed to have human rights respected in Cuba, a country where censorship, limitation of movement, kidnapping by state security and the absence of constitutional guarantees have been the order of the day since January 1, 1959.
We want the US government to audit these companies and expose what has been done with the taxpayers’ money.
Grant recipients don’t publish details of their Cuba spending and controversies sometimes arise. In 2011, a whistleblower told USAID that the Evangelical Christian Humanitarian Outreach for Cuba, or ECHO Cuba, had mismanaged a $1 million grant for a three-year program called Empowering Civil Society, or ECS.
USAID’s Office of Inspector General investigated the claim, reporting in 2013:
“The investigation revealed no evidence of fraud. OIG investigators discovered the following:
1) The actual overhead cost incurred by Echo Cuba during implementation of the ECS program was $44,433 under the USAID approved ECS budget.
2) The USAID approved ECS budget included funds to cover salaries for three Echo Cuba employees. The budget included 30% salary for chief of party, 40% salary for Cuba mission coordinator, and 100% salary for the program coordinator. The budget also included funds to cover a percentage of fringe benefits for the employees mentioned above and additional funding to cover indirect labor costs for four other Echo Cuba employees.
3) OIG agents were unable to substantiate the claim that a Cuban beneficiary was misusing program funds.”
Transparency advocate the Government Attic obtained the OIG report through the Freedom of Information Act, or FOIA, and posted it in April. The report is heavily redacted, but contains interesting revelations about the Echo Cuba operation. Among them:
- Echo Cuba employees traveled to Quito, Ecuador, to train two Cuban church leaders. An unnamed person received $4,500 per month “to distribute among local individuals to develop the local civil society program.”
- Former employees told investigators that Echo Cuba “had ethical issues” and was spending $20,000 per month for overhead when the amount should have been $3,000.
- Echo Cuba said actual overhead was $17,000 per month. “Approximately 95% to 99% of all receipts were accounted for. 100% of all cash sent to Cuba was accounted for.”
- “Of the $1 million USAID grant, approximately $400,000 went to Cuba for the program. Approximately $24,000 to $40,000 per month was sent to Cuba, depending on program activities. These funds were used to purchase supplies, computers, pay trainers, and develop support groups.”
- Auditors found that Echo Cuba had made a $49,282 math mistake in its budget.
- An auditor questioned $18,377 in program costs in a compliance review. Echo Cuba justified the questioned costs.
U.S. government agencies over the past decade have spent millions of dollars doing internal audits of Cuba programs. I have filed FOIA requests for some of these results and have gotten back heavily redacted reports containing little useful information.
EnCompass LLC, at 1451 Rockville Pike #600 in Rockville, Maryland, is among the companies that has been monitoring Cuba programs. On Sept. 29, USAID gave the company $197,945.58 as part of a contract worth up to $584,012. USAID wrote:
The LAC/Cuba (Latin America and the Caribbean/Cuba) program requires services that will help USAID and its partners offset the challenges to adequately monitor activities, analyze data quality, measure progress and evaluate impact.
In 2016, I touched on the subject of audits in a paper I wrote about U.S. government democracy promotion projects. Below is an excerpt:
The DMP Group, based in Washington, D.C., performed many of the audits. I filed a FOIA request for the results on March 18, 2011. USAID denied my request and I appealed.
On Sept. 25, 2015 – four years, six months and seven days after my initial request – the agency released an audit showing that one USAID contractor had submitted nearly a quarter million dollars in questionable expenses in 2009 and 2010.
The contractor, International Republican Institute, or IRI, had claimed unsupported costs of $244,856 while running a Cuba program on USAID’s behalf. Many of the details about the expenses were redacted.
USAID sent me a second audit showing that another contractor had submitted $193,115 in questionable expenses in 2009 and 2010.
The contractor, an NGO called International Relief & Development, had been managing a program called “Hastening the Transition to Democracy in Cuba.”
The audit said:
“We also noticed an ineligible charge of [redacted] included in the travel costs to the subaward for alcoholic beverages which are specifically unallowable per 2 CFR 230: Appendix B, 3.”
Cost breakdowns were redacted, so it was impossible to know how much was spent on alcohol and other items in the name of Cuban democracy.
IRD was one of USAID’s main partners for Cuba programs. Even after auditors questioned its handling of the “Hastening the Transition to Democracy” program in 2010, it received at least $3.5 million for Cuba projects from September 2011 to September 2014.