The evaluation, issued in July 2026, examined the department’s administration of functions and awards transferred after State assumed responsibility on July 1, 2025. The review focused on whether State had enough management capacity to oversee the transferred work, not on whether funds were lost or aid programs failed.

A portfolio spanning 17 State offices

By September 2025, 17 State Department bureaus and offices were administering 1,504 transferred programs and awards, covering more than 100 countries. The awards included work performed in places such as Israel and the Palestinian Territories and Ukraine.

The inspector general’s detailed table listed $51.48 billion in obligated value and $86.62 billion in total expected cost. Those figures describe the portfolio snapshot from September 2025; they are not a current August 2026 balance. Obligated value also is not the same as money already disbursed.

The report estimated that approximately $41 billion had been disbursed and that about $10 billion remained in unliquidated obligations in the data reviewed.

Officials reported practical management problems

State officials told investigators that some department offices had limited or no prior experience administering certain forms of foreign assistance. The transferred awards used mechanisms that were unfamiliar to some officials, creating additional training and oversight needs.

The review also identified problems involving staffing, training and access to information-technology systems. Officials reported incomplete guidance for changing award terms and conditions, which could complicate routine administration and documentation.

Reuters reported that the department hired 838 people to administer the awards, fewer than bureaus requested. In the Bureau of African Affairs, Reuters reported, 232 positions had been filled against 732 requested positions. Those staffing figures are attributed to Reuters’ reporting rather than presented as figures independently calculated in the inspector general’s report.

The watchdog pointed to earlier recommendations

The inspector general issued no new corrective recommendations in the July evaluation. Instead, it encouraged State to complete earlier recommendations related to assigning responsibility for the realignment, assessing organizational capacity and developing a strategic workforce plan.

Those earlier recommendations followed the department’s effort to realign selected USAID functions and transfer selected programs and awards known as the Green List. The inspector general said the recommendations had not been fully implemented as of July 2026. OIG classified them as resolved pending further action.

State’s Office of the Under Secretary for Management told the watchdog that implementation of the May 2025 recommendations was in progress. The next accountability question is whether those commitments produce measurable improvements in staffing, training, system access, award documentation and monitoring.

What to watch next

For taxpayers and lawmakers, the central issue is whether the department built enough capacity before absorbing a portfolio of this size while undergoing its own reorganization. Later inspector general audits, State implementation updates and congressional oversight could provide evidence about whether the identified weaknesses have been addressed.

The evaluation does not establish that transferred funds were diverted or that programs were unsuccessful. It documents a management challenge: State was responsible for a broad, expensive and geographically dispersed portfolio while some offices were still developing the people, systems and guidance needed to administer it.

Sources

• State Department OIG evaluation
• Reuters reporting on the watchdog findings