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The auditor-general is investigating the financial office of the provincial government of the Eastern Cape, which gets $827,000 a year from the federal government for a scholarship fund that is supposed to benefit 650 to 700 students from the impoverished province. At least some of the scholarships have gone unpaid as far back as 1997.

At a Congressional hearing in April, the department's inspector general revealed that the agency has lost track of at least $450-million in the past three years. Much of the money was lost in duplicate payments to grant recipients, states, and contractors. But some of it, she said, was stolen or improperly spent by department employees and contractors.