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Difficult Environment, but Improved U.S. Monitoring Needed' which was 
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United States Government Accountability Office: 
GAO:  

Report to Congressional Committees: 

July 2011:  

Burma: 

UN and U.S. Agencies Assisted Cyclone Victims in Difficult 
Environment, but Improved U.S. Monitoring Needed: 

GAO-11-700: 

GAO Highlights: 

Highlights of GAO-11-700, a report to congressional committees.  

Why GAO Did This Study: 

Cyclone Nargis hit Burma’s impoverished Irrawaddy Delta on May 2, 
2008, leaving nearly 140,000 people dead or missing and severely 
affecting about 2.4 million others, according to the UN. The Burmese 
military government initially blocked most access to the affected 
region; however, amid international pressure, it slowly began allowing 
international aid workers entry into the region. Since 1997, the 
United States has imposed sanctions to prohibit, among other things, 
the exportation of financial services to Burma and transactions with 
Burmese officials. In response to a congressional mandate, GAO (1) 
described the assistance UN and U.S. agencies have provided in 
response to Cyclone Nargis, (2) assessed USAID actions to help ensure 
funds are used as intended and do not benefit sanctioned entities, and 
(3) described the challenges responders experienced and the lessons 
learned. GAO reviewed financial and program documents; interviewed 
U.S., UN, and nongovernmental organization (NGO) officials; and 
traveled to Thailand and Burma.  

What GAO Found: 

UN and U.S. agencies provided about $335 million for emergency 
response and recovery activities after Cyclone Nargis. Of that total, 
11 UN agencies obligated roughly $288 million for assistance in 
various sectors, including food, health, water and sanitation, and 
agriculture. The U.S. government provided about $38 million of the UN’
s total as part of its roughly $85 million in obligations for 
emergency response and longer-term recovery activities. Of the $85 
million U.S. response, the U.S. Agency for International Development 
(USAID), which led U.S. efforts, obligated about $72 million. The 
Department of Defense obligated about $13 million to procure and 
deliver emergency relief supplies. (See our video clip showing 
conditions shortly after Cyclone Nargis.)  

USAID took actions to help ensure U.S. funds were used as intended and 
did not benefit sanctioned entities, but had some monitoring 
weaknesses. USAID took actions prior to the delivery of assistance, 
including selecting partners experienced in working with USAID and in 
Burma and providing extra guidance to help ensure funds were not 
misused. To monitor assistance, USAID has conducted some site visits. 
However, USAID’s monitoring contains little financial oversight and we 
found that two grantees charged USAID for unapproved international 
travel. Also, in some cases site visits were not sufficiently 
documented. USAID relies on external audits of grantees, but relevant 
USAID staff were not aware of audit findings related to one grantee’s 
cash payments to villagers in Burma. The grantee subsequently 
addressed the audit findings. Lastly, U.S. and UN agencies said they 
examined reports of misuse of assistance in their programs and found 
no evidence that assistance had been misused.  

GAO’s review of 16 after-action reports from donors, NGOs, and UN 
agencies, showed that those responding to Cyclone Nargis experienced 
similar challenges and developed lessons learned in four main areas: 
access, coordination, implementation, and limited in-country disaster 
response capacity. Responders found it difficult to reach affected 
areas because the Burmese government limited their travel and the 
infrastructure was poor. Responders also had difficulty coordinating 
between headquarters and field offices for several reasons, including 
limited telecommunication services. A U.S. report highlighted 
coordination challenges amongst U.S. agencies, stating that agencies’ 
conflicting agendas resulted in difficulties related to the 
appropriateness, timing, procurement, and distribution of aid. 
Implementation challenges include supplies that were incompatible with 
local conditions, such as medicines with instructions printed in non-
Burmese languages and difficulties monitoring aid. Capacity challenges 
included a lack of experienced disaster specialists in Burma, which 
resulted in nonqualified individuals being placed in positions out of 
necessity. To address some of these challenges, reports suggested that 
organizations increase support staff and use the same reporting 
systems. Other reports prioritized involving local communities in 
decision making and improving emergency preparedness and local 
response capacity.  

What GAO Recommends: 

GAO recommends that the Administrator of USAID (1) take four actions 
to improve the management of grants related to Burma, including 
enhancing financial monitoring and reinforcing the requirement to 
document site visits, and (2) review the questionable costs for 
international travel GAO identified. USAID concurred with GAO’s 
recommendations.  

View [hyperlink, http://www.gao.gov/products/GAO-11-700] or key 
components. For more information, contact Thomas Melito at (202) 512-
9601 or melitot@gao.gov.  

[End of section]  

Contents: 

Letter: 

Background: 

UN and U.S. Agencies Obligated About $335 Million in Assistance to 
Burma after Cyclone Nargis: 

USAID Has Taken Actions to Help Ensure Funds Have Been Used As 
Intended, but Has Some Monitoring Weaknesses: 

Organizations Responding to Cyclone Nargis Experienced Similar 
Challenges and Developed Lessons Learned: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Scope and Methodology: 

Appendix II: Mission Descriptions of the UN Agencies That Responded to 
Cyclone Nargis: 

Appendix III: U.S. Emergency Assistance Provided to Burma in Response 
to Cyclone Nargis: 

Appendix IV: Organizations Responding to Cyclone Nargis Experienced 
Interconnected Challenges and Developed Lessons Learned: 

Appendix V: U.S. Agencies Experienced Challenges and Developed Lessons 
Learned in Responding to Cyclone Nargis: 

Appendix VI: Comments from the U.S. Agency for International 
Development: 

Appendix VII: Comments from the Department of Defense: 

Appendix VIII: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Reports Included in Our Review: 

Table 2: Mission Descriptions of the UN Agencies That Responded to 
Cyclone Nargis: 

Figures: 

Figure 1: Map of Cyclone Nargis Path through Burma: 

Figure 2: Cyclone Destruction in the Delta Region: 

Figure 3: UN Assistance by Sector, 2008 through March 2011: 

Figure 4: U.S. Emergency Response Obligations by Sector, Fiscal Years 
2008 and 2009: 

Figure 5: USAID/RDMA Early Recovery Assistance, Fiscal Years 2010 
through 2013: 

Figure 6: Observations of Field-Level Internal Controls: 

Figure 7: Access to Cyclone-Affected Populations, Common Challenges 
and Lessons Learned: 

Figure 8: Coordination between Responding Organizations, Common 
Challenges and Lessons Learned: 

Figure 9: Implementation of Assistance, Common Challenges and Lessons 
Learned: 

Figure 10: In-Country Capacity, Common Challenges and Lessons Learned: 

Figure 11: U.S. Government Assistance to Townships in Burma, by 
Location: 

Abbreviations: 

AO: Agreement Officer: 

AOTR: Agreement Officer's Technical Representative: 

ASEAN: Association of Southeast Asian Nations: 

DOD: U.S. Department of Defense: 

FAO: Food and Agriculture Organization of the United Nations: 

NGO: Nongovernmental organization: 

OFAC: Office of Foreign Asset Controls, U.S Treasury Department: 

OFDA: Office of Foreign Disaster Assistance, USAID: 

RDMA: Regional Development Mission for Asia, USAID: 

State: U.S. Department of State: 

TCG: Tripartite Core Group: 

Treasury: Department of the Treasury: 

UN: United Nations: 

UN OCHAUN: Office for the Coordination of Humanitarian Affairs: 

UNDP: United Nations Development Program: 

UNICEF: United Nations Children's Fund: 

USAID: U.S. Agency for International Development: 

WFP: World Food Program:  

[End of section]  

View GAO Components: 

Video of Cyclone Nargis's destruction in the delta region: [hyperlink, 
http://www.gao.gov/products/GAO-11-700]  

[End of section] 

United States Government Accountability Office: 
Washington, DC 20548:  

July 26, 2011: 

The Honorable Patrick Leahy: 
Chairman: 
The Honorable Lindsey Graham: 
Ranking Member: 
Subcommittee on State, Foreign Operations, and Related Programs: 
Committee on Appropriations: 
United States Senate:  

The Honorable Kay Granger: 
Chairwoman: 
The Honorable Nita Lowey: 
Ranking Member: 
Subcommittee on State, Foreign Operations, and Related Programs: 
Committee on Appropriations: 
House of Representatives:  

Cyclone Nargis hit Burma's impoverished Irrawaddy Delta on May 2, 
2008, leaving nearly 140,000 people dead or missing and severely 
affecting about 2.4 million others, according to the United Nations 
(UN) Office for the Coordination of Humanitarian Affairs (UN OCHA). 
[Footnote 1] In response, UN OCHA reports that the international 
community mobilized more than $600 million in aid as of May 2011, 
including $334.8 million from U.S. and UN agencies.[Footnote 2] The 
Burmese military government initially blocked most international 
access to the affected region; however, amidst international pressure, 
it slowly began allowing aid to be delivered throughout May 2008 and 
finally allowed international aid workers into the cyclone-affected 
delta by late May 2008. The United States has provided funds for 
Cyclone Nargis emergency response and recovery activities largely 
through UN agencies and international nongovernmental organizations 
(NGO). The U.S. Agency for International Development (USAID) has 
funded most of the U.S. response and recovery activities. The 
Department of Defense (DOD) provided emergency supplies, direct air 
transport, and logistics support. The U.S. Department of State (State) 
played a role in coordinating and monitoring the U.S. government 
response. 

In 1997, the United States prohibited new investment in Burma and has 
since imposed broad sanctions to prohibit the exportation of financial 
services to Burma,[Footnote 3] certain imports from Burma, and 
transactions with senior Burmese officials and others,[Footnote 4] and 
has provided limited assistance to Burma. The sanctions arise from 
actions and policies by the Burmese military government that repress 
the democratic opposition in Burma. The U.S. Department of the 
Treasury (Treasury) implements many elements of the sanctions program, 
including the prohibitions on exports of financial services to Burma 
and the targeted financial prohibitions. Congressional committees 
mandated that we assess the assistance that the United States provided 
in response to the cyclone.[Footnote 5] To address the mandate, in 
this report we (1) describe the assistance UN and U.S. agencies have 
provided in response to Cyclone Nargis, (2) assess USAID actions to 
help ensure funds are used as intended and do not benefit sanctioned 
entities, and (3) describe the challenges responders experienced and 
the lessons learned. 

To address these objectives, we reviewed financial and program 
documents from USAID, DOD, State, Treasury, UN agencies, and NGOs. We 
also interviewed U.S., UN, and NGO officials in Washington, D.C.; 
Bangkok, Thailand; and Rangoon, Burma; and conducted site visits to 
select USAID-funded recovery projects in Burma. To address the first 
objective, we reviewed relevant documents, including grants, 
cooperative agreements, and progress reports. We interviewed U.S. and 
UN officials and conducted site visits. To address the second 
objective, we reviewed program and financial files for funds USAID 
awarded in response to Cyclone Nargis and spoke with USAID officials 
about their monitoring of programs. We also conducted a limited 
internal controls review of three NGOs, which collectively account for 
66 percent of funding that USAID awarded to international NGOs to 
respond to Cyclone Nargis. We also met with officials from these three 
NGOs and with USAID officials responsible for financial oversight of 
the NGOs' programs. To address the third objective, we reviewed 16 
relevant after-action and assessment reports prepared by the U.S. 
government, UN agencies, and NGOs to identify challenges experienced 
during the Cyclone Nargis response, as well as lessons learned. We 
also interviewed U.S., UN, and NGO officials. 

We conducted this performance audit from July 2010 through July 2011 
in accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. See appendix I 
for a more detailed discussion of our scope and methodology. 

In this report, we recommend that the Administrator of USAID direct 
the appropriate mission and offices to improve management of grants 
related to Burma by taking actions, such as (1) enhancing financial 
monitoring of agreements by including periodic reviews of grantee 
internal controls, transactions, and disbursement records; (2) 
providing grantees with specific guidance on the approval process for 
international travel requests, and ensuring that USAID staff monitor 
grantees' expenditures for compliance with related laws, regulations, 
and grant agreements, including international travel; (3) reinforcing 
the requirement for staff to formally document site visits to 
grantees; and (4) ensuring all relevant offices are made aware of 
audit findings in a timely manner. We also recommend that the 
Administrator of USAID direct the appropriate mission and offices to 
follow-up on the questionable costs associated with international 
travel that we identified in this report and take action as 
appropriate on any identified unallowable costs. USAID concurred with 
all recommendations. 

Background: 

Cyclone Nargis Severely Affected More than 3 Million Burmese: 

Cyclone Nargis left nearly 140,000 people dead or missing, up to 
800,000 displaced, and roughly 2.4 million severely affected.[Footnote 
6] The strong tropical cyclone struck Burma's impoverished Irrawaddy 
Delta on May 2, 2008, with a storm surge of 12 feet and continued east-
northeast through the Rangoon division (see figure 1). 

Figure 1: Map of Cyclone Nargis Path through Burma: 

[Refer to PDF for image: map]  

Depicted on the map is the path of the cyclone:  

May 2, 6:30 p.m.: 121 miles per hour (mph): near Labutta; 
May 3, 12:30 a.m.: 98 miles per hour (mph): near Pyapon; 
May 3, 6:30 a.m.: 81 miles per hour (mph): near Rangoon; 
May 3, 12:30 p.m.: 58 miles per hour (mph): near Kayaikto.  

Sources: GAO based on USAID 2008 map USG Humanitarian Assistance to 
Burma. Data from Dartmouth Flood Observatory.  

[End of figure] 

Strong winds and heavy rainfall led to the flooding of inland areas 
and agricultural lands, the destruction of 450,000 homes, and the 
devastation of food stocks, livelihoods, and infrastructure, according 
to the Tripartite Core Group joint assessment.[Footnote 7] For 
examples of Cyclone Nargis's destruction in the delta region, see 
figure 2 and our video. The assessment stated that the cyclone 
destroyed or severely damaged more than 50 percent of schools and 
nearly 75 percent of health facilities in the affected areas. The 
cyclone also impaired access to clean water because the salt water 
contaminated communal water collection systems and destroyed household 
rainwater collection containers. Prior to the cyclone, Burma had 
significant humanitarian needs resulting from decades of chronic 
underinvestment in essential services by the Burmese government, 
ongoing ethnic conflict, and government policies that stifle economic 
growth. 

Figure 2: Cyclone Destruction in the Delta Region: 

[Refer to PDF for image: photograph]  

Source: DOD.  

[End of figure] 

Burmese Government Restricted Access to Cyclone-Affected Areas but 
Some Aid Was Delivered: 

In the week following the cyclone, the Government of Burma said it was 
accepting international aid but was not ready to accept international 
aid workers, insisting that the disaster could be handled internally 
and therefore they did not need experts. Due to the inability to enter 
Burma, many foreign donors, including the U.S. government, began 
assembling staff in Bangkok, Thailand, to be ready for quick 
deployment if granted access. The U.S. and other donors also had 
military ships anchored off the coast of Burma, ready to supply 
humanitarian assistance if allowed by the Burmese government. 

The Government of Burma restricted the movement of the few 
international aid workers who were in Burma when the cyclone hit as 
well as those it eventually allowed to enter the country. The Burmese 
Government has had a longstanding policy requiring approval for any 
international staff to travel outside of Rangoon.[Footnote 8] Within 
the first two weeks after the cyclone struck, the government set up 
military checkpoints outside of Rangoon, blocking access to the 
cyclone-affected areas for anyone without the proper travel approvals. 

Despite the inability of international aid workers to get into Burma 
and government restrictions on the movement of international aid 
workers within Burma, some aid was delivered. International agencies 
already in Burma launched operations within a few days, working 
through their local staff or in partnership with local organizations. 
The Burmese government provided some assistance to cyclone-affected 
areas. One U.S. official reported that the Burmese military set up a 
logistics center in Rangoon and delivered some relief supplies. One 
report also suggested that the Burmese army and navy rescued some 
people stranded in remote areas; set up camps for displaced people; 
and restored some electricity, communication, and transportation 
links.[Footnote 9] 

Burmese citizens and local organizations also assisted cyclone 
victims. According to the same report, within hours of the cyclone, 
the first local response efforts were underway, led by monks, doctors, 
students, artists, intellectuals, travel agents, and small business 
owners. Several hundred new and existing groups, including a 
contingent of Burmese citizens returning from abroad, provided relief. 
While most of the larger international agencies initially focused on 
the main population centers, many of these small, informal groups 
assisted the most isolated areas. Several officials cited the local 
response as one of the main reasons there was not a further loss of 
life in the weeks immediately following the cyclone; however, they 
reported that the local response was exhausting its supplies by the 
end of May 2008. 

Tripartite Core Group Formed to Facilitate Response: 

Under pressure by the international community and UN entities to allow 
international aid workers access to affected populations, the Burmese 
government pledged on May 23, 2008, during a visit by the UN Secretary 
General, that it would begin granting international aid workers access 
to Burma and the cyclone-affected regions. The Association of South 
East Asian Nations (ASEAN),[Footnote 10] of which Burma is a member, 
played a leading role in getting international disaster response 
workers into Burma. ASEAN took the lead in coordinating assistance 
offered by the international community, with full support from the UN, 
and in late May 2008 formed the Tripartite Core Group (TCG). The TCG's 
mission was to facilitate trust, confidence, and cooperation between 
the Government of Burma and the international community on matters 
concerning Cyclone Nargis humanitarian relief and recovery work. The 
TCG consisted of three members from the Burmese government, three from 
ASEAN, and three from the UN. The TCG started its work on May 31, 
2008, and met once a week until its mandate ended in July 2010. The 
TCG facilitated the issuance of visas and permits to travel, as well 
as visa extensions for UN and foreign aid workers. The TCG also led 
the post-Nargis Joint Assessment, conducted in June 2008, and helped 
facilitate the entry and deployment of 10 commercial helicopters used 
in conducting assessments and delivering relief supplies. 

