OFFICE OF THE SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION

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January 29, 2009

OPPORTUNITIES TO IMPROVE MANAGEMENT OF THE 

QUICK RESPONSE FUND 

 

What SIGIR Found 

OPA has developed a sound process for reviewing and selecting 

projects to be funded by the QRF program. However, improvements 

are needed in OPA’s and USAID’s processes for assessing whether 

their projects were successful and met their intended goals. OPA 

acknowledges that improvement is needed in assessing its project 

results. USAID collects a large amount of data on its projects but 

needs to improve its process for evaluating and documenting outcomes. 

USAID has relied on its contractor to assess project outcomes rather 

than conducting independent analyses. However, SIGIR’s review of 

the contractor’s analyses found little information on whether results 

were achieved, on unintended consequences, or on issues of relevance, 

effectiveness, efficiency, impact, and sustainability. Without an 

effective follow-up system to determine how QRF funds have been 

used, projects funded under the programs are vulnerable to waste and 

fraud. 

OPA received $35 million for QRF activities, and USAID received 

$100 million. OPA has largely finished its portion of the program, 

obligating $34.99 million of its $35 million. USAID hired a contractor 

to manage its part of the program and considers its $100 million as 

fully obligated when it signed the contract. As of January 15, 2009, 

USAID reports that $52.1 million in projects have been approved. 

Contractor programmed support costs are not included in this amount. 

These programmed support costs appear relatively high, amounting to 

approximately $.45 for each $1.00 in grants. The contractor also pays 

subcontractors an 8% fee to disburse the funds, bringing total 

programmed support costs to approximately $.53 per $1.00. In written 

comments on a draft of this report, USAID provided data that shows its 

support cost budget as of January 20, 2009, is about $.61 for each $1.00 

in grants provided to recipients. SIGIR plans to review support costs 

later this year. 

We noted some opportunities to improve program management in 

several other areas. These include the need to ensure that complete 

documentation is in project files, and a need for improved training in 

awarding and managing large IRAP projects. 

Special Inspector General for Iraq Reconstruction 

For more information, contact SIGIR Public Affairs 

at (703) 428-1100 or PublicAffairs@sigir.mil

Summary of Report: SIGIR-09-

011 

Why SIGIR Did This Study 

The Quick Response Fund program (QRF) 

was created by the Department of State (DoS) 

in 2007 to allow Provincial Reconstruction 

Teams (PRTs) in Iraq to support initiatives 

that promote efforts by community-based 

leaders and organizations to improve their 

communities’ access to public services, 

economic opportunities, employment, and 

education. The U.S. Embassy’s Office of 

Provincial Affairs (OPA) reviews and selects 

projects and either OPA or the U.S. Agency 

for International Development (USAID) 

carries them out. The USAID component of 

the QRF is the Iraq Rapid Assistance Program 

(IRAP). 

For this report, SIGIR’s objectives were to 

answer the following general questions: (1) 

Are appropriate management controls in place 

and properly implemented to prevent waste, 

fraud, and abuse of QRF resources? (2) Have 

performance goals, metrics, and processes 

been developed and implemented to assess 

program performance and results? (3) How 

have program funds been allocated and 

expended? 

What SIGIR Recommends

SIGIR makes three recommendations to OPA 

intended to improve program results 

assessments, QRF documentation, and 

training. 

USAID generally agreed with the findings in 

this report but believes it is too early in the 

process to measure results. The U.S. 

Embassy-Iraq also agreed with the findings in 

the report. OPA provided technical comments 

that we included where appropriate. 

SIGIR 

Special Inspector General for IRAQ Reconstruction 
SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION

January 29, 2009 

MEMORANDUM FOR SECRETARY OF STATE 

U.S. AMBASSADOR TO IRAQ 

DIRECTOR, IRAQ TRANSITION ASSISTANCE OFFICE 

DIRECTOR, U. S. AGENCY FOR INTERNATIONAL 

DEVELOPMENT 

MISSION DIRECTOR-IRAQ, U.S. AGENCY FOR 

INTERNATIONAL DEVELOPMENT 

SUBJECT: Opportunities to Improve Management of the Quick Response Fund (SIGIR-09-011) 

This report is provided for your information and use. It discusses the results of our review of the 

Quick Response Fund (QRF). The objectives of this audit were to determine (1) if appropriate 

management controls are in place and properly implemented, (2) if performance goals, metrics, 

and processes have been developed and implemented to assess program performance and results, 

(3) if the desired program results have been met, and (4) the funding allocated and expended for 

the QRF program and Iraq Rapid Assistance Program. This review was conducted as SIGIR 

project 8018. 

We considered comments from the Mission Director-Iraq, U.S. Agency for International 

Development, and the U.S. Embassy- Iraq, when preparing the final report. The comments are 

addressed in the report, where applicable, and a copy is included in the Management Comments 

section of this report. 

We appreciate the courtesies extended to the staff. For additional information on this report, 

please contact Nancee Needham, Deputy Assistant Inspector General for Audits, (240)-553-0581 

ext. 3793 /Nancee.needham@iraq.centcom.mil, or Glenn Furbish, Principal Deputy Assistant 

Inspector General for Audits, (703) 428-1058 / glenn.furbish@sigir.mil. 

 Stuart W. Bowen, Jr. 

