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Democracy Assistance: State Should Improve Accountability Over Funding; USAID Should Assess Whether New Processes Have Improved Award Documentation

GAO-18-136 Published: Dec 14, 2017. Publicly Released: Dec 14, 2017.

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.

In FY12-16 USAID about evenly split $5.5 billion among contracts, grants and cooperative agreements.

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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)
Closed – Implemented
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...
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)
Closed – Implemented
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...
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)
Closed – Implemented
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...

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Topics

Cooperative agreementsData collectionDatabasesDemocracy assistanceForeign assistanceDocumentationGrant programsHuman rightsInteragency agreementsInternational organizations