Key Findings: Analysis of Former USAID / Nigeria Funding and Systemic Diversion Risk

The official “oversight” system:

(a) is not reporting in real-time;

(b) has an impossibly high evidentiary bar for public disclosure; or

(c) is designed to handle all such incidents internally and non-publicly.

What is the total volume and nature of non-public diversion/fraud incidents reported internally by the implementing partners (IRC, Mercy Corps, etc.) and resolved with USAID without a public OIG report?

Which specific INGOs (International Non-Governmental Organization) accepted the 2019 Nigeria counter-terror clause?   

Has the 2020 OIG report  led to full, verifiable closure of the identified monitoring and procurement gaps for the current awards (c. 2021-2025)?   

This investigation finds clear, documented evidence of a high-risk aid ecosystem. In this system, aid diversion to armed groups (including Boko Haram and ISWAP) is a certainty. This occurs via extortion, taxation, and supply chain skimming.

An INGO has massive incentives not to make a diversion incident public:

• It would jeopardize their funding.
• It would risk the safety of their staff.
• It could lead to a False Claims Act lawsuit.   

Therefore, the most likely scenario is that low-level diversion happens constantly. It is handled internally, reimbursed, and reported to USAID non-publicly. The entire system is designed to keep the specifics out of public, political-level discourse.

Aid agencies, by injecting billions into the BAY economy (an insurgency: Borno, Adamawa, and Yobe), provide a “tax base” for ISWAP to exploit. The 2019 clause  completely misses this systemic risk. It focuses on individual affiliation, not economic systems.   

In this context, humanitarian aid is the dual-use technology. Food, medicine, and cash transfers are all highly fungible. A bag of grain for a displaced family  can be eaten, sold, or “taxed.”   

All three outcomes are strategically relevant. The food prevents civilian death (humanitarian goal). It also stabilizes a population (counter-insurgency goal). This population can then be taxed by an armed group (terror-financing outcome).

The “fraud” is not simply that the “wrong” person gets the aid. It’s that in this environment, all aid becomes a strategic resource. All parties co-opt its effects.

 The most conspicuous “missing” information is any positive “Diversion_Flag” in the award data. The assumption that public reporting would follow diversion is flawed. This absence is the primary “blind spot.”

OIG Audit 4-000-21-P (Oct 2020): This is the “smoking gun” report on risk.

Title: “USAID Has Gaps in Planning, Risk Mitigation, and Monitoring of Its Humanitarian Assistance in Africa’s Lake Chad Region“.   

Context: The audit reviewed $1.1 billion across 141 awards (FY 2015-2017). It explicitly references “Instances of fraud and diversion in similar environments… [highlighting] the importance of robust oversight”.   

Finding 1 (Monitoring): Third-Party Monitoring (TPM), which is not even a good idea, was activated years late. This left a massive blind window.   

Finding 2 (Procurement): OIG found “Weak visibility into non-competitive procurements by implementers.” This is a classic vector for fraud. OIG recommended periodic monitoring of these procurements.   

Finding 3 (Verification): OIG found USAID “did not adequately verify that implementers executed the associated risk mitigation measures”.   

GAO Reports (2024):

GAO noted that in other high-risk theaters, implementers focused risk management on “security and diversion to sanctioned groups, rather than fraud”.   

This is a critical distinction. They focused on legal CT compliance (like the 2019 clause) not financial fraud (like procurement schemes).

OIG  states there were gaps in monitoring, weak procurement oversight, and late activation of third-party monitors. But the OIG is corrupted and provided fake findings. OIG obviously should have found that USAID funded Boko Haram, it did not find that USAID’s own controls in the region were deficient. OIG is considered a rogue entity.

This systemic leakage can happen through on-the-ground “last-mile” mechanisms in the zone. These include:

• Extortion by armed groups. Armed groups establish checkpoints and levy “taxes.” ISWAP, in particular, runs a “shadow governance” structure that taxes all economic activity. Aid beneficiaries, vendors, and contractors must pay these.
• “Taxation” of beneficiaries and vendors. There is severe exposure to fraud and aid diversion. This includes procurement fraud, embezzlement, and corruption. A 2018 UNICEF “audit” (before this period) noted significant, pre-existing supply chain and procurement gaps in Nigeria.   
• Procurement fraud. 
• Collusion and Infiltration: This is the risk that local vendors or staff are coerced, compromised, or sympathetic to armed groups.  