Inspector General 
Table of Contents 

Executive Summary i 

Introduction 1 

Outcomes Are Not Properly Monitored 4 

Funding Allocated and Expended 7 

Documentation and Training Need Improvement 8 

Conclusions and Recommendations 10 

Management Comments 11 

Appendices 

 A. Scope and Methodology 12 

 B. Acronyms 14 

 C. Audit Team Members 15 

 D. Management Comments 16 
Opportunities To Improve Management of the Quick 

Response Fund 

SIGIR-09-011 January 29, 2009

Executive Summary 

Introduction 

In August 2007, the Department of State (DoS) created the Quick Response Fund (QRF) 

program to provide a flexible mechanism to enable Provincial Reconstruction Teams (PRT) and 

embedded Provincial Reconstruction Teams (ePRTs), to facilitate Iraqi efforts to promote and 

accelerate economic and social development. In this report we refer to PRTs and ePRTs 

collectively as PRTs. The funds are provided through grants and/or direct purchases of 

materials─such as seed, fertilizer, or books─to local neighborhood and government officials or 

members of community-based organizations, including nonprofit organizations, business and 

professional associations, charitable organizations, and educational institutions. 

In many respects QRF is the DoS counterpart to the Department of Defense Commander’s 

Emergency Response Program, in that it makes funds available to quickly respond to 

immediately assist local organizations, associations and institutions. QRF is a DoS program with 

two components: a DoS component and a U.S. Agency for International Development (USAID) 

component: 

• The U.S. Embassy’s Office of Provincial Affairs (OPA) manages the DoS component, 

which is called the Quick Response Fund. This report refers to the overall program as the 

QRF program and to the DoS component of the program as the QRF-S program. 

• The USAID component is the Iraq Rapid Assistance Program (IRAP). 

A total of $135 million in FY 2007 Supplemental Economic Support Funds (ESF) and $30 

million in USAID Civil Society and Conflict Mitigation program funds were allocated to support 

the QRF program; $35 million was allocated to QRF-S and $130 million was allocated to IRAP. 

The $30 million in USAID Civil Society and Conflict Mitigation program funds is not included 

in this review. 

OPA is responsible for the overall management of QRF program activities and the management 

of the two program components is divided based on the dollar value of the support provided. 

OPA’s QRF-S program manages grants or funds for purchases under $25,000. The USAID 

Mission-Iraq’s IRAP program is responsible for all grants of $25,000 to $500,000, and has hired 

a contractor to manage its part of the program. The PRTs initiate all QRF-S and IRAP project 

proposals, but approval authority is divided. All grants must be approved by an OPA-managed 

Technical Evaluation Committee at the U.S. Embassy in Baghdad and by a Technical Evaluation 

Committee in Washington, D.C. Purchases under $25,000 (known as micro-purchases) are made 

locally and can be approved by PRT Team Leaders. Procurements over $25,000 (known as 

i
direct procurements) must be approved by OPA. After OPA approval, the procurement request 

is forwarded to either the Joint Contracting Command-Iraq/Afghanistan or the U.S. EmbassyBaghdad General Services Office for contract award. 

SIGIR initiated this review to assess the effectiveness and oversight of QRF program activities. 

The objectives of this audit were to answer these general questions: 

• Are appropriate management controls in place and properly implemented to prevent waste, 

fraud, and abuse of QRF resources? 

• Have performance goals, metrics, and processes been developed and implemented to assess 

program performance and results? 

• How have program funds been allocated and expended? 

Results In Brief 

OPA has developed a sound process for reviewing and selecting projects to be funded by the 

QRF-S and IRAP programs to ensure that projects support program goals. However, OPA and 

USAID both need to improve their processes and documentation for assessing the success of 

projects in meeting intended goals. OPA acknowledges that it needs to improve its assessments. 

USAID collects a large amount of data on its projects, but relies on its contractor to assess 

project outcomes─ rather than conducting independent analyses. SIGIR’s review of the 

contractor’s analyses found little information on 

• the achievements and results

• unintended program consequences

• issues of relevance, effectiveness, efficiency, impact, and sustainability.

Without effective follow-up systems, projects funded under the QRF program are vulnerable to 

waste and fraud.

OPA received $35 million for QRF activities, and USAID received $100 million. OPA has 

largely finished its portion of the program, obligating $34.99 million of its $35 million as of 

September 30, 2008. USAID hired a contractor to manage its part of the program and considers 

its $100 million as fully obligated when it signed the contract. As of January 15, 2009, USAID 

had approved $52.1 million in IRAP projects. Contractor support costs are not included in this 

amount and appear relatively high─approximately $.45 for each $1.00 in grants awarded.1

 The 

contractor also pays subcontractors an 8% fee to disburse the funds, bringing total programmed 

support costs to approximately $.53 for each $1.00 in grants. In its written comments on a draft 

of this report, USAID provided data that shows that as of January 20, 2009, its support cost 

budget is estimated to be about $.61 for each $1.00 in grants provided to recipients. SIGIR plans 

to review support costs later this year. 

 

1

 Based on USAID contract data from June 2008, when the grant management contract was definitized, 

ii
iii

SIGIR noted opportunities to improve program management in several other areas, including the 

need to ensure that complete documentation is in project files, and a need for improved training 

in awarding and managing IRAP projects. 

Recommendations 

SIGIR recommends that the Director, Office of Provincial Affairs, direct that actions be taken to: 

1. Develop an appropriate process for evaluating and monitoring QRF-S projects to 

determine their outcome. 

2. Establish procedures to ensure that QRF project files include all required documentation, 

to include closeout documentation that identifies the results of the project. These 

procedures should include checks to validate the completeness of file documentation. 

3. Modify QRF training to include PRTs’ role and responsibilities for large grants and 

purchases managed by USAID. 

