Democracy Assistance: State Should Improve Accountability Over Funding; USAID Should Assess Whether New Processes Have Improved Award Documentation
Fast Facts
Promoting democracy abroad has been a long-standing U.S. priority.
We examined how much money U.S. agencies pledged for democracy assistance in fiscal 2012-2016 and how they awarded the funds.
We found USAID obligated $5.5 billion, but we could not determine a total for the State Department because some of its bureaus could not provide reliable data. In addition, in our sample we found USAID seldom documented award-related decisions in a complete and timely manner.
We recommended that State improve data reliability and that USAID assess whether its new processes are improving award documentation.
Total Obligations and Number of Awards for USAID Democracy Assistance, by Award Type, for Fiscal Years 2012 through 2016
In FY12-16 USAID about evenly split $5.5 billion among contracts, grants and cooperative agreements.
Highlights
What GAO Found
In fiscal years 2012–2016, the U.S. Agency for International Development (USAID) obligated $5.5 billion and the National Endowment for Democracy (NED) obligated $610.2 million in democracy assistance funding. The total funding the Department of State (State) obligated for democracy assistance could not be reliably determined. One-third of all USAID obligations were provided through public international organizations (PIOs), which under USAID guidance are composed principally of countries or other organizations designated by USAID; 94 percent of PIO obligations were provided to the World Bank for democracy assistance projects in Afghanistan. The remaining two-thirds of USAID obligations were provided through contracts, grants (excluding PIOs), and cooperative agreements. Of the 10 State bureaus providing democracy assistance, 3 were unable to provide reliable funding data for fiscal years 2012–2016. Data from these bureaus were incomplete, nonstandard, or inaccurate. Federal internal control standards call for agencies to use quality information from reliable sources to achieve intended objectives and to monitor activities. Without such data, State cannot effectively monitor its democracy assistance programming and report reliable data externally.
For the awards GAO sampled, USAID generally did not document decisions about whether to award a contract, grant, or cooperative agreement (known as award-type decisions) in a complete and timely manner. According to applicable USAID guidance, agency officials were required to (1) document the final award-type decision with their written determination, including a rationale based on the requirements of the Federal Grant and Cooperative Agreement Act, and (2) complete this documentation before award solicitation occurs or, for noncompetitive awards, before USAID initiated communications with a potential sole-source awardee. However, USAID provided both complete and timely documentation of the award-type decision for 5 of the 41 awards GAO sampled. For the remaining 36 awards, the documentation was either incomplete, not timely or timeliness was indeterminate, or both (see table). While USAID has taken steps to improve documentation for award-type decisions by updating its guidance and templates, it has not assessed whether these updates have resulted in complete and timely documentation. It is important that USAID document these decisions in advance of solicitation because the selection of an award type may affect requirements for administering the award, including competition and oversight requirements and whether or not profit is permissible.
Documentation and Timeliness of Award-Type Decision for Selected USAID Awards
|
Award type |
Awards in sample |
Awards lacking any documentation |
Awards with partial or complete documentation |
Timely |
Not timely/ timeliness indeterminate |
|
Contracts |
13 |
3a |
10 |
2 |
8 |
|
Grants |
5 |
1 |
4 |
2 |
2 |
|
Cooperative agreements |
23 |
6 |
17 |
2 |
15 |
|
Total |
41 |
10 |
31 |
6b |
25 |
Source: GAO analysis of U.S. Agency for International Development (USAID) information. | GAO-18-136
aThree of the contracts in the sample were base awards with task orders issued under them; GAO did not receive documentation of the award-type decision for the base awards.
bOne award that GAO deemed timely did not have complete documentation of the award-type decision.
Why GAO Did This Study
Supporting efforts to promote democracy has been a foreign policy priority for the U.S. government. In recent years, USAID and State have allocated about $2 billion per year toward democracy assistance overseas. Congress required USAID and State to each establish guidelines for and report on the use of contracts, grants, and cooperative agreements for certain democracy programs.
GAO was asked to review U.S. democracy assistance. This report (1) examines funding USAID, NED, and State obligated for democracy assistance primarily through contracts, grants, and cooperative agreements and (2) evaluates documentation of USAID award-type decisions, among other objectives.
GAO analyzed USAID, NED, and State democracy assistance award data for fiscal years 2012–2016. GAO also reviewed relevant regulation and agency policies and analyzed documentation for a nongeneralizable sample of USAID awards selected based on factors such as award type, program area, and country.
Recommendations
State should improve the reliability and completeness of its democracy assistance funding data, and USAID should assess whether steps taken are resulting in complete and timely documentation of democracy assistance award-type decisions. State and USAID concurred with GAO's recommendations and described actions planned or under way to address them.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of State |
Priority Rec.