U.S. Government Has Imposed Sanctions on Burma Since 1997: 

Since 1997 the U.S. government has imposed sanctions on Burma mainly 
due to the ruling Burmese military regime's actions and policies. 
[Footnote 11] The State Law and Order Restoration Council (later known 
as the State Peace and Development Council) that took power in 1988 
has routinely restricted freedom of speech, religion, and movement and 
committed other serious human rights violations against the Burmese 
people. It has condoned the use of forced labor and taken military 
action against ethnic minorities living within the country. Burma's 
ruling regime has also periodically blocked or impeded activities 
undertaken by UN and international NGOs in Burma, as we previously 
reported.[Footnote 12] In 1990, national parliamentary elections 
resulted in an overwhelming victory for the National League for 
Democracy party, led by Aung San Suu Kyi. However, the ruling State 
Law and Order Restoration Council refused to yield power and 
maintained its policies of autocratic rule. 

Parliamentary elections held in November 2010--described by a U.S. 
government source as "flawed"--saw the ruling regime's party garner 
more than 75 percent of the seats. Parliament convened in January 2011 
and selected the former Prime Minister as President. The government 
source reported that the vast majority of national-level appointees 
named by the new President are former or current military officers. 

The current U.S. sanctions against Burma limit, among other things, 
the export of financial services by U.S. persons or from the United 
States to Burma and new U.S. investment in Burma. The Treasury's 
Office of Foreign Assets Control (OFAC) manages the U.S. sanctions 
program by issuing licenses, monitoring compliance, and bringing 
enforcement actions against violators of the sanctions. The sanctions 
have developed through laws, such as the Burmese Freedom and Democracy 
Act of 2003 and the Tom Lantos Block Burmese JADE (Junta's Anti-
Democratic Efforts) Act of 2008, as well as through presidential 
executive orders. U.S. law also requires that the United States 
withhold a share of its voluntary contributions to most UN 
organizations proportionate to their funding for programs in Burma. 
[Footnote 13] Generally, aid donated to Burma on behalf of the United 
States is not intended to benefit sanctioned entities, such as senior 
Burmese government officials or persons associated with the military 
regime that have been designated as such by OFAC. Further, State 
identifies Burma as a "major illicit drug producing country" that has 
failed to adhere to its obligations under international counter-
narcotics agreements and is, therefore, banned from receiving some 
U.S. aid under the Foreign Assistance Act of 1961.[Footnote 14] 

To operate legally in Burma, USAID used funds provided with 
notwithstanding authority[Footnote 15] and obtained OFAC licenses. 
Notwithstanding authority allowed USAID to provide humanitarian 
assistance to Burma despite other provisions of law limiting agencies' 
ability to operate in Burma. This authority automatically applied to 
USAID's Office of Foreign Disaster Assistance (USAID/OFDA) programs 
because the law allows for international disaster assistance, 
including relief and rehabilitation, to be provided notwithstanding 
any other provision of law. Other appropriations were also provided 
with notwithstanding authority to fund humanitarian assistance in 
Burma for individuals and communities impacted by the cyclone. 
[Footnote 16] OFAC licenses have allowed USAID and its grantees and 
contractors to operate in Burma, in order to conduct financial 
transactions and other activities otherwise prohibited by the U.S. 
sanctions. 

UN and U.S. Agencies Obligated About $335 Million in Assistance to 
Burma after Cyclone Nargis: 

In response to the humanitarian crisis in Burma following Cyclone 
Nargis, UN and U.S. agencies obligated roughly $334.8 million in 
assistance, as of March 2011. Of this total, the UN obligated $288 
million and the United States obligated $84.6 million--$37.8 million 
of which went to UN agencies, and is therefore included in the UN 
total as well. Of the remaining U.S. assistance, $33.9 million was 
provided through NGOs and $12.9 million was provided by DOD. 

UN Agencies Obligated $288 Million for Emergency Response and Recovery 
Assistance: 

UN agencies played a critical role in implementing international 
assistance in response to Cyclone Nargis. Eleven UN agencies obligated 
$288 million since 2008, $37.8 million (13 percent) of which came from 
U.S. funding,[Footnote 17] and provided emergency response and 
recovery assistance.[Footnote 18] The UN, through the acting 
Humanitarian Coordinator and the country team, organized the emergency 
and early recovery phase of the Cyclone Nargis response and assigned 
UN agencies and NGOs lead responsibility for particular relief 
sectors, as shown in figure 3, an interactive graphic. (See appendix 
II for mission descriptions of the UN agencies.)  

Figure 3: UN Assistance by Sector, 2008 through March 2011: 

[Refer to PDF for image: illustrated table]  

Interactive instructions: 
The online version of this matrix is interactive. Hover your mouse 
over each UN organization for a description of that organization.
To view these descriptions in the offline version, see appendix II.  

World Food Program (WFP): 
Obligations: $129.4 million; 
Emergency telecommunications: Lead responsibility for the sector; also 
provided assistance; 
Food: Lead responsibility for the sector; also provided assistance; 
Logistics/emergency relief supplies: Lead responsibility for the 
sector; also provided assistance. 

United Nations Children's Fund (UNICEF): 
Obligations: $79.3 million; 
Education: Lead responsibility for the sector; also provided 
assistance; 
Shelter: Provided assistance; 
Health: Provided assistance; 
Nutrition: Lead responsibility for the sector; also provided 
assistance; 
Protection: Provided assistance; 
Water, sanitation, and hygiene: Lead responsibility for the sector; 
also provided assistance.  

United Nations Development Program (UNDP): 
Obligations: $33.9 million; 
Agriculture: Provided assistance; 
Early recovery/livelihoods: Lead responsibility for the sector; also 
provided assistance; 
Logistics/emergency relief supplies: Provided assistance; 
Water, sanitation, and hygiene: Provided assistance.  

Food & Agriculture Organization of the United Nations (FAO): 
Obligations: $17.2 million; 
Agriculture: Lead responsibility for the sector; also provided 
assistance.  

United Nations High Commissioner for Refugees (UNHCR): 
Obligations: $9.7 million; 
Shelter: Provided assistance; 
Protection: Lead responsibility for the sector; also provided 
assistance.  

Word Health Organization (WHO): 
Obligations: $8.7 million; 
Health: Lead responsibility for the sector; also provided assistance.  

Office of the Coordination of Humanitarian Affairs (UN OCHA)[A]: 
Obligations: $4.5 million.  

International Labor Organization (ILO): 
Obligations: $2.3 million; 
Early recovery/livelihoods: Provided assistance.  

United Nations Population Fund (UNFPA): 
Obligations: $1.9 million; 
Health: Provided assistance; 
Protection: Provided assistance.  

United Nations Educational, Scientific and Cultural Organization 
(UNESCO): 
Obligations: $0.6 million; 
Education: Provided assistance.  

United Nations Human Settlements Program (UN-HABITAT): 
Obligations: $0.5 million; 
Shelter: Lead responsibility for the sector; also provided assistance.  

Total funding: $288.0 million.  

Source: GAO analysis of UN data.  

Note: Certain sectors had more than one lead agency, and the lead 
position sometimes changed over time. In addition, sectors, such as 
education and health, had NGOs as co-leads. 

[A] UN OCHA provided a broad array of coordination assistance across 
the sectors.  

[End of figure]  

Four UN agencies--the World Food Program (WFP), United Nations 
Children's Fund (UNICEF), United Nations Development Program (UNDP), 
and the Food and Agriculture Organization of the United Nations (FAO)--
contributed approximately 90 percent of the $288 million. Nearly half 
of the total funding came through WFP, which distributed food and 
supplied common services, such as providing trucks and cargo vessels 
for transporting humanitarian assistance, to the UN and other 
responding agencies. These four UN agencies provided the following 
activities and services: 

* WFP. As the UN's largest assistance provider for this humanitarian 
emergency and the lead agency responsible for the food, logistics, and 
telecommunications sectors, WFP obligated nearly $130 million for 
associated activities, as of March 2011. WFP distributed food in the 
Irrawaddy Delta and Rangoon Division, reaching nearly one million 
people and supplying more than 70,000 tons of food according to WFP 
reports. The food commodities included rice, beans, vegetable oil, 
salt, ready-to-eat meals, and high-energy biscuits. In urban areas of 
the Rangoon Division, where markets remained viable, WFP conducted a 
cash transfer program that provided cash assistance to purchase a 
week's worth of food to more than 49,000 beneficiaries. However, the 
Burmese government canceled this program in June 2008. According to 
WFP officials, the Burmese government maintained that the cash 
transfer program had a negative impact on the economy because it used 
informal rather than formal exchange rates.[Footnote 19] In August 
2008, following the termination of the project, WFP began providing 
food rations for 131,400 Rangoon beneficiaries. In fall 2008, WFP and 
its partners began to shift their focus from relief food provision to 
early recovery efforts in order to establish opportunities for work 
and livelihood redevelopment--principally in the occupations of 
farming and fishing. 

In addition to food assistance, WFP helped supply and coordinate 
common services to the UN and other responding agencies. WFP 
established five logistics hubs across the delta to provide forward 
locations for temporary food storage prior to distribution, and bases 
for transportation to onward destinations by road, waterways, or air. 
Upon completion of air operations in August 2008, WFP reported that it 
had transported 4,177 tons of food and relief supplies from the UN 
staging area in Bangkok. Helicopters delivered 1,088 tons of emergency 
food and nonfood items to 160 remote locations. Because the delta is a 
labyrinth of waterways, WFP contracted a fleet of barges, push tugs, 
and river boats, which various agencies used to transport an 
additional 10,405 tons of humanitarian supplies, as well as trucks for 
inland travel. 

* UNICEF. UNICEF led three sectors--education; nutrition; and water, 
sanitation, and hygiene--and obligated more than $79 million for 
associated activities, as of March 2011. UNICEF reported that strong 
winds and heavy rainfall from Cyclone Nargis left more than 4,000 
schools and more than 600 health facilities destroyed or badly 
damaged. As a result, their immediate priorities included preventing 
disease outbreaks, ensuring availability of safe drinking water, 
establishing temporary learning spaces for children, creating child-
friendly spaces for traumatized children, and tracing and 
reintegrating the families of separated children. UNICEF said it 
constructed and maintained 300 emergency latrines, installed 558 large 
rainwater containers and 8 water treatment plants, administered more 
than 110,000 measles vaccinations to children in cyclone-affected 
areas and deployed health assistants to severely affected townships, 
provided school kits to 2,322 schools to facilitate resuming of the 
school year and renovated 965 schools and 702 staff houses, and 
supported 27,000 children through a range of care and protection 
activities in 272 locations in 13 affected townships. 

* UNDP. As the lead agency for the early recovery sector, UNDP was the 
only UN agency with project offices located in the delta region prior 
to Cyclone Nargis. UNDP's eight project offices and associated staff 
helped distribute supplies, such as water, food, plastic sheets, 
cooking utensils, medicine, and clothing. UNDP obligated nearly $34 
million, as of March 2011, and adapted its pre-cyclone Human 
Development Initiative projects to meet the early recovery needs of 
Cyclone Nargis survivors, focusing primarily on livelihood re- 
establishment, but also including grass-roots interventions in the 
areas of primary health care, the environment, HIV/AIDS, training and 
education, and food security. UNDP also adapted its micro-enterprise/ 
micro-credit program to support enterprise creation and 
rehabilitation, including helping affected populations to rebuild 
their houses. 

* FAO. To restore and strengthen food security by helping to restore 
livelihoods in agriculture and fisheries production in Burma's cyclone-
affected provinces, FAO obligated about $17 million, as of March 2011. 
As the lead agency for the agriculture sector, FAO provided crop, 
vegetable, and fruit seedlings; fertilizers; technical assistance for 
crop and livestock production; improved fishing techniques; fish 
processing equipment; livestock and fisheries inputs; veterinary 
equipment; and animal vaccinations. 

U.S. Government Responded to Cyclone Nargis with Nearly $85 Million in 
Assistance: 

In response to Cyclone Nargis, the U.S. government obligated $84.6 
million since May 2008--$74.9 million for emergency response 
activities and $9.7 million for longer-term recovery assistance. Of 
the total funds obligated, USAID obligated $71.7 million, of which 
$37.8 million went to UN programs, and DOD obligated $12.9 million. 
U.S. assistance covered multiple sectors throughout the delta region; 
however, certain townships received a more extensive range of 
assistance.[Footnote 20] (See appendix III for a map that shows the 
location and type of emergency assistance that U.S. agencies provided 
in response to Cyclone Nargis.)  

U.S. Emergency Response Prioritized Relief Supplies: 

As the lead agency for the U.S. government's response to Cyclone 
Nargis, USAID/OFDA established a disaster assistance response team in 
the region within days after the cyclone struck. USAID/OFDA also 
immediately provided $250,000 to UN agencies for emergency assistance. 
Due to the delay in the Burmese government's issuance of visas, USAID 
deployed the disaster response team to Bangkok, and a logistics team 
established operations in Utapao, Thailand.[Footnote 21] 

The U.S. government's emergency response consisted of $33.9 million in 
assistance from USAID/OFDA, $28.1 million in food aid assistance from 
USAID's Office of Food for Peace, and $12.9 million in assistance from 
DOD, as shown in figure 4. 

Figure 4: U.S. Emergency Response Obligations by Sector, Fiscal Years 
2008 and 2009: 

[Refer to PDF for image: illustrated horizontal bar graph with 2 
photographs]  

Photographs: 
Emergency supplies provided by the U.S. government and other donors.  

U.S. and Burmese military personnel off-load water and other critical 
supplies from U.S. C-130 aircraft.  

Obligations: Agriculture/Food; 
USAID/FFP: $28.1 million; 
USAID/OFDA: $4.0 million; 
Selected activities/objectives: Provided 23,640 metric tons of food 
aid. Assisted communities to restart their agricultural and fisheries
cycles in a timely fashion.  

Obligations: Logistics/coordination/emergency relief; 
USAID/OFDA: $10.9 million; 
DOD: $12.9 million; 
Selected activities/objectives: Provided airlift and logistics 
coordination in support of the humanitarian community in Burma and 
provided emergency nonfood relief commodities.  

Obligations: Early recovery; 
USAID/OFDA: $8.6 million; 
Selected activities/objectives: Provided employment opportunities, 
rehabilitated basic infrastructure, and assisted in agricultural 
restoration.  

Obligations: Water, sanitation, and hygiene; 
USAID/OFDA: $3.0 million; 
Selected activities/objectives: Provided water supply, storage 
containers, and sanitation facilities; promoted safe hygiene 
practices; and distributed soap and other hygiene items.  

Obligations: Health and Nutrition; 
USAID/OFDA: $2.6 million; 
Selected activities/objectives: Provided emergency primary health care 
services, including vaccines; insecticide mosquito nets; and essential 
drugs for diarrhea, pneumonia, malaria, and other critical diseases.  

Obligations: Shelter; 
USAID/OFDA: $1.6 million; 
Selected activities/objectives: Provided temporary emergency shelter 
and helped townships gain access to locally available shelter 
materials.  

Obligations: Protection; 
DOD: $0.3 million; 
Selected activities/objectives: Provided protection of children and 
women from violence, abuse and exploitation through activities such as 
family tracing and reunification and the establishment of child-
friendly spaces.  

Total assistance: $72 million[A].  

[A] Total does not include $2.9 million in USAID/OFDA support costs.  

Sources: GAO analysis of USAID and DOD data. Photos from DOD.  

[End of figure]  

USAID/OFDA obligated the nearly $34 million as follows: 

* $21.5 million was provided through 21 awards in 2008 to 20 different 
NGOs and UN organizations. Most of the awards were for emergency 
shelters, relief commodities and hygiene and sanitation facilities, 
including providing the means to access safe drinking water. Some 
awards also helped support capacity building for the local 
communities, particularly for food production. 

* $5 million was provided in 2009 through seven awards to seven NGOs 
and UN organizations. These awards were largely modifications to the 
2008 awards that extended the original grant time periods and provided 
extra funding for ongoing activities. 

* $4.5 million was provided to procure and distribute relief 
commodities to various NGOs for distribution throughout the delta 
region in the early weeks following the cyclone. 

* $2.9 million was provided for administrative, travel, and logistical 
support for the emergency response. This included travel and 
transportation costs for the disaster assistance response team members. 

In addition to USAID/OFDA, USAID's Office of Food for Peace obligated 
$28.1 million of Food for Peace emergency food assistance[Footnote 22] 
between September 2008 and January 2009, which WFP distributed to 
affected populations. The 23,640 metric tons of assistance included 
beans, rice, vegetable oil, and corn-soy blend. The first U.S. food 
shipment, consisting of 300 metric tons of corn-soy blend, arrived in 
Burma in September 2008 from U.S. prepositioned food stocks in 
Djibouti, Africa. Most of the other food supplies arrived from the 
United States between November 2008 and January 2009, approximately 7 
to 9 months after Cyclone Nargis struck Burma. [Footnote 23] 

DOD Transported Emergency Supplies and Assistance: 

DOD provided $12.9 million in transportation assistance and emergency 
supplies after Cyclone Nargis struck Burma. Between May 12 and June 
22, 2008, DOD operated a U.S. government air-bridge with C-130 
aircraft between Thailand and Burma and provided critical supplies, 
such as water, food, and emergency shelter material. The U.S. 
government air-bridge completed 185 airlifts and delivered more than 
$4 million of USAID/OFDA emergency relief supplies and commodities 
from DOD, UN agencies, NGOs, and the Government of Thailand. Upon the 
insistence of the Government of Burma, and because of a lack of other 
viable options, DOD provided early shipments of supplies to the 
Government of Burma for delivery. Soon thereafter, DOD consigned all 
emergency supplies flown to USAID's NGO partners.[Footnote 24] 

U.S. Recovery Assistance Targets Four Sectors: 

To sustain the efforts initiated in the immediate aftermath of Cyclone 
Nargis, USAID's Regional Development Mission for Asia (USAID/RDMA) 
obligated an additional $9.7 million to fund four cooperative 
agreements in the priority sectors of livelihoods; health; water, 
sanitation, and hygiene; and shelter starting in May 2010, as shown in 
figure 5.[Footnote 25] This assistance was targeted to provide for 
critical needs in sectors that required continued support as 
assistance moved into the recovery and reconstruction phases. USAID 
said its programs complemented other ongoing donor-funded programs, 
involved high levels of community participation, and fostered local 
beneficiary ownership. Ultimately, USAID will have supported relief 
and recovery in the Cyclone Nargis-affected communities for 4.5 years 
after the disaster at the close of these agreements.[Footnote 26] 

Figure 5: USAID/RDMA Early Recovery Assistance, Fiscal Years 2010 
through 2013: 

[Refer to PDF for image: illustrated horizontal bar graph with 2 
photographs]  

Photographs: 
USAID-funded bridge replacement.  