Management Comments 

The USAID Mission Director-Iraq provided comments, which are included in Appendix D to 

this report. USAID generally concurred with the findings of the draft report with some 

reservations. Foremost, USAID believes that it is too early in the grant process to measure 

progress. Nonetheless, USAID reported that its contractor would document the actual 

accomplishments of the grantees prior to close-out and that USAID would monitor this process. 

USAID also said that it has a monitoring and evaluation contractor that assists USAID in 

overseeing the grants contractor’s performance. 

Regarding the operational and support costs of the contract, USAID noted that $62.3 million out 

of the $100 million is available for grants. This amounts to a contract support cost of $.61 for 

every $1.00 in grants provided to Iraq recipients. SIGIR included this updated number in the 

report. 

The U.S. Embassy-Iraq provided comments to our draft report which we included in Appendix 

D. The Embassy concurred with the recommendations in the report. OPA provided technical 

comments, which are included in the report where appropriate. 
Introduction 

In August 2007, the Department of State (DoS) created the Quick Response Fund program 

(QRF) to provide Provincial Reconstruction Teams and embedded Provincial Reconstruction 

Teams (hereafter referred to collectively as PRTs) with a flexible means to fund local projects 

that facilitate Iraqi efforts to promote accelerated economic and social development. Using 

grants and procurement authority, assistance is provided to local neighborhood and government 

officials or members of community-based organizations, including nonprofit organizations, 

business and professional associations, charitable organizations, and educational institutions. 

QRF is not designed to help individuals or for-profit businesses. 

Procurement authority is used to acquire goods and services required by the U.S. government to 

support PRT projects.2 Examples include seed, fertilizer, or books. Goods acquired by 

procurement may be transferred to other entities or nongovernment organizations or local 

governments. Grants transfer cash or goods to an entity to carry out an activity. The 

responsibility for the procurement of goods and services necessary to perform the activity is 

transferred to the grantee. QRF is in many respects the DoS counterpart to the Department of 

Defense Commander’s Emergency Response Program, in that funds are made available quickly 

to respond to immediately assist local organizations, associations, and institutions to fulfill a 

need.3

Background 

DoS initiated the QRF program to allow PRTs to support community-based leaders and 

organizations’ efforts to improve access to public services, economic opportunities, employment, 

and education. DoS first requested funding for the QRF in the Fiscal Year (FY) 2007 

Supplemental budget request for Economic Support Funds (ESF). The request stated that the 

funds “will support a new Quick Response Fund (QRF) modeled after the Department of 

Defense’s successful Commander’s Emergency Response Program. Provincial Reconstruction 

Teams use this flexible tool to quickly execute programs that will improve the local community.” 

Although QRF is a DoS program, it has two components: OPA manages one and USAID 

manages the other. OPA calls its component the QRF program, and it manages grants, micropurchases, and direct purchases under $25,000. Through the use of warranted contracting or 

grant officers, OPA also manages direct purchases of over $25,000. In this report we refer to the 

overall program as QRF and the OPA component as QRF-S. USAID manages the Iraq Rapid 

Assistance Program (IRAP), which includes grants and purchases of $25,000 to $500,000. 

USAID-managed grants can range from $25,000 to $200,000 per recipient or up to $500,000 for 

grants to a non-government Iraqi organization for non-construction projects. USAID uses a 

contractor, Development Alternatives, Inc (DAI), to manage, disburse, and monitor IRAP grants 

 

2

 Procurements are divided into two groups; procurements under $25 thousand (known as micro-procurements) and 

procurements over $25 thousand (known as direct procurements). 

3

 The Commander’s Emergency Response Program is a Department of Defense program used to respond to urgent 

humanitarian relief and reconstruction requirements by allowing military commanders to carry out programs and 

projects that immediately assist the Iraqi people and support the reconstruction of Iraq. 

1
and purchases. The DAI contract is also being used to manage, disburse and monitor another 

USAID grant program, Civil Society and Conflict Mitigation. 

The PRTs in Iraq initiate all QRF project proposals (both QRF-S and IRAP). However, approval 

authority varies depending on the type of funding to be used for a project and its’ value. All 

grant proposals must be approved by an OPA-managed Technical Evaluation Committee located 

in the U.S. Embassy and by a Technical Evaluation Committee located in DoS’ Bureau of Near 

Eastern Affairs in Washington, D.C. Purchase requests over $25,000 are approved by OPA and 

passed on to either the Joint Contracting Command-Iraq/Afghanistan or the General Services 

Office at the U.S. Embassy for appropriate contracting action. Purchase requests under $25,000 

are executed locally and may be approved by PRT Team Leaders. 

OPA has provided the PRTs with guidelines on the use of QRF. According to the guidelines, 

priorities for the program are: 

• Supporting youth program projects that provide practical opportunities to prepare for a 

productive career and to make contributions to the improvement of their communities. 

• Supporting local civil society networks and groups, municipal governments, and the 

business community to promote effective and transparent delivery of government 

services at the local level. 

• Encouraging women’s participation in the market-based economy and civil society. 

• Promoting public accountability projects that include anticorruption and transparency 

components. 

• Promoting the rule of law and legal reforms, including education on legal rights and 

property rights administration. 

• Supporting specific projects for the environment or the promotion of public health. 

• Fostering a market economy and the development of the private sector or public 

education on the workings of a market economy. 

Examples of activities in the QRF program include supplies or services related to sanitation, food 

distribution, medical equipment and supplies; irrigation, civic cleanup; beautification programs; 

and other urgent humanitarian projects. Funds may not be used to purchase vehicles, support 

individual electoral campaigns, support political party activities, provide military or law 

enforcement assistance, or duplicate available government services. 

