B-231247, Jul 18, 1988

B-231247, Jul 18, 1988

MISCELLANEOUS TOPICS - National Security/International Affairs - Foreign aid programs - Funds - Use - Accountability DIGEST: The Anglo-Irish Agreement Support Act, Public Law 99-415, which authorizes the contribution of U.S. funds to support economic and social development in Ireland and Northern Ireland, does not specifically place any responsibilities on the Agency for International Development (A.I.D.) for insuring that any such contributions are ultimately used for the purposes designated by that act. The Act places accountability on the President by requiring prior annual certifications, and an annual report on whether the Act's objectives are being achieved. A.I.D.'s Role in Insuring Accountability for Funds Contributed under Pub. L. 99-415 (B-231247; Code 472164)

Evaluator-In-Charge, NSIAD - Irene A. Robertson:

This responds to your question concerning the nature and extent of the Agency for International Development's (A.I.D.) responsibility under the Anglo-Irish Agreement Support Act, for insuring that any funds contributed pursuant to that act are expended for its intended purposes. understand that NSIAD is reviewing A.I.D.'s accountability for and management of funds contributed under the authority of that act, through the use of the Economic Support Fund.

Briefly, the Anglo-Irish Agreement Support Act did not place any responsibility on A.I.D. to insure that contributed funds are ultimately used for the Act's intended purposes (i.e., that funds expended out of the so-called International Fund are in fact used to support and promote economic and social development in Northern Ireland). Instead, the Act places accountability on the President by requiring prior annual certifications before additional funds are provided, and an annual report on whether the Act's objectives are being achieved.

In contrast, the Agreement entered into by the participating governments concerning the financing and operation of the so-called International Fund provides A.I.D. with the authority to insure proper accountability for any contributions the United States may make.

QUESTION: What is the nature and extent of A.I.D.'s responsibility under the Anglo-Irish Agreement Support Act, for insuring that any funds contributed pursuant to that act are ultimately expended for its intended purposes?

ANSWER: The Congress enacted the Anglo-Irish Agreement Support Act of 1986, Public Law 99-415, dated September 19, 1986, in order to support and promote economic and social reconstruction and development in Ireland and Northern Ireland (see sections 2 and 5). To achieve this purpose, the Act provided that of the amounts made available in the Economic Support Fund for fiscal years 1986, 1987 and 1988, certain amounts were to be used for making United States contributions to the International Fund (section3). /1/ Section 4 of the Act also authorizes the providing of certain other assistance such as the use of A.I.D.'s Private Sector Revolving Fund, 22 U.S.C. 2151f.

The Anglo-Irish Agreement Act does not specifically place any responsibility on A.I.D. in terms of insuring that any United States contributions to the International Fund, of other A.I.D. resources, are ultimately used for the purposes designated by that act (i.e., to support and further economic and social development and reconstruction in Ireland and Northern Ireland). A.I.D., also, does not have any responsibilities under the legislation authorizing the Economic Support Fund, 22 U.S.C. 2346, to insure that a country or international organization in fact utilizes funds contributed by A.I.D. for the purposes intended.

Under the Act, accountability for any U.S. contributions is placed in the President by requiring prior annual Presidential certifications and annual reports. /2/ First, section 5(c) of the act provides that each fiscal year the United States may make contributions only if the President certifies to the Congress that he is satisfied that "... Disbursements form the International Fund ... will address the needs of both communities in Northern Ireland." That section also requires that the President's certification shall include a detailed explanation of the basis for the President's decision.

Second, section 6 requires that at the end of each fiscal year in which the United States makes any contribution, that the President report to the Congress on the degree to which:

"(1) the International Fund has contributed to reconciliation between the communities in Northern Ireland;

(2) the United States contribution to the International Fund is meeting its objectives of encouraging new investment, job creation, and economic reconstruction on the basis of strict equality of opportunity ..."

The act does not specify any role for A.I.D. in the presidential certification and reporting process. However, under the implementing Agreement entered into by the Government of Ireland, the Government of the United Kingdom of Great Britain and Northern Ireland, and the United States Government (the participating governments), A.I.D. has an important role in this process. This Agreement, executed on September 26, 1986, immediately after the enactment of the Anglo-Irish Agreement Support Act, identifies A.I.D. as the United States representative, and contains detailed requirements for the purpose of insuring that funds contributed by the United States are properly spent and accounted for. /3/

Article 4 of the Agreement provides that disbursements from the Fund will be made only after the other two Governments furnish the United States, evidence that a separate United States bank account is established in a recognized bank, and evidence that the Trustee Bank has undertaken, among other things:

" - to maintain, ... books and records relating to the Trust Account, to be audited at quarterly intervals in accordance with generally accepted auditing standards;

- to provide the Donor (United States) with a full statement before any transfer from it takes place;

- to afford the authorized representative of the Donor the opportunity at all reasonable times to inspect and audit the Trust Account and books, records and other documents relating thereto."

ANNEX B of the Agreement further requires the other two governments to furnish A.I.D. with documents concerning the scope and nature of reporting to the United States on the impact of the Fund activities on meeting its objectives and the internal and external auditing procedures which the Fund intends to follow in managing its resources. Also, Annex B provides that the Fund's programs will be subject to independent audit by an outside accountant.

/1/ This Fund was established by the governments of Ireland and the United Kingdom pursuant to Article 10 of the Anglo-Irish Agreement dated November 15, 1985, for the purpose of funding economic development projects in Northern Ireland (see section 8).

/2/ One Congressman commented during the debates in the House of Representatives as follows:

"Mr. Speaker, H.R. 4329, as amended, contains authorities and requirements that will insure effective oversight of this important assistance program. Through annual prior certifications by the President and through annual reports on the program implemented, Congress will be able to monitor the program closely to ensure that the money is being spent wisely and properly."

CONG.REC. H6240 (daily ed. August 14, 1986) (statement of Representative Fascell).

The Senate report on this legislation stated that a formal audit of expenditures from the International Fund is not called for. See S. Rep. No. 99-326 at 6 (1986).