USAID-funded maternal health care assistance.  

Obligations: Livelihoods: $5.8 million; 
Selected activities: Rebuild rural livelihoods and communities by
supporting community-driven village infrastructure projects designed 
to create immediate wage labor and provide farmer advisory services and
agricultural financing for small farm households.  

Obligations: Health: $2.4 million; 
Selected activities: Reduce sickness and death among disaster affected
populations, with a particular focus on decreasing high rates of 
communicable disease.  

Obligations: Shelter: $0.9 million; 
Selected activities: Support shelter rehabilitation and repair for
vulnerable households in Dedaye Township, an area that suffered from 
Cyclone Nargis’s impact and had not initially received shelter 
support.  

Obligations: Water, sanitation and hygiene: $0.6 million; 
Selected activities: Improve household health in targeted populations
by increasing access to sufficient amounts of potable water and 
increasing safe sanitation practices.  

Total assistance: $9.7 million.  

Sources: GAO analysis of USAID data. Photos from GAO.  

[End of figure] 

USAID Has Taken Actions to Help Ensure Funds Have Been Used As 
Intended, but Has Some Monitoring Weaknesses: 

USAID Took Actions Prior to Delivery of Assistance: 

Prior to delivery of assistance, USAID took several actions to help 
ensure that funds were used as intended and did not benefit sanctioned 
entities. First, USAID selected grantees that had experience working 
in Burma and with the United States. To provide immediate emergency 
assistance, USAID/OFDA generally selected grantees already working in 
Burma who were also familiar with USAID regulations and restrictions. 
In addition, USAID/OFDA said that they required all grantees, or their 
sub-grantees, to be registered to work in Burma before grants were 
finalized. This ensured grantees were able to begin providing 
assistance immediately. In providing follow-on assistance, USAID/RDMA 
decided to provide recovery funds to organizations that had received 
USAID/OFDA grants, a strategy that they said allowed them to implement 
their programs faster. They said these organizations had built 
relationships with the affected villages, were familiar with all the 
U.S. restrictions, and had demonstrated success operating in Burma. 
Officials reviewed the previous performance of each grantee in 
selecting organizations for the follow-on assistance. 

Second, USAID/OFDA, State, and DOD officials initially decided to 
provide only low-value emergency relief supplies to limit the risk of 
theft by the Burmese military. Given that the Government of Burma 
insisted on receiving and distributing all aid in the initial days of 
the response, U.S. agencies said they chose their mix of relief 
supplies carefully to limit the risk of diversion by the Government of 
Burma. A State official told us that they chose certain goods, such as 
bottles of water and plastic sheeting, specifically with this purpose 
in mind. This official stated that the Government of Burma requested 
items such as helicopters and vehicles that could have been diverted, 
which the U.S. government did not provide. 

Third, USAID/RDMA included written guidance in its agreements to 
emphasize restrictions and help grantees determine who in Burma is 
restricted from receiving U.S. assistance. For example, each agreement 
contains a clause clarifying that assistance cannot be provided to or 
through the Government of Burma, while recognizing that situations may 
arise where government workers, such as teachers or local health 
officials, may observe USAID-funded training. U.S. officials told us 
that they provide this extra guidance to help organizations better 
understand the restrictions. USAID/RDMA has also tried to design its 
programs to reduce the risks that U.S. assistance will benefit 
Government of Burma employees. For example, since U.S. funds generally 
cannot be used to provide any benefit to official village midwives 
because they are Government of Burma employees, USAID/RDMA approved 
grantees to work with community health workers, who are not government 
employees, as part of their health sector programs. In addition to the 
guidance in the agreements, USAID conducted post-award briefings with 
all partners to discuss the terms of the agreements, with an emphasis 
on ensuring that U.S. assistance does not benefit sanctioned entities. 
A USAID legal advisor participated in these briefings to answer 
participants' questions about how to differentiate between 
beneficiaries and local government employees.[Footnote 27] 

Finally, USAID obtained licenses from OFAC, or ensured its grantees 
had valid licenses, which allowed grantees to conduct all operations-- 
including financial transactions--necessary to implement humanitarian 
assistance programs in Burma without violating U.S. sanctions. 
[Footnote 28] USAID ensured that all of its grant agreements included 
copies of OFAC licenses. Under the terms of the licenses, USAID and 
its grantees had to continue to ensure that U.S. funding did not 
benefit sanctioned entities in Burma. 

USAID Monitored Assistance Under Difficult Conditions, But 
Documentation Is Insufficient: 

Amid numerous travel and operational constraints, USAID has taken 
actions to monitor grantees' program delivery; however, we found that 
their site visits were not always documented as required.[Footnote 29] 
USAID does not have an official presence in Burma, so staff must 
request permission to enter Burma weeks prior to any planned 
monitoring site visits; however, the Burmese government often does not 
grant permission in a timely manner, according to USAID officials. In 
addition, the Government of Burma placed numerous and significant 
restrictions on international travel to the affected region, which 
USAID officials said negatively affected their ability to conduct 
monitoring. USAID/OFDA officials also reported difficulties in 
conducting monitoring due to staffing constraints. They stated that a 
disaster of this magnitude could warrant fifteen to twenty members on 
the response team. However due to the inability to get visas for all 
team members, there were only four members in Burma during the height 
of the emergency response, and ultimately only seven team members 
gained access to Burma. USAID's ability to monitor is also constrained 
by the remoteness of the cyclone-affected areas. For example, one 
USAID grantee runs programs that are located on Middle Island, which 
took us 16 hours of travel by car and boat to reach under good 
conditions from Rangoon, where the U.S. embassy is located. 

As discussed below, despite the numerous constraints, USAID conducted 
some monitoring of its programs: 

* Emergency assistance. USAID and State officials told us they 
monitored emergency assistance from May 2008 through May 2009. USAID/ 
OFDA officials reported that members of USAID's disaster assistance 
response team made visits to the cyclone-hit delta region to oversee 
implementation of USAID-funded grant activities and to discuss results 
with beneficiaries from May 2008 to July 2008. However, the USAID- 
provided documentation of visits during this time focuses on the 
assessment of needs in the region, with no detailed discussion of 
monitoring of USAID programs. Further, USAID assigned an emergency 
disaster response coordinator--who was stationed in Burma from 
September 2008 to May 2009--to monitor program activities.[Footnote 
30] She told us that during her time in Burma, she made only one 
monitoring site visit to each partner because of Burmese government-
imposed travel restrictions. While she did not prepare formal trip 
reports, she told us that she reported her activities to USAID/OFDA 
staff members through e-mails and conversations and also reported her 
activities and findings to embassy staff for inclusion in classified 
cables issued by the embassy. However, while she was sometimes asked 
to clear information on the cables, she reported that she never saw 
finalized cables containing information she submitted. 

* Food aid. To oversee USAID's food aid contributions to Burma, USAID 
assigned a food aid official to the disaster assistance response team 
in Bangkok roughly 2 weeks after Cyclone Nargis hit Burma. However, 
the food aid official returned to Washington, D.C., when she was 
unable to obtain a visa and monitored food aid activities from there, 
relying on disaster assistance response team members, other embassy 
officials, and WFP staff in Burma to monitor food assistance in a 
limited capacity. The official said she had regular informal 
communication via e-mail and telephone with WFP staff in Washington, 
D.C., and Burma. She was able to travel to Burma several months later, 
in September 2008, during which time she conducted site visits with 
WFP personnel across the Irrawaddy Delta. Her site visits included 
observations of food distributions and an inspection of a WFP 
warehouse. Upon returning, she drafted a trip report that was 
circulated within USAID, but was never finalized. The report included, 
among other things, her observations from the field visits and 
challenges encountered in the response. 

* Recovery assistance. To monitor recovery assistance, USAID officials 
visited cyclone-affected areas three times between 2010 and 2011 and 
made several other visits to Rangoon, where they met with grantees. 
USAID officials said that while the Burmese government typically 
grants access, the level of uncertainty surrounding when they will 
grant the access makes it difficult to monitor aid delivery on short-
term notice, limits the number of site visits they make, and precludes 
them from properly planning monitoring visits. USAID officials 
responsible for monitoring recovery assistance provided us with nine 
trip reports, including two for trips to monitor grantee activities. 
The trip reports include headings for information such as activities 
monitored, key meetings, issues identified, recommendations, and 
photographs from site visits. We found that one of the two reports was 
generally lacking in detail. For example, the report included no 
detail on what the officials actually observed during the visit or any 
discussion of the activities they monitored in terms of potential 
issues or progress. 

USAID staff reported that State officials from the embassy in Rangoon 
also conducted some monitoring activities; however, they did not 
receive instructions on monitoring procedures. According to a USAID 
official, State officials provided additional support for USAID staff 
on some site visits, or if traveling in the vicinity of USAID 
programs, they were asked to observe some of the activities and report 
back to USAID. While this monitoring was helpful, a USAID official 
told us that these State officials had not received formal USAID 
training on what to look for during site visits or how to conduct 
effective monitoring visits. All USAID agreement officers and their 
technical representatives are required to attend mandatory training 
that includes monitoring procedures. 

USAID's Monitoring Includes Limited Financial Oversight and Relies on 
External Audits, but Staff Were Not Aware of Relevant Audit Findings: 

USAID's monitoring activities, including their limited number of site 
visits, involve little financial oversight, which is to help ensure 
funds are used as intended. USAID monitoring consists of program and 
financial monitoring. Program monitoring is focused on the 
effectiveness of USAID programs and is carried out by field officers, 
program officers, and the relevant agreement officer's technical 
representative (AOTR).[Footnote 31] Financial monitoring is carried 
out by the AOTR and the relevant mission's office of financial 
management. For financial monitoring, USAID primarily relies on its 
reviews of grantee's quarterly self-reported cumulative expenditure 
data, and the grantee's annual single audit[Footnote 32] to reveal any 
instances of financial noncompliance. 

Grantee Financial Reports and Site Visits: 

Grantees are required to submit regular financial reports that are 
reviewed by the program office and the mission's office of financial 
management. These reports include cumulative financial transactions, 
such as drawdowns and expenditures. The office of financial management 
and the AOTR review these reports to assess the reasonableness of 
grantee drawdowns. USAID does not require grantees to provide 
supporting documentation, such as invoices or detailed transactions. 
[Footnote 33] An official in USAID/RDMA's office of financial 
management told us that the AOTR, who is also the relevant program 
officer, compares these reports to information obtained from site 
visits and progress reports to ensure the information grantees report 
is reasonable. 

USAID officials said that staff conducting monitoring in Burma, 
including the relevant AOTR, focused their site visits on programmatic 
issues but did not review grantee internal control frameworks or 
review disbursements to determine whether funds were used for intended 
purposes. However, USAID officials told us they consider their 
observation of grantees' use of materials procured with grant funds 
and the connection of those materials to the program activities 
described in the grant agreement to be a review of grantee financial 
actions. A USAID contracting officer reported that, given the limited 
amount of time the AOTR spends in the field monitoring, the emphasis 
is often on the programmatic side of her monitoring responsibilities. 
Further, the AOTR stated that the administrative burden associated 
with obtaining permission to enter Burma and travel to grantee sites 
detracts from USAID's ability to monitor the Cyclone Nargis-related 
programs more closely and make more meaningful assessments. 

Single Audit Reports: 

USAID officials also told us they rely on the grantees' annual single 
audits, in addition to their review of grantee financial reports, to 
monitor compliance with their grant agreements; however, we found that 
relevant USAID program staff were not aware of some internal control 
weaknesses and questioned costs included in a grantee's single audit 
report.[Footnote 34] Two of the three grantees we reviewed were 
required to submit single audits, and one had significant findings. We 
reviewed the June 30, 2009, and June 30, 2010, single audits of one of 
the grantees and the December 31, 2009, single audit of a second 
grantee. We found that the June 30, 2009, single audit of the first 
grantee had 11 findings related to internal controls and compliance 
with federal program requirements. For example, the auditors 
questioned cash payments to Burmese villages totaling $641,695 because 
the grantee did not provide the auditor with sufficient documentation 
for the cash payments. Officials from the grantee's Bangkok office 
told us that they addressed the auditor's findings and that they now 
maintain records of cash payments made to beneficiaries. We reviewed 
the same grantee's June 30, 2010, single audit report and noted that 9 
of the 11 prior year findings related to the grantee's programs in 
Burma had been resolved, and the grantee is taking steps to resolve 
the remaining two findings. 

During our fieldwork, USAID program officials responsible for 
overseeing the Burma programs said that they were not aware of the 
single audit findings. USAID officials told us that the USAID 
Inspector General's office reviews the single audit reports and 
distributes the audit packages to the relevant program offices. In 
this instance, because the Bangkok program staff did not receive any 
information from the Inspector General's office, they assumed that the 
single audits did not contain any findings related to the programs in 
Burma. USAID/RDMA officials told us that they would also have expected 
to uncover any audit findings during their preaward survey conducted 
in March 2010; however, the 2009 audit that contained the relevant 
findings for the first grantee was not released until a month after 
USAID's request for audits, and the grantee did not forward the report 
when it was released.[Footnote 35] USAID/RDMA officials stated that if 
they had been informed of the single audit findings, they most likely 
would have awarded the grant to the NGO, but they would also have 
requested information from the grantee about how they were addressing 
the audit findings. 

Questionable Costs for International Travel: 

In conducting a limited transaction review of selected USAID grantees, 
we found that two of the three grantees incurred questionable costs 
because they failed to obtain USAID's mandatory prior approval for 
each international trip funded by the grants.[Footnote 36] According 
to USAID regulations, the grantees may only charge international 
travel costs to the award when USAID has previously approved each 
separate international trip for which such costs are incurred. 
[Footnote 37] Under USAID regulations, prior approval means securing 
USAID's permission in advance of incurring costs on restricted items, 
and such advance permission may be obtained by specifying items in an 
approved budget.[Footnote 38] According to USAID guidance, "failure to 
comply with prior approval requirements generally causes USAID to deem 
the costs unallowable."[Footnote 39] 

Although the USAID award agreements require grantees to obtain prior 
approval for international travel, we found that this was not always 
done. For example, we found that for one grantee who has completed a 
$4.9 million grant, USAID had approved one traveler for six 
international trips between Thailand and Burma. However, this grantee 
incurred costs for 15 trips in 2008--10 trips between Thailand and 
Burma and 5 trips between Thailand and other countries, including 
Pakistan and Japan--at a total cost of about $7,357. A grantee 
official told us that they did not seek USAID prior approval for the 
additional trips, but that they did subsequently inform USAID of the 
trips in their required periodic reports. For another grantee, 
although the USAID agreement did not authorize any international 
travel, a grantee official told us that four international trips 
totaling approximately $3,633 had been paid for under their ongoing 
USAID award. 

USAID officials told us that their practice is to review written 
requests that grantees submit for international travel and to grant 
approval if the work and travel proposed are to be performed in 
conformance with the award terms and sufficient funds are available. 
They also said that unplanned international travel can arise as a 
legitimate need for grantees in Burma due to the challenges in 
obtaining visas for non-Burmese staff. With regard to the 
international trips taken by the two grantees mentioned above, 
USAID/OFDA officials told us that they rely on some monitoring by the 
program staff and annual audits to detect unapproved travel; however, 
they said they did not approve the first grantee's international trips 
we questioned. Under USAID regulations on grant administration, USAID 
retains the right to recover funds from its grantees for any costs 
charged to the grant that a final USAID audit determines to be 
disallowed costs.[Footnote 40] USAID/RDMA officials told us that for 
the second grantee, USAID approval for international trips was not 
necessary because they were within the budget limitations specified in 
the agreement for travel and transportation. However, we reviewed the 
agreement, noting that the travel and transportation budget is 
approximately $137,000; however, the agreement did not expressly 
specify any international travel. Therefore compliance with existing 
regulations, guidance, and the USAID award agreement would require 
USAID's prior approval for each separate international trip. This 
grantee did not obtain such prior approval, and therefore incurred 
questionable costs that may be unallowable under its agreement. 
[Footnote 41] In this grantee's agreement USAID reserved the right to 
an earlier recovery of unallowable costs, which includes requiring the 
grantee to refund the disallowed amount during the grant's performance 
period. Additionally, USAID policy provides that in certain 
circumstances USAID may ratify the grantee's activities by approving 
the disallowed international travel expenditures after the travel has 
occurred and the costs have been incurred.[Footnote 42] 

USAID Relies on Partners' Monitoring and Reporting of Activities: 

Given the difficulties in traveling to USAID-funded project sites in 
Burma to conduct monitoring, USAID relies on its partners' monitoring 
of program activities and self-reporting to gauge program progress and 
to identify any issues for follow-up during their limited number of 
site visits.[Footnote 43] USAID told us that both the UN and NGO 
partners had established operations in the cyclone-affected region and 
had procedures for monitoring assistance. The UN agencies we reviewed 
told us that they had established a presence in the delta and 
conducted monitoring visits using Burmese local staff, supplemented by 
international staff site visits, as feasible. In addition, the UN 
agencies are subject to internal audits on a regular basis. For 
example: 

* WFP relied on both its existing oversight mechanisms as well as 
international organizations' staff present in the delta prior to 
Cyclone Nargis to carry out monitoring and oversight of its 
operations. According to a WFP official, these mechanisms helped the 
agency account for the purchase of commodities, their transport to 
established warehouses, and their distribution to implementing 
partners for distribution to affected communities. 

* UNICEF set up five hubs throughout the delta region responsible for 
monitoring and oversight. In addition, UNICEF headquarters has an 
office of internal audit that audits each country office on a regular 
basis. The September 2009 audit of UNICEF's Burma Country Office 
included all major areas related to operations and programs, including 
emergency funds. The audit did not find any problems in the way UNICEF 
conducts its business in Burma. 

