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Report to the Chairman, Subcommittee on Legislative, Committee on 
Appropriations, House of Representatives: 

March 2004: 

INTERNATIONAL EXCHANGE PROGRAMS: 

Open World Achieves Broad Participation; Enhanced Planning and 
Accountability Could Strengthen Program: 

GAO-04-436: 

GAO Highlights: 

Highlights of GAO-04-436, a report to the Chairman, Subcommittee on 
Legislative, Committee on Appropriations, House of Representatives 

Why GAO Did This Study: 

Congress created the Russian Leadership Program in 1999 as a pilot 
project to promote mutual understanding by exposing emerging Russian 
leaders to the American economic system and democratic institutions. In 
2003, Congress renamed the program the Open World Leadership Center, 
expanded its scope, and extended eligibility to a number of other 
countries. Because Open World had not been independently evaluated, GAO 
was asked to review (1) the program’s progress toward achieving its 
overall purpose and (2) whether it has appropriate financial management 
and accountability mechanisms in place. 

What GAO Found: 

Open World has exposed a large, broad, and diverse group of Russians to 
U.S. economic and political systems. As of December 2003, the program 
brought about 6,800 men and women from Russia’s seven geographic 
regions to more than 1,200 U.S. communities. Our analysis found that 
most delegates generally hold highly favorable views of their 
experience in the program. Many found ways to adapt what they learned 
to the Russian environment. Also, embassy officials said Open World 
complemented U.S. mission activities. However, because the program does 
not have formalized strategic and performance plans with measurable 
indicators, it is difficult to determine the extent to which it is 
targeting and reaching the right people and giving them experiences 
that result in improved mutual understanding. While Open World does 
survey delegates about their experiences, it has not yet conducted a 
full program evaluation to determine progress toward its long-term 
goals. Open World officials agree that such an evaluation is necessary 
and hope to conduct one in the near future.

Open World does not have the formalized financial management and 
accountability mechanisms that would provide Congress and other 
decision makers with timely and reliable information about its cost and 
performance. Now that Open World has permanent status and is expanding 
its scope, it is appropriate for the program to turn its attention to 
enhancing these mechanisms. Its procedures for reviewing program 
transactions and analyzing financial reports have neither been 
evaluated for their adequacy nor formalized in writing; and it does not 
prepare financial statements that can be subject to an independent 
audit. In addition, Open World does not have an audit or financial 
management advisory committee to advise the Board of Trustees on 
financial management, accountability, and internal control issues. 
Finally, Open World is not disclosing the value of services contributed 
by U.S. volunteers who support the program—information that generally 
accepted accounting principles encourage entities to disclose, if 
practicable.

What GAO Recommends: 

GAO recommends that Open World establish strategic and performance 
plans, strengthen assessing and reporting on program performance, and 
improve its financial management and accountability mechanisms. Open 
World generally concurred with 7 of our 8 recommendations and is 
proceeding to implement some of them. Open World took issue, however, 
with our emphasis on performance measures, noting that its success is 
only measurable in the medium or long term. GAO believes that measuring 
incremental progress—a capability that will become more important as 
Open World expands—is critical to ensuring the program is on course, 
and there are valid methodologies for doing so.

www.gao.gov/cgi-bin/getrpt?GAO-04-436.

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Jess T. Ford at (202) 
512-4268 or fordj@gao.gov.

[End of section]

Contents: 

Letter: 

Results in Brief: 

Background: 

Program Has Reached a Large, Diverse Audience, but Measuring 
Improvements in Mutual Understanding Is Difficult: 

Open World Lacks Formalized Financial Management and Accountability 
Mechanisms: 

Conclusions: 

Recommendations: 

Agency Comments and Our Evaluation: 

Appendixes: 

Appendix I: Scope and Methodology: 

Appendix II: National Host Organizations: 

Appendix III: Selected International Exchange Programs for Russia and 
the Newly Independent States That Are Administered by the State 
Department: 

Appendix IV: Selected Independent Entities Funded through the Executive 
Branch: 

Appendix V: Comments from the Open World Leadership Center: 

Appendix VI: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Staff Acknowledgments: 

Figures: 

Figure 1: Key Events in the Development of Open World: 

Figure 2: Program Operations and Activities: 

Figure 3: Total Expenditures Reported by Open World, Fiscal Years 1999 
to 2003: 

Figure 4: Delegates in the Civic Program by Theme, 2000 to 2003: 

Figure 5: Representation of Delegates from Each Geographic Region in 
Russia and the Number That Visited Each of the U.S. States (1999 to 
2003): 

Figure 6: Delegates by Age (2003): 

Figure 7: National Host Organizations (2003): 

Figure 8: Selected State Department-Administered Exchange Programs for 
Russia and the Newly Independent States: 

Figure 9: Statutory Authorities and Governing Structures of Selected 
Independent Entities Funded through the Executive Branch: 

Letter March 17, 2004: 

The Honorable Jack Kingston: 
Chairman, Subcommittee on Legislative: 
Committee on Appropriations: 
House of Representatives: 

Dear Mr. Chairman: 

Congress created the Russian Leadership Program as a pilot project 
within the Library of Congress in 1999[Footnote 1] and, about 2 years 
later, established it as an independent entity on a permanent 
basis.[Footnote 2] The program's founders envisioned it as a way to 
promote mutual understanding between the United States and Russia to 
positively influence Russia's development following the collapse of the 
former Soviet Union. The program aimed to expose emerging political 
leaders at all levels of government to the American economic system and 
democratic institutions through visits to communities across the United 
States, allowing participants to see how Americans from all walks of 
life conduct their business and professions and their private, social, 
and cultural lives. The idea was to develop a cadre of people committed 
to democratic and free market principles by reaching out to emerging 
leaders, similar to the way that young German leaders were targeted by 
the Marshall Plan after World War II. In 2003, Congress changed the 
program's name to the Open World Leadership Center,[Footnote 3] 
expanded its scope to a cultural leaders program for Russia, and 
extended eligibility to the remaining 11 countries of the Newly 
Independent States and 3 in the Baltic states.[Footnote 4] Congress has 
appropriated about $64.4 million for the program since it was created.

In light of this expansion and because the Open World Leadership Center 
has not been independently evaluated since its inception, you asked GAO 
to review (1) what progress Open World has made toward achieving its 
overall purpose, and (2) whether the program has appropriate financial 
management and accountability mechanisms in place. Also, we are 
providing information for illustrative purposes on the statutory 
authority and governing structures of several entities that, like Open 
World, are independent but unlike Open World, are funded through the 
executive branch (see app. IV).

To address our objectives, we reviewed Open World's organizational 
structure, operational policies and procedures, program documentation, 
and legislative history. We also observed selected program activities, 
including the vetting process and a predeparture orientation in Moscow, 
as well as program orientation and other events in Washington, D.C. In 
addition, we analyzed the results of program surveys that participants 
completed from 2000 to 2003 and supplemented this analysis with 
interviews of 56 program alumni during fieldwork in Moscow, St. 
Petersburg, Petrozavodsk, and Samara, Russia. We assessed program and 
survey data that we obtained from Open World for accuracy, and we 
determined that the data were sufficiently reliable for the purposes of 
our study. We also met with Open World's Chairman of the Board of 
Trustees, Executive Director, and other staff and management; State 
Department officials; major contractors, including the American 
Councils for International Education; and representatives of national 
host organizations. In Russia and Ukraine, we met with the U.S. 
ambassadors, U.S. embassy officials, contractors, and representatives 
of nominating organizations. With regard to Open World's financial 
management and accountability mechanisms, we discussed the program's 
related processes with Open World officials and reviewed supporting 
documentation to gain an understanding of the operation of these 
processes. We did not conduct an audit of Open World's financial 
reports or individual transactions. (For a detailed discussion of our 
scope and methodology, see app. I.): 

Results in Brief: 

Since the program's launch in 1999, Open World has exposed a large, 
broad, and diverse group of Russians to U.S. economic and political 
systems, yet it is difficult to gauge Open World's progress in 
improving mutual understanding because the program does not have a 
comprehensive and systematic strategy by which to measure such 
progress. As of December 2003, Open World brought 6,800 men and women 
from seven geographic regions in Russia to more than 1,200 communities 
throughout the United States.[Footnote 5] Based on our analysis of 
responses to surveys conducted by Open World, as well as our interviews 
with Open World alumni, participants generally hold very favorable 
views of their experience in the program and nearly all found it 
useful. Many of them offered concrete examples of actions they have 
taken to adapt what they learned from their U.S. visits to the Russian 
environment. Furthermore, ambassadors and embassy officials said that 
Open World complements U.S. mission activities and enhances outreach 
efforts and noted that congressional sponsorship of Open World lends a 
certain cachet to the program, allowing it to attract emerging leaders 
who otherwise might not participate. However, because the program does 
not have formalized strategic and performance plans with systematic 
performance measurement indicators, it is difficult to determine the 
extent to which it is targeting and reaching the right people and 
providing participants with the right types of experiences, including 
those that result in improved mutual understanding. Open World does 
survey all participants on their experiences in and immediate reactions 
to the exchange program, but it does not systematically compare 
participant attitudes and knowledge both before and after their 
participation in the program. Open World staff told us they have begun 
redesigning the surveys to enhance their usefulness as an evaluative 
tool. Open World has also conducted several alumni surveys. However, 
Open World has not yet conducted a full program evaluation to determine 
progress toward its long-term objectives. Open World officials agree 
that such an evaluation is necessary and hope to conduct one in the 
near future.

