Ensuring Oversight to U.S. Aid to Ukraine

The unprecedented level of humanitarian, economic, and military aid that the United States has provided to Ukraine since Russia’s illegal invasion in February 2022 has been instrumental in Ukraine’s military resistance against Russia, and it has allowed the Ukrainian government to pay pensions and teacher salaries, support its healthcare system, and perform other activities to ensure that the government continues to function.

To support the Ukrainian government, the United States has directed $22.9 million of the total appropriated funds as “budget support,” a tool that provides cash directly to Kyiv. This is an instrument that the United States rarely uses, most often in support of geostrategic countries. Given the amount of assistance, the use of budget support, and perceptions of corruption, some in Congress have called for increased oversight of these funds, including the potential for a special inspector general modeled on the ones created for Iraq’s and Afghanistan’s reconstruction efforts. These concerns are not unfounded. Creating a special inspector general, however, would create an additional layer of oversight that could produce a chilling effect on the disbursement of assistance while likely not yielding the desired increased oversight and transparency in the short term. Instead, Congress and other stakeholders should look to the existing Offices of Inspector General (OIGs) at the Department of Defense (DOD), Department of State, and the U.S. Agency for International Development (USAID) to provide rigorous oversight of U.S. assistance to Ukraine. Congress understood this when it provided additional support for the OIGs in the supplemental appropriations for Ukraine.

A Breakdown of U.S. Assistance to Ukraine

The United States has provided billions in funding for Ukraine since the start of the war. The four supplemental aid packages passed by Congress to support Ukraine since the war began totals over $113.4 billion. Appropriated in these packages is $62.3 billion for the Department of Defense, $46.1 billion for the Department of State and USAID, and $5 billion for other government agencies. The fourth package, which provided $48 billion, was approved in December 2022 by Congress. The amount was meant to cover Ukraine’s needs through the end of this fiscal year, though there are some concerns that this will not be enough, and the Biden administration does not plan to ask for additional funds until the next fiscal year.

U.S. assistance to Ukraine falls largely into three main categories: military, economic, and humanitarian aid. Of the three main funding buckets, military aid spending has made up a much higher amount than economic and humanitarian assistance, at approximately $48.7 billion spent to date. This aid is not simply weapons equipment like the cluster munitions the Biden administration sent to Ukraine in July 2023, but includes providing training and logistics support and funding grants through presidential drawdowns and the Foreign Ministry Financing program. In addition to the military aid, the United States has provided $26.4 billion in economic support and budgetary aid through grants and other financial support mechanisms and $3.6 billion in humanitarian assistance including food assistance, healthcare and refugee support, and other humanitarian aid needs. It is within the realm of military spending that much of the dialogue on a Special Inspector General for Ukraine Assistance (SIGUA) centers. As Congress works to fund the U.S. military through FY 2024, the National Defense Authorization Act (NDAA), which passed in the House of Representatives on July 14, 2023, includes an amendment by Representative Chip Roy (R-TX) to create a SIGUA to oversee U.S. aid to Ukraine.

U.S. Assistance to Ukraine and Oversight

Strong oversight of U.S. assistance to Ukraine is important to ensure the continued support of Congress and the American people. It is important for Ukraine and the Biden administration to show clearly where the assistance is going and the impact that this assistance is having on the war. These are tasks that the OIGs at the DOD, State Department, and USAID are well equipped to handle. This is particularly true of economic and humanitarian assistance, which are two categories that have more difficulty showing clear, tangible outcomes. Security assistance—largely in the form of weapons and other military equipment—is having a clear and visible impact on the war. The DOD also has strong safeguards in place that allow it to easily track the flow of weapons, ammunition, and other equipment from point of delivery to Ukraine until they find their way into the field.

Critical to U.S. support for Ukraine is the provision of the $22.9 billion direct budget support to the Ukrainian government. Since the war began, the Ukrainian government has experienced a significant monthly shortfall in tax and other government revenues. Ukraine’s choices for additional funding are limited. In August 2022, Ukraine’s international debt holders agreed to a suspension of debt payments, but this effectively locks Ukraine out of global debt markets. The government could turn to local debt markets, but the interest rates charged are significantly higher than they were prewar. Budget support from Ukraine’s partners has helped to close its monthly deficit. This has been provided through prewar World Bank funding mechanisms as well as the creation of new trust funds including the Ukraine Relief, Recovery, Reconstruction and Reform Trust Fund (URTF). The money is dispersed in monthly tranches to the Ukrainian Ministry of Finance, which then allocates this money among ministries to meet the government’s obligations.

Some in Washington—including members of Congress and the current Special Inspector General for Afghanistan Reconstruction (SIGAR)—have called for the creation of a SIGUA. However, given the ongoing joint work of the three OIGs, it is premature to create an additional layer of bureaucracy that would likely duplicate existing oversight efforts. Congress, recognizing that the OIGs would need more money to adequately provide oversight to U.S. aid to Ukraine, appropriated additional resources to support oversight efforts. Since the outbreak of the war, the three OIGs have met regularly to discuss best practices for oversight and transparency. Congress also requested that the OIGs issue a joint oversight plan for Ukraine assistance, which was issued in January 2023.

