Aid Oversight PDF Download

Pursuant to a congressional request, GAO reviewed the Agency for International Development's (AID) policies and procedures for administering grants and cooperative agreements with private voluntary organizations, educational institutions, and other nonprofit organizations, focusing on whether AID has effective procedures to: (1) maximize competition in grant awards; (2) ensure the proper use of grant funds; and (3) monitor grantee performance. GAO found that AID: (1) does not consistently implement key internal controls; (2) does not ensure maximized competition for grant awards, since project officers fail to prepare noncompetitive award justifications; (3) guidance does not specify what evidence is necessary to support competition exceptions; (4) does not ensure that applicants do not seek grants in order to avoid more stringent contract competition requirements; (5) does not ensure that grantees' budgets are reasonable and do not include excessive costs or unallowable expenses; (6) grant officers do not routinely document their determinations of grantees' management and financial capabilities or cite primary source data in support of their determinations; (7) has initiated an audit management and resolution program to improve its financial audits of U.S. grantees, and issued guidelines for financial audits contracted by foreign recipients; (8) grant monitoring is restricted because project officers often do not use measurable benchmarks and target dates and face time and travel constraints in conducting site visits; (9) headquarters often fails to delegate monitoring duties to field missions; and (10) Financial Integrity Act reviews fail to assess its compliance with its internal control procedures.