Open World does not have the formalized financial management and 
accountability mechanisms that would provide Congress and other 
decision makers with the kind of cost and performance information that 
is especially important for a permanent, expanding program. Now that 
Open World has permanent status and is expanding its scope, it is 
appropriate for the program to turn its attention to enhancing its 
financial management and accountability mechanisms. Open World has 
established procedures for reviewing and approving program transactions 
and for analyzing financial reports, but these procedures have not been 
evaluated for their adequacy or been formalized in written, management-
approved policies that Open World staff are required to follow. The 
lack of formal policies, particularly in the grants management area, 
may leave some critical elements of grantee accountability inadequately 
addressed. Although Open World prepares financial information for its 
Board of Trustees, Open World does not prepare financial statements 
and, to date, has not subjected its finances to an independent audit, 
as required by the board's bylaws. However, program officials plan to 
prepare financial statements for Open World and initiate an audit by 
the summer of 2004. In addition, Open World's governance structure does 
not include an audit committee or financial management advisory 
committee to provide the Board of Trustees and management with 
independent advice on financial management, accountability, and 
internal control issues. Finally, while Open World receives contributed 
services of significant value from U.S. volunteers who support the 
program, it is not collecting and disclosing data on the value of these 
services--information that generally accepted accounting principles 
encourage entities to disclose, if practicable.

This report makes recommendations to the Chairman of Open World's Board 
of Trustees to establish strategic and performance plans that 
articulate Open World's direction and set measurable goals and 
indicators, strengthen mechanisms for collecting data and reporting on 
program performance, and improve its financial management and 
accountability mechanisms. In commenting on the official draft of this 
report, Open World generally concurred with our observations and 
conclusions. Open World also generally agreed with 7 of our 8 
recommendations and said that it is proceeding with plans to implement 
some of them. However, Open World took issue with the report's emphasis 
on measurable goals and indicators of success, noting that the results 
of exchange programs can only be validated in the medium or long term. 
We believe that measuring incremental progress is critical to ensuring 
that the program's resources and activities are being optimally 
directed toward its ultimate aims, and we note that there are a number 
of valid methodologies for doing so. This capability will become even 
more important as Open World further expands. We have reprinted Open 
World's comments in appendix V.

Background: 

While Congress originally envisioned Open World as a vehicle to bring 
Russia's emerging political leaders to the United States, Open World 
has recently been authorized to expand the scope of its program. As 
shown in fig. 1, Open World has launched pilot programs in Lithuania, 
Ukraine, and Uzbekistan, with the first groups of about 50 participants 
from each country visiting the United States between December 2003 and 
February 2004. While Congress also made 11 other countries in the Newly 
Independent States and Baltic states eligible for funding, as of 
February 2004, there were no plans to extend the program to these 
countries.

Figure 1: Key Events in the Development of Open World: 

[See PDF for image]

[End of figure]

Open World is governed by a Board of Trustees[Footnote 6] and works 
with numerous partners to carry out the program. U.S. embassies play a 
key role by nominating individuals for the program, vetting applicants 
for final selection, and processing visas for participants.[Footnote 7] 
In addition, Open World has contracts with several organizations, such 
as the American Councils for International Education,[Footnote 8] which 
provides logistical support, and Project Harmony,[Footnote 9] which 
coordinates alumni activities,[Footnote 10] along with a network of 26 
Open World alumni coordinators throughout Russia. Grants are awarded to 
U.S. national host organizations that, in conjunction with local 
partners, develop programs for participants and arrange home stays. 
(See app. II for a list of national host organizations in 2003.) The 
following chart illustrates Open World's program operations and 
activities, as well as the entities involved in carrying out the 
program.

Figure 2: Program Operations and Activities: 

[See PDF for image]

[A] Nominating organizations include, for example, the Open Society 
Institute, the American Bar Association's Central European and Eurasian 
Law Initiative, and many others.

[B] For a list of national host organizations, see app. II.

[End of figure]

Funding and Support: 

Congress appropriates an annual amount for Open World, which has ranged 
from $8 million in fiscal year 2002 to $13.5 million in fiscal year 
2004.[Footnote 11] In addition, Open World is authorized to seek and 
accept private donations and reports that it has received current gifts 
and pledges of about $2 million.[Footnote 12] Figure 3 shows the 
program's total expenditures (unaudited) for fiscal years 1999-2003 and 
expenditures by major category during the same period. Based on data 
for the program's expenditures and the number of participants for 2003 
provided by Open World, we estimated the average cost per participant, 
including facilitators, to be about $6,200.

Figure 3: Total Expenditures Reported by Open World, Fiscal Years 1999 
to 2003: 

[See PDF for image]

[A] Fiscal year 2001 was a transition year for the program as it 
reorganized into the Open World Leadership Center.

[End of figure]

When the program was established as an independent entity in December 
2000, Congress provided the program with additional authority and 
support, including the authority to receive donations and appoint an 
executive director and to establish a trust fund in the Department of 
the Treasury to be credited with appropriations and donations approved 
by the program. In addition, Congress authorized the Library of 
Congress to provide the program with support services, including the 
ability to disburse appropriated funds; pay the program's personnel; 
and provide administrative, legal, financial management, and other 
services. The Library was also authorized to collect the full costs of 
the services from the program's trust fund. To formalize this 
arrangement, the Library and Open World entered into an interagency 
agreement. In addition to providing for support services, the agreement 
enables Open World to use Library personnel to conduct the program and 
the Library to recover the related salary and benefit costs of such 
personnel. According to Open World officials, the Library currently has 
14 established positions[Footnote 13] assigned to assist the center in 
conducting its program.

As provided for in the interagency agreement, the Library of Congress 
provides financial management services to the Open World Leadership 
Center. Open World officials review and approve financial management 
documents before submitting them to the Library of Congress for 
processing. Much of Open World's in-house financial management 
activities are performed by a financial management consultant who makes 
recommendations to both the Executive Director and the Program 
Administrator regarding approval of program disbursements.[Footnote 
14]

Types of Exchanges: 

In an effort to reach emerging leaders in various sectors, the program 
for Russia focuses on three types of exchanges--parliamentary, civic, 
and cultural. Parliamentary visits match members of Russia's two houses 
of parliament--the Duma (the lower house) and the Federation Council 
(the upper house)--with host U.S. senators, representatives, and 
governors. The civic program in 2003 featured eight themes: economic 
development, education reform, environment, federalism, health, rule of 
law, women as leaders, and youth issues (see fig. 4).[Footnote 15] It 
targets, among others, government officials and civic leaders at all 
levels, with an emphasis on regional and local levels, and other 
community leaders. The new cultural program for Russia is designed 
specifically for cultural leaders, including museum professionals, 
visual and performing artists and administrators, and librarians.

Figure 4: Delegates in the Civic Program by Theme, 2000 to 2003: 

[See PDF for image]

[End of figure]

The typical exchange program runs for 10 days, including a 2-day 
orientation program upon arrival in the United States. Delegations 
usually consist of five people--four delegates and one paid facilitator 
who acts as a "bridge" between the Russian delegates and their American 
hosts.[Footnote 16] Most participants stay in private homes of American 
host volunteers for some or most of their local visit--a special 
feature of the program.[Footnote 17] In addition, unlike some other 
U.S. exchange programs, English is not a requirement for the Open World 
program.[Footnote 18] As a result, Open World has been able to send 
participants from each region of Russia to the United States--most for 
the first time.[Footnote 19]

Program Has Reached a Large, Diverse Audience, but Measuring 
Improvements in Mutual Understanding Is Difficult: 

As of December 2003, Open World reported bringing 6,800 Russian 
delegates from seven geographic regions to visit over 1,200 communities 
in all U.S. states. The percentage of delegates from each region is 
roughly comparable to the proportion of the Russian population that 
each region represents. Figure 5 illustrates the representation of 
delegates, in terms of the number and percentage, from each region in 
Russia and the number of delegates that traveled to each state within 
the United States between 1999 and 2003.

