Pursuant to a congressional request, GAO reviewed the role of nongovernment organizations (NGO) in the economic and social reconstruction of El Salvador, focusing on: (1) what experience NGO working in El Salvador have had in administering program funds; (2) what mechanisms were available to help NGO participate in the reconstruction program to strengthen their administrative capabilities; (3) whether the Salvadoran government had procedures that impeded greater participation by NGO; and (4) the extent to which NGO were participating in reconstruction efforts.

GAO found that: (1) Salvadoran-based NGO had less experience dealing with formal developmental and relief assistance projects and generally did not have management control systems that would meet U.S. requirements; (2) many Salvadoran-based NGO lacked experience in designing and administering projects that would meet U.S. assistance standards; (3) technical assistance will soon be available to help NGO develop or upgrade their capabilities to implement projects and enhance their financial controls; (4) the Salvadoran government processes and procedures did not directly exclude any NGO from participating in the program for political or other reasons; (5) NGO representatives were unsure about the procedures and criteria for submitting project proposals and for qualifying for National Reconstruction Plan funds; (6) representatives of the five primary Farabundo Marti National Liberation Front-affiliated NGO stated that they would be willing to accept U.S. funds and to work with the civilian government, under certain conditions; and (7) NGO and the Salvadoran government have implemented projects funded under the National Reconstruction Plan in 32 of the 40 municipalities where mayors have not returned.