Foreign Assistance:

USAID Relies Heavily on Nongovernmental Organizations, but Better Data Needed to Evaluate Approaches

GAO-02-471: Published: Apr 25, 2002. Publicly Released: May 10, 2002.

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U.S. officials are interested in transferring some government social welfare functions to nongovernmental organizations (NGOs). One area is in the delivery of foreign assistance to developing countries and countries transitioning from communism to market-oriented democracy. Many NGOs active in international development have years of experience working overseas and have received millions of dollars in funds from private sources as well as the U.S. government. USAID directed $4 billion of its $7.2 billion assistance funding to NGOs in fiscal year 2000. However, the amount of funding provided by specific types of assistance is unknown, because USAID lacks comprehensive and reliable data. USAID uses various types of contracts, grants, and cooperative agreements to provide assistance through NGOs. This range of funding mechanisms allows USAID flexibility to draw on the strengths and expertise of a large community of experienced NGOs. The different mechanisms have advantages and disadvantages in terms of cost, time, selection of potential implementers, and USAID's authority to oversee assistance activities. Compared with USAID, official donors provide more of their funding to foreign governments and private donors and spend more of their funding on unsolicited proposals. USAID emphasizes the use of funding mechanisms that involve greater programmatic and financial controls and competition for funding among NGOs.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: To help ensure that the United States Agency for International Development (USAID) makes effective use of nongovernmental organizations and funding mechanisms in carrying out its international development activities (Foreign Assistance: USAID Relied Heavily on Nongovernmental Organizations, but Better Data Needed to Evaluate Approaches, GAO-02-471, April 25, 2002), we recommended that USAID compile more reliable data on the extent to which the agency uses specific types of organizations and funding mechanisms so that further analysis of the effectiveness of USAID's assistance approaches may be conducted. In 2004, the agency initiated the development of the Executive Information System, a reporting system designed to provide USAID management and other decision makers with extensive information on an agency-wide basis. Among the information to be generated by this system, according to an agency official, are data on the extent to which USAID uses specific types of organizations and funding mechanisms to deliver foreign assistance. Developing this system is a long term effort, which USAID expects to be completed by 2010, as funding allows.

    Recommendation: To help ensure that the United States Agency for International Development (USAID) makes effective use of nongovernmental organizations and funding mechanisms in carrying out its international development activities, USAID should compile more reliable data on the extent to which the agency uses specific types of organizations and funding mechanisms so that further analysis of the effectiveness of USAID's assistance approaches may be conducted.

    Agency Affected: Department of State: Agency for International Development

 

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