USAID in Ukraine: mechanisms & compliance

What USAID is: structure, budget, mission

United States Agency for International Development (USAID) is the main U.S. federal agency for international development, founded in 1961 by John Kennedy through the Foreign Assistance Act. Until 2025, USAID operated with a budget of $50+ billion per year (FY2024), a staff of ~10,000 employees, and missions in 100+ countries. Thematic priorities: Democracy, Human Rights, and Governance; Economic Growth and Trade; Education; Energy; Food Security; Environment and Climate Change; Gender Equality; Global Health; Humanitarian Assistance; WASH. From 2022 to 2024, USAID provided Ukraine with $2.6 billion in humanitarian aid, $5 billion in development assistance, and $30 billion in direct budget support through World Bank mechanisms.

USAID funding mechanisms

CONTRACT – a procurement mechanism for delivering specific services. Governed by the Federal Acquisition Regulation (FAR). A strict scope of work; USAID is the buyer of the result. COOPERATIVE AGREEMENT – a grant with USAID's «substantial involvement» in strategic decisions, approval of key personnel and workplans. The most common mechanism for large multi-year development programs. Governed by 2 CFR 200. GRANT – a classic grant without active USAID involvement. For smaller projects (up to $5 million) and academic research. FIXED AMOUNT AWARD (FAA) – a variant of a grant with fixed milestone-based payments without detailed financial reporting. Contracts – through SAM.gov, Grants/CA – through Grants.gov.

NOFO: how to read and use it

Notice of Funding Opportunity (NOFO) – the key document for working with USAID grants. Published on Grants.gov and SAM.gov with a unique Funding Opportunity Number. Standard structure (30–100 pages): SECTION A – Funding Opportunity Description; SECTION B – Award Information (number of awards, size, duration); SECTION C – Eligibility Information (types of organizations, geographic restrictions, cost share requirements); SECTION D – Application and Submission Information; SECTION E – Application Review Information (criteria with weights); SECTION F – Federal Award Administration Information. Some NOFOs have a pre-application stage (concept note, 5–10 pages).

SAM.gov registration: the mandatory first step

System for Award Management (SAM.gov) – the single registration system for everyone applying for federal awards. Registration is free. Step-by-step procedure: Step 1 – Create a Login.gov account; Step 2 – Enter your Employer Identification Number (EIN) or Tax Identification Number (TIN); Step 3 – Obtain a Unique Entity Identifier (UEI) – a 12-character identifier that replaced the DUNS Number; Step 4 – Complete the Entity Registration with bank details for EFT; Step 5 – For non-US organizations: an NCAGE Code via nspa.nato.int; Step 6 – Complete 800+ Representations and Certifications questions. Registration is valid for 365 days and requires annual renewal. Timeline: 7–10 business days for US entities, 4–6 weeks for foreign entities.

Key USAID programs in Ukraine (2022–2024)

Before January 2025, the most active programs by amount: PEACE Fund – $27.5 billion for paying the salaries of civil servants, teachers, and doctors; Energy Security Project – $200+ million for infrastructure restoration; USAID ENGAGE – $40 million for youth engagement; USAID Democratic Governance East – $50+ million to support local self-governance; USAID Civil Society Program – $25 million to support NGOs; USAID Independent Media – $15–20 million to support independent journalism; USAID Agriculture Growing Rural Opportunities (AGRO) – agriculture; USAID Economic Resilience Activity (ERA) – for regions affected by the conflict. Full list: foreignassistance.gov.

Requirements for applicant organizations

US-based organizations are priority recipients of USAID awards. Non-US organizations (including Ukrainian ones) can apply directly for some programs through the Local Capacity Development initiative. Types of eligible organizations: 501(c)(3) non-profits; university consortia; for-profit companies (with restrictions); Public International Organizations; individual researchers – only through host organizations. Documentation: Articles of Incorporation; IRS Determination Letter; Annual Audited Financial Statements for 2–3 years; Policies and Procedures Manual; a NICRA or the de minimis 10% rate; a Capability Statement (3–5 pages).

