AID's Management of the Housing Guaranty Program
NSIAD-84-75
Published: Apr 25, 1984. Publicly Released: Apr 25, 1984.
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Highlights
GAO reviewed the Agency for International Development's (AID) Housing Guaranty (HG) program to assess the use of the program in an environment of high external debt, balance-of-payment difficulties, and other economic problems in recipient countries. The HG program is the U.S. Government's principal means of providing shelter assistance to developing countries and offers full repayment guaranty of principal and interest to private U.S. lenders for commercial rate loans.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| U.S. Agency for International Development | The Administrator of AID should direct the Office of Housing to make preproject surveys in host countries to ensure that income levels of intended beneficiaries in each project are actually below the median income. |
Closed – Implemented
AID disagreed that surveys should be required for each project but said that it would use surveys when appropriate. GAO believes that preproject surveys are necessary to ensure that HG projects are designed for and provided to below median income groups.
|
| U.S. Agency for International Development | The Administrator of AID should direct the Office of Housing to emphasize institution building and cost recovery as the shelter programming goals which offer the most promise for future progress. |
Closed – Implemented
AID said that it agreed that institution building and cost recovery are important goals, that it has emphasized them, and that it will continue to do so. GAO does not believe that AID has given institution building and cost recovery the priority emphasis that they should receive.
|
| U.S. Agency for International Development | The Administrator of AID should prepare an action plan to stem further deterioration in the level of the reserve fund and to minimize the contingent liability exposure of the U.S. Government. The plan should include assurance that no HG loans be extended to any country where U.S. Government contingent liability for such loans exceeds reserve fund assets. It should determine where the HG program ranks as a development assistance mechanism and consider replenishment of the HG reserve fund from AID budget resources. |
Closed – Implemented
AID said it had an action plan and that it can only minimize contingent liability exposure which precludes limiting loans. AID said it was attempting to replenish the reserve fund through budget requests. The recommendation to replenish the reserve fund was for reprogramming existing AID monies and not for new AID appropriations.
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| U.S. Agency for International Development | The Administrator of AID should not seek exemption of HG loans within the internal U.S. Government decisionmaking process from any country's debt rescheduling which includes AID loans. |
Closed – Not Implemented
AID said it will continue to follow government policy on debt rescheduling and that, if circumstances indicate the need for HG program exemption from reschedulings, it would "act within the ambit of official policy." Government policy does not permit special treatment for particular agencies or programs in a debt rescheduling.
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| U.S. Agency for International Development | The Administrator of AID should direct the Office of Housing and Urban Programs to prepare a thorough country risk analysis for each proposed HG loan. |
Closed – Implemented
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
|
| U.S. Agency for International Development | The Administrator of AID should direct the Office of Housing and Urban Programs to define "equivalent" guaranty and establish criteria under which such a guaranty may be substituted for a host-country government guaranty, and exercise caution in extending HG loans which do not have host-country government guarantees. |
Closed – Implemented
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
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Topics
Contingent liabilitiesDeveloping countriesEconomic analysisForeign economic assistanceFunds managementGovernment guaranteed loansHousing programsInternational economic relationsLoan repaymentsProgram evaluation