* UNDP reported that all of its projects were implemented at the 
village level, with direct implementation and supervision by UNDP 
project personnel and by NGOs with direct UNDP supervision. In 
addition, an Independent Assessment Mission is organized annually to 
verify UNDP compliance with its mandate in Burma.[Footnote 44] The 
three missions in 2008, 2009, and 2010 concluded that UNDP's program 
fully complied with the mandate. In addition, UNDP has provided 
written assurance to State each year to certify its compliance with 
the following U.S. conditions: (1) UNDP's work must focus on 
eliminating human suffering and addressing the needs of the poor, 
while providing no benefit to the Government of Burma, and (2) UNDP's 
work must be undertaken only through internal or international private 
voluntary organizations independent of the Government of Burma and in 
consultation with stakeholders, including the leadership of the 
National League for Democracy and National Coalition Government of the 
Union of Burma. 

USAID also reported that NGOs established local offices in the delta 
region to oversee operations, conducting site visits with local and 
international staff. During our site visits with three implementing 
partners, we observed field-level internal controls, which are 
designed to safeguard funds. For example, several NGOs had cash 
transfer programs. To address the risk that individuals could steal or 
misuse funds, the organizations developed systems for documenting cash 
receipts and disbursements and for ensuring physical control over 
funds. For example, as illustrated in figure 6, one village we visited 
safeguarded cash by establishing lock boxes that required four 
assigned villagers be present to open--three key holders and the 
village president. Similar processes for documenting cash receipts and 
disbursements and ensuring physical controls were also utilized by 
other partners we examined. In addition, each implementing partner 
used methods to encourage local oversight by beneficiaries, such as 
forming local committees to make important resource allocation 
decisions and distributing transparency flyers to advertise the amount 
and recipients of delivered aid. In addition, one partner hired young 
female villagers as bookkeepers because, according to program 
officials, in this culture, Burmese villagers would more likely be 
willing to ask young females questions, as opposed to older males. 
Bookkeepers in two villages told us they had received several 
inquiries into the bookkeeping and expenditures from fellow villagers. 

Figure 6: Observations of Field-Level Internal Controls: 

[Refer to PDF for image: 3 photographs and associated data]  

Observations of field level controls:  

Based on our observations, field level internal controls of one 
subgrantee in Middle Island have been designed and implemented to 
safeguard USAID funds. The subgrantee provides low interest micro-
loans to qualified Burmese villagers who are in need of costly 
emergency medical care. The village’s bookkeeper maintains detailed 
records to track loans made and repaid. And the village’s president
maintains physical custody of the iron box that holds the cash and
records used for the micro-loans. There are three keyed locks on the 
box and three villagers each have possession of one of the three keys. 
The three villagers and the village president must be present to 
unlock the box. Having multiple people present when handling cash 
decreases the risk of misappropriation. We observed similar controls 
in other villages we visited.  

Photographs:  

Iron box that is used to store cash and records for the micro-loan 
program in Middle Island.  

This is an image of the cash and records that are maintained in the 
iron box.  

This photograph is of the village’s recordkeeping books, which are 
used to track micro-loans made and repaid.  

Source: GAO.  

[End of figure] 

USAID has also relied on UN and NGO partners' required reports and 
informal communication to monitor progress and keep informed of 
issues. USAID required most NGO grantees to formally report to USAID 
quarterly, with some required to report semiannually.[Footnote 45] 
USAID requires UN partners to report based on standard guidelines in 
ADS for awards to public international organizations.[Footnote 46] 

USAID/OFDA and USAID/RDMA officials also communicated informally with 
grantees in Bangkok and Rangoon. Even with this communication and 
reporting, we found that USAID program staff still observed issues 
requiring follow-up during the site visit to one grantee, reinforcing 
the importance of USAID site visits. During our site visit, USAID 
staff expressed concern about the way the grantee reported program 
results and the possibility that the reports may not be fully accurate 
because the local manager may be reluctant to raise issues or 
problems, given the Burmese cultural norms which discourage providing 
negative information. USAID staff told us that they will discuss this 
with the grantee and possibly revise the information the grantee 
reports to help ensure problems are identified. 

U.S. and Other Organizations Found No Evidence of Misuse: 

USAID, State, UN, and international NGO officials said they examined 
all reports of potential misuse of assistance within their programs 
and found no evidence of misuse, although they did find that some 
beneficiaries sold small amounts of materials. For example, a USAID 
official told us that a beneficiary may sell an item, such as a USAID 
supplied tarp, he no longer needs in order to buy items that he does 
need. However, USAID officials told us this may not be a misuse of 
assistance as it still allows beneficiaries to obtain goods they need. 
USAID and DOD officials said they kept very detailed lists of all 
relief supplies provided. USAID said they gave these lists to U.S. 
Embassy staff who used them in market surveys. In these surveys, 
Embassy staff, including Burmese national staff, monitored local 
markets in the delta and Rangoon for evidence that U.S.-provided 
relief materials were being sold. USAID/OFDA officials also reported 
that branding USAID-donated goods was important for effectively 
monitoring assistance, as any diverted aid would be easily 
identifiable. 

In a highly publicized example of potential diversion of assistance, 
WFP reported that during the first week of the Cyclone Nargis 
response, the Burmese government airport authorities briefly took 
control of the contents of two flights, including 38 tons of high 
energy biscuits, when they landed. However, these contents were 
released to WFP the next day after negotiations with the Ministry of 
Social Welfare. 

Organizations Responding to Cyclone Nargis Experienced Similar 
Challenges and Developed Lessons Learned: 

Our analysis of 16 evaluative reports[Footnote 47] from NGOs, 
governments, and UN agencies as well as interviews with U.S., UN, and 
NGO officials found that organizations responding to Cyclone Nargis 
experienced similar challenges in four main categories: access to 
affected populations, coordination among responding organizations, 
implementation of assistance, and in-country disaster response 
capacity. We also identified some lessons learned to confront these, 
and other, challenges from these organizations' experiences in 
responding to Cyclone Nargis. In analyzing the various challenges each 
organization reported facing in their response to Cyclone Nargis, we 
developed the four main categories, as well as several subcategories, 
to capture the similarities of challenges reported and quantify the 
number of times each type of challenge was reported. We then reviewed 
the lessons identified and selected those relevant to the overall 
categories and subcategories. Not all responding organizations faced 
the challenges reported or might find the lessons applicable.[Footnote 
48] (appendix IV contains additional information on the challenges and 
lessons learned, and appendix V discusses U.S.-specific challenges.)  

Restricted Access Delayed Response, Limited Coverage, and Complicated 
the Operating Environment: 

According to the reports we reviewed, restricted access and poor 
infrastructure delayed assistance, limited coverage, and complicated 
emergency response and recovery operations for some organizations in 
Burma (see figure 7). The most frequently cited challenge regarding 
restricted access was obtaining travel authorizations from the Burmese 
government, both to enter Burma and to travel around the country. The 
Government of Burma initially restricted foreigners from entering into 
Burma and required government issued authorizations for international 
staff to travel within Burma. Consequently, the emergency relief and 
humanitarian efforts became highly dependent on Burmese nationals and 
international staff already in Burma. These responders were often 
overworked and operated beyond their mandate or outside their areas of 
expertise. In addition, responders faced poor roads and infrastructure 
and high transportation costs. Many areas were only accessible by boat 
or by air and, given the scarcity of boats, hiring them became very 
difficult and air drops were too expensive. The reports we reviewed 
suggest that similar access and infrastructure constraints call for 
creative approaches to negotiating with the host country government 
and looking for ways to modify normal operations, such as by bringing 
in national staff from other countries and owning boats as opposed to 
trying to hire them in a market experiencing shortages and inflated 
prices. 

Figure 7: Access to Cyclone-Affected Populations, Common Challenges 
and Lessons Learned: 

[Refer to PDF for image: illustration]  

Common Challenges: 
Restricted access delayed response activities, limited coverage, and 
complicated the overall operating environment. 
Lessons Learned: 
Similar restricted situations call for creative negotiation approaches 
and flexible adaptation.  

Common Challenges: 
Obtaining Government of Burma authorization to enter and operate in 
Burma delayed assistance and complicated logistics. (13) 
Lessons Learned: 
* ASEAN and the Tripartite Core Group were successful in building 
trust with the Government of Burma and gaining access for international
responders; 
* UNICEF brought in their Burmese staff from other country offices 
because they did not require entry visas and internal travel permits; 
* Alternative coordination methods can be used to better engage 
relevant organizations without putting them at risk. For example, 
UNICEF, the only organization with a formal agreement with the 
Ministry of Education to carry out emergency education activities, 
included other partners through the cluster system.  

Common Challenges: 
Transportation obstacles further restricted access to affected 
populations. (8) 
Lessons Learned: 
Boats and helicopters helped to reach remote villages. Because hiring 
boats was difficult, one report suggests that buying boats or renting 
them by the month might be more effective.  

Sources: GAO analysis of 16 reports on Cyclone Nargis response.  

Note: We identified challenges and lessons learned independently of 
each other. The parenthetical number following the description of each 
challenge is the number of analyzed reports citing that challenge as a 
significant obstacle. Because lessons varied greatly across 
organizations, we did not quantify the number of reports citing each 
lesson.  

[End of figure]  

Complex and Poorly Managed Coordination Resulted in Disjointed 
Response Efforts: 

Our review found that coordination among donors was also problematic 
(see figure 8). Difficulties in communicating between headquarters in 
either Bangkok or Rangoon and the field were the most commonly 
reported coordination challenge. As a result, occasionally decisions 
made at headquarters conflicted with those made in the field. Reports 
mentioned the physical distance between the locations and the limited, 
and unreliable, telecommunication services in the delta, as some of 
the reasons contributing to the communication challenges. Reliable 
internet access was generally lacking in the field, and the Burmese 
government restricted the importation and use of communications 
equipment. Another widely experienced challenge was gathering and 
sharing data among responding organizations. Many reports noted that 
shared information was often inaccurate, unreliable, and inconsistent. 
Some reports attributed this challenge to factors such as mistrust 
among organizations, poor information management practices of some 
groups, and a lack of commonly used and readily available reporting 
mechanisms or common databases accessible by all responding 
organizations. Lastly, USAID's after action report on the U.S. Cyclone 
Nargis Emergency Response cited a challenge within the U.S. government 
of carrying out a coordinated response. Conflicting agendas amongst 
USAID, DOD, and State officials resulted in coordination difficulties 
related to the appropriateness, timing, procurement, and distribution 
of aid. USAID officials reported that, while their response was based 
on humanitarian needs, State and DOD also had political motives which 
included engagement with the Burmese government.[Footnote 49] As a 
result, USAID officials reported that DOD conducted air lifts for a 
longer period of time than some USAID officials thought was necessary, 
and in some cases provided aid that USAID considered inappropriate. 
The lessons we identified emphasize the need for installing common 
reporting formats for all organizations to use and improving support 
to the field offices, including providing more resources such as local 
information centers. 

Figure 8: Coordination between Responding Organizations, Common 
Challenges and Lessons Learned: 

[Refer to PDF for image: illustration]  

Common Challenges: Complex and poorly managed coordination resulted in 
disjointed response efforts based on limited data on needs and 
coverage; 
Lessons Learned: Improve coordination by using standard reporting and 
information-sharing forms and increasing support for field staff.  

Common Challenges: Coordination between headquarters and provisional
field offices was often disjointed. (12) 
Lessons Learned: Establish local resource centers and NGO liaison
officers at field locations. Increase visits from Rangoon-based 
leadership.  

Common Challenges: Complications in collecting and sharing information
hindered assistance delivery. (10) 
Lessons Learned: The Myanmar Information Management Unit and cluster-
managed resources were useful to information management. Expand 
responsibility of cluster information managers, including increased
coordination with actors with similar roles, such as the OCHA reports 
officer.  

Common Challenges: Coordination among international responders lacked
coherence. (6) 
Lessons Learned: Predevelop common reporting templates and information 
management tools (accompanied by clear guidelines) to improve the 
consistency and reliability of shared information.  

Sources: GAO analysis of 16 reports on Cyclone Nargis response.  

Note: We identified challenges and lessons learned independently of 
each other. The parenthetical number following the description of each 
challenge is the number of analyzed reports citing that challenge as a 
significant obstacle. Because lessons varied greatly across 
organizations, we did not quantify the number of reports citing each 
lesson.  

[End of figure]  

Some Decisions Based on Limited Information and Burma's Unique 
Constraints Hindered Implementation Effectiveness: 

The reports we reviewed highlighted implementation challenges, 
including the use of incompatible relief supplies, inappropriate 
targeting, and inability to monitor (see figure 9). Many reports cited 
examples of donated or procured assistance supplies that were inferior 
in quality or incompatible with local conditions, which limited their 
usefulness. Examples included: 

* tents, which proved to be inappropriate given the delta's hot and 
humid conditions; 

* 5-gallon water bottles, which were heavy and difficult to transport; 
and: 

* medical supplies that had instructions printed only in non-Burmese 
languages. 

In addition, cultural norms and inadequate information about affected 
populations complicated responders' efforts to effectively target and 
distribute aid. For example, some organizations based targeting 
decisions on the level of need of individuals; however, Burmese 
culture values fairness and equality, and as a result many villages 
would redistribute supplies to ensure all villagers received 
something, thereby reducing the efficacy of the organizations' efforts 
to target the neediest with their aid.[Footnote 50] Lastly, the lack 
of trained personnel in the field, the remoteness of certain 
locations, or lack of government approval hindered robust monitoring 
and evaluation mechanisms. Strategies reported to improve 
effectiveness of implementation included engaging with local 
beneficiaries to involve them in the development of procurement, 
targeting, and distribution strategies. 

Figure 9: Implementation of Assistance, Common Challenges and Lessons 
Learned: 

[Refer to PDF for image: illustration]  

Common Challenges: The restrictive operating environment and narrowly-
informed approaches of responders hindered the effectiveness of some 
response activities; 
Lessons Learned: Focusing more on local engagement and enhancing 
protection strategies could improve the effectiveness of response 
activities.  

Common Challenges: Donated and procured goods were sometimes inferior 
or incompatible with local conditions. (10) 
Lessons Learned: 
* One organization noted that a focus on traditional practices and 
local participation contributed to beneficiary satisfaction; 
* UNICEF balanced the speed and cost of aid delivery by importing 
goods only while local, low-cost solutions were being developed; 
* FAO suggests delegating procurement to implementing partners at the 
township level.  

Common Challenges: Targeting and distribution of assistance were 
obstructed by political, logistical, or organizational capacity 
factors. (10) 
Lessons Learned: 
* Targeting efforts should consider the Burmese tradition of equity 
that underlies redistribution within communities. FAO concluded that
communities should decide how aid would be appropriately distributed; 
* Further strengthen protection mechanisms through: 
- integrating cross-cutting protection, gender, and age issues; 
- engaging the Department of Social Welfare; and; 
- establishing organizational responsibility at the onset of an 
emergency; 
* UNICEF found success with supporting community-based child 
protection groups.  

Common Challenges: Monitoring, evaluation, and oversight mechanisms
were limited. (3) 
Lessons Learned: Technical field consultants helped facilitate
monitoring and oversight. Two reports advocated for community-level 
monitoring.  

Sources: GAO analysis of 16 reports on Cyclone Nargis response.  

Note: We identified challenges and lessons learned independently of 
each other. The parenthetical number following the description of each 
challenge is the number of analyzed reports citing that challenge as a 
significant obstacle. Because lessons varied greatly across 
organizations, we did not quantify the number of reports citing each 
lesson.  

[End of figure]  

Limited In-Country Preparedness and Capacity Exacerbated the Impact 
and Hindered Response Efforts: 

Our review found that limited emergency preparedness and response 
capacity in Burma exacerbated the impact of the disaster and hindered 
efforts throughout the response (see figure 10). One of the most 
frequently cited capacity challenges was the inability to meet the 
high demand for technical, skilled, and experienced disaster 
responders. The number of staff in Burma experienced or trained in 
disaster relief was below what was needed. As a result, some positions 
had to be filled with personnel that had no previous experience and 
limited knowledge of humanitarian response principles, which caused 
delays or difficulties in carrying out the response. Also, many 
organizations described their interaction with local organizations in 
coordinated response activities as limited due to Burmese political, 
cultural, or capacity factors. These factors included language and 
cultural barriers, lack of access to electronically shared 
information, limited modes of transportation, and insufficient time 
and staff to attend coordination meetings. In addition, the response 
to Cyclone Nargis was hampered by weak early warning systems and 
disaster preparedness plans in Burma, as well as among international 
organizations. Lastly, emergency supply stocks and prepositioned food 
supplies were lacking within the country. Responders cited the 
improvement of in-country emergency preparedness and response capacity 
through personnel training and local engagement as critical. 

Figure 10: In-Country Capacity, Common Challenges and Lessons Learned: 

[Refer to PDF for image: illustration]  

Common Challenges: Limited in-country preparedness and response 
capacity exacerbated the impact of the disaster and hindered efforts 
throughout the response; 
Lessons Learned: In-country preparedness and response capacity could 
be improved through personnel training and local engagement.  

Common Challenges: Relatively inexperienced in-country personnel had
difficulty meeting all response needs. (13) 
Lessons Learned: Cyclone Nargis highlighted the need for standby
arrangements with skilled personnel who have emergency response 
experience. This should include a roster of local actors who receive 
capacity training that is refreshed and updated periodically over the 
long term.  

Common Challenges: Local participation in coordinated response 
activities was limited. (7) 
Lessons Learned: During the response, national actors benefited from
greater mobility and acceptance from government authorities and local 
communities. Strategies to further engage these actors include the 
following: 
* appointing local counterparts to coordination positions, 
* developing alternatives to electronic information sharing, and, 
* translating coordination meetings and key documents into Burmese.  

Common Challenges: Early warning systems and disaster preparedness
plans were weak at all levels. (7) 
Lessons Learned: A database of in-country information technology and 
communications support, suppliers, warehousing, and transportation 
providers would be helpful. One organization told us that prepositioning
relief supplies was essential and recommended establishing reserve 
warehouses in Southeast Asia.  

Sources: GAO analysis of 16 reports on Cyclone Nargis response.  

Note: We identified challenges and lessons learned independently of 
each other. The parenthetical number following the description of each 
challenge is the number of analyzed reports citing that challenge as a 
significant obstacle. Because lessons varied greatly across 
organizations, we did not quantify the number of reports citing each 
lesson.  

