Despite a federal judge’s order in mid-February that USAID must fulfill its financial obligations to foreign aid contractors, grantees, and recipients, the payment process has been plagued by delays, with over 6,000 payments still pending as of March 27.
These payment issues stem directly from the Trump administration’s swift actions to dismantle USAID and fundamentally alter the U.S. foreign aid structure. The combined impact of January’s comprehensive foreign aid freeze, massive staff reductions, and thousands of terminated contracts has created severe disruptions, even affecting organizations that should still be receiving funds. Many aid groups are still awaiting payment for work completed prior to the freeze.
The situation appears likely to worsen as the administration pushes forward with plans to dissolve USAID by July and transfer its functions to the State Department. USAID’s operational capacity has already been severely compromised, with fewer than 900 direct-hire employees remaining as of March 21 and essentially none by September 1, according to congressional notifications.
While USAID reported disbursing more than $250 million between March 10 and 21, humanitarian organizations report that payments have been inconsistent at best.