Depending on the nature of a project and the funding mechanism used, funds may be disbursed 

in a lump sum or in periodic disbursements to recipients. The disbursements are made from an 

imprest fund maintained at each PRT. 4

 When the PRT disburses funds the PRT cashier (referred 

to as a sub-cashier) prepares and forwards a package of supporting documents to the Finance 

Management Office located in the U.S. Embassy in Baghdad. The Finance Management Office 

 

4

 An imprest fund is a cash fund, usually of a fixed amount, established by an advance of funds from an agency 

finance or disbursing officer to a duly appointed cashier, for disbursement as needed from time to time in making 

payment in cash. PRTs under the QRF Program have imprest funds normally ranging in value from $100,000 to 

$300,000. 

2
reviews and processes the documents and authorizes replenishment of the funds disbursed to the 

PRT sub-cashier in the form of a Treasury check. SIGIR did not examine the financial controls 

over the imprest funds as part of this review but plans to review these controls in the future. 

DoS was initially provided with $125 million for the QRF program through the Fiscal Year 2007 

Supplemental Economic Support Fund Appropriation. DoS allocated $25 million to OPA for 

QRF-S and $100 million to USAID for the IRAP component of QRF. OPA subsequently 

received an additional $10 million allocation to the QRF-S program bringing the QRF-S’ total 

funding to $35 million. USAID added $30 million to fund Civil Society and Conflict Mitigation 

programs bringing the IRAP program total to $130 million. However, USAID tracks the $30 

million separately. SIGIR did not review the $30 million provided for Civil Society and Conflict 

Mitigation programs. 

Soon after the QRF program started, the DoS’ Bureau of Administration, Office of the 

Procurement Executive and the Bureau of Near East Affairs Iraq, with assistance from OPA, 

conducted an internal review of the QRF program. The purpose of the review was to proactively 

assess the program in the early stages of implementation to mitigate potential operational and 

management issues or problems in the future. The review included interviews with selected 

QRF stakeholders and users, user surveys distributed to PRTs, random examination of QRF 

transactions, QRF database analysis, and evaluation of QRF guidelines and forms. The review 

noted problems in several areas: slow replenishment of Treasury checks to reimburse PRTs for 

micro-procurements, differences in financial data from QRF database reports and financial 

reports from the DoS financial system known as Consolidated Overseas Accountability Support 

Tool, complicated and confusing QRF guidance and procedures, inadequate staffing of the QRF 

management team in Iraq, slow Regional Security Office vetting of potential recipients, 

inadequate training of PRT members on the QRF program, inadequate communication of 

changes in QRF to PRTs, problems with the USAID contractor, and lack of a performance 

management system to adequately measure and capture program results. DoS and the Embassy 

took corrective actions to address most of the issues raised in the review. 

Objectives 

SIGIR initiated this review to assess the effectiveness and oversight of QRF program activities. 

The objectives of this audit were to answer these general questions: 

• Are appropriate management controls in place and properly implemented to prevent waste, 

fraud, and abuse of QRF resources? 

• Have performance goals, metrics, and processes been developed and implemented to assess 

program performance and results? 

• How have program funds been allocated and expended? 

3
Outcomes Are Not Properly Monitored 

OPA has developed a process for reviewing and selecting QRF-S and IRAP projects to ensure 

that the projects meet established guidelines. However, OPA and USAID lack information 

needed to assess whether project outcomes met their intended goals. OPA does not have a 

follow up process. USAID relies on its contractor to track project outcomes rather than conduct 

independent analyses. SIGIR’s review of the USAID contractor’s analyses found little 

information on whether project results were achieved. Without effective follow-up systems, 

projects funded under the QRF-S and IRAP programs are vulnerable to waste and fraud. OPA 

acknowledges that improvement is needed in this area. 

QRF-S Lacks a Monitoring Process 

Although OPA has awarded grants and procurement funds for its QRF-S projects for over a year, 

it has not developed a formal process for following up on its grants and disbursements to 

determine if the funds, supplies, or equipment provided were used as intended or if the projects 

were effective. According to the QRF-S Program Manager, the program initially lacked 

sufficient staff to follow up on the projects, and awarding the grants and direct and microprocurement funds was OPA’s main priority. Around February and March 2008, or about six 

months into the operation of the program, the QRF-S management team conducted an internal 

review that helped to address its operational and management issues and adjust its processes to 

optimize program benefits. However, the review assessed program outcomes only through the 

use of surveys and interviews, rather than systematically using performance metrics. The report 

prepared by the review team identified the need to develop metrics that measure outcomes and 

program impact rather than just funds disbursed. In written comments on a draft of this report, 

DoS reported that it has since hired sufficient staff to oversee QRF program activities. 

The lack of documented results is evident in OPA’s database that tracks its QRF-S projects, 

proposal requests, approvals, funding and disbursements. One field in the database is a section 

for “Award Results.” However, SIGIR found that for 92 of 100 micro-procurement projects we 

examined the awards results section was not completed or, when completed, contained limited 

information such as the status of payments or vague statements on project status such as “final 

payment in the amount of $5,515 was issued on 6/15/2008; project completed; or “Second and 

final payment on this successful project,” rather than an actual description of the award results. 

OPA agreed with SIGIR’s conclusion that the projects outcomes were not adequately monitored. 

