GAO Finds State Department Canceled Nearly $3 Billion in Foreign Aid Without Tracking the Fallout

A Government Accountability Office report released in early October 2026 found the State Department canceled roughly 4,300 foreign assistance awards -- about 25% of its portfolio, worth nearly $3 billion -- as of March, after absorbing USAID's programs. GAO found State could not say how many contractors or non-citizen staff work at its embassies, warning it "cannot be assured" it has the capacity to do its job. More than 4,000 of its roughly 10,000 awards were listed as both active and terminated in its own grants system. A companion State Department Inspector General report found the U.S. Agency for Global Media cut operations "without a detailed analysis of the cost or impact," leaving more than 400 staff on paid leave at an estimated $3.2 million every two weeks as of July.

The findings describe reorganizations driven by speed rather than planning, leaving agencies unable to account for their own spending, staffing or programs -- the kind of gap that invites waste and erodes the institutional capacity Congress relies on for oversight.

State and USAGM's acting leadership agreed with all of the watchdogs' recommendations, including building better workforce data and setting measurable goals.