Foreign Assistance: Funds Obligated Remain Unspent for Years

Highlights

Pursuant to a congressional request, GAO examined the Agency for International Development's (AID) economic assistance pipeline, focusing on the funds six AID missions obligated for development assistance and economic support but had not yet expended.

Recommendations

Recommendations for Executive Action

Agency Affected	Recommendation	Status
U.S. Agency for International Development	The Administrator, AID, should review the justifications for not deobligating funds in projects that have passed their terminal date and deobligate the funds that cannot be justified, beginning with the $8 million GAO identified.	Closed – Implemented Most funds have been deobligated, and other funds are in the process of being deobligated. The Administrator sent new guidance to the field and a cable. The GAO review indicates that AID deobligated some funds identified as excess, and is taking the issue of excess pipeline more seriously.
U.S. Agency for International Development	The Administrator, AID, should require all missions and offices to identify excess funds in the pipeline at the end of each fiscal year and provide the rationale as to why this excess exists, and if the rationale is not consistent with AID guidance take the necessary steps with the host government to deobligate the funds.	Closed – Implemented Final guidance has been issued. As part of the guidance to the field, each regional bureau is having missions identify the excess and provide internal justifications for the excess.
U.S. Agency for International Development	The Administrator, AID, should require that future AID project and program agreements include a standard provision stating the conditions under which AID could unilaterally deobligate certain assistance funds (such as in the case of long delayed projects). U.S. national interests, political considerations, or constraints regarding the reprogramming of earmarked funds, may affect the extent to which AID actually uses this management tool; nevertheless, a standard provision in the agreements would provide leverage to get some projects or programs moving in the right direction.	Closed – Implemented A standard provision is now included in AID grants or in the project agreement papers.

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Topics

International Affairs

Appropriated fundsBudget obligationsDeobligationsEconomic developmentForeign economic assistanceForeign financial assistanceForeign governmentsFunds managementInternational relationsMission budgeting