Fast Facts

The U.S. Agency for International Development obligated (legally committed) $185 billion in FY 2009-2019 appropriations to spend on various projects.

Under its policies, USAID tries to spend its money before the end of the next fiscal year following the obligation. We consider spending after that to be delayed. For selected accounts funded in FY 2009-2017, we found as much as $23 billion in delayed spending. Analyzing delayed spending could help USAID identify excess funds, which could be used for other projects.

USAID does not review the timeliness of its spending. We recommended USAID routinely analyze the timeliness of its spending, and more.

USAID's Timely or Possibly Delayed Expenditures for Selected Funds Appropriated in Fiscal Years 2009-2017, as of March 31, 2020

Graph showing around 20% of USAID expenditures were possibly delayed each year in fiscal years 2009-2017

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Highlights

What GAO Found

Almost $20 billion of the $185 billion (11 percent) that the U.S. Agency for International Development (USAID) obligated from funds appropriated in fiscal years 2009–2019 remained unliquidated (or not yet expended), as of March 31, 2020. Funds appropriated for Development Assistance (DA), Economic Support Fund (ESF), and Global Health Programs (GHP) made up about 78 percent of these unliquidated obligations (ULO).

GAO estimates that $23 billion in DA, ESF, and GHP obligations from funds appropriated in fiscal years 2009–2017 may have had delayed expenditures under USAID's forward funding policy (see fig.). Based on this policy, GAO defines delayed expenditures as those made after the end of the fiscal year following the fiscal year of obligation, if exceptions have not been granted. The actual amount of delayed expenditures may be less than $23 billion because, for example, this estimate likely includes projects with exceptions to USAID's forward funding policy.

USAID's Obligations from Development Assistance, Economic Support Fund, and Global Health Programs with Timely or Possibly Delayed Expenditures under USAID Policy in Fiscal Years 2009–2017, as of March 31, 2020

USAID's Obligations from Development Assistance, Economic Support Fund, and Global Health Programs with Timely or Possibly Delayed Expenditures under USAID Policy in Fiscal Years 2009–2017, as of March 31, 2020

Note: GAO's analysis is based on USAID's data on subobligations, and obligations made outside of bilateral agreements. GAO defines these expenditures as delayed under USAID's forward funding policy, but the funds remain legally available for expenditure for the entire period of availability for obligation plus 5 fiscal years after the period of availability for obligation has expired, in accordance with the account closing law. See 31 U.S.C. §§ 1552(a) and 1553(a).

USAID has processes for monitoring ULOs but does not analyze data on what GAO refers to as the timeliness of expenditures under its policy. USAID monitors ULOs by completing quarterly financial reviews, among other activities. However, USAID does not analyze data to identify (1) expenditures that occur after the fiscal year following obligation and (2) exceptions to timelines established in its policy. Doing so could enable USAID to make more informed resource decisions.

USAID officials cited various factors that contribute to expenditure delays and possible excess ULOs, and USAID has taken some steps to manage them. USAID officials cited external factors such as political changes and internal factors such as reform initiatives, as contributing to increased ULOs. In response, USAID has launched an automated deobligation tool, among other steps taken.

Why GAO Did This Study

Congress provides foreign assistance funding through various appropriation accounts for international development projects. USAID is the primary U.S. agency responsible for implementing these projects and may have up to 11 fiscal years to expend its appropriations from certain accounts. USAID requires program managers to follow its forward funding policy, with some exceptions, and annually monitor ULOs to identify excess funds that may be eligible for deobligation and used for other purposes.

A Senate report provides for GAO to consult with the appropriations committee on a review of USAID's expenditure rates. This report examines (1) USAID data on ULOs for funds appropriated in fiscal years 2009–2019, (2) the extent to which expenditures in selected accounts met our definitions of timely or delayed under USAID policy, (3) the extent to which USAID monitors ULOs and the timeliness of expenditures, and (4) factors that USAID cites as contributing to expenditure delays and excess ULOs and steps taken to manage them. GAO analyzed financial data—primarily for DA, ESF, and GHP—reviewed USAID policies, and interviewed officials in Washington, D.C., and at three missions with large amounts of ULOs.

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Recommendations

GAO is making three recommendations, including that USAID should routinely analyze data on (1) the timeliness of expenditures and (2) exceptions granted under its policy. USAID generally agreed with these recommendations.

Recommendations for Executive Action

Agency Affected Recommendation Status
United States Agency for International Development The Administrator of USAID should revise USAID's policy to clarify whether the date of obligation or subobligation should be used as the standard for calculating forward funding. (Recommendation 1)
Closed - Implemented
In December 2020, GAO reported that USAID's forward funding policy is unclear and has led to inconsistent implementation. Specifically, USAID's policy does not specify whether to use the obligation or subobligation date when calculating forward funding length (or the length of the pipeline in months) in the context of bilateral agreements. To help ensure that USAID officials are implementing this policy as intended and allow them to compare the timeliness of expenditures across missions and bureaus, GAO recommended that the USAID Administrator revise USAID's policy to clarify whether the date of obligation or subobligation should be used as the standard for calculating forward funding, and USAID concurred. In January 2021, USAID distributed an Executive Message, or general notice, and posted it on the agency's intranet for record purposes. The notice clarified that when USAID has a bilateral agreement with the government of a partner country, the forward funding policy applies to subobligations, not the original bilateral obligation. This clarification should make it easier for USAID to follow required procedures so that their forward funding does not exceed reasonable standards.
United States Agency for International Development
Priority Rec.
This is a priority recommendation.
The Administrator of USAID should analyze financial data on the timeliness of expenditures. (Recommendation 2)
Open
USAID agreed with this recommendation. As of March 2021, USAID officials stated that they are working on an implementation plan to address the recommendation and have a tentative completion date of June 30, 2021. We will continue to monitor USAID's progress in implementing this recommendation.
United States Agency for International Development The Administrator of USAID should routinely gather and analyze data on exceptions granted to the timelines established in USAID's forward funding policy. (Recommendation 3)
Open
USAID agreed with this recommendation. As of March 2021, USAID officials stated that they are working on an implementation plan to address the recommendation and have a tentative completion date of June 30, 2021. We will continue to monitor USAID's progress in implementing this recommendation.

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