Figure 5: Representation of Delegates from Each Geographic Region in 
Russia and the Number That Visited Each of the U.S. States (1999 to 
2003): 

[See PDF for image]

[A] Calculations of each region's population as a percentage of total 
Russian population were based on population data published by Gokomstat 
of Russia.

[End of figure]

Fifty-eight percent of the delegates in 2003 were women. The average 
age of Open World delegates in 2003 was 39 years. As shown in figure 6, 
77 percent of the delegates in 2003 were 45 years of age or younger.

Figure 6: Delegates by Age (2003): 

[See PDF for image]

[End of figure]

Delegates come from a wide variety of academic and professional 
backgrounds. Ninety-four percent of 2003 delegates reported having 
completed higher education, 12 percent had the equivalent of a master's 
degree, and 1 percent had the equivalent of a doctorate. Their degrees 
span a wide spectrum, ranging from the fields of law and medicine to 
agriculture and journalism. Fifty-eight percent of the delegates 
reported that they had authored publications. Professions varied from 
Duma members and judges to leaders of nongovernmental organizations. 
Twenty percent of the delegates reported they were elected officials. 
Open World records as of February 2004 showed that 140 members of the 
Duma and 20 members of the Federation Council--representing about 31 
percent and 11 percent of the current Duma and Federation Council, 
respectively--have traveled to the United States through Open World. 
Also, 577 Russian judges have participated in the program. In addition, 
Open World officials noted that Russia's diverse ethnic groups were 
substantially represented among program participants.

Stakeholders Generally Cite Positive Impacts of Program: 

Based on our analysis of responses to participant surveys conducted by 
Open World, as well as our interviews with Open World alumni in Russia, 
delegates generally hold highly favorable views of their experience in 
the program. Almost all of the delegates reported that the program was 
useful and had partially or completely met their expectations. They 
also reported a greater willingness to cooperate with Americans as a 
result of the exchange. While overall comments were positive, some 
delegates cited not having enough time to establish business contacts.

Delegates Give Open World High Marks Overall: 

Our analysis of Open World questionnaires that surveyed delegates for 
their experiences in and immediate reactions to the program, and our 
own interviews of past delegates, showed that Open World program alumni 
hold highly favorable views of their exchange experience. Almost all of 
them reported the program was either probably or definitely useful to 
them.

Many alumni with whom we met offered concrete examples of actions they 
had taken to implement what they learned from their U.S. visits in the 
context of the Russian environment.[Footnote 20] For example, several 
members of the Russian Ministry of Internal Affairs in Moscow used 
information they gained from their visits with State Department 
officials and nongovernmental organizations to draft legislation 
prohibiting the trafficking of women. The Chairman of the Judicial 
Council in Moscow and several judges at the Supreme Court in 
Petrozavodsk told us that they established court management structures 
modeled after U.S. courts and developed a judicial code of ethics in 
consultation with American judges. Librarians in Petrozavodsk told us 
that, after returning from the United States, they helped to establish 
a library association in the Republic of Karelia that is similar to the 
Russian Library Association, a counterpart to the American Library 
Association. Another alumnus joined the Rotary Club in Moscow after his 
Open World experience and was recently elected the president of his 
chapter. One woman said that upon learning about fund-raising efforts 
and philanthropy of private organizations in the United States, she 
began soliciting donations for her nongovernmental organization from 
private businesses in Russia.

In addition, almost all alumni said that since the exchange, they had 
contacted other Open World alumni in other regions within Russia. Many 
of them had been invited to and had attended alumni conferences or 
other alumni events such as computer training seminars and professional 
development workshops. In addition, over half the alumni we interviewed 
had used the Internet to view Open World's Web site or keep in touch 
with contacts made during their exchange experience. The American 
Corners[Footnote 21] facilities that we visited in Petrozavodsk and 
Samara, whose directors had participated in Open World, have become a 
hub for alumni who use the facilities' computers for Internet access 
and other services.

The majority of the alumni we interviewed said that their views of the 
United States changed in some way after the exchange. For example, one 
alumnus said she was unable to accurately visualize the United States 
before participating in the program and had developed the impression 
from Cold War propaganda that Americans had few opportunities and 
little hope for the future. Some alumni expected Americans to be 
hostile and were surprised by their friendliness.

Open World surveys showed that, for the most part, delegates reported 
that the program improved their understanding of American institutions 
to some degree. For example, in 2003, a large amount of delegates (74 
percent) believed that their visit improved their understanding of 
ethnic and cultural diversity in the United States, as well as their 
understanding of democracy (74 percent), role of Congress (68 percent), 
higher education system (70 percent), legal system (67 percent), 
freedom of speech (62 percent), market economy (50 percent), and role 
of religious organizations (52 percent). For example, among the past 
delegates we interviewed, one was impressed with the religious 
diversity in America when he observed Amish communities in 
Pennsylvania. Another delegate was impressed by the large Russian 
immigrant population in Brighton Beach, New York. Many delegates were 
surprised by how open and transparent American government institutions 
are to the citizenry, citing, for example, the openness of and public 
access to city council meetings, congressional sessions, courtrooms, 
and public hearings.

According to Open World's 2003 surveys, 89 percent of delegates 
reported they probably or definitely expect a positive long-term impact 
as a result of their visit to the United States. For example, 88 
percent of delegates reported that, as a result of the exchange, their 
readiness to cooperate with American leaders had risen. Eighty-six 
percent also reported that their trip improved relations between 
Russian and U.S. citizens. Fifty-four percent indicated that they 
extended an invitation to their American counterparts to visit them in 
Russia during the next year. Seventy-six percent said they plan to stay 
in contact with persons they meet in the United States.

Some Disappointment about Contacts: 

While overall comments in Open World's surveys were positive,[Footnote 
22] some delegates cited areas that could be improved. For example, 34 
percent of delegates in 2003 indicated they had not had sufficient time 
to establish individual business contacts with their professional 
counterparts. In addition, 34 percent indicated they had not had 
sufficient time for individual consultations on professional issues. 
Although the majority of the alumni we interviewed said they were 
satisfied with the contacts they made during the program, a few of them 
wished they had met with higher-level officials. For example, a deputy 
chief at the Moscow State Duma reported Open World does not facilitate 
enough contacts with high-level decision makers. Another said that 
because he did not meet with his American counterparts, he had the 
impression they did not have an interest in meeting Russians. Others 
said the program was simply too short to meet with everyone they had 
hoped. Nonetheless, Open World's surveys indicated that 56 percent of 
alumni felt that a 2-week program would be optimal. Open World 
officials said they considered 10 days as a reasonable amount of time 
to expect participants to be away from their jobs.

Open World Seen as Valuable Tool to Enhance, Complement U.S. Mission 
Activities: 

Ambassadors and embassy officials with whom we met noted that Open 
World complements U.S. mission activities and enhances outreach 
efforts--citing, in particular, the program's alumni as a valuable 
resource. Although the U.S. mission offers several State Department-
administered exchange programs, none of these individual programs 
brings Russians to the United States on the same scale as Open World, 
particularly from the remote regions of the country.[Footnote 23] (See 
app. III for a list of selected State exchange programs.) According to 
U.S. mission officials in Russia, including those at the consulate in 
St. Petersburg, it is at locations outside of the major cities that 
Open World has an advantage and can best target potential delegates for 
the program who have not yet traveled to the United States on other 
U.S. exchange programs. In fact, when visiting various regions within 
the country, embassy officials find it especially useful to meet with 
Open World alumni, many of whom are in leadership positions. For 
example, while visiting Volgograd, the U.S. ambassador met with Open 
World alumni who shared some examples of direct results of their 
exchange experiences. One alumnus started several youth programs in his 
district, while another started public information programs on healthy 
lifestyles directed at Volgograd youth.