[End of figure]  

Conclusions: 

In response to the urgent humanitarian needs in Burma resulting from 
Cyclone Nargis, the U.S. government has obligated about $85 million 
for emergency response and recovery activities under difficult 
conditions stemming from political concerns and operational 
constraints. USAID has taken actions to monitor its assistance and 
ensure funds have been used as intended and did not benefit sanctioned 
entities. Given USAID's limited ability to visit project sites in 
Burma, actions such as conducting more comprehensive financial 
oversight, documenting site visits, and communicating past audit 
findings become even more important to help ensure funds are used for 
intended purposes. The fact that single audit reports are issued 
several months after the end of an entity's fiscal year, further 
supports the need for current, on-going financial monitoring. Periodic 
reviews of grantee internal controls together with a review of some of 
the grantee's disbursement transactions and supporting documentation 
would strengthen USAID's financial oversight and help ensure 
compliance with the terms of the grant agreements, including 
compliance with international travel requirements. Reviewing 
questionable costs for international travel under the completed and 
ongoing grants could enable USAID to recover any costs that USAID 
determines to be unallowable. Documenting site visits, as required by 
USAID policy, provides a record that can be particularly useful when 
program staff change. By including relevant and sufficient detail, 
these documents create a historical record on which future monitoring 
and grant award decisions can be based. Finally, better communication 
of single audit findings among the USAID offices would ensure that 
program staff become aware of important issues they should pursue when 
monitoring assistance. 

Recommendations for Executive Action: 

We recommend that the Administrator of USAID direct the appropriate 
mission and offices to improve management of grants related to Burma 
by taking actions, such as: 

* enhancing financial monitoring of agreements by including periodic 
reviews of grantee internal controls, transactions, and disbursement 
records; 

* providing grantees with specific guidance on the approval process 
for international travel requests, and ensuring that USAID staff 
monitor grantees' expenditures for compliance with related laws, 
regulations, and grant agreements, including international travel; 

* reinforcing the requirement for staff to formally document site 
visits to grantees; and: 

* ensuring all relevant offices are made aware of audit findings in a 
timely manner. 

We also recommend that the Administrator of USAID direct the 
appropriate mission and offices to follow-up on the questionable costs 
associated with international travel that we identified in this report 
and take action as appropriate on any identified unallowable costs. 

Agency Comments and Our Evaluation: 

USAID and DOD provided written comments on a draft of this report. We 
have reprinted their comments in appendixes VI and VII. These 
agencies, along with the Departments of State and the Treasury and the 
UN Country Team in Burma, provided technical comments and updated 
information, which we have incorporated throughout this report, as 
appropriate. 

USAID, the agency to which we directed our recommendations, concurred 
with our recommendations. USAID said that financial monitoring is 
critical and that financial reviews should be enhanced as allowable 
given regulatory and operational limitations. They also said that 
existing guidance in USAID awards should be adhered to and enforced 
and USAID's ability to conduct preawards surveys and timely audits 
should be enhanced. USAID also recognized the importance of 
documenting oversight while noting that in disaster response 
environments, the main focus is on life-saving and life-sustaining 
activities. USAID agreed that relevant offices and officials should be 
aware of adverse audit information given their monitoring 
responsibilities. USAID also agreed to conduct appropriate follow-up 
actions with the grantees on questionable costs associated with 
international travel that we identified. In addition, USAID commented 
on our characterization of their actions to ensure funds were used as 
intended, as well as the evidence that assistance had not been 
misused. We made changes consistent with the information we obtained. 

We are sending copies of this report to interested members of 
Congress; the Administrator of USAID; the Secretaries of Defense, 
State, and the Treasury; the UN Country Team in Burma; and relevant 
NGOs. The report is also available at no charge on the GAO Web site at 
[hyperlink, http://www.gao.gov]. 

If you or your staffs have any questions about this report, please 
contact me at (202) 512-9601 or melitot@gao.gov. Contact points for 
our Office of Congressional Relations and Public Affairs may be found 
on the last page of this report. GAO staff who made major 
contributions to this report are listed in appendix VI.  

Signed by:  

Thomas Melito: 
Director, International Affairs and Trade: 

[End of section] 

Appendix I: Scope and Methodology: 

UN and U.S. Assistance: 

To describe assistance provided by UN and U.S. agencies in response to 
Cyclone Nargis, we reviewed documents, including grants, cooperative 
agreements, and progress reports, from UN agencies, the U.S. Agency 
for International Development (USAID), Department of Defense (DOD), 
Department of State (State), and nongovernmental organizations (NGO). 
We also interviewed United Nations (UN), U.S., and NGO officials in 
Washington, D.C.; Bangkok, Thailand; and Rangoon, Burma; and conducted 
site visits to select USAID-funded recovery projects in Burma. 

The team obtained the data for UN agency assistance to Burma from the 
UN Office for the Coordination of Humanitarian Affairs (UN OCHA) 
Financial Tracking Service. We report UN agency obligations.[Footnote 
51] In assessing this data we found that the service data are reported 
by donors and appealing organizations. UN OCHA reported that they 
cross-check and reconcile the data to ensure there is no duplicate 
reporting of funding and to verify the accuracy of the numbers 
reported. 

The tracking service makes efforts to collect and report all 
humanitarian assistance. However, the service guarantees only that 
suitable humanitarian funding information sent to it will be posted; 
it cannot guarantee that it will find and record information not sent 
to it. Given this limitation, it is possible that we may have 
underreported total assistance obligated through UN agencies. Overall, 
through our review of UN OCHA procedures for capturing and reporting 
the data, we found the data sufficiently reliable to report on 
obligations as compiled by UN OCHA. 

We obtained data on U.S. obligations from USAID and DOD. For USAID 
obligations, we verified these data against the underlying agreements 
and found the data to be sufficiently reliable to report on total 
assistance obligated by the Office of Foreign Disaster Assistance, 
Regional Development Mission for Asia, and Food for Peace. For DOD 
obligations, we interviewed officials on their process for recording 
and reconciling expenses and found the total amount of assistance 
reported by DOD to be sufficiently reliable for our purposes. 

Actions to Help Ensure Funds Were Used as Intended: 

To assess USAID actions to help ensure funds were used as intended and 
did not benefit sanctioned entities, we reviewed program and financial 
files for funds USAID awarded in response to Cyclone Nargis and spoke 
with USAID officials about their monitoring of programs. The documents 
we reviewed included grants and cooperative agreements awarded for 
Cyclone Nargis response activities, progress reports, and Department 
of the Treasury Office of Foreign Assets Control licenses. We also 
conducted a limited internal controls review of three NGOs, which 
collectively account for 66 percent of funding that USAID awarded to 
international NGOs to respond to Cyclone Nargis. We also met with 
officials from these three NGOs and with USAID officials responsible 
for financial oversight of the NGOs' programs. 

In choosing the three NGOs to review, we selected those organizations 
that had ongoing recovery activities in response to Cyclone Nargis, in 
addition to having conducted emergency response and relief activities. 
This risk-based approach to grantee selection allowed us to examine 
the evolution of oversight by USAID from the immediate aftermath of 
Cyclone Nargis to the current recovery phase, more than 2 years later. 
The three organizations that met these criteria received multiple 
USAID awards beginning in 2008 to conduct emergency relief operations, 
such as distribution of commodities, as well as to conduct recovery 
work, such as rehabilitating markets and reconstructing sanitation 
facilities. 

For our limited internal controls review of these three NGOs, we 
interviewed grantee officials, reviewed single audit reports; and 
performed detailed reviews of transactions. We also tested certain 
grantee expenditures. We reviewed supporting documentation for 
selected grantee expenditures for sufficiency, compliance with laws, 
regulations, and grant agreements, as well as appropriateness. While 
we identified some questionable expenditures, our work was not 
designed to identify all improper or questionable expenditures or to 
estimate their extent. 

Challenges and Lessons Learned: 

To report on the challenges and lessons learned from the Cyclone 
Nargis emergency response, we reviewed relevant evaluative reports 
from U.S. government and UN agencies, and NGOs involved in the 
response. We selected 16 reports for content analysis based on their 
methodology.[Footnote 52] Specifically, the reports needed to outline 
reasonable methods for collecting data--such as surveys and interviews 
with responders--and a process for filtering this information prior to 
reporting.[Footnote 53] 

The reports offer a range of scope and content. While some reports 
evaluate a specific organizational response, others include the 
efforts of and information from several organizations. Some reports 
focus on the early months of the response, while others evaluate 
efforts up to almost two years after the onset of the emergency. Table 
1 lists the reports we included in our review. 

Table 1: Reports Included in Our Review: 

Report 1. Best Practices and Lessons Learnt: UNICEF Myanmar's Response 
following Cyclone Nargis (Rangoon, Burma, April 2009). 

Report 2. Evaluation of CARE Myanmar's Cyclone Nargis Response, 
Ternstrom Consulting AB (Sweden, December 2008). 

Report 3. IFRC, Emergency Shelter Cluster Review: Cyclone Nargis, 
Myanmar; Jessica Alexander (Burma, April 2009). 

Report 4. USAID, Cyclone Nargis Burma Humanitarian Response After 
Action Review Report (Washington, D.C., September 2009). 

Report 5. Evaluation of Christian Aid's Response to Cyclone Nargis, 
Andrew Featherstone (United Kingdom, March 2009). 

Report 6. SIDA-Funded OSRO/MYA/902/SWE Project Implemented by FAO in 
Myanmar: Interim Evaluation Report (Rome, Italy, March 2010). 

Report 7. Myanmar Inter-Agency Contingency Plan (IA-CP) Version 2.0, 
OCHA (Rangoon, Burma, August 2010). 

Report 8. Inter-Agency Real Time Evaluation of the Response to Cyclone 
Nargis, UN (New York, NY, December 2008). 

Report 9. Evaluation of the Save the Children Response to Cyclone 
Nargis, Andrew Featherstone (Burma, April 2009). 

Report 10. Cyclone Nargis: Lessons for Operational Agencies, 
Ramalingam, B. and S. Pavanello, Active Learning Network for 
Accountability and Performance in Humanitarian Action (United Kingdom, 
May 2008). 

Report 11. Inter-Agency Review of the Myanmar Protection of Children 
and Women Cluster Response to Cyclone Nargis (Rangoon, Burma, October 
2008). 

Report 12. Review of the WASH Cluster in Myanmar, Following the 
Cyclone Nargis Response (Rangoon, Burma, January 2009). 

Report 13. ActionAID: Mid-Term Evaluation Emergency Response Programme 
(Rangoon, Burma: July 2009). 

Report 14. Review of FAO Implemented UN Central Emergency Response 
Fund (CERF) Projects: Country Case Study Report Myanmar (May 2010). 

Report 15. A Humanitarian Call: The ASEAN Response to Cyclone Nargis 
(Jakarta, Indonesia, July 2010). 

Report 16. UNICEF, Myanmar 2008 Consolidated Emergency Report 
(Rangoon, Burma, March 2009). 

Source: GAO.  

[End of table]  

Once we selected reports that met the above criteria, two analysts 
separately identified challenges and lessons learned cited within each 
document. We defined "challenge" as any significant obstacle that 
hindered a specific response effort. We defined "lesson learned" as 
any successful or promising approach derived from a Cyclone Nargis 
response that could enable actors to overcome challenges or improve 
efforts in future emergencies. Furthermore, a "lesson" must be derived 
from a common or well-proven response experience and address Burma's 
unique political, social, or environmental circumstances. After the 
two analysts independently identified reported challenges and lessons 
based on these criteria, they compared the results and reconciled 
inconsistencies. A supervisory analyst reviewed their work. 

We also gathered information on challenges and lessons from interviews 
with the previously mentioned responding organizations. We used this 
input to substantiate data gained from the document review, as well as 
supplement it with information that was not previously reported. For 
reporting purposes, once all the challenges were identified, we 
tallied each under broad categories and subcategories that summarized 
the similarities amongst the various challenges being reported. These 
categories and subcategories were developed by us based on an analysis 
of the challenges identified as well as our experience from previous 
disaster assistance work. Similarly, we reviewed the lessons we 
identified from the various reports and selected relevant lessons that 
address the subcategories of challenges we identified. Not all 
responding organizations faced the challenges reported or might find 
the lessons applicable. We did not assess the feasibility of 
implementing the lessons learned. 

We conducted this performance audit from July 2010 to July 2011 in 
accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

[End of section] 

Appendix II: Mission Descriptions of the UN Agencies That Responded to 
Cyclone Nargis: 

Table 2 describes the overall mission of each UN agency that provided 
aid after Cyclone Nargis, as depicted in figure 3. 

Table 2: Mission Descriptions of the UN Agencies That Responded to 
Cyclone Nargis: 

Agency: World Food Program (WFP); 
Mission: WFP's mission is to get food where it is needed in 
emergencies, and to use food to help communities rebuild after an 
emergency has passed. WFP also works to reduce chronic hunger and 
under-nutrition and to strengthen the capacity of countries to reduce 
hunger, among other activities.  

Agency: United Nations Children's Fund (UNICEF); 
Mission: UNICEF advocates for the protection of children's rights and 
helps meet children's basic needs. It responds in emergencies to 
relieve the suffering of children and those who provide their care, 
and it promotes the equal rights of women and girls and supports their 
full participation in developing their communities, among other 
activities.  

Agency: United Nations Development Program (UNDP); 
Mission: UNDP is the UN's global development network and helps 
developing countries attract and use aid effectively to address the 
challenges of democratic governance, poverty reduction, crisis 
prevention and recovery, environment and energy, and HIV/AIDS.  

Agency: Food and Agriculture Organization of the United Nations (FAO); 
Mission: FAO is the lead UN agency for agriculture, forestry, 
fisheries, and rural development. Its mission is to raise levels of 
nutrition and standards of living, to improve agricultural 
productivity, and to better the condition of rural populations.  

Agency: United Nations High Commissioner for Refugees (UNHCR); 
Mission: UNHCR's mission is to safeguard the rights and well-being of 
refugees and does this by leading and coordinating international 
efforts to protect refugees and resolve refugee problems.  

Agency: World Health Organization (WHO); 
Mission: WHO is responsible for providing leadership on global health 
matters, shaping the health research agenda, setting norms and 
standards, articulating evidence-based policy options, providing 
technical support to countries, and monitoring and assessing health 
trends.  

Agency: Office for the Coordination of Humanitarian Affairs (UN OCHA); 
Mission: UN OCHA is responsible for bringing together humanitarian 
actors in response to an emergency to ensure a coherent response and a 
framework within which each actor can contribute effectively to the 
overall response effort.  

Agency: International Labor Organization (ILO); 
Mission: ILO's mission is to promote standards and fundamental rights 
and principles in the workplace, encourage decent employment 
opportunities, enhance social protection, and strengthen dialogue on 
work-related issues. Its mandate in Burma was more limited and was 
restricted to activities for the elimination of forced labor, 
including forced and/or underage recruitment and human trafficking, 
and for the introduction of freedom of association.  

Agency: United Nations Population Fund (UNFPA); 
Mission: UNFPA promotes health and equal opportunity for men, women, 
and children. It supports countries in using population data for 
policies and programs to reduce poverty, combat the spread of HIV, 
protect the dignity of women, and promote family planning and prenatal 
care.  

Agency: United Nations Educational, Scientific, and Cultural 
Organization (UNESCO); 
Mission: UNESCO's mission is to contribute to the building of peace, 
the eradication of poverty, sustainable development, and intercultural 
dialogue through education, the sciences, culture, communication, and 
information.  

Agency: United Nations Human Settlements Program(UN-HABITAT); 
Mission: UN-HABITAT's mission is to promote socially and 
environmentally sustainable towns and cities with the goal of 
providing adequate shelter for all.  

Source: GAO analysis of UN data.  

[End of table]  

[End of section]  

Appendix III: U.S. Emergency Assistance Provided to Burma in Response 
to Cyclone Nargis: 

The U.S. government funded emergency humanitarian assistance for 
townships in Burma damaged by Cyclone Nargis. As shown in figure 11, 
the townships of Bogale, Labutta, and Mawlamyinegyun received the most 
extensive range of assistance, covering at least five of the seven 
relief sectors the U.S. funded. 

Figure 11: U.S. Government Assistance to Townships in Burma, by 
Location: 

[Refer to PDF for image: map of Burma and associated table] 

Agriculture and food security: 
Bogale: [Check]; 
Dala: [Check]; 
Dedaye: [Check]; 
Kawhmu: [Check]; 
Kungyangon: [Check]; 
Kyaitlat: [Check]; 
Kyauktan: [Check]; 
Labutta: [Check]; 
Maubin: [Check]; 
Mawlamyinegyun: [Check]; 
Myaungmya: [Empty]; 
Ngapudwa[A]: [Empty]; 
Pathein: [Empty]; 
Pyapon: [Check]; 
Pyinkhayine Island: [Empty]; 
Rangoon: [Empty]; 
Seikgyikanaunglo: [Empty]; 
Set San: [Empty]; 
Twantay: [Check].  

Early recovery: 
Bogale: [Check]; 
Dala: [Check]; 
Dedaye: [Check]; 
Kawhmu: [Check]; 
Kungyangon: [Check]; 
Kyaitlat: [Check]; 
Kyauktan: [Check]; 
Labutta: [Check]; 
Maubin: [Check]; 
Mawlamyinegyun: [Check]; 
Myaungmya: [Check]; 
Ngapudwa[A]: [Check]; 
Pathein: [Empty]; 
Pyapon: [Check]; 
Pyinkhayine Island: [Check]; 
Rangoon: [Empty]; 
Seikgyikanaunglo: [Empty]; 
Set San: [Empty]; 
Twantay: [Check].  

Emergency relief supplies/logistics[A]: 
Bogale: [Check]; 
Dala: [Check]; 
Dedaye: [Check]; 
Kawhmu: [Check]; 
Kungyangon: [Check]; 
Kyaitlat: [Empty]; 
Kyauktan: [Empty]; 
Labutta: [Check]; 
Maubin: [Empty]; 
Mawlamyinegyun: [Check]; 
Myaungmya: [Check]; 
Ngapudwa[A]: [Check]; 
Pathein: [Check]; 
Pyapon: [Check]; 
Pyinkhayine Island: [Check]; 
Rangoon: [Check]; 
Seikgyikanaunglo: [Check]; 
Set San: [Check]; 
Twantay: [Empty].  