However, OPA pointed out that the majority of the PRT-managed projects were less than 

$25,000. According to OPA, the costs associated with monitoring small value projects with 

dedicated site visits supported by security escorts, may outweigh the benefits. As a result, OPA 

said that the PRTs would be encouraged to use local staff if available, to monitor projects. 

USAID’s Monitoring Process Lacks Overall Assessments 

USAID has awarded grants and procurement funds for IRAP projects for over a year and has the 

rudiments of a process for following up on its projects in place. However, USAID did not fully 

4
approve and implemented its performance monitoring process until December 2008. To its 

credit, USAID collects a large amount of data on its projects but needs to improve its process for 

evaluating and documenting results. 

USAID identifies a process for monitoring and evaluating program performance in its 

Automated Directive System (ADS). The ADS identifies USAID’s programming policy, which 

guides the way USAID designs programs to achieve development results, implements the 

programs, and assesses them. The ADS describes USAID’s programming system as “designed 

to promote clarity in defining objectives and provide flexibility in selecting and implementing 

the activities to achieve them. The programming system includes three functions: planning, 

achieving, and assessing and learning, which are described as follows: 

• Planning: The Agency’s mission, value, and core values provide a framework that 

guides USAID’s planning. This framework is shaped by learning from past experience 

and is described in USAID’s Agency Strategic Plan. The plan also sets out an overall 

vision of what USAID wants to accomplish through a statement of its overarching agency 

goals and represents a broad consensus on a framework for action that directly affects its 

planning efforts. 

• Achieving: Linking the planning and the assessing and learning functions are 

performance measures. USAID needs to know whether it is succeeding, and it 

determines this by establishing performance measures and performance targets before 

achievement takes place. USAID uses these measures to assess progress and outcomes. 

• Assessing and Learning: In the assessing and learning phase, USAID defines how it 

assesses its progress on an ongoing basis, modifies activities when needed, makes 

changes to results based on experiences or other factors, and learns from its success or 

failure so as to improve its ability to succeed in future programs. 

Early problems in monitoring QRF activities are partially attributable to delays in putting a 

performance monitoring and evaluation system in place. USAID required the contractor to 

develop a Performance Monitoring Plan that was to include indicators that were measurable and 

easily attainable from reliable sources and could be used to track quarterly and annual progress. 

This plan was to serve as USAID’s basis for monitoring results. However, this plan was not 

approved until late December, 2008. The contractor had submitted a number of draft plans most 

recently in November 2008, but none had been approved. Contractor officials told us that the 

main reason for the delay in approving the plan is that the contractor is normally held responsible 

for meeting performance measures. However, for the IRAP program, the contractor is 

accountable not for achieving project goals but for the process indicators of efficient grant 

formulation, implementation, and support, and tracking an illustrative array of indicators, to 

provide snapshots of what the IRAP grants have accomplished. The contractor is also to help 

USAID ensure that the IRAP grants are linked to development documents such as the PRT work 

plans, the PRT/Brigade Combat Teams’ Unified Common Plans, and the Provincial 

Development Strategies. According to a contractor official, USAID and the contractor finalized 

the performance monitoring plan in late December 2008. 

While USAID was reviewing the monitoring plan, the contractor developed and used a 

performance monitoring system that tracked progress on all IRAP project activities and 

5
deliverables, including progress toward achieving targets and results. According to the 

contractor’s annual work plan (year 2), performance monitoring is conducted by Project 

Development Officers and Grant Managers. These personnel should conduct field visits to grant 

locations at least once during the life of each grant as security conditions permit. In addition, the 

contractor has subcontractors who should visit grant sites once per month, security permitting. 

Site visit reports should be written by the Project Development Officers and Grant Managers and 

submitted to USAID for review. The subcontract requires narrative reports and site reports with 

a minimum of five pictures. These reports are retained in the Technical Assistance Management 

Information System, which is the contractor’s project management system. Grantees produce, in 

a checklist format, final reports that feed into the monitoring and evaluation plan. Final grantee 

reports are reviewed by Project and Grant Managers and are also stored in the information 

system. 

SIGIR reviewed the documentation in the information system for four completed grant projects 

and found that while performance measures were identified, grantee reports contained little 

information on whether the performance measures had been achieved. The final grantee reports 

for the four projects contained brief statements that did not fully describe the success and impact 

of the particular project. For example: 

• For a project to train internally displaced people to make carpets the description of the 

result was that the recipients feel as if there is someone who cares about their problems. 

• For a project to present health information to mothers and children in remote areas, the 

result is described in terms of the number of people that attended the presentation. 

SIGIR also reviewed several available weekly and quarterly reports provided by the contractor 

and found that the reports did not provide (1) insight into the results of the projects, (2) 

information on how successful the projects have been, or (3) information on the project’s impact 

on the community. The reports present numbers and amounts of grants with updates on current 

projects and contractor activities during the period. 

SIGIR’s review also found no independent analysis of the grants by USAID personnel. While 

using a contractor to assist in grant management may be necessary, independent verification by 

USAID is a control measure that can protect USAID against fraud and waste. USAID’s 

automated directive system also identifies a need for independent evaluation that focuses on why 

results are or are not being achieved, on unintended consequences, or on issues of interpretation, 

relevance, effectiveness, efficiency, impact, or sustainability. 