In addition to enhancing outreach efforts, State officials in 
Washington, D.C., and U.S. embassy officials with whom we spoke in 
Russia said Open World complements other U.S. mission activities. 
Similarly, Open World is able to build on relationships fostered by 
other U.S.-Russia assistance activities to further its own program. For 
example, the U.S. Agency for International Development (USAID) worked 
through Open World to send more Russian judges to the United States 
than it could have funded on its own, as part of the Vermont-Karelia 
Project. This project was initially established to bring 
representatives of the judiciary of Karelia, with which the judiciary 
of Vermont has a long-standing working relationship, to meet their 
counterparts and learn about the U.S. judicial system. The program has 
since grown to include an additional six Russian regions and six U.S. 
states and is now called the Russian-American Rule of Law Consortium, 
of which the Vermont-Karelia Project is a part. Also, the State 
Department targets Open World alumni for follow-up technical assistance 
and training upon their return to Russia. Thus, although Open World 
does not bring Americans to Russia, under State or USAID sponsorship, 
some American judges who had hosted Open World delegates later visited 
Russia to provide technical assistance and training.

Embassy officials and State officials in Washington, D.C., noted that, 
although there are other independent entities within the executive 
branch that carry out international activities such as exchange 
programs, Open World is the only exchange program within the 
legislative branch. (For illustrative purposes, app. IV provides 
information on some independent entities funded through the executive 
branch.) The officials told us that the program's independent status 
and current placement within the legislative branch offered some 
advantages, noting that congressional sponsorship of Open World lends a 
certain cachet to the program and allows it to attract emerging leaders 
who otherwise might not participate. The officials also said that 
congressional involvement was important to sustaining the support of 
Congress and other decision makers.

Program Has No Formalized Strategy by which to Measure Progress: 

Although Open World does deliberate and decide on programmatic themes 
and target audiences that it would like to emphasize each coming year, 
it does not have formalized strategic and performance plans that define 
success, what it will take to succeed, and how it should be 
measured.[Footnote 24] Without a framework that identifies long-term 
goals, explicitly links them to U.S. mission priorities and plans 
overseas, and systematically identifies the incremental outcomes 
expected at each step, along with measurable indicators of such 
progress, it is difficult to gauge whether Open World is targeting and 
reaching the right people, whether it is providing delegates with the 
right types of experiences, and whether these experiences are resulting 
in improved mutual understanding. This also makes it more difficult for 
Open World to adjust its course of action, when necessary, and to 
determine whether it is using its resources in the most efficient and 
effective manner. Also, although Open World surveys all delegates on 
their experiences in and immediate reactions to the exchange program, 
it does not systematically compare delegate attitudes and knowledge 
both before and after their participation in the program. Open World 
has also administered several different alumni surveys; however, these 
surveys are of limited value in gauging improvements in mutual 
understanding.

Open World does provide nominating organizations with general criteria 
for determining a person's eligibility for the program.[Footnote 25] To 
further screen nominees, the vetting committee considers such factors 
as a person's active involvement in politics, the community, or 
teaching; the number of publications issued; the number of people the 
person supervises; whether the person is from outside the capital; and 
any prior visits to the United States to make subjective judgments 
about the applicant's potential to influence change and apply the 
experience gained from participating in the program. Nevertheless, it 
is difficult to determine whether these are the optimal criteria for 
any given year, or whether they are being met, without explicit and 
measurable performance targets that are designed and sequenced to mesh 
with a larger strategy for achieving Open World's long-term goals.

Similarly, the lack of a strategy makes it difficult to assess whether 
delegates are gaining the desired experiences from their involvement in 
the program. We found varied responses among the past alumni we 
interviewed regarding what would constitute an optimal mix of 
experiences. Some favored a more focused approach involving training 
that is narrowly targeted toward specific professional needs. Others 
said that a broad exposure to the United States and its institutions is 
all that can be expected during a 10-day visit. One program nominator 
said that the program should consist of two separate trips: On the 
first, delegates would simply gain an insight into the American 
political and economic systems, while the second trip would be more 
focused on specific professional experiences. Without an explicit 
strategy that links particular target groups with specific program 
content, approaches, and timing, it is difficult to determine whether 
the experiences that delegates are gaining are optimal at any given 
time.

Open World Surveys Are of Limited Value in Measuring Progress: 

Open World conducts surveys that attempt to capture delegates' 
experiences in and immediate reactions to the exchange program, 
including their impressions about whether their attitudes had changed 
as a result of their participation in the program. However, it does not 
systematically compare delegate attitudes and knowledge both prior to 
and following their participation. Open World has also administered 
alumni surveys; however, these surveys were not designed to determine 
the long-term impact of the program, including whether improved mutual 
understanding has occurred. While measuring the impact of exchange 
programs is difficult because the full effects of such programs may not 
be known for years, Open World officials agree that such an evaluation 
is necessary and hope to conduct one in the near future.

Program Surveys: 

American Councils conducts three types of surveys for the Open World 
program--application, predeparture, and postprogram. The application 
survey primarily contains descriptive information regarding the 
applicant, such as place of residence and occupation. The predeparture 
survey, filled out just before the participant leaves for the United 
States, contains additional descriptive information, including the 
participant's age, ethnicity, educational profile, employment, and 
views on democratic values. The postprogram survey, which is filled out 
immediately after the exchange program, contains information on 
delegates' exchange experiences and their impressions of how the 
program affected them. These three surveys had very high response 
rates, all exceeding 90 percent.

Overall, Open World surveys do an adequate job of measuring delegates' 
experiences and immediate reactions to the exchange program. However, 
the surveys miss the opportunity to measure whether a delegate's 
attitude toward the United States and its institutions changed as a 
direct result of participation in the program by not measuring pre-and 
postparticipation attitudes using parallel questions.[Footnote 26] The 
postprogram survey asks retrospective questions about whether 
delegates' attitudes changed and whether their expectations were met. 
From a methodological standpoint, this approach is useful but not as 
rigorous as measuring attitudes and expectations before and after the 
program because it relies on the delegates' accurately recalling how 
they felt before the exchange program. Open World staff told us they 
had not regularly analyzed responses to the surveys for evaluative or 
management purposes; however, they have recently embarked on an effort 
to redesign the surveys to use them for these purposes.

Alumni Surveys: 

Open World alumni have been surveyed, but these surveys were primarily 
designed to aid in program management, not to measure the long-term 
impact of the program. In 2000, American Councils conducted a survey to 
gain constructive feedback on what 1999 alumni found useful about the 
program and to obtain their opinions on what kinds of people should be 
considered as future program candidates. This survey was distributed 
through alumni networks and had a response rate of less than 30 
percent--too low to be representative of total delegates. In 2002, 
American Councils in Moscow administered a survey to elicit ideas from 
alumni on how the program could be improved and to prepare them for 
upcoming alumni activities. However, Open World officials reported that 
the survey was not helpful because the answers were too general or 
vague and contained few suggestions for cost-effective improvement. 
Open World officials informed us they conducted an alumni questionnaire 
in December 2003 to assist Open World in planning future activities for 
alumni, but as of January 2004, the results had not been analyzed. Open 
World and American Councils staff acknowledged that a full program 
evaluation of alumni to determine the program's progress over the long 
term was necessary and that they hope to conduct such an evaluation in 
the future.

Open World Lacks Formalized Financial Management and Accountability 
Mechanisms: 

Open World does not have the formalized financial management and 
accountability mechanisms--formalized policies, audited financial 
statements, an audit or financial management advisory committee, or 
full program data--that would provide Congress and other decision 
makers with the timely, reliable cost and performance information that 
is especially important for a permanent, expanding program. Although 
Open World has established procedures for reviewing and approving 
transactions and analyzing financial reports, these procedures have not 
been formalized in written policies. For example, Open World has 
procedures for reviewing budget submissions that accompany grant 
applications, for awarding grants, and for reviewing grantee 
expenditures. It also has procedures for analyzing reports on program 
payroll and outstanding obligations. However, it has not evaluated 
whether these procedures provide adequate internal control or codified 
them into management-approved policies that Open World staff are 
required to follow. Documentation of policies and procedures covering 
an entity's internal control structure and all significant transactions 
and events is fundamental to ensuring that all staff understand and 
consistently apply procedures, while management assessment of these 
procedures is an essential component of internal control. Management 
evaluation of controls, along with approval and documentation of 
procedures, is particularly important when financial management 
services are being performed by a contractor. According to federal 
government standards for internal control,[Footnote 27] written 
policies and related operating procedures should address key control 
activities such as approvals, verifications, reconciliations, and the 
creation and maintenance of related records that provide evidence and 
appropriate documentation of these activities.