The Secretary of State should direct the Bureau of International Narcotics and Law Enforcement Affairs to identify and address factors that affect the reliability of its democracy assistance data, such as miscoded or missing data. (Recommendation 1) |
The Department of State concurred with this recommendation and took the following steps to implement it. As noted in State's written comments to GAO's report, in 2017, the Bureau of International Narcotics and Law Enforcement Affairs (INL) implemented the Regional Financial Management System (RFMS) to track overseas financial transactions, including democracy assistance. This new processing model links funding, obligations, and expenditures to the bureau's bilateral agreements. According to State, this upgrade improved data reliability by eliminating the duplicate entry of fiscal data, including project codes, and reducing manual data-entry errors. In addition, there are data verification procedures and system edits to prevent manual manipulation of the data. State also reported taking several steps since then to improve the recording of agency-wide data in its financial systems, including democracy assistance data. These steps include communication with overseas posts and periodic reporting, such as identifying discrepancies in procurement data across different financial systems (e.g., RFMS and Federal Procurement Data System). State has provided "scorecards" on a quarterly basis to posts whose data show high degree of variance. State also provided specific suggestions for posts to address their data variance (e.g., instances where the post may need to manually update information). In April 2022, INL updated its RFMS user guide, highlighted the need to enter correct project codes, and provided a crosswalk between INL's project codes and the standardized program structure and definitions used for foreign assistance, including democracy assistance. Our analysis of INL's democracy assistance funding data for fiscal year 2021, the most recent year available, showed that that data were more complete and accurate than similar data we examined as part of our review (fiscal years 2012 through 2016). Specifically, INL awarded over $52 million for democracy assistance projects in 44 countries in fiscal year 2021. Over 90 percent of projects awarded domestically included start and end dates. According to INL, State's Bureau of the Comptroller and Global Financial Services will update RFMS so that the start and end dates for projects awarded overseas can be easily accessed by INL.
|
| Department of State | The Secretary of State should direct the Director of the Office of U.S. Foreign Assistance Resources to implement a process to improve the reliability, accessibility, and standardization of democracy assistance data across the geographic regions of the Bureaus of European and Eurasian Affairs and South and Central Asian Affairs, such as utilizing a centralized database for award data. (Recommendation 2) |
Department of State concurred with this recommendation and took the following steps to implement it. In April 2019, State noted that its deployment of an overseas State Assistance Management System (SAMS Overseas), which automates and centralizes the federal assistance process for users at overseas posts, would improve the reliability, accessibility, and standardization of its data, including EUR and SCA democracy assistance data. In March 2020, State noted that SAMS Overseas was fully deployed to 264 embassies and posts by the end of fiscal year 2019. To improve reliability, State informed GAO that SAMS Overseas was integrated with State's financial management system, which is expected to result in efficiencies such as decreased duplicate data entry. State noted that at the time of each post's or mission's SAMS Overseas deployment date, all federal assistance (including grants and cooperative agreements, but not contracts) data was required to be processed through SAMS Overseas. State officials were not aware of any contracts being awarded by EUR and SCA for the democracy sector. To improve accessibility, State officials said that since the federal assistance data is now stored and accessed through the centralized electronic system, State personnel overseas and domestically can view data and run reports related to their federal assistance awards. To improve standardization, State officials said that business rules were built into SAMS Overseas to ensure that standard required fields are completed as appropriate. State provided GAO a sample report from SAMS Overseas that consisted of 61 data fields, including award title and purpose as well as period of performance start and end dates. State also provided GAO a sample of EUR and SCA democracy assistance data, which appeared complete and without any duplicates. Specifically, State provided data - including the award number, type of award, award subtype, and period of performance start and end dates - for democracy related grants and cooperative agreements that were first awarded in fiscal year 2018 by EUR-ACE for Belarus and Montenegro and by SCA for Afghanistan and Pakistan.
|
| U.S. Agency for International Development | The USAID Administrator should direct the Office of Acquisition and Assistance to assess whether current processes and procedures as outlined in revised guidance result in complete and timely documentation of award-type decisions for democracy assistance. (Recommendation 3) |
In April 2018, the United States Agency for International Development (USAID) stated that it was reviewing a representative sampling of fiscal year 2017 democracy awards; and in August 2018, USAID reported that it completed its review. USAID shared with GAO the list of democracy awards it sampled as well as which awards met the requirements for timeliness and documentation. Specifically, USAID reported that it selected a sample of the top 40 democracy awards based on total estimated cost. USAID noted that it determined that 32 of the 40 awards (80 percent) were issued in accordance with USAID guidance, of which 31 (96.8 percent) were timely. USAID also noted that while 8 of the 40 awards (20 percent) did not have a selection of instrument memorandum, the selection was documented in a negotiation memorandum. Additionally, in August 2018, USAID reported that it completed a policy and process to post selection of instrument determinations for democracy programs on a public website to increase transparency. USAID noted that it initiated the policy and process in response to GAO's findings and recommendation regarding selection of instrument determinations for democracy awards. Specifically, USAID issued a bulletin that applies to all Contracting Officers and Agreement Officers (COs/AOs) working on democracy awards. The bulletin informs the COs/AOs that USAID decided to make the selection of instrument determination for democracy programs available to the public for the transparency of these decisions, and reminded COs/AOs to follow mandatory selection of instrument guidance.
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