WASHINGTON — A federal agency that disburses billions of dollars in humanitarian aid, disaster relief, and pro-democracy programs every year, has inadvertently funneled American taxpayer funds to individuals and entities with "terrorist affiliations" and lacks the safeguards to prevent such incidents from recurring, an internal audit has revealed.

"In the basement of Gaza Islamic University, a U.S.-funded institution," said Rep. Mark Kirk, R-Ill., who sits on the House Appropriations Subcommittee on State, Foreign Operations and requested the audit, "Palestinian police found several Iranian agents and an Iranian general teaching the students in the U.S.-funded chemistry lab how to make suicide bombs."