Health: 
Bogale: [Empty]; 
Dala: [Empty]; 
Dedaye: [Empty]; 
Kawhmu: [Empty]; 
Kungyangon: [Empty]; 
Kyaitlat: [Empty]; 
Kyauktan: [Empty]; 
Labutta: [Check]; 
Maubin: [Empty]; 
Mawlamyinegyun: [Empty]; 
Myaungmya: [Empty]; 
Ngapudwa[A]: [Check]; 
Pathein: [Empty]; 
Pyapon: [Empty]; 
Pyinkhayine Island: [Empty]; 
Rangoon: [Empty]; 
Seikgyikanaunglo: [Empty]; 
Set San: [Empty]; 
Twantay: [Empty].  

Protection: 
Bogale: [Check]; 
Dala: [Empty]; 
Dedaye: [Empty]; 
Kawhmu: [Empty]; 
Kungyangon: [Empty]; 
Kyaitlat: [Empty]; 
Kyauktan: [Empty]; 
Labutta: [Empty]; 
Maubin: [Empty]; 
Mawlamyinegyun: [Empty]; 
Myaungmya: [Empty]; 
Ngapudwa[A]: [Empty]; 
Pathein: [Empty]; 
Pyapon: [Empty]; 
Pyinkhayine Island: [Empty]; 
Rangoon: [Empty]; 
Seikgyikanaunglo: [Empty]; 
Set San: [Empty]; 
Twantay: [Empty].  

Shelter and settlements: 
Bogale: [Check]; 
Dala: [Empty]; 
Dedaye: [Empty]; 
Kawhmu: [Empty]; 
Kungyangon: [Empty]; 
Kyaitlat: [Empty]; 
Kyauktan: [Empty]; 
Labutta: [Check]; 
Maubin: [Empty]; 
Mawlamyinegyun: [Check]; 
Myaungmya: [Empty]; 
Ngapudwa[A]: [Empty]; 
Pathein: [Empty]; 
Pyapon: [Empty]; 
Pyinkhayine Island: [Empty]; 
Rangoon: [Empty]; 
Seikgyikanaunglo: [Empty]; 
Set San: [Empty]; 
Twantay: [Empty].  

Water, sanitation, and hygiene: 
Bogale: [Check]; 
Dala: [Empty]; 
Dedaye: [Empty]; 
Kawhmu: [Empty]; 
Kungyangon: [Empty]; 
Kyaitlat: [Empty]; 
Kyauktan: [Empty]; 
Labutta: [Check]; 
Maubin: [Empty]; 
Mawlamyinegyun: [Check]; 
Myaungmya: [Check]; 
Ngapudwa[A]: [Check]; 
Pathein: [Empty]; 
Pyapon: [Empty]; 
Pyinkhayine Island: [Check]; 
Rangoon: [Empty]; 
Seikgyikanaunglo: [Empty]; 
Set San: [Empty]; 
Twantay: [Empty].  

Source: GAO based on USAID 2008 map USG Humanitarian Assistance to 
Burma.  

Note: Map does not include location of U.S.-funded food aid 
distributions. Map contains some townships that have the same name as 
villages. 

[A] Ngapudaw is the only township that received logistics assistance.  

[End of figure]  

[End of section]  

Appendix IV: Organizations Responding to Cyclone Nargis Experienced 
Interconnected Challenges and Developed Lessons Learned: 

Our analysis of 16 evaluative reports[Footnote 54] from NGOs, 
governments, and UN agencies found that organizations responding to 
Cyclone Nargis experienced interconnected challenges and developed 
lessons learned in four categories: access to affected populations, 
coordination among responding organizations, implementation of 
assistance, and in-country capacity. In analyzing the various 
challenges each organization reported facing in their response to 
Cyclone Nargis, we developed the four main categories, as well as 
several subcategories, to capture the similarities of challenges 
reported and quantify the number of times each type of challenge was 
reported. We then reviewed the lessons identified and selected those 
relevant to the overall categories and subcategories. Not all 
responding organizations faced the challenges reported or might find 
the lessons applicable.[Footnote 55] 

Restricted Access Delayed Response, Limited Coverage, and Complicated 
the Operating Environment: 

According to 13 reports, the time needed to gain access to affected 
populations delayed assistance and complicated logistics. The 
Government of Burma restricted foreigners from entering into and 
traveling within Burma. Furthermore, many responders had to negotiate 
with government authorities to operate in affected areas. 
Consequently, the response became highly dependent on nationals and 
those already in Burma. These responders and others who gained access 
were often overworked and operated beyond their mandate or outside 
their expertise. 

Eight reports described transportation obstacles as further 
restricting access. Responders faced poor roads and infrastructure, 
high transportation costs, difficult climatic conditions, and remote 
affected areas. 

Only one report cited the challenge of donor imposed restrictions, 
which prevented access to local authorities, limiting meaningful 
coordination and capacity-building. This challenge was, however, cited 
in several interviews with implementing partners. Some partners 
described restricted access to health workers, teachers, and technical 
experts as particularly cumbersome. One UN Development Program (UNDP) 
official stated that U.S. restrictions significantly hindered the 
effectiveness of its development work in Burma. The inability to 
coordinate with Burmese government officials created difficulties for 
the USAID disaster assistance response team, one Office of Foreign 
Disaster Assistance (USAID/OFDA) official said. 

The analyzed reports suggest that similar restricted situations call 
for creative approaches to negotiating with the Government of Burma 
and operational flexibility, such as the following: 

* According to the Association of Southeast Asian Nations (ASEAN), the 
Tripartite Core Group was "an innovative example of a body that ASEAN 
and other regional associations around the world could replicate in 
response to future emergencies."  

* According to the UN Children's Fund (UNICEF), although they 
generally experienced good working relationships with the Government 
of Burma, some negotiations were necessary. Discussions to gain access 
required skilled negotiation with support from Burmese nationals. 
UNICEF brought in their Burmese staff working in other country offices 
because they did not require entry visas and internal travel permits, 
whereas their foreign counterparts did. 

* If a similar situation arises, the Protection of Children and Women 
Cluster recommends exploring alternative coordination methods to 
engage local actors that do not have Burmese government authorization 
to operate, without putting them at risk. For example, during the 
Cyclone Nargis response UNICEF was the only organization with a formal 
agreement with the Ministry of Education to carry out emergency 
education activities. The UN agency included other relevant actors in 
education activities through the cluster system. 

* According to one NGO, the cluster system was initially effective in 
organizing responders, but geographical (rather than sectoral) 
clusters would have been more appropriate, given the restrictions on 
access and the inability of some organizations to reach affected 
populations. 

* Boats and helicopters helped to overcome ground transportation 
obstacles and reach remote villages. However, boats were in scarce 
supply and difficult to hire. For more effective future responses, one 
report suggests that organizations could own or rent boats on a 
monthly basis. 

Complex and Poorly Managed Coordination Resulted in Disjointed 
Response Efforts: 

Coordination was somewhat difficult between headquarters (either in 
Bangkok or Rangoon) and provisional field offices, according to 12 
reports. Problems stemmed from limited telecommunication services, the 
isolation of and weak leadership at field offices, unclear division of 
responsibility between headquarters and the field, and poor 
understanding of how information should be communicated from the field 
back to headquarters. 

Ten reports described poor information management and issues related 
to data gathering as obstacles to coordinating, planning, or 
monitoring. Difficulties stemmed from limited baseline data on 
affected populations at the onset of the emergency, weak assessment 
structures and capacities, and the restrictive political context. 
These problems were exacerbated by some organizations' hesitancy to 
share information and a lack of commonly used and readily available 
formats and databases for data exchange. Many reports noted that 
shared information among responding organizations was often 
inaccurate, unreliable, and inconsistent. Communication among 
responders was also hindered by limited telecommunications (radio, 
telephone, and Internet services) and government restrictions on the 
importation and use of certain communication equipment.[Footnote 56] 
Internet access at field locations was particularly problematic. 

Six reports found that coordination among international humanitarian 
organizations lacked coherence. These reports cited reasons such as 
high turnover of cluster leadership, weak strategic planning and 
guidance, and poor coordination of assessment and distribution 
activities. 

The lessons we identified below emphasize the need for clearer 
guidance on responsibility, increased support for field staff, and 
common reporting formats: 

* Coordination of future response activities could be improved with 
the use of statements of intent that clearly define each actor's role. 

* The Emergency Shelter Cluster Review advocated for the replication 
of the "Bangkok-Yangon decision-making model" in similar emergency 
events, in which those outside the country provide logistical support 
and field offices have decision-making authority over operational 
matters. 

* According to ASEAN, field offices were "indispensable" in providing 
strategic direction and facilitating coordination. To improve 
coordination between the field and headquarters, one report recommends 
establishing local resource centers and NGO liaison officers at field 
locations. Another report noted that increasing visitation and 
technical advising from Rangoon to the field would be helpful. 

* Analyzed reports described the Myanmar Information Management Unit 
and cluster managed resources--including update documents, Google 
Group networks, and maps--as useful approaches to information 
management. However, the responsibilities of cluster information 
managers need to be expanded, including increasing coordination with 
the UN Office for the Coordination of Humanitarian Affairs reports 
officer and the UN Communications Group. 

* Reports described the need for common reporting templates and 
information management tools to improve the consistency and 
reliability of shared information. 

Some Decisions Based on Limited Information and Burma's Unique 
Constraints Hindered Implementation Effectiveness: 

Some shortsighted decisions by responders and Burma's highly 
restrictive operating environment hindered the effectiveness of some 
response activities. Ten reports cited examples of assistance supplies 
that were inferior in quality or incompatible with local conditions, 
which limited their usefulness. Examples included tents,[Footnote 57] 
food, water treatment and filtration systems, information technology 
equipment, building materials, and fishing boats. Multiple reports and 
interviews identified U.S.-donated bottled water, tarpaulins, and 
medical supplies as particularly problematic. For example, DOD-
procured water bottles were heavy and difficult to transport and 
medical supplies had instructions printed in non-Burmese languages. 
Generic packages, such as the Red Cross's shelter toolkit and the UN 
Food and Agriculture Organization's fishing gear, needed revision to 
meet the needs of local practices. Multiple reports credited local 
dissatisfaction of some aid commodities to poor participatory 
consultation and limited local procurement. 

According to 10 reports, effective targeting and distribution of 
assistance was obstructed by political, logistical, or organizational 
capacity factors. Inadequate information about affected populations, 
logistical obstacles in reaching remote areas, and time and staff 
constraints complicated responders' efforts. The Burmese practice of 
redistribution within communities limited the efficacy of targeting: 
many Burmese communities would decide who received aid based on 
principles of fairness rather than need. Carrying out protection 
programs was also challenging in Burma, given the political 
sensitivity associated with individual rights. The Protection of Women 
and Children Cluster found it difficult to advocate for the inclusion 
of women and children in high-level strategy and planning. 

Coordinating the transition between relief and early recovery 
activities was also problematic. Donors' focus on food and water 
distribution in the first months of the emergency delayed the 
initiation of and support for livelihood and economic recovery 
activities. According to UNDP, failing to target "medium to big 
farmers" exacerbated unemployment among the landless poor who depended 
on farmers for income. Interviews we conducted with NGOs confirmed 
weaknesses in livelihood responses, but also highlighted the same for 
shelter recovery. 

Six reports found that procuring commodities in Burma was difficult 
due to factors such as inadequate supply and quality, lack of 
registered suppliers, and government-controlled supply chains. 
Implementing partners also told us the restricted banking system was a 
challenge, along with a declining exchange rate (with respect to the 
dollar), which made materials more expensive. Contrastingly, 
international procurement was costly and subject to Burmese government 
restrictions and approval. An interview revealed that USAID's food aid 
shipped from the United States took up to 3 to 5 months to reach Burma. 

Monitoring, evaluation, and oversight mechanisms were limited in 
Burma. Three reports cite such contributing factors as the overall 
restrictive environment, remoteness of affected areas, inadequate 
staff capacity, and limited resources of local authorities. In one 
interview, an implementing partner explained that Burmese staff are 
reluctant to report bad news, which is an obstacle to reporting fraud 
or misuse. 

The analyzed reports presented various strategies to improve the 
effectiveness of assistance through specific implementation efforts, 
such as the following: 

* Reports described local procurement, incorporation of traditional 
practices and robust local engagement as strongly contributing to 
beneficiaries' satisfaction with assistance. UNICEF's water, 
sanitation, and hygiene division balanced this goal with the need to 
respond quickly by importing expensive goods only while local, low-
cost solutions were being created. Reports cited rainwater harvesting, 
ceramic water filters, and earthenware water storage as successful 
local solutions. The Red Cross found that bamboo and timber shelter 
kits were better accepted than generic versions. With regard to 
fishing gear kits, FAO recommends supplying materials that can be used 
by beneficiaries to construct gear to meet their own requirements. 
Furthermore, nonlocal varieties of seed and livestock should only be 
distributed if local counterparts are not available. Because tents are 
inappropriate in Burma, UNICEF recommends developing and 
propositioning a "semi-permanent school kit" or temporary spaces that 
could be used as schools capable of withstanding the Burmese climate. 

* Economic recovery should be identified and initiated as soon as 
possible after a disaster, with improved coordination of livelihood 
strategies between the Agriculture and Early Recovery Clusters. 
According to Save the Children, cash distribution and in-kind grants, 
such as those distributed through their Livelihood Quick Impact 
Project, were effective in promoting early recovery. In situations 
where markets were functioning, UNDP found that cash grants and cash- 
for-work were more effective than in-kind assistance. 

* Targeting efforts should factor in the Burmese tradition of equity 
that underlines redistribution. FAO recommends engaging communities in 
discussions of aid and allowing them to decide how it should be 
distributed in a transparent way. 

* The Protection of Children and Women Cluster Review describes the 
established Vulnerability Network as a creative response to the 
challenging operating environment in Burma prior to Cyclone Nargis but 
also states the need for a broader protection cluster to address 
remaining protection gaps. 

* Analyzed reports also emphasized the need for improved procurement 
resources and processes, such as local market assessments, "preferred 
supplier" relationships for key commodities, and joint buying 
agreements. One report stated that a scheme like World Concern's Joint 
Procurement Initiative is potentially useful but only if initiated at 
the onset of the emergency. 

* Technical field officer positions helped facilitate monitoring and 
interaction with implementing partners during the Cyclone Nargis 
response. One report recommends further building community-level 
capacity for monitoring. UNDP claims that at this level "diverse and 
representative membership," robust accountability systems, and a 
culture of transparency are essential to preventing mismanagement of 
assistance. In an interview, one USAID official stated that clear 
branding of donated goods was the key to effective monitoring in Burma. 

Limited In-Country Capacity and Preparedness Exacerbated the Impact 
and Hindered Response Efforts: 

According to 13 reports, a limited number of experienced personnel and 
technical specialists in-country had difficulty meeting all response 
needs. The inexperience of some cluster coordinators created delays 
and complications in the field. While local responders were generally 
better accepted by local citizens and government authorities, they 
generally had limited capacity and experience. 

Seven reports describe local engagement in coordinated response 
activities as limited, due to Burmese political, cultural, or capacity 
factors. These factors included language and cultural barriers, lack 
of access to electronically shared information, limited modes of 
transportation, and inadequate time and staff to attend cluster 
meetings. Local responders without formal operating agreements with 
the Government of Burma often censored their input, which limited 
participation at cluster meetings. International organizations noted 
time pressure, limited access to affected populations, and lack of 
confidence in local capacity as obstacles to engaging local actors. 

The response to Cyclone Nargis was also hampered by weak early warning 
systems and disaster preparedness plans at all levels--local, 
national, and among international organizations. In addition, 
emergency supply stocks and prepositioned food supplies were lacking 
within the country. 

Responders cited the improvement of in-country emergency preparedness 
and response capacity through personnel training and local engagement 
as critical. The following are recommendations culled from the reports 
that we analyzed. 

* Many reports emphasize the need to build local capacity and better 
incorporate national actors into contingency planning and cluster 
activities. Standby arrangements with skilled personnel with 
humanitarian and remote management experience could be established by 
organizations operating in Burma. This should include a roster of 
local actors involved in the Cyclone Nargis emergency response who 
receive capacity training that is updated periodically over the long-
term. One report recommends prioritizing local capacity-building in 
areas now under the responsibility of expatriates. 

* Recommended strategies to improve local engagement included: 
training facilitated through learning resource centers in the field; 
appointing local counterparts for cluster leadership, such as 
information managers; providing Burmese translation at cluster 
meetings and for key documents; and developing alternatives to 
electronic information sharing. Engaging and gaining the buy-in of 
local authorities and other government actors (i.e., medical, 
education, and development affairs officers) is also key to 
facilitating local participation. 

* A database of in-country information technology and communications 
support, suppliers, warehousing, and transportation providers would 
also be helpful. 

* One implementing partner said that prepositioning relief supplies 
was essential, and noted the usefulness of doing so before Cyclone 
Giri hit Burma in 2010. The partner further suggested establishing 
reserve warehouses in Southeast Asia. 

[End of section] 

Appendix V: U.S. Agencies Experienced Challenges and Developed Lessons 
Learned in Responding to Cyclone Nargis: 

In responding to Cyclone Nargis, U.S. agencies experienced numerous 
challenges including Burmese restrictions on access to affected areas; 
U.S. legal restrictions; and difficulties coordinating, planning, and 
staffing activities. USAID issued recommendations to address the 
lessons learned from many of these challenges. 

Burmese Government Travel Restrictions Constrained the U.S. Response: 

U.S. officials said Burmese government restrictions that limited their 
entry into Burma and access to Cyclone Nargis-affected areas 
constrained their response, limited their ability to assess needs, and 
made it difficult to monitor aid delivery. The Burmese government 
granted visas to disaster assistance response team members slowly and 
incrementally; with only 7 of 10 team members eventually granted visas. 