In written comments on a draft of this report, USAID generally concurred with the finding in the 

report, but with reservations. Foremost, USAD said that it believes that it is too early in the 

program to measure progress. According to USAID, only a handful of grants have been closed 

out and IRAP is just reaching the stage where it can be determined whether grantees have 

reached their intended goals. However, SIGIR’s review of USAID’s QRF grant data as of 

January 26, 2009, identified over 100 grants where the funds have been fully allocated. SIGIR 

recognizes that there may be some delay between the allocation of funds and the completion of 

the grant activity. However, delays in completing close-out reports do not allow USAID 

management to adjust its processes and mechanisms as necessary to optimize the program 

6
benefits. While USAID said that prior to close-out its contractor would document the actual 

accomplishments of the grantees and that USAID would monitor this process, we believe 

USAID needs to take steps to close-out the grants near the completion of the grant rather than 

near the completion of the contract in order to maximize the benefits of the grants. 

Funding Allocated and Expended 

Through the FY 2007 Supplemental Economic Support Fund Appropriation the QRF program 

received initial funding of $125 million of which DoS allocated $25 million to OPA and $100 

million to USAID. OPA subsequently received an additional $7 million in May 2008 and $3 

million in August 2008, bringing OPA’s total QRF-S funding to $35 million and overall QRF 

program funding to $135 million. OPA expects to receive an additional $35 million for the QRF 

program from the FY 2008 Supplemental appropriation. USAID added $30 million in Civil 

Society and Conflict Mitigation funds to its IRAP program bringing its total to $130 million. 

However, USAID tracks this money separately and SIGIR did not include these funds in its 

review. 

OPA obligates its portion of the QRF-S program funds upon approval of specific projects and as 

of September 30, 2008, had approved $34.99 million for projects and disbursed $17.5 million. 

USAID, on the other hand, obligated its total $100 million IRAP funding in September 2007 

upon awarding a contract to Development Alternative, Inc. (DAI) to monitor and disburse the 

IRAP grants and purchases. USAID reported that as of January 15, 2009, DAI had $52.1 million 

in approved IRAP projects. 

USAID’s programmed contractor support costs appear relatively high─-amounting to 

approximately $.45 for each $1.00 in grants awarded. USAID contract data from June 2008, 

when its grant management contract was definitized, shows that USAID expected to pay the 

contractor approximately $34.5 million for operations and support costs, and a fixed fee of $5.9 

million. Thus, of the original $130 million ($100 million for IRAP and $30 million for Civil 

Society and Conflict Mitigation), approximately $89.6 million would be available for grants and 

subcontracts. This equates to a programmed support cost of $.45 for each $1.00 in grants 

awarded. The contractor also pays subcontractors an average of 8% of the dollar value of the 

grants to disburse grant funds to the Iraqi recipients. This brings the programmed support cost 

for these contracts to approximately $.53 for each $1.00 in grants. In written comments on a 

draft of this report, USAID provided data that shows that its budgeted support costs for the entire 

grant are now estimated to be approximately $.61 per $1.00 in grants disbursed as of January 20, 

2009. 

SIGIR’s analysis of QRF data (including both QRF-S and IRAP) as of September 2008 shows 

that 55% of the dollar amount of QRF projects approved through September 2008 were for 

grants, 25% were for micro-procurements, and 20% were for direct procurements. All QRF 

projects are classified based on the major program or theme that they support. Table 2 shows the 

total amounts approved and disbursed by project as of September 30, 2008. 

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Table 2—QRF Project Funds Approved and Disbursed 

Project Approved Disbursed % of Total Approved 

Economic Development $11,137,762 $5,003,388 15.95% 

Education 10,653,967 4,612,022 15.25% 

Government Issues 9,345,858 4,669,593 13.38% 

Civil Society 7,833,880 4,794,340 11.22% 

Agriculture 7,007,715 4,516,359 10.03% 

Health 6,466,507 2,380,066 9.26% 

Business Development 4,752,271 2,753,263 6.80% 

Women's Program 3,872,772 2,744,561 5.55% 

Other 3,212,154 212,420 4.60% 

Youth Programs 3,082,272 2,542,785 4.41% 

Rule of Law 2,476,127 1,509,452 3.55% 

Total $69,841,285 $35,738,249 100.00% 

Source: QRF Periodic Report as of September 30, 2008. 

Documentation and Training Need Improvement 

DoS and the U.S. Embassy in Iraq worked together to develop initial management controls, 

guidance, training, and financial reporting procedures for the QRF funds and were proactive in 

identifying and correcting problems in the initial implementation phase of QRF. Although we 

recognize these efforts, we noted incomplete documentation in project files, and a need to train 

PRT personnel on the IRAP program. 

Supporting Documentation Lacks Specificity 

Required closeout documentation was not available in the QRF database for any of the 20 QRF 

projects that SIGIR selected for review. In addition, supporting documentation was not available 

for 5 of the 20 QRF projects we reviewed. As the official depository for QRF-related 

documents, the QRF database should include all information pertaining to each project from 

beginning to end. The supporting documentation that is required to be scanned and uploaded to 

the database for each project is 

• a written proposal for the project 

• team leader and other required approval documentation 

• a budget for the project 

• a description of how the project is in keeping with the overall goals of the team 

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• invoices or other supporting documentation for all purchases 

• closeout documentation 

According to the QRF operating procedures, the closeout documentation for disbursed funds 

should include the results of the project, any problems with the project, and how the project 

meets the overall goals of the team. 

We reviewed 20 projects from the QRF database in August 2008 to determine whether all 

required closeout documentation was available. Our sample consisted of 15 randomly selected 

QRF projects with disbursements ranging from $200 to $23,600, plus the five largest projects. 

The five largest projects had disbursements ranging in value from $150,245 to $250,000. 