The lack of formal policies, particularly in the grants management 
area, may leave some critical elements of grantee accountability 
inadequately addressed. For example, as long as the total grant amount 
is not exceeded, Open World allows up to a 10 percent variance between 
the actual and budgeted amounts by budget category on an approved 
grant, but it does not require grantees to report such variances as 
part of their reporting of grant expenses; it also does not have 
follow-up procedures to deal with variances of more than 10 percent. 
Also, according to Open World officials, grantees are required to 
submit receipts or other evidence for all grant expenses unless Open 
World agrees, as part of the grant agreement, to permit a grantee to 
submit the results of its "single audit" conducted pursuant to OMB 
Circular A-133.[Footnote 28] However, the officials acknowledged that 
Open World does not have a formal policy that clearly defines the 
conditions under which it will accept the results of a single audit in 
lieu of a grantee's submission of receipts or other evidence for all 
grant expenses. For example, in 2003, Open World began requiring, as a 
condition for accepting the results of a single audit, that an audit's 
coverage include a "significant sample" of the costs incurred under the 
Open World grant. However, Open World has neither defined what audit 
coverage represents a "significant sample" nor implemented procedures 
to ensure that the requirement has been followed. According to program 
officials, Open World has permitted only a few grantees to submit 
single audit results in lieu of submitting receipts and other evidence 
of grant expenses. However, as the program expands, it may become 
difficult to manage the detailed review of supporting documentation for 
grantee expenditures; thus, Open World's use of audit reports as an 
oversight mechanism could increase.

Financial Statements Are Not Being Prepared and Audited: 

Open World obtains detailed accounting reports for the program from the 
Library of Congress. In addition, Open World has prepared for the Board 
of Trustees various schedules that separately present the program's 
planned budget and actual obligations. However, Open World does not 
currently prepare summary financial statements that are subjected to 
independent audit and used by the board in its oversight. Program 
officials plan to prepare financial statements for Open World and 
initiate an audit by the summer of 2004. As discussed in our executive 
guide on best practices in financial management,[Footnote 29] a solid 
foundation of control and accountability requires a system of checks 
and balances that provides reasonable assurance that the entity's 
transactions are appropriately recorded and reported, its assets 
protected, its established policies followed, and its resources used 
economically and efficiently for the purposes intended. This foundation 
is built and maintained largely through the discipline of routinely 
preparing periodic financial statements and subjecting them annually to 
an independent audit. In fact, the April 2003 bylaws of the Open World 
Board of Trustees require an annual audited financial statement for the 
Open World Leadership Center Fund. This requirement further underscores 
the importance of Open World developing formal financial management 
policies. The auditor would use the financial management policies and 
any related operating procedures to gain an understanding of and 
evaluate Open World's internal control environment.

Governance Structure Does Not Include an Audit Committee: 

Open World's governance structure does not include either an audit 
committee or financial management advisory committee to provide the 
Board of Trustees and management with independent advice on financial 
management, accountability, and internal control issues. Such a 
committee is a required element of the governance structure of publicly 
owned companies and a best practice for other types of organizations. 
The audit committee of a publicly owned company plays a particularly 
important role in assuring fair presentation and appropriate 
accountability in connection with financial reporting and related 
external audits and general oversight of an organization's internal 
control. In the federal government, audit committees and advisory 
committees are intended to protect the public interest by promoting and 
facilitating effective accountability and financial management. This is 
accomplished by providing management with independent, objective, and 
experienced advice and counsel, including oversight of audit and 
internal control issues. In the case of Open World, use of an audit or 
financial management advisory committee could facilitate the process of 
formalizing financial management policies and procedures, including 
related internal controls, and preparing for the program's first 
financial statement audit.

Value of Contributed Services Is Not Disclosed: 

Open World is not collecting data on the significant volume and value 
of contributed services from U.S. volunteers. According to Open World, 
83 percent of program participants in 2003 stayed in the homes of 
American host volunteers, a contribution that considerably reduces 
program expenditures associated with housing participants during their 
stay. As a result, the amount expended by Open World does not reflect 
the full scope and cost of operating the program. The usefulness of 
information on the nature and extent of similar contributed services is 
recognized under generally accepted accounting principles, which 
encourage entities to disclose, if practicable, the fair value of 
contributed services received.[Footnote 30] Open World could obtain 
data, by geographic area, on the number of program participants that 
stay in the homes of American host volunteers and then apply standard 
per diem rates to estimate the value of meals and lodging provided by 
host volunteers. Collecting and disclosing this information would 
provide management, the Board of Trustees, and Congress with more 
complete information about the full scope of the program.

Conclusions: 

Since its launch in 1999, Open World has organized large numbers of 
diverse delegations from every region in Russia and brought them to the 
United States. Most delegates viewed their program experiences very 
favorably, and many say they have taken concrete actions to adapt what 
they learned from their U.S. visits to the Russian environment. Also, 
U.S. ambassadors and embassy officials consider Open World a valuable 
tool to complement U.S. mission activities and outreach efforts and 
noted that congressional sponsorship of Open World lends a certain 
cachet to the program, allowing it to attract emerging leaders who 
otherwise might not participate. However, because the program does not 
have formalized strategic and performance plans with systematic 
performance measurement indicators, it is difficult to determine the 
extent to which Open World is targeting and reaching the right people 
and providing delegates with the right types of experiences, including 
those that result in improved mutual understanding. Also, Open World 
lacks the formalized financial management and accountability mechanisms 
that would help provide decision makers with useful, relevant, timely, 
and reliable information. Open World began as a pilot project and was 
not established as an independent entity until 2001. Now that Open 
World has permanent status and is expanding its scope, it is 
appropriate for the program to turn its attention to enhancing its 
strategic and performance planning and financial management and 
accountability mechanisms. Such mechanisms are particularly important 
to ensure that Open World's efforts and the related activities of 
embassies, contractors, grantees, and nominating organizations are 
systematically integrated and managed to achieve measurable progress 
toward Open World's fundamental goals. Strengthening these mechanisms 
will become even more important as the program further expands.

Recommendations: 

To enhance Open World's management, particularly in light of the 
program's expansion, this report makes recommendations to the Chairman 
of the Board of Trustees of the Open World Leadership Center to (1) 
establish strategic and performance plans that articulate Open World's 
direction and set measurable goals and indicators; (2) strengthen the 
program's mechanisms for collecting data and reporting on program 
performance; (3) assess whether the current procedures provide adequate 
internal control over expenditures and grantee oversight; (4) develop 
and implement written, management-approved policies, procedures, and 
internal controls for Open World's resources and expenditures; (5) 
develop and implement controls and requirements for grantees to provide 
accountability for grant expenditures to ensure that funds are spent 
for their intended purposes; (6) develop and implement plans for 
routinely preparing financial statements that are annually subject to 
an independent audit; (7) consider establishing an audit committee or 
financial management advisory committee to provide the Board of 
Trustees and management with independent advice on financial 
management, accountability, and internal control issues; and (8) 
estimate and disclose the value of contributed services from U.S. 
volunteers to better reflect the total scope of the program.

Agency Comments and Our Evaluation: 

Open World provided written comments on a draft of this report (see 
app. V). Open World generally concurred with the report's observations, 
conclusions, and recommendations and acknowledged that the time has 
come for strategic planning and for considering options to strengthen 
the program's administrative operations and financial reporting. Open 
World said that it is proceeding with measures to implement some of 
these recommendations. These measures include proceeding with plans to 
develop strategic and performance plans, review the program's data 
collection efforts, and prepare financial statements and subject them 
to an independent audit. In response to other recommendations, Open 
World said it would ask the Board of Trustees to consider forming an 
audit committee for the board, evaluating the in-kind contributions of 
the program's American volunteer hosts, and implementing a system for 
more regular summary financial statements for the board. However, Open 
World took issue with the report's emphasis on measurable goals and 
indicators of success, noting that the results of its programs can only 
be validated in the medium or long term. Open World also said that 
improving mutual understanding is not a measurable, performance-based 
goal.

We recognize the long-term commitment required to measure the ultimate 
success of exchange programs. However, measuring short-term incremental 
progress toward a program's goals is also an important component of any 
serious effort to assess progress over the long term. It is fundamental 
to making necessary course corrections along the way--a capability that 
will become even more important as Open World further expands. While it 
is sometimes difficult to establish direct causal links between 
exchange programs and their ultimate impact, we believe that 
establishing convincing correlations is a reasonable expectation. With 
respect to mutual understanding, there are a number of internationally 
recognized social science research and statistically valid 
methodologies that can be used with questionnaires, interviews, and 
focus groups for gauging changes in attitudes, knowledge, and behavior 
among exchange program participants.