Once in Burma, the team faced various travel restrictions and 
administrative barriers to providing relief, according to a team 
official. The official stated that he had to notify the Burmese 
government 4 days ahead of time to receive their approval for a flight 
carrying relief commodities to land.[Footnote 58] He also had to 
provide a manifest of the commodities and persons on board four days 
in advance and to work with local partners to ensure they would be 
available to offload the supplies as the airplanes landed. Further, 
the Burmese government sometimes denied travel permits for USAID and 
other officials and set up numerous checkpoints in the early days of 
the response. The team also had to tap a wider breadth of resources to 
assess the extent of damage and need for supplies. USAID officials 
said that obtaining permission to travel to the Cyclone Nargis-
affected areas remains difficult. They said that while the Burmese 
government typically grants access, the level of uncertainty 
surrounding when they will grant the access makes it difficult to 
monitor aid delivery on short-term notice, limits the number of site 
visits they make, and precludes them from properly planning monitoring 
visits. These officials said they would like to visit Burma and 
project sites whenever they want to monitor implementation. 

U.S. Restrictions Limit Work with Burmese Government: 

USAID officials also said that U.S. restrictions limiting their 
ability to work with the Burmese government made it difficult to 
coordinate U.S. response and recovery activities. USAID/OFDA officials 
told us that typically the disaster assistance response team is able 
to work with the national government to coordinate a response. This 
was not the case in Burma and it created difficulties for the team. 
USAID officials told us that the restrictions on whom the United 
States can work with were a significant constraint and made it 
difficult to develop recovery programs. For example, in many villages 
midwives (who are government employees) are the only source of 
healthcare; therefore, not working with them makes it very difficult 
to improve health conditions in these villages. Some of USAID's 
implementing partners, including UNDP, said this constraint limited 
the effectiveness of their programs, especially in the areas of health 
and emergency preparedness, as they were not able to engage with key 
personnel. Some partners described restricted access to health 
workers, teachers, and technical experts as particularly limiting 
given the importance these officials have in their sectors. One NGO 
cited a reluctance to accept USAID funding given the constraints it 
would place on that organization's activities. 

U.S. Agencies Struggled to Coordinate their Cyclone Nargis Response: 

USAID's after action report and our interviews with U.S. government 
officials revealed that U.S. agencies struggled to carry out a "whole 
of government" response. USAID said that while their response was 
based on humanitarian needs, State and DOD also had political motives 
which included engagement with the Burmese government.[Footnote 59] 
Conflicting agendas resulted in coordination difficulties related to 
the appropriateness, timing, procurement, and distribution of aid. One 
USAID/OFDA official reported that once U.S. and international 
responders were allowed into Burma, competing priorities among U.S. 
agencies strained the response to Cyclone Nargis. USAID officials 
stated that in their opinion, DOD did not procure the commodities 
needed in Burma. For example, a company in Thailand produces mosquito 
nets that meet international standards. USAID asked DOD to buy nets 
from this provider. DOD originally agreed to do this but then later 
denied the request. They stated that the nets were not dense enough to 
fill the airplanes to capacity. Instead DOD provided items such as 5- 
gallon water bottles, which USAID stated are inappropriate for a 
number of reasons, including that people cannot transport them easily. 
The USAID officials stated that it was clear that DOD had different 
goals than USAID in providing assistance to Burma. A DOD official 
reported that all decisions on goods transported were made after 
consultations with DOD, State, and USAID officials. A State official 
reported having significant input on the decision to provide 5-gallon 
water bottles, as these goods had little risk of being misused. 

USAID/OFDA officials told us that three USAID teams had to communicate 
effectively to conduct USAID's response--the response management team 
in Washington, D.C.; USAID/OFDA in Bangkok, Thailand; and disaster 
assistance response team in Burma--complicating communication efforts. 
USAID's after action report also cited numerous challenges related to 
information management. These included difficulty in communicating 
with the disaster assistance response team due to geography, limited 
available communication systems, and a lack of systematic reporting. 
The report also cited difficulty in tracking commodities because 
USAID/OFDA headquarters and the assistance response team used 
different tracking systems. USAID/OFDA headquarters used the standard 
USAID tracking tools, while the assistance response team had to use 
DOD tracking mechanisms. 

As part of their after action report, USAID/OFDA issued numerous 
priority recommendations to address their communication and 
coordination challenges. For example, the report recommended 
developing a standardized commodity tracking system and setting up 
email accounts by position, not person to address challenges related 
to managing information. It also recommended developing an overall 
outreach strategy to raise USAID/OFDA's visibility and get information 
on USAID/OFDA's mandate, mission, and role as lead federal agency for 
foreign disaster response to key decision makers in other agencies, 
Congress, and partners in part to address the challenge of 
coordinating with DOD. USAID/OFDA reported that as of July 2011, it 
had implemented or was implementing each of these recommendations. For 
example, USAID/OFDA designed and implemented a formal in-kind grant 
agreement to facilitate better commodity tracking. In addition, 
USAID/OFDA is working on a video and resource kit for USAID/OFDA 
regional advisors and team leaders to use with senior U.S. officials 
in disaster-affected countries. 

USAID's Planning of Assistance Delivery was Problematic: 

U.S. agencies reported challenges related to the planning and delivery 
of assistance as well. According to USAID's after action report, 
planning processes and products recently instituted for better 
response decision making were not well understood and did not meet 
needs. Some respondents noted a disconnect between planning and the 
flow of day-to-day work. Others noted difficulty understanding the 
purpose and timing of the Response Action Plan, a key planning 
document, stating that other tools were developed to track pending 
actions. Recommendations to address these challenges included a system 
for tracking day-to-day tasks in the planning process that may change 
more frequently than the response plan. Also it was recommended that 
USAID/OFDA's senior management team define the goal for the first 
response action plan in the disaster assistance response team 
activation meeting. Subsequent goals should be defined in the planning 
meetings and conference calls. As of July 2011, USAID reported that it 
had implemented these recommendations. 

USAID Experienced Staffing Difficulties in Responding to Cyclone 
Nargis: 

U.S. agencies also experienced staffing difficulties in responding to 
Cyclone Nargis. USAID's after action report stated that staffing of 
response management teams and disaster assistance response teams were 
inconsistent and in some cases inadequate for the mission. Staffing 
seemed inequitable among the necessary field functions--over staffing 
some sectors, such as military liaison, and under staffing other 
important sectors, such as logistics. Also, USAID did not always 
follow staffing guidelines in response management policy and 
procedures, such as assigning staff with the necessary skills. 
Finally, due to the high demand for the limited number of specialists 
with specific needed skills, such as health and shelter, USAID/OFDA 
had difficulty finding technical specialists to meet all field needs. 
As a result, USAID/OFDA reported not having sufficient representation 
within all relevant sectors in the UN clusters, including the water, 
sanitation, and hygiene; shelter; and health clusters. 

USAID developed the following recommendations to address the staffing 
challenges: 

* The disaster assistance response team staffing process must be 
strategic, systematic, and deliberate. The team should drive field 
staffing requirements. 

* USAID/OFDA should seek to expand the number of technical specialists 
available for field assignments at both the strategic and operational 
levels. Technical input within the UN cluster process must be early in 
order to influence the overall direction of the response. 

* To the extent possible, USAID/OFDA should not put technical people 
in nontechnical roles, because it further reduces the number of 
available specialists when needed. 

* USAID reported that as of July 2011, it had implemented the first 
recommendation on the staffing process and was working on the other 
two recommendations. They stated that USAID/OFDA has worked 
aggressively to supplement staffing in key technical functions. This 
effort has included adding full time staff in areas such as health, 
nutrition, and shelter. 

[End of section] 

Appendix VI: Comments from the U.S. Agency for International 
Development: 

Note: GAO comments supplementing those in the report text appear at 
the end of this appendix. 

The U.S. Agency for International Development letter was signed 
electronically by Sean C. Carroll, Chief Operating Officer. 

USAID: 
From The American People:  

Thomas Melito: 
Director, International Affairs and Trade: 
U.S. Government Accountability Office: 
Washington, DC 20548:  

Dear Mr. Melito: 

I am pleased to provide the U.S. Agency for International 
Development's formal response to the GAO draft report entitled "Burma: 
UN and U.S. Agencies  Assisted Cyclone Victims in Difficult 
Environment, but Improved U.S. Monitoring Needed" (GAO-11-700).  

The enclosed USAID comments are provided for incorporation with this 
letter as an appendix to the final report.  

Thank you for the opportunity to respond to the GAO draft report and 
for the courtesies extended by your staff in the conduct of this audit 
review.  

Sincerely,  

Sean C. Carroll /s/: 
Chief Operating Officer: 
U.S. Agency for International Development:  

Enclosure: a/s:  

[End of letter]  

USAID Comments On GAO Draft Report No. GA0-11-700:  

General comments:  

The report acknowledges the challenging environment in which the 
United States Agency for International Development (USAID) programs 
have been implemented and identifies areas where USAID oversight 
performance could be improved. USAID notes that the report does not 
identify any significant deficiencies. We also note statements that 
USAID took "some" actions to ensure that funds were used as intended. 
Since these statements are followed by indications of monitoring 
weaknesses, we feel that this does not accurately reflect the 
excellent efforts of the team in implementing the programs in a 
difficult environment. USAID also sees statements that "U.S. and UN 
agencies found little evidence that assistance had been misused". We 
wish to clarify that the USAID staff has seen no evidence that 
resources have been misused. We ask that Government Accountability 
Office (GAO) consider the following changes to increase the accuracy 
of the report:  

* Summary, second paragraph and heading page 20: "USAID took some
actions to help ensure U.S. funds were used as intended but had some
monitoring weaknesses". We request that the first word "some" be 
removed as we feel the USAID team performed extremely well given the 
difficult conditions, including lack of personnel resources;  

* Summary, second paragraph; heading page 33, second paragraph page 33; 
and conclusions page 42: "U.S. and UN agencies said that they found 
little evidence that assistance had been misused." According to USAID, 
no misuse of resources has been encountered - we request that the word 
"little" be change to "no". Although there were a few potential 
examples cited in the report, they did not result in misuse. A closing 
statement on page 33 indicating that there is no evidence that United 
States Government (USG) resources went to sanctioned entities would 
clarify your conclusion. Similarly, on page 42, we suggest that the 
word "some" is removed from the sentence "USAID has taken some actions 
to monitor its assistance and ensure funds have been used as intended 
and did not benefit sanctioned entities." [See comment 1]  

Recommendation 1: We recommend that the Administrator of USAID direct 
the appropriate mission and offices to improve management of grants 
related to Burma by taking actions, such as enhancing financial 
monitoring of agreements by including periodic reviews of grantee 
internal controls, transactions and disbursement records.  

USAID concurs with Recommendation 1. It is critical that both project 
management and financial support staff take all necessary and 
allowable actions to ensure that implementing organizations have the 
necessary administrative and financial capability to implement USAID 
programs effectively and efficiently. While aspects of financial 
monitoring are addressed through pre-award surveys to determine 
organizational capabilities and annual financial audits, regular and 
continual oversight by trained mission project managers and financial 
support staff is vital. The environmental risk level, vulnerabilities, 
and potential weaknesses of the implementing organization, along with 
the nature of the assistance and the method of payment, are all 
important in establishing the level of appropriate monitoring given 
USAID's resources.  

As noted by the GAO, USAID relies on independent annual audits 
conducted under the Single Audit Act, outlined in Office of Management 
and Budget (OMB) Circular A-133 for American non-governmental 
organizations (NGOs) and in the USAID Inspector General's Guidelines 
for Financial Audits Contracted by Foreign Recipients for non-U.S. 
NGOs. Significant financial review occurs at the headquarters level. 
Consistent with 22 CFR 226.53 subsections (b) and (e), NGO grantees 
are required to retain all award records, including financial, for a 
period of three years following the end of the award, and USAID has 
the right to unrestricted access of these records. In addition, the 
Agreement Officer's Technical Representative (AOTR) and field staff 
conduct award financial and programmatic monitoring through visits to 
observe program activities as measured against pre-agreed upon 
performance indicators, as well as through the review of quarterly 
financial and programmatic reports. The nature of an emergency 
response and the operational context (including access restrictions), 
however, can limit the amount of oversight possible. USAID reiterates 
its concurrence that financial monitoring is critical, and that 
financial reviews should be enhanced as allowable under OMB 
regulations. USAID will hold senior managers accountable to ensure 
that personnel perform financial monitoring to the strictest extent 
possible given the regulatory and operational limitations. 

Recommendation 2: We recommend that the Administrator of USAID direct 
the appropriate mission and the offices to improve management of 
grants related to Burma by taking actions, such as providing grantees 
with specific guidance on the approval process for international 
travel requests, and ensuring that USAID staff monitor grantees' 
expenditures for compliance with related laws, regulations and grant 
agreements, including international travel.  

USAID agrees with Recommendation 2. We request a clarifying statement 
be added to the report indicating that, with the exception of 
international travel, no evidence that expenditures not compliant with 
related laws, regulations and grant agreements has been encountered in 
USAID programs in Burma. [See comment 2]  

Existing guidance on international travel, such as provided in the 
Mandatory Provisions that form part of each recipient agreement and 
are based on OMB Cost Principles, should be adhered to and enforced. 
The Agency's ability to conduct full pre-award surveys of 
organizations and timely audits should be strengthened. In addition, 
the role of the AOTR in monitoring programs and exercising their 
financial management responsibilities as codified in Automated 
Directive System (ADS) 303 and related documents should be enhanced. 
With that goal in mind, USAID has developed a number of training 
courses and certification requirements for AOTRs during the past few 
years.  

Standard Provision on International Air Travel and Transportation 
included in USAID awards clearly outlines the requirements for the 
grantee to request approval for international travel. During the life 
of the award the burden is on the grantee to request international 
travel approval when needed, and failure to seek such approval results 
in noncompliance with the award's terms and conditions by the grantee, 
as well as the risk of cost disallowances by USAID. Although it is 
often difficult for USAID to remain fully aware of all actions by all 
grantees in challenging and dynamic post-disaster situations, USAID—
consistent with OMB's USG-wide rules—relies on annual independent 
audits to detect instances of noncompliance and questionable costs. 
USAID will follow up as needed when questioned costs are identified by 
USAID staff or during the annual independent audits. 

Recommendation 3: We recommend that the Administrator of USAID direct 
the appropriate mission and the offices to improve management of 
grants related to Burma by taking actions, such as reinforcing the 
requirement for staff to formally document site visits to grantees.  

USAID concurs with Recommendation 3. ADS 303.3.17 requires and 
references the importance of site visit documentation by the grants' 
Agreement Officer (AO) or AOTR. USAID recognizes the importance of 
verifiable project oversight and concurs that documentation should be 
enhanced by all who perform site visits, including the AO and AOTR who 
are required to do so under the referenced ADS. In disaster response 
environments, the primacy of the focus on life-saving and life-
sustaining activities can result in less focus on certain duties, such 
as site visit documentation, that are not directly related to the 
provision of immediate relief assistance. This does not, however, 
reduce the importance of documentation. USAID is developing internal 
policies to ensure documentation of all monitoring visits and their 
findings, with leadership in the field requiring overseas staff to 
submit visit reports documenting observations and concerns after each 
meeting with a grantee.  

Recommendation 4: We recommend that the Administrator of USAID direct 
the appropriate mission and the offices to improve management of 
grants related to Burma by taking actions, such as ensuring all 
relevant offices are made aware of audit findings in a timely manner.  

USAID concurs with Recommendation 4. The USAID's AO obtains audit 
information as part of the pre-award affirmative determination of the 
grantee's responsibility and may include special award conditions if 
the grantee is high-risk. Audit information is obtained from the 
Federal Audit Clearinghouse (FAC), a publicly available database, and 
other sources. USAID recognizes and concurs with the need to ensure 
that Contracting Officer's Technical Representatives (COTRs)/AOTRs are 
aware of any adverse audit information given their responsibility for 
monitoring. Audit information will be fully shared within the Agency 
in order to assist in assessing a new organization's capabilities, 
designing and negotiating proper controls, and verifying that internal 
control weaknesses are corrected to safeguard USAID funds during 
implementation and ensure that they are used for intended purposes. 

Recommendation 5: We recommend that the Administrator of USAID direct 
the appropriate mission and the offices to follow up on the 
questionable costs associated with international travel that we 
identified in this report and take action as appropriate on any 
identified unallowable costs.  

USAID concurs with this recommendation and will conduct appropriate 
follow-up actions with the grantee. In general, it is the 
responsibility of the grantee to obtain pre-approval for travel from 
the AO or AOTR. When a grantee uses grant funds for international 
travel that has not been pre-approved, USAID is under no obligation to 
pay for the travel. In the post-award A-133 or Recipient Contracted
Audit, any cost for international travel that was not pre-approved 
will become a "questioned cost." Following the review and formal 
acceptance of the audit by USAID Office of the Inspector General 
(OIG), the Contract Audit Management Branch within USAID's Office of 
Acquisitions and Assistance will receive it in order to resolve all 
questioned costs with final determination by the AO. 

The following are our comments on the U.S. Agency for International 
Development letter dated July 13, 2011. 

GAO Comments: 

1. We acknowledge that USAID faced numerous constraints in conducting 
monitoring, and we recommend steps USAID can take to enhance 
oversight. We deleted the word "some" from before: "actions." 
Regarding the statement in our draft report that "U.S. and UN agencies 
said that they found little evidence that assistance had been 
misused," USAID said no misuse of resources has been encountered. They 
requested that we change the word "little" to "no", which we have done 
consistent with the information we obtained. They suggested we report 
that "there is no evidence that United States Government (USG) 
resources went to sanctioned entities"; however, this conclusion is 
beyond the scope of our report. 

2. USAID requested we clarify that, with the exception of 
international travel, we found no evidence of expenditures not 
compliant with related laws, regulations, and grant agreements in 
USAID programs in Burma. Our report discusses the questionable costs 
we identified from the selected transactions we reviewed. Our work 
should not be generalized to cover all USAID expenditures. 

[End of section] 

Appendix VII: Comments from the Department of Defense: 

Office Of The Assistant Secretary Of Defense: 
Special Operations/Low Intensity Conflict: 
2500 Defense Pentagon: 
Washington, D.C. 20301-2500:  

July 5, 2011:  

Thomas Melito: 
Director, International Affairs and Trade: 
U.S. Government Accountability Office: 
441 G Street, NW: 
Washington, DC 20548:  

Dear Mr. Melito:  

This is the Department of Defense (DoD) response to the GAO Draft 
Report, GAO-11-700, "Burma: UN and U.S. Agencies Assisted Cyclone 
Victims in Difficult Environment, but Improved U.S. Monitoring 
Needed," dated July 2011 (GAO Code 320780).  