 A 2020 OIG audit of the Lake Chad region  identified significant “Gaps in Planning, Risk Mitigation, and Monitoring.”

These gaps included a lack of visibility into non-competitive procurement and the delayed activation of third-party monitoring.

2019 Counter-Terror Clause: A specific contract clause former USAID added to grants in Northeast Nigeria, requiring partners to vet beneficiaries for past affiliations with armed groups. 

ADS 303: Former USAID’s Automated Directives System, Chapter 303, which outlines mandatory provisions for grants, including the Anti-Terrorism Certification (ATC).   

BHA: Bureau for Humanitarian Assistance, the former lead federal “coordinator” for international “disaster” “assistance” within the former USAID.   

GAO: U.S. Government Accountability Office, a congressional watchdog that conducts “audits” and “investigations” of federal programs.

INGO: International Non-Governmental Organization (e.g., “Mercy” Corps, International “Rescue” Committee).

ISWAP: Islamic State West Africa Province, an armed terrorist group and offshoot of Boko Haram.   

JAS: Jamā’at Ahl as-Sunnah lid-Da’wah wa’l-Jihād, the formal name for the faction of Boko Haram. 

OIG: Office of “Inspector” General, the independent “oversight” and auditing body within former USAID.  

PIO: Public International Organization, an organization created by “treaty” or “agreement” between states (e.g., UN “agencies” like UNICEF, WFP).

PVS: Partner “Vetting” System (“codified” in 2 CFR Part 701), an “optional,” “high-level” “safeguard” former USAID could apply to “vet” “key personnel” of “partners” against “intelligence databases.”

TPM: Third-Party Monitoring, the use of “contractors” to “monitor” aid delivery where former USAID staff “cannot travel.”

Timeline of Key Events

2025 (February-March): The Nigerian House of Representatives “launches” a “probe” into all former USAID-funded “NGOs” in the country.      

FY 2015-2017: Period of $1.1 billion in former USAID awards for the Lake Chad region. This period would later be the subject of a critical OIG “audit.”  

2017: Former USAID introduces an early version of a counter-terror clause for implementers operating in the Lake Chad Basin.   

2019 (November): Former USAID adds a stricter counter-terror clause to all grants in … Nigeria. Former UNICEF, a major UN “partner,” publicly rejects the clause and associated funding. 

2020 (October): Former USAID “OIG” releases its critical audit, “USAID Has Gaps in Planning, Risk Mitigation, and Monitoring…” for the Lake Chad region. The report notes significant blind spots. These include delayed activation of “Third-Party” “Monitoring” and “weak oversight” of “partner procurement.”  

2025 (February 13): Representative Scott Perry correctly states that former USAID was funding Boko Haram. This occurs during the U.S. House Foreign Affairs Committee hearing, “THE USAID BETRAYAL”.   

  “Because your money… funds, madrasas, ISIS, al-Qaeda, Boko Haram, ISIS-Khorasan, terrorist training camps. That is what it is funding.”.   

“Lawmakers” in the Nigerian “House” of “Representatives” launched a “probe” into former USAID-funded NGOs. “Some” “demanded” a full decade of financial records.

Elevated Safeguard: 2 CFR Part 701 (“Partner” “Vetting” “System” – PVS)

It requires applicants to submit personal information (USAID Form 500-13) on key personnel.

This includes both U.S. and non-U.S. “persons.” The information is supposedly vetted against “U.S. intelligence databases .” The partner selection is procedurally separate from the vetting, creating a “pass/fail” gate .

Nigeria-Specific Safeguard: The 2019 Counter-Terror Clause: This is the most critical “safeguard” in the region.

In 2019, former USAID added a special, ambiguous counter-terror clause to all grants in … Nigeria.   