None of the 20 projects we reviewed had the required information on the actual outcomes of the 

projects or information on how the project actually fit into the overall goals of the PRT. We did 

find that the documentation to support the approval and disbursement process was adequate; 

however, supporting documentation for 5 of the 20 projects did not completely follow the 

requirements identified in the Standard Operating Procedures for QRF. The following are 

examples of requirements that were not followed: (1) supporting documents were signed but not 

dated; (2) project descriptions did not include project goals or the expected impact on the 

community or organization; (3) a description of how each project fits in with the overall plans of 

goals of the PRT involved was not included; and (4) a description of the buy-in by local or 

Government of Iraq officials was not included. 

Training Only Partially Provided 

The DoS team in Washington, D.C. and OPA developed and implemented QRF training for PRT 

staff members prior to and during their assignments in Iraq. Interviews with PRT members and 

our review of training materials shows that both the DoS Washington QRF team and OPA have 

provided a comprehensive training program for the QRF-S personnel. Additionally, USAID 

provides training for its representatives on IRAP. However, military members of the PRT teams 

who do not attend this training sometimes have little understanding of the IRAP program. 

The PRT staff comes from a diverse cross section of professions and backgrounds, and many of 

the PRT staff members do not have formal training in procurement activities, project 

management, or other management disciplines. Therefore, QRF training for PRTs is important 

to the success of the program and to ensure that taxpayer dollars are used appropriately. To 

address program training needs, DoS and OPA developed several QRF training programs for 

current and newly assigned PRT staff. For example, QRF training at the Foreign Service 

Institute’s monthly PRT course includes a short presentation on USAID’s IRAP program. This 

training is intended for PRT staff members prior to their deployment to Iraq to help prepare them 

for their QRF responsibilities. Additionally, OPA provides some QRF training to PRT staff 

during their in-processing at the U.S. Embassy Baghdad prior to departure to their PRT 

assignment. OPA also developed Power Point training presentations that are available online 

and provide the PRT staff a brief overview of areas pertinent to the QRF program. Finally, in 

July 2008, OPA began offering QRF training sessions to PRT members twice each month. 

However, some PRT members who are assigned by the military often do not attend this training. 

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The training provided, however, offers little information on IRAP and the USAID contractor’s 

role in the program. With the exception of the short briefing on IRAP at the Foreign Service 

Institute, little other instruction is provided to the PRT teams about the larger USAID part of the 

QRF program. Discussions with contractor officials and PRT members show that some PRTs 

had difficulty understanding the role that the contractor played in the QRF program. Some PRTs 

appeared confused as to the functions the contractor performs and the services it can provide. 

For example, according to senior contractor official, some PRT teams would want to meet the 

local nationals working for his firm to establish a relationship and obtain some level of assurance 

of program cooperation. However, the officials said that his firm does not allow this interaction 

to ensure the safety of the local nationals as this could jeopardize their lives and families if they 

were seen entering and leaving a PRT location. 

Conclusions and Recommendations 

Conclusions 

OPA has developed a sound process for reviewing and selecting projects to be funded by the 

QRF program. However, OPA does not have a process for assessing whether QRF projects were 

successful and met their intended objectives, and USAID’s process does not effectively evaluate 

and document outcomes. Effective follow-up systems are an important part of an agency’s 

internal control processes to prevent waste and fraud. 

OPA has largely finished its portion of the program, obligating $34.99 million of its $35 million 

for approved QRF-S projects. USAID has approved $52.1 million in IRAP projects as of 

January 15, 2009, but this does not include the USAID contractor’s support costs. These 

programmed support costs appear relatively high. For example, SIGIR’s review found that in 

FY 2008 these costs were approximately $.82 for each $1.00 in grants awarded. However, 

USAID officials told us that contractor deployment costs tend to make costs high in the early 

stages of a program, and the costs come down as the program progresses. At this point, the final 

cost is unknown, however, in its written comments on a draft of this report USAID provided data 

that shows its budgeted support costs for the entire grant are estimated to be approximately $.61 

per $1.00 in grants disbursed as of January 20, 2009. SIGIR plans to review USAID’s support 

costs later this year. 

We noted some opportunities to improve management of the QRF program. Required 

documentation in project files was incomplete, and training for the PRTs on the IRAP program 

could be improved. 

Recommendations 

SIGIR recommends that the Director, Office of Provincial Affairs, direct that actions be taken to: 

1. Develop an appropriate process for evaluating and monitoring QRF-S projects to 

determine their outcome. 

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2. Establish procedures to ensure that QRF project files include all required documentation, 

to include closeout documentation that identifies the results of the project. These 

procedures should include checks to validate the completeness of file documentation. 

3. Modify QRF training to include PRT’s role and responsibilities for large grants and 

purchases managed by USAID. 

Management Comments 

The USAID Mission Director-Iraq provided comments, which are included in Appendix D to 

this report. USAID generally concurred with the findings of the draft report with some 

reservations. Foremost, USAID believes that it is too early in the grant process to measure 

progress. Nonetheless, USAID reported that its contractor would document the actual 

accomplishments of the grantees prior to close-out and that USAID would monitor this process. 

USAID also said that it has a monitoring and evaluation contractor that assists USAID in 

overseeing the grants contractor’s performance. 

In commenting on the operational and support costs of the contract, USAID noted that $62.3 

million out of the $100 million is available for grants. This amounts to a contract support cost of 

$.61 for every $1.00 in grants provided to Iraq recipients. SIGIR included this updated number 

in the report. 

The U.S. Embassy-Iraq provided comments to our draft report which we included in Appendix 

D. The Embassy concurred with the recommendations in the report. OPA provided technical 

comments, which are included in the report where appropriate. 

