Millennium Challenge Corporation:

Review of Compact Records and Information Management Program

GAO-13-615: Published: Jun 20, 2013. Publicly Released: Jun 20, 2013.

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What GAO Found

In 2006, the Millennium Challenge Corporation (MCC) established a records and information management program to maintain and preserve its federal records. The program includes policies related to compact management records--a subset of MCC's federal records. These policies also address the handling of other compact-related information generated by MCC partner governments' accountable entities, which typically manage compact implementation until the 5-year compacts close. MCC's policies require that the entities transfer their compact management records to MCC for storage before compact closure. MCC also requires that partner governments retain compact-related information not classified as records, such as survey data and data quality reviews, for at least 5 years after their compacts close, to facilitate audits and analysis of MCC assistance. However, MCC does not require, and has not conducted, periodic reviews to determine whether it has received all compact-management records from the accountable entities consistent with federal internal control standards. As a result, MCC cannot be sure that it is meeting the federal requirement that it preserve all records documenting its functions, activities, and other transactions.

In reviews of five closed compacts--Armenia's, Benin's, El Salvador's, Ghana's, and Mali's--GAO found variation in the accountable entities' implementation of MCC document retention requirements and the partner governments' ability to retrieve requested compact-related information after the compacts closed. As required by MCC's compact closure guidelines, all five program closure plans that we reviewed contained some discussion of retaining and storing documents, but each accountable entity addressed the guidelines' requirements differently. MCC's guidelines do not provide a list specifying standard types of compact-related information that most compacts should retain. Such variation in approaches to retaining and storing compact-related information will make it more difficult for MCC to verify that standard compact information is retained in all partner countries after the compacts close. In addition, in a test of MCC's ability to retrieve documents from the partner governments after compact closure, GAO found that four of the five governments provided all or most requested documents within 30 days, but Mali's, which is involved in political turmoil, provided no documents. Political turmoil in Madagascar, another compact-recipient country, has also impeded MCC's ability to obtain compact information that may be needed to conduct future audits, evaluate project impact, or inform future compact designs.

Why GAO Did This Study

MCC has approved 26 bilateral compact agreements, providing a total of about $9.3 billion to help eligible developing countries reduce poverty and stimulate economic growth. MCC is subject to the Federal Records Act, which requires that agencies preserve all records documenting its functions and other important transactions.

GAO was asked to review MCC's management of records and information. This report (1) examines MCC's records and information management program and practices and (2) assesses partner governments' implementation of MCC's information retention guidelines. GAO analyzed MCC documents, interviewed MCC officials, and tested MCC's ability to retrieve compact-related information from five closed compacts. GAO selected these compacts because they closed after May 2011, when MCC's Program Closure Guidelines went into effect.

What GAO Recommends

To strengthen MCC's records and information management program, MCC's Chief Executive Officer should (1) develop a policy requiring--and conduct--periodic reviews of MCC's compact-management records to ensure they are complete, (2) revise guidelines to include a sample document retention schedule specifying standard types of compact-related information compacts should retain, and (3) review MCC's policy of delegating storage of most compact-related information to partner governments. MCC agreed with all three recommendations and stated that they have already taken steps to implement them.

For more information, contact David Gootnick at (202) 512-3149 or gootnickd@gao.gov.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In June 2013 , GAO reported that the Millennium Challenge Corporation (MCC) established a records and information management program to maintain and preserve its federal records. The program includes policies related to compact management records -- a subset of MCC's federal records. MCC's policies require that the entities transfer their compact management records to MCC for storage before compact closure. However, MCC does not require, and has not conducted, periodic reviews to determine whether it has received all compact-management records from the accountable entities consistent with federal internal control standards. (See Millennium Challenge Corporation: Review of Compact Records and Information Management Program, GAO-13-615.) To strengthen MCC's records and information management program, GAO recommended that MCC's Chief Executive Officer develop a policy requiring - and conduct - periodic reviews of each set of compact management records that MCC receives from partner governments, to ensure that the records are complete. MCC agreed with our recommendation. In response to our report, MCC provided in April 2017 an updated draft of its Policy and Procedures for Compact and Threshold Program-Related Federal Recordkeeping. The policy requires the Records Management Officer and each Division Records Manager to conduct annually a records inventory or file plan review of all records to ensure they are being properly maintained. In addition, with the implementation of this policy, the Records Management Officer or a representative will conduct, as requested or needed, a Staff Assistance Visit (SAV) to train MCC staff and form a good practice tool prior to an audit/inspection. Furthermore, this policy states that prior to the end of the closure period for a compact, the Resident Country Director will review Annex I of the Records Management Manual to ensure that all required documentation has been obtained and transferred to MCC headquarters.