The State Department also reviewed a draft of this report for technical 
accuracy. State's comments have been incorporated into the report, as 
appropriate.

We are sending copies of this report to other interested members of 
Congress, the Librarian of Congress and Chairman of the Open World 
Leadership Center Board of Trustees, and the Secretary of State. We 
will also make copies available to others upon request. In addition, 
this report will be available at no charge on the GAO Web site at 
[Hyperlink, http: //www.gao.gov]. 

If you or your staff have any questions about this report, please 
contact Jess Ford at (202) 512-4128. Other GAO contacts and staff 
acknowledgments are listed in appendix VI.

Sincerely yours,

Signed by: 

Jess T. Ford: 
Director, International Affairs and Trade: 

Jeanette M. Franzel: 
Director, Financial Management and Assurance: 

[End of section]

Appendixes: 

[End of section]

Appendix I: Scope and Methodology: 

To review the Open World Leadership Center's progress toward achieving 
its overall purpose, we reviewed Open World's organizational structure, 
operational policies and procedures, program documentation, and 
legislative history, and we observed key program activities, including 
the vetting process and a predeparture orientation in Moscow, as well 
as program orientation and other selected events in Washington, D.C. 
This provided us with an understanding of the nature of Open World 
activities and how they are carried out--from the time delegates are 
selected in Moscow to their actual visit in the United States. We also 
analyzed the results of program surveys that delegates completed from 
2000 to 2003.[Footnote 31]

* We reviewed the surveys, which were carried out by American Councils 
and translated into English for elements such as consistency, balance, 
tone, and adherence to common survey design standards. For example, we 
considered whether the response scales used (1) were balanced, (2) 
appeared to cover all possible response options, and (3) contained 
"double-barreled" options--that is, whether questions asked about more 
than one issue but allowed for only one response.

* We studied the survey results to see if there was anything unusual or 
unexpected that might indicate potential problems in the surveys' 
design or structure.

* We met with knowledgeable Open World and American Councils staff, 
both in Washington, D.C., and in Moscow, to determine the completeness 
of the data set and the accuracy of required data elements. We also 
engaged a GAO native Russian speaker to review the translation of key 
questions from Russian to English.

Based on these assessments, we determined that data produced by many of 
the survey items were sufficiently reliable and generally usable for 
the purposes of our study. These data included descriptive information 
on program delegates, such as education level; information on 
participants' satisfaction with certain aspects of their exchange 
experience; and opinions on how the experience affected them. While we 
determined that most data elements were sufficiently reliable, we did 
not use a few data elements that we had questions about.

We supplemented our analysis of the program surveys with interviews of 
56 alumni during fieldwork in Moscow, St. Petersburg, Petrozavodsk, and 
Samara, Russia, in October and November 2003. We chose those four 
cities for our review because they represent not only three of the 
seven geographic regions in Russia where 60 percent of the Open World 
delegates have come from[Footnote 32] but also a mix of urban and rural 
areas, and a diverse group of alumni. Because our interviews were 
limited to a few locations in Russia (due to travel and time 
constraints), we did not generalize the results of our interviews to 
the universe of delegates. We recognize that the opinions and 
experience of the group of delegates with whom we met may not be 
representative of all program alumni; therefore, the results of our 
interviews should be used for illustrative purposes only. We conducted 
our interviews as follows: 

* We developed a structured interview instrument for our meetings with 
program alumni with the assistance of GAO social science analysts and 
analysts fluent in Russian and in consultation with Open World. The 
interview instrument included questions regarding the contacts alumni 
made during their trips, changes in their attitudes toward the United 
States, and any actions they may have taken in Russia as a direct 
result of their participation in the exchange program.

* We conducted individual and group interviews with program alumni from 
various years of the exchange program, including some who were among 
the early delegates in 1999 and others who participated in the program 
as recently as 2003.

* Russian-English translators provided by the U.S. Embassy and the Open 
World Leadership Center facilitated the interviews.

To review whether the program has appropriate financial management and 
accountability mechanisms in place,

* We discussed the nature and scope of existing mechanisms with Open 
World officials.

* We observed deliberations of an Open World panel that reviewed grant 
proposals from organizations interested in hosting Open World 
delegations.

* We performed a "walk-through" of supporting documentation for a grant 
and a contractor payment.

* We performed this work solely to gain an understanding of Open 
World's existing financial management and accountability mechanisms, 
and as such, we did not conduct an audit of Open World's financial 
reports or individual transactions.

To provide information on the statutory authorities and governing 
structures of selected independent organizations funded through the 
executive branch, we conducted legislative research on the purpose, 
statutory authority, governance, and funding of four such organizations 
that carry out various international activities, including exchange 
programs: the African Development Foundation, The Asia Foundation, the 
Inter-American Foundation, and the National Endowment for Democracy.

We conducted our work from July 2003 to January 2004 in accordance with 
generally accepted government auditing standards.

[End of section]

Appendix II: National Host Organizations: 

The Open World Leadership Center awards grants to U.S.-based nonprofit 
and governmental organizations to host visiting delegations. Some 
organizations carry out Open World visits themselves or through their 
local affiliates, while others develop and oversee a network of local 
organizations to provide this hosting. These local organizations 
include civic associations, academic institutions, and nonprofit 
international training providers. Open World selects its host 
organizations annually through a competitive grants process. Figure 7 
provides information on the 16 national host organizations selected in 
the 2003 grants cycle, from May 2003 to April 2004, and includes 
hosting activities.

Figure 7: National Host Organizations (2003)[A]: 

Organization: Academy for Educational Development; 
Mission: Works to solve critical social problems in the United States 
and throughout the world through education, social marketing, research, 
training, policy analysis, and program design and management

 Organization: American International Health Alliance; 
Mission: Works to establish and manage partnerships and programs to 
improve the health status of individuals and communities in the Newly 
Independent States and Central and Eastern Europe

Organization: American University - Transnational Crime and Corruption 
Center; 
Mission: Devoted to teaching, research, training, and formulating 
policy advice on transnational crime, corruption, and terrorism

Organization: American University - Women and Politics Institute; 
Mission: Dedicated to training the next generation of women leaders

Organization: CEC ARTSLINK[B]; 
Mission: An international arts exchange organization that encourages 
and supports creative cooperation among artists and cultural managers 
from Central Europe, Russia, and Eurasia

Organization: CONNECT/U.S.-Russia; 
Mission: Promotes a more humane and peaceful world by examining 
critical issues facing the United States and the countries of the 
former Soviet Union through collaborative relationships

Organization: Duke University - DeWitt Wallace Center for 
Communications and Journalism; 
Mission: Supports a policy of democratic free media in the United 
States and around the world

Organization: Friendship Force International; 
Mission: Aims to create an environment in which personal friendships 
are established across the barriers that separate people

Organization: International Academy for Freedom of Religion and 
Belief; 
Mission: Strives to uphold and promote the principles of religious 
liberty

Organization: Meridian International Center; 
Mission: Promotes international understanding through the exchange of 
people, ideas, and the arts

Organization: National Peace Foundation; 
Mission: Strengthens the foundations for peace through partnerships, 
intercultural exchanges, and citizen networks

Organization: Rotary International; 
Mission: Offers humanitarian, intercultural, and educational programs 
and activities designed to improve the human condition and advance the 
organization's goal of world understanding and peace

Organization: U.S. Department of Agriculture - Graduate School, 
International Institute; 
Mission: Facilitates the exchange of knowledge and skills through 
educational exchanges and observational study programs

Organization: Russian American Rule of Law Consortium (including the 
Vermont-Karelia Rule of Law Project); 
Mission: An organization for partnerships matching the legal 
communities of seven Russian regions with seven U.S. states to develop 
the rule of law in both countries

Organization: Vital Voices Global Partnership; 
Mission: Supports women's progress in building democracies, strong 
economies, and peace

Organization: World Services of La Crosse Inc.; 
Mission: Focuses on improving municipal services, economic development, 
health, social welfare, and quality of life in targeted communities 
Source: GAO analysis of Open World data.

[A] These organizations, except for CEC International Partners, 
CONNECT/U.S. Russia, and Duke University, also served as national host 
organizations prior to 2003.

