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A US state department report has warned that the financial assistance to Pakistan would be suspended if the funds were misused or misdirected.
The department, in its Pakistan Assistance Strategy Report, has explained how it intends to spend and oversee the $ 7.5 billion aid package under the Kerry Lugar Bill and has warned that any misuse of the aid money could result in suspension of all financial assistance.
"The US secretary of state will suspend any government to government assistance to any implementing agency if there is credible evidence of misuse of funds by such agency," the report said.
It also said that the Obama administration wants to channel a large portion of its assistance to Pakistan through Pakistani institutions and contractors, and reduce its dependence on American firms.
About $2 billion in the aid package has been allocated for enhancing security services, governance and legal institutions, The Dawn quoted the report, as saying.
The state department also plans to expand its use of Pakistani public accounting firms to audit money spent on the Pakistani non-government organisations.
"More US assistance will be provided through accountable Pakistani institutions at the national, provincial and local levels to implement Pakistani-identified priority programmes for which they currently have insufficient funds," the report stated.