    Recommendation: To strengthen MCC's records and information management program, the Chief Executive Officer (CEO) should develop a policy requiring--and conduct--periodic reviews of each set of compact management records that MCC receives from partner governments, to ensure that the records are complete.

    Agency Affected: Millennium Challenge Corporation

  2. Status: Closed - Implemented

    Comments: In June 2013, GAO reported that the Millennium Challenge Corporation (MCC) did not provide a list specifying standard types of compact-related information that most compacts should retain. In reviews of five closed compacts - Armenia's, Benin's, El Salvador's, Ghana's, and Mali's - GAO found variation in the accountable entities' implementation of MCC document retention requirements and the partner governments' ability to retrieve requested compact-related information after the compacts closed. As required by MCC's compact closure guidelines, all five program closure plans that we reviewed contained some discussion of retaining and storing documents, but each accountable entity addressed the guidelines' requirements differently. Such variation in approaches to retaining and storing compact-related information will make it more difficult for MCC to verify that standard compact information is retained in all partner countries after the compacts' close. (See Millennium Challenge Corporation: Review of Compact Records and Information Management Program, GAO-13-615.) To strengthen MCC's records and information management program, GAO recommended that MCC's Chief Executive Officer revise program closure guidelines to include a sample document retention schedule, specifying standard types of compact-related information that most compacts would need to retain. MCC agreed with our recommendation. In April 2017, in response to our report, MCC provided an up-dated draft of its Program Closure Guidelines that includes a description of the general requirements to be followed by the Accountable Entity and the partner government. The guidelines include as an appendix an indicative list of the types of materials to be maintained. GAO believes that this appendix is sufficient to serve as a sample documents retention schedule.

    Recommendation: To strengthen MCC's records and information management program, the CEO should revise program closure guidelines to include a sample document retention schedule, specifying standard types of compact-related information that most compacts would need to retain.

    Agency Affected: Millennium Challenge Corporation

  3. Status: Closed - Implemented

    Comments: In June 2013, GAO reported that the Millennium Challenge Corporation (MCC) was unable to retrieve documents from partner governments when a compact was terminated because of political turmoil. (See Millennium Challenge Corporation: Review of Compact Records and Information Management Program, GAO-13-615.) To strengthen MCC's records and information management program, GAO recommended that MCC's Chief Executive Officer review MCC's policy of delegating the storage of compact-related information to partner governments, weighing the costs and benefits of storing more compact information at MCC headquarters. In April 2017, in response to our report, MCC provided an up-dated draft of its Program Closure Guidelines that includes a description of the general requirements to be followed by the Accountable Entity and the partner government, including assurances that MCC and its agents will have access to compact-related information during or after the closure period. MCC concluded that its revised Program Closure Guidelines provide an appropriate solution to the storage of partner governments' non-Federal records and, in conjunction with the provisions in the Compact and the Program Closure Plan, will provide the necessary assurance that Accountability Entities' records will be safeguarded and available for access for the required time periods following the compact end date.

    Recommendation: To strengthen MCC's records and information management program, the CEO should review MCC's policy of delegating the storage of compact-related information to partner governments, weighing the costs and benefits of storing more of this information at MCC headquarters.

    Agency Affected: Millennium Challenge Corporation

 

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