Consideration of the Propriety of the Liquidation by the Agency for International Development

GAO was asked to consider the propriety of the liquidation by the Agency for International Development (AID) of the working fund described on pages 10-13 of the House Report 92-718 and reported in the hearings held by the House Foreign Operations and Government Operations on July 12, 1971, entitled “Economy and Efficiency of U.S. Aid Programs in Laos and Cambodia,” and the disposition of the interest on those funds.

The funds appear to have been made available and were actually granted under the conditions comparable to those considered in 42 Comp. Gen. 289 (1962) and, in our opinion, any unused portion of such funds and interest earned on the grant funds prior to their expenditure for grant proposes should have been credited to the United States. As noted in the decision when Congress intends to make an outright grant of gift, it has no difficult in doing so, and as an example, reference was made to 16 U.S.C. 500 directing that 25 percent of income from national forests be paid to the State in which the forest is situated. We find no comparable provisions in the Foreign Assistance Act of 1961, as amended. Furthermore AID agrees that it might have been feasible to have provided in the grant agreement for the return of any funds when the need therefor no longer existed.

Nevertheless, since the actions of both parties from the time that such grant agreement was entered into have been consistent with the concept that the funds, when granted, became the property of Laos, and since very little purpose would be served at this late date in attempting to recover the interest earned on such funds, we do not propose to insist upon collection efforts by AID in this particular case.