[B] CEC ARTSLINK was formerly known as CEC International Partners or 
Citizen Exchange Council.

[End of figure] 

[End of section]

Appendix III: Selected International Exchange Programs for Russia and 
the Newly Independent States That Are Administered by the State 
Department: 

The State Department facilitates exchange programs--like Open World--
with other parts of the U.S. government, the private sector, and 
foreign governments. State's Bureau of Educational and Cultural Affairs 
is responsible for the management and oversight of U.S. international 
educational and cultural exchange activities, as authorized by the 
Mutual Educational and Cultural Exchange Act of 1961 (Fulbright-Hays 
Act). American embassies collaborate with the bureau in administering 
and supervising exchange activities. As shown in fig. 8, State offers a 
wide spectrum of academic, professional, and youth exchange programs in 
Russia and the Newly Independent States. The programs may run anywhere 
from 2 weeks to 2 or more years, according to State officials, and have 
varied in size from as few as 9 participants up to 675 participants. 
The State Department reported that the exchange programs operating in 
Russia, including those highlighted in this appendix and others, 
brought a combined total of more than 2,300 participants from Russia to 
the United States in fiscal year 2003.

Figure 8: Selected State Department-Administered Exchange Programs for 
Russia and the Newly Independent States: 

[See PDF for image]

[A] Reflects 2003 data for Russia only.

[B] Indicates whether participants stay in private homes.

[C] Indicates whether the program also funds reciprocal visits of U.S. 
citizens to Russia and the Newly Independent States.

[D] Indicates whether English is required to participate in the 
program.

[E] Based on total spending, including management costs, and the number 
of participants in the program; reflects 2003 data for Russia only.

[F] Indicates when the most recent evaluation of the program was 
conducted.

[End of figure]

[End of section]

Appendix IV: Selected Independent Entities Funded through the Executive 
Branch: 

For illustrative purposes, figure 9 provides basic information, 
including statutory authority and governing structures, about selected 
grants-making organizations and entities that Congress supports. Like 
Open World, these programs are independent entities; however, unlike 
Open World, they are funded through the executive branch.

Figure 9: Statutory Authorities and Governing Structures of Selected 
Independent Entities Funded through the Executive Branch: 

[See PDF for image]

[End of figure]

[End of section]

Appendix V Comments from the Open World Leadership Center: 

OPEN WORLD LEADERSHIP CENTER:

www.openworld.gov
Tel 202.707.8943 
Fax 202.252.3464:

OPEN WORLD	
The Library of Congress 
* 101 Independence Avenue, S.E.	
*  Washington, DC 20540-9980:

March 9, 2004:

Dear Mr. Ford:

I am pleased to provide the Open World Leadership Center's comments on 
the draft of the General Accounting Office (GAO) report entitled "Open 
World Achieves Broad Participation; Enhanced Planning and 
Accountability Could Strengthen Program," GAO-04-436.

The GAO report concludes that "Open World has exposed a large, broad, 
and diverse group of Russians to U.S. economic and political systems." 
The report underscores Open World's success in meeting Congressional 
sponsors' intent that the program, from its inception as a pilot effort 
in 1999, achieve ambitious public diplomacy goals through the size, 
scope, and geographic diversity of the emerging generation of Russian 
political leaders it brings to the United States for the first time.

From 1999 to 2003, a total of 6,803 emerging leaders from all 89 
Russian political subdivisions and all levels of government traveled on 
professional exchanges to over 1,200 communities in all 50 U.S. states. 
GAO's evaluation included interviews with Open World alumni, who, GAO 
concluded, "generally hold highly favorable views of their experience 
in the program." More significantly, many of the delegates GAO met with 
reported that they have "taken concrete actions to adapt what they 
learned from their U.S. visits to the Russian environment." GAO 
analysis indicates that Open World has achieved a remarkably high 
degree of proportional geographic representation, and that the 
Department of State considers Open World "a valuable tool to complement 
U.S. mission activities and outreach efforts" in Russia in part because 
of its unique place in the legislative branch, and because Open World 
attracts so many delegates who live outside Russia's major cities and 
who have not previously visited the United States.

We appreciate that GAO has acknowledged and taken into account that 
Open World operated as a pilot program for the first two years of its 
existence and did not become a permanent, independent entity until 
fiscal year 2002. It needs to be added that during this pilot period, 
Open World (then known as the Russian Leadership Program) had to cease 
activities in October 1999 and October 2000 at the end of each fiscal 
year because its statutory authorization had expired.

From the beginning, the program was committed to minimizing 
administrative overhead, working with, and contracting out to, already 
experienced agencies wherever possible. The Congress transformed the 
program into an independent Center that began operations in October 
2001; and in fiscal year 2003 increased its funding for the first time, 
adding other countries as well as a Russian cultural component. The 
time has clearly now come for strategic planning and for considering 
options for strengthening administrative operations and financial 
reporting along the lines suggested in the GAO report.

Toward this end, we are proceeding with audited financial statements 
for fiscal year 2003 as stipulated by the Center's by-laws adopted in 
April 2003, developing strategic and performance plans, and reviewing 
the program's data collection. I will specifically ask the Open World 
Leadership Center Board of Trustees to consider formation of an audit 
committee, an evaluation of the considerable in-kind contribution to 
the Open World Program from its thousands of American volunteer hosts, 
and a system for more regular summary financial statements for the 
Board.

I would respectfully point out, however, that the report's emphasis on 
measurable goals and indicators of success reflects little 
understanding of either the purposes of this kind of exchange or the 
way in which those purposes can realistically be advanced.

The goal of Open World-both in its statute and its daily operation-is 
to introduce an emerging generation of political leaders to the actual 
functioning of America's democratic practices, market economy, and 
nongovernmental civil society. As the program's founder, I generally 
modeled it on the small but significant portion of the Marshall Plan 
that brought young German leaders to the United States after World War 
II to give them firsthand exposure to a very different system, which 
they gradually adopted to rebuild a shattered and defeated Germany into 
a prosperous and democratic federal republic. Much of the future 
leadership of the new Germany came from this relatively small part of 
the Marshall Plan, but the results were achieved over time and would 
not have been evident-as the GAO report seems to suggest-in short-term 
social science data collection. Success in this important area is 
measured in years, through the rise to leadership of a new generation 
that was not formed politically by a totalitarian system and has seen a 
democratic alternative at work.

The program for young Germans after World War II was designed for a 
people who had been pulverized and occupied militarily and had no 
alternative but to return to the democratic system that predated their 
12-year Nazi system. Open World's young Russians came from a country 
that had itself thrown off a 74-year totalitarian system; but Russia 
had no prior experience with democracy and far less historic contact 
with democratic nations.

Because the Open World Program targeted people who had already 
demonstrated some leadership potential within post-Communist Russia, it 
was not possible to get them to leave for long periods of time. One 
measurable sign of success of the program is the astonishing fact that 
not a single participant decided to stay in the United States despite 
the difficult conditions that awaited them back in Russia. This is in 
sharp contrast to the large number of Russians (and other foreigners) 
who have come under various other programs and guises and remained in 
the United States. Another "measurable indicator" of success is the 
equally astonishing fact that, despite the marked recent rise of 
authoritarian nationalist and anti-western sentiment in recent years, 
no participant has used his or her time in America-as far as we have 
heard-for a public denunciation of America and its policies. Indeed, in 
my many conversations with participants passing through Washington, I 
have found the impact of even a brief stay here to be most profound on 
Communists and extreme nationalists-groups that we took considerable 
risk in including in the program.

There are a number of specific ideas and examples that Russian 
participants have taken back to their country; and Open World has 
received substantial media coverage inside Russia-particularly in the 
regional press. But it would be an expensive task to compile, conduct, 
and translate a systematic inventory of all press; and it would be 
patronizing and counterproductive to keep asking past participants to 
testify to the value of their experiences. Mutual understanding is a 
desirable by-product of Open World (and of most other exchange 
programs), but it is not a measurable, performance-based goal.

The Open World program is designed not to have Russians simply imitate 
in the short run something they found in America, but rather to 
experience the value and viability of an accountable, participatory and 
open society-and to adapt and achieve their own version of an open 
society as these leaders rise through the political system over time. 
Critics often argue that exchanges are basically "feel good" programs 
that must be validated by measurable short-term results. But Open World 
is a do-good program that has created many new Russian-American 
exchanges (sister courts, for instance) and some alumni networking 
inside Russia. Its transformation potential can only be validated in 
the medium or long term.

