Refugee Program:

Financial Accountability for Refugee Resettlement Can Be Improved

NSIAD-89-92: Published: Mar 17, 1989. Publicly Released: Mar 17, 1989.

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Pursuant to a legislative requirement, GAO audited voluntary agencies' expenditures of funds they received under the Department of State's Refugee Reception and Placement Program for fiscal years 1986 and 1987.

GAO found that: (1) Congress passed legislation in 1986 to improve the voluntary agencies' financial accountability through increased financial reporting requirements; (2) meaningful comparison of program costs among agencies was difficult due to their inconsistent data reporting; (3) State did not effectively monitor the accuracy, comparability, or reliability of the agencies' financial reports; (4) the cooperative agreements between State and the voluntary agencies did not require the agencies to prepare financial statements audited in accordance with generally accepted government accounting standards (GAGAS); (5) the cooperative agreements' requirement that agencies spend funds within 12 months after the fiscal year in which they received them did not prevent agencies from accumulating large unobligated balances; (6) the agencies' differing methods and assumptions for classifying direct-service and administrative costs made interpretation of reports difficult; and (7) the agencies' reports to Congress did not provide an accurate description of the proportion of federal funds they used for direct refugee assistance.

Matter for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: State has implemented a change in the cooperative agreements which meets the intent of the proposed legislation.

    Matter: To modify the period during which funds may be expended, Congress may wish to consider amending section 412(b)(1)(A) of the Immigration and Nationality Act to state that funds provided to agencies under such grants and contracts may only be obligated or expended during the fiscal year in which they are provided or the subsequent 6 months or such subsequent fiscal period as the Department of State may approve as necessary to provide current services to refugees.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: State concurred with the recommendation and implemented changes in 1990.

    Recommendation: The Secretary of State should require the Director, Bureau of Refugee Programs, to provide definitions of administrative and direct-service costs for each voluntary agency, tailored to fit the circumstances of each agency, as part of the cooperative agreement. Audit reports that include assessments of the expenditures in accordance with these definitions, as would be required under a GAGAS audit, could be used to evaluate each agency's use of federal funds.

    Agency Affected: Department of State


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