Central America:

Problems in Controlling Funds for the Nicaraguan Democratic Resistance

NSIAD-87-35: Published: Dec 5, 1986. Publicly Released: Dec 5, 1986.

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In response to a congressional request, GAO monitored the Department of State's Nicaraguan Humanitarian Assistance Office's (NHAO) compliance with the legislation that made $27 million available for humanitarian assistance to the Nicaraguan democratic resistance.

GAO found that: (1) based on invoices, receipts, and other documentation, NHAO had disbursed $26.8 million, as of September 4, 1986; and (2) according to the receipts, NHAO spent about $17 million on goods and services it purchased in the region and $9.8 million for U.S. supplies; (3) NHAO spent about $24 million for food, pharmaceuticals, transportation, and clothing; (4) NHAO exercised considerable control over funds expended in the United States by reviewing invoices and verifying the delivery of purchased supplies; and (5) NHAO could not exercise sufficient financial and programmatic controls beyond U.S. borders because of the sensitive political situations in certain countries. GAO also found that: (1) NHAO visited the region in June 1986, in response to press allegations and intelligence reports, and found that it had paid about $80,000 based on false receipts; (2) some of the funds were used to purchase ammunition and grenades; (3) NHAO recovered about $25,000 and has taken action to offset the remaining funds against subsequent purchases; and (4) efforts to track program funds paid to regional suppliers were further complicated because payments were not always made directly to them.

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