HHS Steered $2.3 Billion in Pandemic Grants to Overseas Labs Without Site Visits, GAO Finds

GAO Draft Finds Widespread Oversight Gaps

WASHINGTON, Dec. 29, 2025. The Department of Health and Human Services awarded $2.34 billion in pandemic preparedness grants to foreign laboratories between 2022 and 2025 without completing legally required site visits, according to a draft Government Accountability Office report obtained by The Alamo Post. The 147-page draft, labeled "GAO-26-104234" and dated Dec. 22, found that HHS program officers cleared 14 grants to labs in nine countries even though no federal inspector had visited the facilities during the award period, according to a GAO investigator familiar with the review. The countries include China, Germany, South Africa, Brazil, Thailand, Vietnam, Kenya, Nigeria, and Egypt, the investigator said.

The grants flowed through the National Institute of Allergy and Infectious Diseases, the Biomedical Advanced Research and Development Authority, and the Centers for Disease Control and Prevention, the draft states. The largest single award, $612 million over five years, went to a consortium led by the University of Hamburg and a partner lab in Wuhan, China, for pathogen surveillance work, according to the GAO investigator. A separate $298 million BARDA contract awarded in March 2024 to a South African biotechnology firm included no deliverables for physical security inspections, the investigator said. HHS inspector general auditors who reviewed a sample of six awards found missing invoices, unsigned progress reports, and equipment purchases that did not match grant descriptions, according to the draft.

GAO investigators traced the lapse to a 2023 policy memo issued by the HHS Office of Global Affairs that allowed remote "desk reviews" to substitute for on-site monitoring if travel budgets were constrained, the investigator said. That memo remained in effect through September 2025 and covered at least 37 active grants, the investigator added. The draft report estimates that $1.1 billion in unspent funds remain subject to the relaxed oversight rules, creating what the report calls "heightened risk of misuse, diversion, or foreign influence."

Congress and OMB Move to Halt New Awards

Two congressional appropriators told The Alamo Post that House and Senate spending panels plan to freeze $410 million in fiscal 2026 HHS global health funding until the department provides certified logs of every foreign site visit conducted since 2022. The freeze is expected to be included in a joint explanatory statement accompanying the full-year appropriations bill scheduled for floor votes on Jan. 7 and Jan. 8, according to the two appropriators, who were briefed on the plan Dec. 28. The House Oversight Committee has scheduled a hearing for Jan. 9 at 10 a.m. in room 2154 of the Rayburn House Office Building, with witnesses from GAO, HHS, and the Office of Management and Budget, one of the appropriators said.

A budget analyst at the Office of Management and Budget said an OMB controller memorandum, signed Dec. 27 by the acting controller, directs all federal agencies to suspend new foreign laboratory grants over $10 million until agencies certify that site visits occurred or explain why they did not. The memo, numbered "M-26-02," gives agencies until Jan. 13 to submit compliance certificates, the analyst said. The analyst added that OMB is preparing a rescission package to claw back $220 million in unobligated balances from the South African and Egyptian awards.

The HHS Office of Inspector General separately opened a formal inquiry, IG-2025-HHS-0892, on Dec. 23 after receiving the GAO draft, according to the GAO investigator. The inquiry is expected to produce an interim report by March 15 and could lead to referrals to the Justice Department if grant recipients made false claims, the investigator said. A spokesperson for HHS did not respond to requests for comment on Dec. 29.

Waste Watchdogs See Pattern, Not One-Off

Budget analysts and congressional aides said the findings fit a broader pattern of weak oversight for overseas research contracts. A second GAO report, expected in February, will examine $4.7 billion in climate and agriculture grants to international organizations, according to the investigator. That review has already identified 23 awards lacking performance metrics, the investigator said. The current draft also notes that HHS paid $18.4 million in administrative fees to a third-party grant manager based in Geneva even though the firm had no independent monitoring staff in the countries where work occurred, the investigator said.

The two congressional appropriators said Republicans on the House Appropriations Committee plan to offer an amendment during the Jan. 7 markup requiring the HHS secretary to certify foreign site visits before any fiscal 2026 funds are released. The amendment, if adopted, would direct the department to publish a list of visited laboratories and dates on a public dashboard within 90 days, the appropriators said. One of the appropriators described the proposed language as the most stringent grant oversight provision attached to HHS in more than a decade.

Major news organizations have not yet published the GAO findings or the OMB freeze. Watch for the release of the final GAO report, expected Jan. 2; the OMB compliance deadline of Jan. 13; and the House Oversight hearing on Jan. 9. If the rescission package moves forward, the administration will need to notify Congress within 45 days and justify each recapture, a process that could dominate the opening weeks of the new congressional session.