‘What Do You Mean?’: Brian Mast Presses Witnesses About Foreign Assistance Grants Overhead

3 months ago

During a House Foreign Affairs Committee hearing last week, Rep. Brian Mast (R-FL) questioned witnesses about the budget for foreign assistance grants.

Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:

https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript

Stay Connected
Forbes on Facebook: http://fb.com/forbes
Forbes Video on Twitter: http://www.twitter.com/forbes
Forbes Video on Instagram: http://instagram.com/forbes
More From Forbes: http://forbes.com

Transcript

00:00I'm going to recognize myself for five minutes.

00:03And as I start out here, maybe there's

00:06some agreement or some good debate between you two.

00:10What is the budget that we're looking at on average,

00:13year over year?

00:13What are some of the budgets we're

00:14looking at for DRL from what you all have seen in terms

00:17of grants going out the door?

00:21Not everything coming in for salaries,

00:22but when we're talking about grants going out the door,

00:25what do you guys see and if we can agree

00:27on some kind of roundabout?

00:28We were looking at a, at least when I was assistant secretary,

00:32it was about $1.5 billion.

00:34I think it's gone up a bit.

00:37The operations budget was about $30, $40 million.

00:41Yeah, that's not right.

00:43It was, so the grant budget when I was there

00:46was a little over $100 million a year.

00:50During the Trump administration, Congress increased it.

00:55It went up about four times.

00:57I don't have the exact figure, obviously,

00:59but it went up to, I think, in the $400 to $500 million range.

01:03How many grants do you all think that's getting divided into?

01:06It's about, I think on an annual basis, roughly about 1,000.

01:12DRL is, one of the cool things about the Bureau, in my view,

01:18is that they're pretty good at doing very small grants.

01:20So USAID can't do anything under mega millions.

01:26One of the best programs that DRL has,

01:28that has strong bipartisan support,

01:31is the ability to get very tiny grants of like $2,000, $3,000,

01:35$5,000 out in even less than 48 hours.

01:38And of the 1,000 grants, how many sub-grants do you think

01:42they're talking about?

01:43How many sub-grants do you all think the entity that you wrote

01:47a grant to is now writing another or several other grants

01:50to other entities that you did not actually give a dollar to?

01:54You did not vet.

01:58That's pretty hard.

01:59That's pretty hard to say.

02:00That was the basis for my comment

02:03about the big organizations like Humanics and others

02:07that understand the federal acquisition regulations.

02:11You can't, without doing what Jim said earlier,

02:15get down into the field and give some Nigerian human rights

02:19defenders a small grant for peace building.

02:24They just don't know how to account for the money.

02:26So it requires a lot more.

02:31A lot of that money gets sucked off in overhead,

02:33I would suggest to you.

02:34Elaborate on that when you say sucked off in overhead.

02:38I brought up the example numerous times.

02:40We almost had a whole hearing on the atheism in Nepal.

02:44But the numbers are round, and so we'll use it as an example.

02:46$500,000, expand atheism in Nepal.

02:49It was denied here for several hours

02:51until we ultimately held it up.

02:52And then afterwards, the people that

02:54were here denying it for two hours

02:56called me afterwards and said, oh, crap, sorry.

02:59And we missed half of the slides in the program.

03:01By the way, here they are.

03:03The lawyer sent it to us.

03:04But when you look at that $500,000,

03:06Nepal's probably daily wage is, what, probably $2 a day

03:10on average, something like that there.

03:12So what do you think the $500,000 went to?

03:16I know this is a pure speculation question.

03:18But was it $50,000 towards producing 100 slides

03:23to give a PowerPoint, and then the other $450,000

03:26in paying salaries for people at some NGO sitting in England?

03:31Or what is it?

03:35Well, it is pure speculation.

03:37Jim would probably know better what the overhead rates are.

03:39Yeah, I could talk a little bit about sort of generically,

03:42rather than the specific.

03:43Because I don't know the specific project.

03:45The challenge that we have, and you're exactly right.

03:48So what we end up doing is we'll give a grant

03:51to an NGO in London who will then hire some random German

03:56to then fly to Uganda and set up a program where there will

04:02be an office, there will be an office space,

04:04there will be this guy's family or this gal's family.

04:09And then they'll run a program which

04:11will have slides and office and those types of things.

04:14Once you start getting to the actual implementation

04:16of the program, what we often see is a 50% overhead rate.

04:21And there's been efforts afoot to try

04:25to limit the overhead rate.

04:26And it's different between contractors and grantees.

04:29And what that actually does is different

04:31based upon the type of program, the sector, the region

04:34that you're operating.

04:36But there's a lot of countries that

04:38do foreign assistance that really try to limit overhead

04:41to under 10%, which I think is the right metrics

04:45and right approach.

04:45And would you say what you're outlining

04:48is par for the course, whether you're talking about DRL,

04:51or USAID, or Commerce, or take your pick of where

04:55the dollars might be coming from in terms of aid going abroad.

04:58Every agency is different, but I do

05:00think that there's general consensus about, yeah,

05:02that is the way most of the, at least

05:04on the foreign assistance side of state and aid,

05:06there is a consistency.

05:08As the former Congressman said, I mean,

05:11you have DRL does sort of micro grants

05:15where aid sort of lives in the $1 to $5 million range.

05:20So there's a little bit of different in scale, which

05:22allows you to have different expectations.

05:25But there's also different levels of programming.

05:27Often, you'll see five-year programs run out of aid,

05:31or you may have shorter out of DRL.

05:33So it just depends on each one.

05:35Chair now recognizes Mr. Crow for five minutes.

05:40Thank you, Mr. Chairman.

05:42We heard today that DRL does somewhere

05:46in the neighborhood of 1,000 grants, hundreds of millions.

‘What Do You Mean?’: Brian Mast Presses Witnesses About Foreign Assistance Grants Overhead

Category

Transcript

Recommended