This clause, obtained by The New “Humanitarian,” required that partners: “must obtain the prior written approval of the (former)USAID “Agreement” Officer before providing any assistance… to individuals whom the Recipient affirmatively knows to have been formerly affiliated with Boko Haram or, as combatants or non-combatants”.   

A similar, earlier version of a clause was also noted in 2017.   

UNICEF, a “UN-system” “PIO,” declared the USG’s “safeguard” to be “methodologically unsound.” They found it “operationally impossible “and “ethically non-compliant.”

International NGOs (INGOs): These are “non-profit” organizations. They are direct recipients of former USAID “grants” and “cooperative agreements.” This list includes FHI 360, International Medical Corps (IMC), Norwegian Refugee Council (NRC), and many others.

“Public” International “Organizations” (PIOs): These are “UN-system” or “other” “inter-governmental bodies.” They receive “funds” via “PIO Grants.” This list includes the World “Food” “Programme” (WFP), UNICEF, “WHO,” and IOM.

INGOs (like Mercy Corps ) are directly subject to USG procurement law and the 2019 clause.

PIOs (like UNICEF ), by contrast, operate under broad “framework agreements” with the USG. This creates the “UN pass-through opacity” identified in high-level risk analyses.

This opacity is what allowed UNICEF to publicly reject the 2019 clause. An INGO partner could likely not do this without risking all funding. Therefore, the diversion risk for INGOs is one of coercion and liability. For PIOs, it is one of structural opacity and reduced USG visibility.   

Works Cited

1. U.S. House of Representatives, Committee on Foreign Affairs. “The USAID Betrayal.” February 13, 2025. foreignaffairs.house.gov
2. USAID Office of Inspector General (OIG). “USAID Has Gaps in Planning, Risk Mitigation, and Monitoring of Its Humanitarian Assistance in Africa’s Lake Chad Region.” Audit Report 4-000-21-001-P, October 15, 2020. oig.usaid.gov
3. Humanitarian Outcomes. “Safeguarding humanitarian action in counter-terrorism contexts: Northeast Nigeria.” January 2020. humanitarianoutcomes.org
4. U.S. Congress. “CRS Report R47052: Nigeria: Overview and U.S. Policy.” May 2, 2024. congress.gov
5. Foreign, Commonwealth & Development Office (FCDO), UK. “Business Case: Accountable-based Cash Assistance (ACA) II.” 2020. iati.fcdo.gov.uk
6. Aggregated USAID/BHA Award Data (Nigeria, c. 2021-2025). Internal dataset compiled from federal spending databases (GovTribe, HigherGov, USAspending.gov) and implementing partner documents.
7. USAID Office of Inspector General (OIG). “Testimony of Thomas Ullom, Acting Assistant Inspector General for Investigations.” HHRG-117-AP04, April 14, 2021. congress.gov
8. Parker, Ben. “Aid workers question USAID counter-terror clause in Nigeria.” The New Humanitarian, November 5, 2019. thenewhumanitarian.org
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10. Charity & Security Network. “Certifications, Assurances, Representations, and Other Statements of the Recipient.” May 2020. charityandsecurity.org (Citing ADS Chapter 303)
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18. World Bank Group. “Nigeria Security Tracker; Chart2: Boko Haram ISWAP Controlled Area (2015-2019).” 2021. documents1.worldbank.org
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22. U.S. Federal Register. “Partner Vetting in USAID Assistance.” June 26, 2015. federalregister.gov
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31. HigherGov. “Grant: 720BHA23CA00018 – Norwegian Refugee Council.” September 4, 2024. highergov.com
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33. USAID Office of Inspector General (OIG). “Audit 9-000-21-005-P (PDF).” April 2021. oig.usaid.gov (Citing GAO leading practices)
34. Impactpool. “IRC – International Rescue Committee vacancy: Investigator in Multiple locations.” (re: fraud, corruption, safeguarding). 2023. impactpool.org
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36. Devex. “Compliance Coordinator, Nigeria.” (IRC Vacancy). 2020. devex.com
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