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Appendix A—Scope and Methodology 

SIGIR initiated this audit in May 2008 (Project 8018) to ensure that OPA and USAID fhave 

effective management controls in place for the Quick Response Fund program to prevent fraud, 

waste, or abuse and to determine whether program goals are being met. 

To identify reporting procedures for the financial, management and QRF program results we 

interviewed DoS and USAID staff and officials. We requested copies of written policies, 

guidance, and procedures regarding the financial and program management of the QRF program 

and IRAP. We also met with DoS and USAID officials and obtained additional data and 

supporting documentation from the IRAP implementing contractor. 

To determine the adequacy of financial and program management controls and program results, 

we analyzed management data used to report approved and completed QRF projects, examined 

contractor invoices, and reviewed program training opportunities and written procedures and 

guidance. We also selected a sample of completed QRF projects to determine whether they met 

the parameters of the program. Additionally, we evaluated an internal DoS review of the QRF to 

assess the operations and management and ultimately the success of the program. 

We performed this audit under the authority of Public Law 108-106, as amended, which also 

incorporates the duties and responsibilities of inspectors general under the Inspector General Act 

of 1978, as amended. We conducted this review between May and November 2008 in 

accordance with generally accepted government auditing standards. Those standards require that 

we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable 

basis for our findings and conclusions based on our audit objectives. We believe that the 

evidence obtained provides a reasonable basis for our findings and conclusions based on our 

audit objectives. 

Use of Computer-Processed Data 

To perform this audit, we used data provided by U.S. agencies and USAID’s contractor that was 

obtained from the QRF Tracking Database, the Consolidated Overseas Accountability Tool and 

the Technical Assistance Management Information System (TAMIS). We conducted limited 

tests of the data in the QRF Tracking Database and TAMIS to hard copy data available and 

matching electronic data and examined the reconciliation process of financial data in the QRF 

Tracking Database to financial data in COAST. We examined the general and application 

controls for QRF projects entered into the QRF Tracking Database as part of our overall 

evaluation of approval, disbursement, and documentation controls for the QRF program. While 

we found some instances of inadequate documentation in the QRF Tracking Database and 

reconciliation differences due to timing issues between the QRF Tracking Database and the 

Consolidated Overseas Accountability Tool, we found nothing material that would impact on our 

use of the computer-processed data for this audit. 

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Internal Controls 

As part of the overall evaluation of the QRF program, we examined internal controls related to 

the QRF approval, disbursement, and imprest fund reimbursement process. We also conducted a 

limited evaluation of physical cash control procedures and examined internal controls as they 

relates to policies and procedures in place to ensure adequate financial and program management 

reporting. 

Prior Coverage 

There has been no prior audit coverage of the Quick Response Fund or the Iraq Rapid Assistance 

Program. 

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Appendix B—Acronyms 

Acronym Descripton 

ADS Automated Data System 

DoS Department of State 

ESF Economic Support Fund 

IRAP Iraq Rapid Assistance Program 

OPA U.S. Embassy Office of Provincial Affairs 

PRT Provincial Reconstruction Team 

QRF 

QRF-S 

Quick Response Fund 

Quick Response Fund-State 

SIGIR Special Inspector General for Iraq Reconstruction 

USAID United States Agency for International Development 
Appendix C—Audit Team Members 

This report was prepared and the audit conducted under the direction of David R. Warren, 

Assistant Inspector General for Audit, Office of the Special Inspector General for Iraq 

Reconstruction. 

The staff members who conducted the audit and contributed to the report include: 

Walter J. Franzen 

W. Randy Gentry 

Nancee K. Needham 

Frank W. Slayton 

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Appendix D—U.S. Agency for International 

Development Mission Iraq Comments 

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Appendix D—U.S. Embassy-Iraq Comments 

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SIGIR’s Mission Regarding the U.S. reconstruction plans, programs, and 

operations in Iraq, the Special Inspector General for Iraq 

Reconstruction provides independent and objective: 

• oversight and review through comprehensive audits, 

inspections, and investigations 

• advice and recommendations on policies to promote 

economy, efficiency, and effectiveness 

• deterrence of malfeasance through the prevention and 

detection of fraud, waste, and abuse 

• information and analysis to the Secretary of State, the 

Secretary of Defense, the Congress, and the American 

people through Quarterly Reports 

Obtaining Copies of SIGIR 

Reports and Testimonies 

To obtain copies of SIGIR documents at no cost, go to 

SIGIR’s Web site (www.sigir.mil). 

To Report Fraud, Waste, and 

Abuse in Iraq Relief and 

Reconstruction Programs 

Help prevent fraud, waste, and abuse by reporting 

suspicious or illegal activities to the SIGIR Hotline: 

• Web: www.sigir.mil/submit_fraud.html 

• Phone: 703-602-4063 

• Toll Free: 866-301-2003 

Congressional Affairs Hillel Weinberg 

Assistant Inspector General for Congressional 

Affairs 

Mail: Office of the Special Inspector General 

for Iraq Reconstruction 

 400 Army Navy Drive 

 Arlington, VA 22202-4704 

Phone: 703-604-0368 

Email: hillel.weinberg@sigir.mil 

Public Affairs Kristine Belisle 

Assistant Inspector General for Public Affairs 

Mail: Office of the Special Inspector General 

for Iraq Reconstruction 

 400 Army Navy Drive 

 Arlington, VA 22202-4704 

Phone: 703-428-1217 

Fax: 703-428-0818 

Email: PublicAffairs@sigir.mil 

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