The Joint Strategic Oversight Plan for Ukraine Response (JSOP-Ukraine Response) is a compilation of the current collaboration between the three OIGs to ensure oversight of U.S. aid to Ukraine. The FY 2023 plan is the first annual joint oversight plan submitted to Congress. Encompassing an all-of-government approach, the report summarizes and categorizes the work already being done by the OIGs.

The JSOP-Ukraine Response divides oversight into three main strategic oversight areas (SOAs):

1. Security assistance and coordination: Jointly managed by the DOD and the State Department, this SOA includes encouraging anti-corruption programs, ensuring end-use monitoring, and providing advice to partner security forces, among other oversight mechanisms.
2. Non-security assistance and coordination: Jointly managed by the State Department and USAID, this SOA focuses on the non-security assistance that the United States has provided Ukraine, including economic and humanitarian aid.
3. Management and operations: Jointly managed by the three OIGs, this SOA focuses on ensuring the security of U.S. personnel, administering U.S. government programs, and managing U.S. government contracts.
    

The JSOP-Ukraine Response report outlines 64 current or planned oversight projects and 14 completed projects. Current mechanisms in place include the joint hotline operated by the three OIGs. This hotline is confidential, open to the public, and a reliable way to report allegations of fraud, mismanagement, and abuse. Additional oversight mechanisms include a mix of classified and unclassified audits and investigations into various government programs.

In response to questions about the effectiveness of U.S. assistance in Iraq and Afghanistan and the volume of assistance, Congress created two special inspectors general to provide additional oversight. Created in 2008, the SIGAR, as an independent body, did identify several issue areas with U.S. assistance to Afghanistan, including fraud and a lack of a comprehensive recovery strategy; it also criticized aid agencies for not taking enough risk. This duality arguably created a chilling effect on the willingness of USAID and its implementing partners to do more in Afghanistan. From a strategic perspective, there is a debate over whether SIGAR helped or hurt the reconstruction of Afghanistan, and it is ultimately unclear if the work of SIGAR altered the outcome of the war. SIGAR continues its work to this day, despite Kabul falling to the Taliban nearly two years ago.

Following the 2013–14 Revolution of Dignity, Ukraine established considerable anti-corruption reforms that work toward the advancement of good governance, transparency, and accountability; however, the country continues to be weighed down by perceptions of corruption, which remains a concern for Ukraine’s partners. The calls for a SIGUA ignore this progress. Since 2014, the Ukrainian government has managed significant support from a wide range of international donors. To date, there have been no allegations of corruption associated with this support. Moreover, the country has a vibrant civil society that has provided an important source of independent transparency and accountability for government.

Conclusion

The calls for oversight to U.S. aid to Ukraine are justified and will ensure the continued support from the U.S. Congress and the American people. However, the mechanisms put in place by the three OIGs at the U.S. DOD, the U.S. Department of State, and USAID already provide the necessary oversight and accountability. Rather than repeat the approach taken in Afghanistan and Iraq, Congress and the Biden administration should learn from the analysis produced by SIGAR and SIGIR and apply those lessons.

It is understandable that Congress feels the need to act to ensure that U.S. aid to Ukraine is distributed securely, fairly, and appropriately. But this action does not need to take the form of a SIGUR. Instead, the U.S. government could take the following measures to assist in the oversight and monitoring of aid provided to the Ukrainian government:

• Confirm an inspector general for the OIGs at the Department of State and USAID, which are both operating without a confirmed inspector general.
• Grant flexible hiring authority to the current OIGs in order to ensure timely and efficient appointments.
• Increase the cap on the number of personnel at the U.S. embassy in Kyiv and allow establishment of permanent slots for OIGs, rather than relying on temporary duty assignments.
   

The situations in Afghanistan and Iraq are vastly different from that of Ukraine, but they are similar in the significant amounts of aid the United States provides. The prevalent role of civil society in Ukraine can help monitor and ensure that U.S. aid is reaching the people it is meant to benefit. The OIGs are already working on an MOU with Ukraine to allow access for monitoring funds, and Ukraine has shown complete cooperation, allowing OIGs direct access to databases as needed. Given existing oversight mechanisms put in place by the three OIGs, a special inspector general for Ukraine assistance is unnecessary and would detract from the good work already in place to ensure accountability of U.S. foreign assistance by the three OIGs at the DOD, the State Department, and USAID. Congress should consider codifying this approach and providing additional resources to support the high level of oversight the three inspectors general are already providing.

Daniel F. Runde is senior vice president, William A. Schreyer Chair, and director of the Project on Prosperity and Development at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Madeleine McLean is a research assistant with the CSIS Project on Prosperity and Development.