Because Open World involves a very large number of promising future 
leaders, it carries a comparably high statistical probability of 
successfully impacting the system. GAO notes that "the percentage of 
delegates from each region is roughly comparable to the proportion of 
the Russian population that each region represents." The program thus, 
by its very structure, encourages the democratizing process, which-for 
the first time in Russian history-is effecting changes from the 
periphery in and the bottom up rather than just out and down from the 
Kremlin.

In closing, I hope it is valuable to the Congress in requesting GAO's 
review to note the information gathered [Appendix III] about other 
exchange programs and executive branch agencies that conduct exchanges 
with Russia and other countries of the Newly Independent States (NIS). 
It would have been helpful to have pointed out in the executive summary 
(1) that the number of Open World participants exceeds that of all 
Executive Branch programs combined, (2) that it operates at an 
economical per capita cost ($6,200 in its most recent year), and (3) 
that only Open World operates effectively outside Russia's major 
cities.

As chairman of the Center's board of trustees, I will share GAO's 
report and findings with our honorary chairman, Senator Ted Stevens; 
our Congressionally appointed trustees, Senators Bill Frist and Carl 
Levin, and Representatives Robert E. Cramer and Amo Houghton; and our 
private-citizen trustees, who all have great experience in exchanges of 
this kind: former U.S. Ambassador to the Russian Federation James 
Collins, former Member of Congress James Symington, and the founder of 
the Open Society Institute, George Soros. Our goal as a board is to 
oversee the administration of the program and any future expansion 
requested by Congress. We appreciate the report's comments and will 
keep its recommendations in mind as we try to balance added financial 
investment in administration with the all-important goal of bringing as 
many future leaders to America as possible from the former Communist 
countries.

Signed by: 

James H. Billington:

Chairman of the Board of Trustees:

Mr. Jess T. Ford:
Director, International Affairs and Trade Division: 
U.S. General Accounting Office:
441 G Street, N.W., Room 4964 
Washington, DC 20548: 

[End of section]

Appendix VI: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Michael Courts, (202) 512-8980: 

Staff Acknowledgments: 

In addition to the person named above, Natalya Bolshun, Lyric Clark, 
Janey Cohen, Martin De Alteriis, David Dornisch, Etana Finkler, Maxine 
Hattery, Catherine Hurley, Ed Kennedy, Lori Kmetz, Joy Labez, David 
Merrill, John Reilly Jr., Mark Speight, and Heather Von Behren made key 
contributions to this report.

(320215): 

FOOTNOTES

[1] Pub. L. 106-31, Title III, § 3011 (1999).

[2] The Center for Russian Leadership Development was established in 
Pub. L. 106-554, § [Title III, § 310] (Dec. 21, 2000). 

[3] The program was renamed the Open World Leadership Center by Pub. L. 
108-7, Div. H, § 1401 (Feb. 20, 2003).

[4] The remaining 11 countries of the Newly Independent States are 
Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, 
Moldova, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan. The three 
Baltic states are Estonia, Latvia, and Lithuania. While pilot programs 
have recently been launched in Ukraine, Uzbekistan, and Lithuania, as 
of February 2004, Open World had no plans to extend the program to 
other eligible countries until an assessment of the pilot programs is 
conducted.

[5] In addition, there were 1,727 facilitators who served as both 
interpreters and "troubleshooters" for the delegations throughout their 
visit. Because facilitators may accompany delegations to the United 
States more than once in any given year, we do not include facilitators 
in our analysis of Open World survey data. However, Open World 
officials noted that the program benefits facilitators as well as 
delegates.

[6] The Board of Trustees is composed of nine members--two members of 
Congress appointed by the Speaker of the House of Representatives and 
two members appointed by the President Pro Tem of the Senate on a 
bipartisan basis; the Librarian of Congress; and four other individuals 
appointed by the Librarian of Congress.

[7] In Moscow, the U.S. Embassy also provides program management and 
supervision of Open World locally-hired staff.

[8] The American Councils for International Education (referred to as 
American Councils in this report) is a nonprofit education, training, 
and consulting organization that specializes in conducting professional 
and academic exchanges.

[9] Project Harmony Inc. is a nonprofit organization based in Vermont 
that develops and facilitates professional training, exchange programs, 
Internet centers, and other technology initiatives between the United 
States and Eurasia.

[10] Alumni activities include, among others, regional alumni 
conferences (14 have been held so far) and a Web site.

[11] In fiscal year 2000, the program was funded under the FREEDOM 
Support Act.

[12] Legislative Branch Appropriations Act, 2001, Pub. L. 106-554, 
Appendix B, Title II (Dec. 21, 2000). Open World's board established a 
Bilateral Corporate Advisory Council in 2001 to undertake fund-raising 
activities; the council is presently inactive.

[13] Two of these positions are cultural affairs staff at the U.S. 
Embassy in Moscow; the remaining staff are in Washington, D.C.

[14] The consultant, who works on a part-time contract basis, performs 
a variety of budget execution and grant monitoring tasks for Open 
World.

[15] Open World did not have programmatic themes in 1999. However, in 
an effort to make its programs more relevant to delegates, Open World 
developed programmatic themes in 2000 based on areas of focus for U.S. 
assistance to Russia. 

[16] Facilitators are required to be fluent in English and have 
previous experience studying, working, or living in the United States.

[17] According to Open World officials, in 2003, 83 percent of the 
participants stayed in private homes.

[18] According to Open World 2003 surveys, 60 percent of the 
participants reported they had either a below average command of 
English or none at all. 

[19] Ninety-four percent of the participants reported that they had not 
been to the United States before their participation in the Open World 
program.

[20] Some of these activities were also supported by U.S. assistance 
programs other than Open World.

[21] The American Centers and Corners program uses space in public 
libraries abroad to provide information about the United States and the 
U.S. government. The embassy supplies participating libraries with 
computer hardware and Internet access. As of March 2004, there were 26 
such facilities in Russia, and the Department of State is expanding the 
program to other parts of the world.

[22] According to Open World's survey of program delegates, on average, 
over 90 percent of the delegates had a favorable view of most 
organizational aspects of the program, such as trip arrangements, place 
of stay, and meetings. 

[23] According to State officials, State-administered exchange programs 
operating in Russia brought a combined total of more than 2,300 
participants from that country to the United States in fiscal year 
2003. 

[24] Under the Government Performance and Results Act of 1993 (Pub. L. 
103-62, 107 Stat. 285, as amended), executive branch performance 
management efforts are intended to inform Congress and the public of 
(1) annual performance goals, (2) measures that will be used to gauge 
performance, (3) strategies and resources required to achieve those 
goals, and (4) the procedures to be used to verify and validate 
progress. These plans are to provide a direct linkage between longer-
term goals and day-to-day activities. Although legislative branch 
entities are not required to comply with the act, some model their 
performance measurement efforts along the same lines.

[25] In general, nominating organizations are given an opportunity to 
submit a designated number of individuals for Open World's 
consideration. At times, program alumni have also been asked to 
nominate individuals. Open World solicits roughly two nominations for 
every participant slot. In 2003, there were 52 nominating organizations 
in Russia, 23 in Ukraine, 14 in Uzbekistan, and 8 in Lithuania. 

[26] There is only one parallel question in the predeparture and 
postprogram surveys. 

[27] U.S. General Accounting Office, Standards for Internal Control in 
the Federal Government, GAO/AIMD-00-21.3.1 (Washington, D.C.: November 
1999). 

[28] Office of Management and Budget Circular A-133, Audits of States, 
Local Governments, and Non-Profit Organizations, sets forth standards 
for obtaining consistency and uniformity among federal agencies for the 
audit of nonfederal entities expending federal awards.

[29] U.S. General Accounting Office, Executive Guide: Creating Value 
Through World-class Financial Management, GAO/AIMD-00-134 (Washington, 
D.C.: April 2000). 

[30] Financial Accounting Standards Board, Statement of Financial 
Accounting Standards 116, Accounting for Contributions Received and 
Contributions Made (Norwalk, CT: June 1993).

[31] Data for 2001 were not available due to program changes that year. 
Unless indicated differently by the text, survey results for all years 
analyzed were comparable; therefore, we reported the 2003 results.

[32] The seven geographic regions in Russia are Central, Far East, 
Northwest, Urals, Volga, North Caucasus, and Siberia. Moscow is in the 
Central region, St. Petersburg and Petrozavodsk are in the Northwest 
region, and Samara is in the Volga region.

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