Audit Finds Weaknesses in U.S. Agency for Global Media’s Oversight of Millions in Grant Funding

During the audit of the U.S. Agency for Global Media’s (USAGM) fiscal year 2024 financial statements, an independent external auditor identified multiple weaknesses in key operational and financial management areas, according to the Department of State’s Office of Inspector General (OIG).

The Office of Inspector General (OIG) is an independent entity responsible for preventing and detecting waste, fraud, abuse, and mismanagement. It inspects more than 270 embassies, diplomatic posts, and international broadcasting installations worldwide to assess whether policy goals are being achieved and if U.S. interests are effectively represented and advanced.

An audit conducted by independent external auditor Kearney & Company revealed deficiencies in the U.S. Agency for Global Media’s (USAGM) grantee monitoring processes, raising concerns about oversight and accountability in grant management and utilization. Additionally, weaknesses were identified in the agency’s accounting practices for property, plant, and equipment (PP&E), suggesting potential inaccuracies or inefficiencies in financial reporting and asset management.

“During the audit of the U.S. Agency for Global Media’s FY 2024 financial statements, the independent external auditor identified weaknesses related to grantee monitoring, accounting for property, plant, and equipment, and segregation of duties in the property management system,” the Department of State’s Office of Inspector General stated in its audit summary.

The audit found that USAGM, which funds five major grantees—including Radio Free Europe/Radio Liberty, Radio Free Asia, and the Middle East Broadcasting Networks—provided over $372 million in federal grants during FY 2024, representing approximately one-third of its annual funding. However, despite efforts to strengthen oversight through a grant monitoring program developed in 2019, significant deficiencies remain.

While 14 out of 15 tested monitoring controls were found to be effective, weaknesses in grant closeouts persist, increasing the risk of financial mismanagement. Notably, some grant closeouts involved awards dating back as far as 1994, and no closeouts were performed for the Open Technology Fund in FY 2024.

Additionally, the audit revealed lapses in the accounting and management of USAGM’s PP&E, valued at approximately $37 million. The agency failed to track disposals accurately, with 55% of its capital assets not being physically verified during the annual inventory process. Furthermore, missing data in financial records led to overstated asset values, raising concerns about the accuracy of USAGM’s financial statements.

Another critical issue identified was the lack of segregation of duties in the property management system, eQuip. The audit found that users with administrator roles could create, approve, edit, and delete assets, potentially leading to fraud or unauthorized actions. The agency also relied solely on the vendor’s security classification for the system, failing to conduct its own risk assessment as required by federal guidelines.

Despite these findings, USAGM received an unqualified opinion (i.e., a “clean audit”), indicating that independent auditors did not identify any material weaknesses or significant deficiencies. “Despite the challenging arena and the dangerous countries in which we operate, the U.S. Agency for Global Media (USAGM) remains committed to maintaining responsible stewardship of taxpayer funds entrusted to us by Congress to provide our audiences with accurate, objective, and professional news and information,” the agency stated.

USAGM has formally responded to the OIG regarding the audit. Roman Napoli, Chief Financial Officer carrying out the duties and functions of the Office of the Chief Executive Officer, stated in a letter to the OIG:

“Regarding the matters raised in your letter, we consider your identification an opportunity to improve our operational efficiency and effectiveness. In the area of grantee monitoring, the USAGM grants monitoring team has made significant progress in closing out prior-year grants, and USAGM intends to close all grants issued up to FY 2022 by the end of FY 2025.”

“Regarding accounting for property, plant, and equipment (PP&E), controls have been updated to establish systematic communication between agency components to ensure that property control procedures are conducted in a timely manner and to the fullest extent. USAGM will continue to provide training for property management officials to ensure property transactions are recorded and accounted for correctly in the property management system. Additionally, USAGM will continue to strengthen internal controls to ensure all transactions related to capitalized PP&E assets are recorded accurately and in a timely manner,” the letter states.

USAGM, known until 2018 as the Broadcasting Board of Governors (BBG), is an independent U.S. government agency that broadcasts news and information. It is considered an arm of U.S. diplomacy. USAGM oversees Voice of America (VOA) and the Office of Cuba Broadcasting, as well as state-funded entities such as Radio Free Europe/Radio Liberty, Radio Free Asia, the Middle East Broadcasting Networks, and the Open Technology Fund.