Microenterprise Development: USAID's Program Has Met Some Goals; Annual Reporting Has Limitations

In its November 17, 2003 report "Microenterprise Development: USAID's Program Met Some Goals; Annual Reporting Has Limitations" (GAO-04-171), GAO recommended that the USAID Administrator review the agency's Microenterprise Results Reporting (MRR) system with the goal of ensuring that its annual report was complete and accurate. Specifically, GAO recommended that the Administrator review and reconsider the methodologies used for collection, analysis, and reporting of data on meeting its spending targets. In response to GAO's recommendation, USAID has made several improvements to improve the collection, analysis and reporting of this data. For example, it issued new guidance on what information should be collected, added requirements to perform spot checks on the data to improve accuracy, providing better instructions to clearly stipulate what portion of USAID assistance to institutions can be reported as microenterprise funding to improve its accuracy, and added clarifications in its annual report to better inform the reader of specific USAID's contribution to the institutions. This action addresses GAO's concern that reporting on this issue was not complete or accurate.

In its November 17, 2003 report "Microenterprise Development: USAID's Program Has Met Some Goals; Annual Reporting Has Limitations" (GAO-04-171), GAO recommended that the USAID Administrator review the agency's Microenterprise Results Reporting (MRR) system with the goal of ensuring that its annual report was complete and accurate. Specifically, GAO recommended that the Administrator review and reconsider the methodologies used for collection, analysis, and reporting of data on outreach to the very poor. In response to GAO's recommendation, USAID has added clarifying language to its report, citing the limitations of its data on outreach to the poor. This action addresses GAO's concern that reporting on this issue was not complete or accurate.

In its November 17, 2003 report "Microenterprise Development: USAID's Program Met Some Goals; Annual Reporting Has Limitations" (GAO-04-171), GAO recommended that the USAID Administrator review the agency's Microenterprise Results Reporting (MRR) system with the goal of ensuring that its annual report was complete and accurate. Specifically, GAO recommended that the Administrator review and reconsider the methodologies used for collection, analysis, and reporting of data on Microfinance Institution (MFI) sustainability. In response to GAO's recommendation, USAID has taken a number of actions intended to improve the completeness and accuracy of its reporting on MFI sustainability. These actions include (1) a requirement that each MFI explain its sustainability calculations, (2) USAID review and follow-up on problematic calculations, (3) adding new explanations on how sustainability should be calculated by the MFIs, (4) adding clarifications in its annual report to Congress that highlights the variance in sustainability reporting, (5) efforts to develop international protocols to standardize sustainability calculations to reduce such variances, and (6) adding additional internal controls and data quality checks in its procedural manual. These actions address GAO's concern that reporting on this issue was not complete or accurate.

In its November 17, 2003 report "Microenterprise Development: USAID's Program Met Some Goals; Annual Reporting Has Limitations" (GAO-04-171), GAO recommended that the USAID Administrator review the agency's Microenterprise Results Reporting (MRR) system with the goal of ensuring that its annual report was complete and accurate. Specifically, GAO recommended that the Administrator review and reconsider the methodologies used for collection, analysis, and reporting of data on the contribution of USAID funding to the microfinance institutions (MFIs) it supports. In response to GAO's recommendation, USAID's report will now highlight that USAID funding alone is not responsible for the accomplishments highlighted in USAID's report to Congress. For example, USAID will add language that states that the MRR "cannot definitively address the question of what impact of USAID funding has been; the data reported in this survey should not be attributed solely to USAID support. Rather, these results could be understood to be the combined effect of all the prior assistance received by the institution, which may include support from other donors as well as USAID." This action addresses GAO's concern that reporting on this issue was not complete or accurate.