DoD appreciates the opportunity to review your draft report and has no 
comment on the report's recommendations, which address the monitoring 
of grants in Burma by the U.S. Agency for International Development 
(USAID).  

DoD wishes, however, to clarify for the record the USAID officials' 
comments on page 37 that were repeated on page 65 of the draft report. 
Specifically, USAID officials cited as a DoD goal in its cyclone 
response effort the political objective "to engage with the Burmese
Government." DoD's actions were not motivated by an interest in 
engaging the Government of Burma, but were in support of the U.S. 
Government's overall humanitarian objective. DoD's provision of 
transportation supported the humanitarian assistance mission of USAID, 
which was the lead agency for the U.S. Government response to Cyclone 
Nargis, and the Department of State, which is the lead Department for 
Burma-related issues and policies for the U.S. Government. DoD's 
disaster assistance efforts were coordinated with USAID and the
Department of State.  

Thank you for the opportunity to respond to the GAO draft report and 
for the courtesy extended by your staff in conducting this review.  

Sincerely,  

Signed by:  

[Illegible] for: 
Michael D. Lumpkin: 
Acting:  

[End of section]  

Appendix VIII: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Thomas Melito, (202) 512-9601 or melitot@gao.gov: 

Staff Acknowledgments: 

Cheryl Goodman, Assistant Director; Michael Maslowski; Bonnie Derby; 
Ranya Elias; Elizabeth Guran; Kimberly McGatlin; Susan Ragland; Kai 
Carter; Ashley Alley; Sada Aksartova; David Dayton; Martin de 
Alteriis; Lauren Fassler; Will Horton; Etana Finkler; and Jena 
Sinkfield made key contributions to this report. 

[End of section]  

Footnotes:  

[1] Burma is also known as Myanmar. 

[2] As reported through UN OCHA's Financial Tracking System as of May 
2011. The other approximately $278 million of the more than $600 
million total includes funding from international donors, such as the 
United Kingdom, Australia, Japan, the European Commission, and private 
donors.  

[3] The Department of the Treasury's Office of Foreign Assets Control 
(OFAC) issued a general license for organizations to export financial 
services to Burma that are not otherwise authorized, in order to 
support not-for-profit humanitarian or religious activities in Burma 
(OFAC Amended General License No. 14-B). The license prohibits exports 
of financial services, either directly or indirectly, to the 
Government of Burma. In addition, OFAC has granted USAID and State a 
specific license which allows U.S. government grantees in Burma to 
transfer funds that are in direct support of activities defined and 
authorized by their U.S. government grants and contracts. This license 
would authorize assistance for sanctioned entities, including the 
Government of Burma, if they were contained within the scope of a 
grantee's agreement with the U.S. government. However, USAID reported 
that their agreements generally do not authorize assistance for the 
Government of Burma or sanctioned entities.  

[4] The sanctions were developed through a series of federal laws and 
executive orders, many of which block property and interests in 
property of certain entities and individuals in Burma. In addition to 
senior Burmese government officials designated by OFAC, sanctions also 
apply to any Burmese persons who provide substantial economic and 
political support for the Burmese government who are on OFAC's list of 
Specially Designated Nationals and Blocked Persons (Pub. L. No. 110- 
286, § 5(d) (2008); Pres. Det. 2009-11 (Jan. 15, 2009)). 

[5] H.R. Rep. 111-151, at 128 (2009). 

[6] As reported in UN OCHA's Myanmar Revised Appeal, Cyclone Nargis 
Response Plan (July 2008). 

[7] Tripartite Core Group, Post-Nargis Joint Assessment (July 2008).  

[8] Rangoon is the former capital of Burma, and its largest city. In 
2005, Burma's ruling regime unexpectedly relocated the capital city 
from Rangoon to Nay Pyi Taw, further isolating the government from the 
public and international community. Nay Pyi Taw is sparsely populated, 
and rapid development of the new capital continues. Foreign diplomatic 
missions remain in Rangoon, according to State. 

[9] International Crisis Group, Burma/Myanmar After Nargis: Time to 
Normalize Aid Relations, Asia Report N°161 (Oct. 20, 2008). 

[10] ASEAN's goals include accelerating economic growth, social 
progress, and cultural development in the region through joint 
endeavors in the spirit of equality and partnership. Indonesia, 
Malaysia, Philippines, Singapore, and Thailand established ASEAN in 
1967. Burma, Brunei Darussalam, Cambodia, Lao PDR, and Vietnam 
subsequently joined.  

[11] Australia, Canada, and the European Union have joined the United 
States in imposing sanctions against Burma's regime. 

[12] GAO, International Organizations: Assistance Constrained in 
Burma, [hyperlink, http://www.gao.gov/products/GAO-07-457] 
(Washington, D.C.: Apr. 6, 2007).  

[13] Members fund UN agencies through voluntary contributions, 
assessed contributions, or both. Voluntary contributions are decided 
on by each country, and they finance special UN programs and offices, 
such as the UN Development Program and the UN Children's Fund. The 
U.S. federal law that requires withholding the U.S. proportionate 
share for programs in Burma does not apply to the UN Children's Fund. 
In contrast, member countries are required to pay their assessed 
contributions for UN organizations.  

[14] 22 U.S.C. § 2291j, 22 U.S.C. § 2291j-1; Presidential 
Determination No. 2009-30, 74 Fed. Reg. 48369 (Sept. 15, 2009). 

[15] 22 U.S.C. § 2292(b). 

[16] Supplemental Appropriations Act, 2009, Pub. L. No. 111-32, 123 
Stat. 1859, 1892 (June 24, 2009). 

[17] USAID provided funding to 7 of the 11 UN agencies. The four UN 
agencies that did not receive U.S. funding are the Food and 
Agriculture Organization; International Labor Organization; United 
Nations Educational, Scientific, and Cultural Organization; and the 
United Nations Population Fund. 

[18] All UN agency funding obligations are as reported in UN OCHA's 
Financial Tracking Service. See [hyperlink, http://fts.unocha.org/]. 
The tracking service makes efforts to collect and report all 
humanitarian assistance. However, it guarantees only that suitable 
humanitarian funding information sent to it will be posted; the 
tracking service cannot guarantee that it will find and record 
information not sent to it. Given this limitation, it is possible that 
we may have underreported total UN obligations.  

[19] According to WFP, UN agencies, NGOs, and businesses in Burma 
generally used the common market exchange rate of around 1,100 Burmese 
kyat to one U.S. dollar--the exchange rate at the time of the crisis. 
Use of the official and highly over-valued exchange rate of 6 kyat to 
one U.S. dollar would have made all UN operations too costly, 
according to WFP. 

[20] The townships of Bogale, Labutta, Mawlamyinegyun, and Ngapudaw 
received the most extensive range of assistance, covering at least 
four of the seven relief sectors the U.S. funded. 

[21] Although disaster response team members requested visas within 
days after the cyclone struck, the Burmese regime granted some but not 
all visas in late May 2008. 

[22] Section 3001 of Pub L. No. 110-246, the Food, Conservation, and 
Energy Act of 2008, changed the title of the underlying legislation 
from the Agricultural Trade Development Assistance Act of 1954, also 
known as P.L. 480, to the Food for Peace Act. Title II of the Food for 
Peace Act, administered by USAID, addresses donation of agricultural 
commodities for humanitarian purposes. (Other U.S. food aid programs 
are administered through the U.S. Department of Agriculture, including 
Food for Peace Title I, Food for Progress, and the McGovern-Dole 
International Food for Education and Child Nutrition programs.) U.S. 
commodities provided under Title II of the Food for Peace Act to meet 
emergency needs are generally distributed through the World Food 
Program and nongovernmental organizations.  

[23] The WFP Country Director in Burma during the humanitarian crisis 
said that Food for Peace's 4-month delay in delivering rice had a 
significant impact on WFP's ability to plan distribution. We 
previously reported that multiple challenges affect the timeliness of 
U.S. food assistance delivery, including uncertain funding and 
inadequate planning, ocean transportation contracting practices, legal 
requirements, and inadequate coordination to systematically track and 
respond to delivery problems. Delivering U.S. food aid from vendor to 
village requires on average 4 to 6 months. We reported that while 
agencies have in some cases tried to expedite food aid delivery, the 
entire logistics process often lacks the timeliness required to meet 
humanitarian needs in emergencies. See GAO, Foreign Assistance: 
Various Challenges Impede the Efficiency and Effectiveness of U.S. 
Food Aid, [hyperlink, http://www.gao.gov/products/GAO-07-560] 
(Washington, D.C.: Apr. 13, 2007). Also see GAO, International Food 
Assistance: Better Nutrition and Quality Control Can Further Improve 
U.S. Food Aid, [hyperlink, http://www.gao.gov/products/GAO-11-491] 
(Washington, D.C.: May 12, 2011). 

[24] When Cyclone Nargis struck Burma on May 2, 2008, the U.S. Pacific 
Command was conducting a major sea-based military exercise in the 
region, which included a disaster response component. As such, DOD was 
prepared to provide additional assistance if asked to do so. However, 
the Burmese government did not give DOD permission to conduct any 
relief operations beyond an air-bridge from Thailand. 

[25] USAID does not have a mission in Burma; therefore programs 
related to Burma are carried out by USAID/RDMA, headquartered in 
Bangkok, Thailand. 

[26] The current USAID/RDMA cooperative agreements for Cyclone Nargis 
related assistance programs continue through December 31, 2012. 

[27] USAID/RDMA officials also reported halting a number of activities 
leading up to the November 2010 elections to avoid the appearance of 
supporting the Burmese government in any manner.  

[28] OFAC issued several renewals to USAID and State's specific 
license, which allows U.S. government grantees in Burma to transfer 
funds that are in direct support of conducting activities defined and 
authorized by their U.S. government grants and contracts. The license 
does not authorize the transfer of any blocked property that is not 
expressly authorized in the terms of the license. 

[29] USAID policy requires that the agreement officer or agreement 
officer's technical representative write a brief report highlighting 
his or her findings from site visits and include a copy of the report 
in the official award file. See USAID Automated Directives System 
(ADS) 303.3.17(b). 

[30] USAID also reported that a USAID officer from the Office of 
Transitions Initiatives conducted some site visits during the time 
between the departure of the disaster assistance response team and the 
arrival of the response coordinator. 

[31] The cognizant agreement officer designates a technical 
representative (AOTR) for each USAID agreement. The AOTR is 
responsible for ensuring that USAID exercises prudent management over 
its awarded assistance and makes the achievement of program objectives 
easier by monitoring and evaluating the recipient and its performance 
during the award. The AOTR's monitoring responsibilities include both 
financial and programmatic aspects.  

[32] The Single Audit Act (31 U.S.C. §§ 7501-7507), as implemented by 
Office of Management and Budget guidance, requires each reporting 
entity (states, local governments, and nonprofit organizations) that 
expends $500,000 or more in federal awards in a fiscal year under 
multiple federal programs to obtain an annual "single audit." A single 
audit consists of (1) an audit and opinions on the fair presentation 
of the financial statements and the schedule of Expenditures of 
Federal Awards; (2) an understanding of and testing of internal 
control over financial reporting and the entity's compliance with 
laws, regulations, and contract or grant provisions that have a direct 
and material effect on certain federal programs (i.e., the program 
requirements); and (3) an audit and an opinion on compliance with 
applicable program requirements for certain federal programs. 

[33] USAID regulations, which implement Office of Management and 
Budget Circular No. A-110's guidance on grant administration, do not 
require grantees to submit supporting documentation for expenditures. 
It does require grantees to retain, and make available for audits and 
examinations, financial records, supporting documents, statistical 
records, and all other records pertinent to an award, and to do so 
generally for a period of three years from the date of submission of 
the final expenditure report. See USAID grant regulations, 22 C.F.R. § 
226.53 (Retention and Access Requirements for Records). 

[34] We have raised concerns in the past about the quality of single 
audits and have testified that audits are not being conducted in 
accordance with professional standards and requirements. These audits 
may provide a false sense of assurance and could mislead users of the 
single audit reports. We also recommended that the Office of 
Management and Budget monitor the risk, cost-benefit, and efficiency 
and effectiveness of the single audit process. See GAO, Single Audit 
Quality: Actions Needed to Address Persistent Audit Quality Problems, 
[hyperlink, http://www.gao.gov/products/GAO-08-213T] (Washington, 
D.C.: Oct. 25, 2007) and Single Audit: Opportunities Exist to Improve 
the Single Audit Process and Oversight, [hyperlink, 
http://www.gao.gov/products/GAO-09-307R] (Washington, D.C.: Mar. 13, 
2009). 

[35] RDMA officials notified us that they received, in April 2011, a 
copy of the grantee's June 30, 2009, audit in response to their 
request.  

[36] For our review, we selected three grantees that, in total, were 
awarded approximately $17.3 million (about 66 percent of total aid to 
NGOs from the United States), and conducted a limited review of the 
internal controls of the disbursement process. We reviewed supporting 
documentation for selected grantee expenditures; our work was not 
designed to identify all questionable costs or to estimate their 
extent. 

[37] 22 C.F.R. § 226.27, incorporating by reference the allowable 
costs provisions promulgated in the Office of Management and Budget 
Circular No. A-122, Cost Principles for Non-Profit Organizations, 
codified at 2 C.F.R. part 230, Appendix B (Selected Items of Cost), ¶ 
51.E. (Foreign Travel Costs). 

[38] 22 C.F.R. § 226.27, incorporating by reference provisions in the 
Office of Management and Budget Circular No. A-122, Cost Principles 
for Non-Profit Organizations, codified at 2 C.F.R. § 230.25(b), which 
establishes a defined term for "prior approval." 

[39] USAID ADS 303.3.18(b).  

[40] See USAID regulations (22 C.F.R. § 226.71(g)), which implement 
Office of Management and Budget Circular No. A-110's guidance on grant 
administration. 

[41] USAID policy states that grantees must comply with prior approval 
requirements that are established in the grant agreement and that 
noncompliance with prior approval requirements generally causes USAID 
to deem the costs unallowable. See ADS 303.3.18(b) (Expenditures 
Requiring Prior Approval). 

[42] USAID policy states that when it is in the best interest of the 
federal government and funds are available, the agreement officer (AO) 
may review the facts and circumstances of the expenditure made without 
prior approval and approve the expense if the: (1) expenditures are 
otherwise allocable, allowable, and reasonable; (2) AO could have 
approved the expenditures at the time that they were made; (3) AO has 
the authority to approve the same type of expenditure at the time of 
the request for approval; (4) approval promotes efficient 
implementation of USAID's program; or (5) facts and circumstances of 
the expenditure show that the grantee was not grossly negligent and 
did not intend to circumvent USAID requirements. USAID policy further 
states that the grantee must submit a written request to the AO 
addressing the criteria set out above and the AO must make a written 
determination. See ADS 303.3.18(b) (Expenditures Requiring Prior 
Approval). 

[43] We did not evaluate the effectiveness of USAID grantees' 
monitoring activities for this report. 

[44] UNDP works in Burma under a mandate from its executive board that 
focuses activities at programs with grassroots level impact in the 
areas of basic health, training and education, HIV/AIDS, the 
environment, and food security. As such, UNDP in Burma does not work 
with the Burmese government or its technical line departments, in 
terms of capacity building, training, or transfer of financial 
resources. 

[45] USAID official told us the decision to require only semiannual 
reporting for some partners was directly related to the length of the 
program. For example, one agreement that stipulated semiannual 
reporting was a 1-year program, and the official did not want the 
grantee spending a disproportionate amount of time preparing progress 
reports as opposed to implementing the assistance.  

[46] USAID ADS 308.3.14, which references the standard provisions for 
cost-type grants to public international organizations, requires a UN- 
specific audit and records clause to be included in all awards to the 
UN. The grantee must agree to furnish the U.S. government with a final 
report on activities carried out under the grant, including accounting 
for grant funds in sufficient detail to enable USAID to liquidate the 
grant. The report must be submitted to the U.S. Mission to the UN in 
New York, New York, for forwarding to the USAID program office. 

[47] We reviewed 16 reports for lessons learned, and 15 of those same 
reports for experienced challenges. The reports were compiled by NGOs, 
UN agencies, a U.S. agency, and UN-led sector-based coordination 
groups, such as the Water, Sanitation, and Hygiene Cluster. (See 
appendix I for information on our scope and methodology.)  

[48] We did not assess the feasibility of implementing the lessons 
learned.  

[49] In commenting on a draft of this report, DOD officials disagreed 
with USAID's assertion that DOD had political motives, stating their 
response was in support of overall U.S. humanitarian objectives.  

[50] We reported recently on a similar challenge experienced in the 
broader context of international food assistance. We found that 
targeting of international food assistance can often be undermined at 
the recipient level by the cultural practice of sharing in local 
communities. See [hyperlink, http://www.gao.gov/products/GAO-11-491]. 

[51] For purposes of this report, we are defining UN obligations to 
include all assistance outlined in a signed agreement, such as a 
contract, grant, or cooperative agreement. We did not include data on 
UN pledges. 

[52] We reviewed 16 reports for lessons learned, and 15 of those same 
reports for experienced challenges. The report excluded from the 
latter is a planning document with limited discussion of actual 
response efforts. Nevertheless, the document contains a "lessons 
learned" section, which is informative with respect to lessons.  

[53] We contacted the authors of reports that did not include adequate 
detail on methodology and requested further information.  

[54] We reviewed 16 reports for lessons learned and 15 of those same 
reports for experienced challenges (see appendix I for further 
detail).  

[55] We did not attempt to assess the feasibility of the lessons we 
identified from the various reports.  

[56] The Government of Burma controls and routes all Internet and 
satellite connections. Also, the only wireless telephones that worked 
in the delta were Government of Burma issued phones that had limited 
range and were not always given to international NGOs and expatriates, 
according to one report.  

[57] Tents proved to be inappropriate in Burma's hot and humid 
climate.  

[58] USAID/OFDA officials noted that this notification requirement is 
not unusual in many Asian countries; however the requirement is often 
waived in disaster situations. A waiver was not granted in the case of 
Burma.  

[59] In commenting on a draft of this report, DOD officials disagreed 
with USAID's assertion that DOD had political motives, stating their 
response was in support of overall U.S. humanitarian objectives.  

[End of section]  

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