FROM USAID
December 15, 2025
Dear USAID Implementing Partners,
As the U.S. Agency for International Development (USAID) continues to finish closing the agency, USAID is taking additional immediate and decisive action to safeguard taxpayer funds and enhance financial oversight across its assistance portfolio.
Effective immediately, USAID suspends all payments through Letters of Credit (LOCs) for all terminated assistance awards. All future payments for these terminated awards must be processed solely through direct reimbursement.
This necessary change stems from serious concern regarding the systemic lack of adequate federal oversight at USAID inherent in the LOC drawdown process, particularly after an award has officially ended. It is fundamentally incompatible with responsible stewardship of public funds to allow continued drawdown against terminated awards. Furthermore, these awards are now significantly past the 120-day closeout period, meaning there should be no remaining need for LOC funding.
With awards terminated and the 120-day closeout period exhausted, this necessary shift to direct reimbursement for terminated awards previously compensated through the LOC process should have minimal operational impact. However, if you believe this change will cause a significant documented hardship related specifically to your terminated award, you must contact your cognizant Contracting/Agreement Officer within three (3) business days of the date of this letter.
In such communication, you must provide a comprehensive, documented explanation detailing the alleged unavoidable impact this change to direct reimbursement will have on the closeout of the terminated award. USAID, at its sole discretion, will then review the submission and determine if an equitable adjustment is warranted.
President Trump has made clear transparent and accountable financial management for the American people is important, and your immediate compliance with this critical policy change is welcome throughout the remaining USAID closeout process.
Eric Ueland
Performing the Duties of USAID Administrator and Chief Operating Officer