Foreign Assistance:

Accuracy of AID Statistics on Dollars Flowing Back to the U.S. Economy Is Doubtful

NSIAD-93-196: Published: Aug 3, 1993. Publicly Released: Sep 2, 1993.

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Pursuant to a congressional request, GAO reviewed how the Agency for International Development (AID) determines the extent to which U.S. foreign economic assistance dollars flow back to the United States through the procurement of U.S. goods and services.

GAO found that: (1) both Buy American Reporting System (BARS) and AID reflow studies rely on imprecise and inconsistent measuring techniques and estimates that cannot be verified; (2) BARS was implemented to respond to congressional requests for reflow statistics, not because AID needed such statistics to manage its program; (3) BARS statistics are not useful for management decisionmaking; (4) BARS is a costly system that places a significant burden on AID staff resources; and (5) the ratio of AID-obligated funds to total U.S. exports of goods and services has declined from 8.2 percent in 1962 through 1964 to 1.2 percent in 1990 through 1992 because exports have grown more rapidly than the foreign assistance program.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: AID staff met with appropriate congressional staff and reached agreement on discontinuing the BARS report and replacing it with a less costly one-page summary of Buy American source data. AID estimated that moving to this new reporting system would save AID approximately $400,000 per year.

    Recommendation: The Administrator, AID, should discuss with interested members of Congress the problems with the current system and seek their concurrence on using a less expensive and burdensome method to meet their information needs. If, after such discussions, AID decides to continue BARS, the reports submitted to Congress should prominently disclose BARS limitations, namely that BARS data is unverifiable and of doubtful accuracy and reliability, and that, at best, BARS data can only be used as a general indication of AID procurement from the United States.

    Agency Affected: United States Agency for International Development


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