NICRA: the indirect cost mechanism

Negotiated Indirect Cost Rate Agreement – an official agreement between an organization and the Cognizant Federal Agency on the percentage of indirect costs. Covers: administrative staff, office rent, utilities, general IT infrastructure. Three options: 1) De minimis rate 10% – automatically available without a NICRA (applied to MTDC); 2) Negotiated NICRA – an official agreement requiring submission of an Indirect Cost Rate Proposal with audited financial data for 2–3 years; 3) Predetermined rate – fixed for 2–4 years. Typical rates: US universities 45–80%; US non-profits 15–30%; foreign entities 10–25%. Negotiation process: 4–8 months.

Structure of a USAID grant application

The technical part (60–70% of the score) – the Technical Proposal, usually 30–50 pages: 1) Project Summary (1–2 pages); 2) Problem Statement (3–5 pages) with analysis, baseline conditions, theory of change; 3) Technical Approach (10–15 pages) – methodology, key activities, expected outcomes; 4) Management Approach – organizational structure, key personnel; 5) MEL Plan (3–5 pages) – performance indicators with baselines and targets; 6) Sustainability Plan; 7) Cross-cutting considerations – Gender Equality, Social Inclusion, Environmental Compliance, Conflict Sensitivity. Past Performance – 3–5 reference projects. Budget & Budget Narrative – a line-item budget, SF-424A.

Evaluation criteria and scoring

Standard criteria for USAID Cooperative Agreements: 1) Technical Understanding and Approach (25–35%); 2) Management and Staffing Plan (20–25%); 3) Past Performance (15–20%); 4) Monitoring, Evaluation & Learning (10–15%); 5) Cost Realism / Budget (15–20%). Scoring is carried out by a Technical Evaluation Committee (TEC) of 3–5 USAID staff. Additionally: written clarifications, oral presentations (30–60 minutes), Cost Discussions with finalists. The process from submission to award: 4–9 months for Cooperative Agreements, 2–4 months for simple Grants.

Compliance: USAID Cost Principles (2 CFR 200)

The federal accounting standard for all organizations with USAID funding – 2 CFR 200 «Uniform Administrative Requirements, Cost Principles, and Audit Requirements» (Uniform Guidance). Key principles: Allowable Costs – expenses must be necessary, reasonable, allocable, adequately documented. Unallowable Costs – alcohol, lobbying, entertainment, personal expenses, contributions to political parties, first class travel. Procurement Standards (§200.318–§200.327) – competitive procedures are mandatory for purchases over $10,000. Brand Marking (ADS 320) – all materials must carry the USAID Identity (the «FROM THE AMERICAN PEOPLE» logo).

Post-award management: reporting and compliance

After the Cooperative Agreement is signed, the operational phase begins. Quarterly reporting: Performance Report (10–20 pages) + Financial Report SF-425. Annual reporting: Annual Performance Report (30–50 pages) + Annual Work Plan. Final reporting: Final Performance Report within 90 days after the end date + Final Financial Report + Closeout documents. Monitoring by USAID: Site Visits 2–4 times a year, Desk Reviews quarterly, Portfolio Reviews once a year. Audits: a Single Audit annually if federal awards exceed $750,000; a Financial Audit for non-US organizations.

Common mistakes and how to avoid them

At the submission stage: 1) Ignoring specific NOFO requirements – each NOFO has unique requirements; 2) A weak theory of change – the donor does not understand how activities lead to outcomes; 3) Incorrect cost share; 4) Formatting violations – exceeding the page limit, font smaller than 12pt; 5) Expired SAM.gov – the application is automatically rejected. During implementation: unallowable costs, procurement violations, late reports, scope creep, subgrant monitoring gaps, insufficient documentation of decisions.

How to prepare: a strategy for 2025

The current strategy for Ukrainian organizations: 1) Keep your SAM.gov registration active – it is cheap «insurance» in case USAID programs resume; 2) Diversify your donor portfolio – Horizon Europe, Creative Europe, Interreg, GIZ (giz.de), SIDA, DANIDA, KfW; 3) Strengthen GDPR compliance and alignment with EU standards; 4) Develop partnerships with US-based organizations – funding can be obtained through subgrants; 5) Invest in MEL capacity – theory of change, indicators, and data collection apply across all grants. USAID archive: usaid.gov.