prompt_front: You are given two reports by the government agency.



Question: Write a one-page summary of the report 1.



Report 2: The federal government, through the Department of Energy, operates four regional power marketing administrations (PMAs), created by statute: the Bonneville Power Administration (BPA), the Southeastern Power Administration (SEPA), the Southwestern Power Administration (SWPA), and the Western Area Power Administration (WAPA)  Each PMA operates in a distinct geographic area of the coterminous United States (see Figure 1 )  Congressional interest in the PMAs has included diverse issues such as rate setting, cost and compliance associated with the Endangered Species Act (ESA; P L  93-205 ; 16 U S C  §§1531 et seq ), and questions of privatization of these federal agencies  In general, the PMAs came into being because of the government's need to dispose of electric power produced by federal dams constructed largely for irrigation, flood control, or other purposes, and to achieve small community and farm electrification—that is, providing service to customers whom it would not have been profitable for a private utility to serve  With minor exceptions, these agencies market the electric power produced by federal dams constructed, owned, and operated by the Corps of Engineers (Corps) and the U S  Bureau of Reclamation (BOR)  PMAs must give preference to public utility districts and cooperatives (e g , "preference customers"), selling their power at cost-based rates set at the lowest possible rate consistent with sound business principles  The Federal Energy Regulatory Commission (FERC) regulates PMA rates to ensure that they are set high enough to repay the U S  Treasury on schedule for the portion of federal facility costs that have been allocated to hydropower beneficiaries  Since FY2011, power revenues associated with the PMAs have been classified as discretionary offsetting receipts (i e , receipts that are available for spending by the PMAs), thus the agencies are sometimes noted as having a "net-zero" spending authority  Only the capital expenses of WAPA and SWPA require appropriations from Congress  Each PMA also has unique elements and regional issues that affect its business  They are discussed in alphabetical order  Created by the Bonneville Project Act of 1937 (16 U S C  §832) just before the completion of two large dams in the Pacific Northwest—Bonneville Dam in 1938 and Grand Coulee Dam in 1941—BPA was the first PMA  Though it serves a smaller geographical area, BPA is on par with WAPA (which serves the largest area) in the size of its transmission system  The agency operates and maintains about 75% of the high voltage transmission lines in its service territory, which includes Idaho, Oregon, Washington, western Montana and small parts of eastern Montana, California, Nevada, Utah, and Wyoming  BPA also markets wholesale electricity from 31 federally owned hydropower facilities in the Northwest  These generation facilities are owned both by the Corps and BOR  BPA differs from the other three PMAs in that it is self-financed: it receives no federal appropriations  Since passage of the Federal Columbia River Transmission System Act of 1974 (16 U S C  §838), BPA has covered its operating costs through power rates set to ensure repayment to the Treasury of capital and interest on funds used to construct the Columbia River power system  BPA also has permanent Treasury borrowing authority, which it may use for capital on large projects  This money is repaid with interest, through power sales  As of 2018, BPA had $5 53 billion of bonds outstanding to the U S  Treasury, with BPA's current borrowing authority capped by Congress at $7 70 billion  BPA has also looked at other financing options as it approaches its debt limit, looking at nonfederal debt refinancing, lease-purchases, and other asset management strategies  BPA has initiated strategies and a financial plan to address a changing power generation and demand market, as it endeavors to meet its mandate for cost-based electric power rates  These plans are outlined in its Strategic Plan for 2018 to 2023, and address goals from financial health to infrastructure modernization  Wholesale power prices in the United States are generally trending downward, while BPA's firm power rates have trended upward  BPA repays its funding from the U S  Treasury largely through electricity sales to customers  While BPA generates its electricity from hydropower (which is traditionally one of the lower-cost means of power generation), increasing amounts of renewable electricity from growing wind and solar capacity installations in the Pacific Northwest are challenging BPA's price competitiveness, and perhaps its ability to repay its debts in a timely manner  In 2014, BPA entered into the Regional Cooperation Agreement (RCA) with the State of Washington to address the debt of Energy Northwest, a "joint action agency formed by the Washington state legislature in 1957" to manage public power utility costs  Energy Northwest owns and operates four electric power generation facilities: White Bluffs Solar Station, Packwood Lake Hydroelectric Project, Nine Canyon Wind Project, and the Columbia Generating Station  The Regional Cooperation debt is "the issuance of new bonds by Energy Northwest to refund outstanding bonds shortly before their maturities when substantial principal repayments were and are due " According to BPA, this allows for "integrated debt management" for the combined total debt portfolios of BPA and Energy Northwest, with a net effect reducing the "weighted average interest rate and the maturity of BPA's overall debt portfolio" over the life of the program  This refinancing, according to BPA, has enabled BPA to prepay higher-interest-rate federal obligations, and has "preserved or restored U S  Treasury borrowing authority " However, the debt service of the RCA is "borne by BPA ratepayers through BPA rates " BPA estimates that the "aggregate potential principal amount" of RCA refunding through bonds issued in fiscal years 2019 through 2030 could exceed $4 0 billion  BPA is responsible for maintaining and modernizing the generation and transmission infrastructure of its systems, and preserving and enhancing its physical and cybersecurity  With energy and capacity markets changing in the western United States (especially with the growing need to integrate increasing amounts of variable renewable sources), and the development of the Energy Imbalance Market (EIM) in the West, BPA is considering whether to join the EIM, and how this might affect its operations and customers  Environmental, fishing, and tribal advocates have sued the federal government over concerns that operating rules for hydropower dams on the Columbia and Snake Rivers (i e , operations consistent with the National Marine Fisheries Service Biological Opinion) are inadequate to ensure survival of species threatened or endangered under the Endangered Species Act  In addition, several environmental groups filed a lawsuit blaming the dams for warm river waters in summer 2015 that resulted in the deaths of about 250,000 adult sockeye salmon migrating up the Columbia and Snake Rivers  Some of these parties have sought to remove the four lower dams on the Snake River to ensure survival of some salmon and steelhead species  In 2016, a federal judge overturned a previous management plan for the dams, finding that it would not be sufficient to protect salmon runs, and ordered a new management plan that could include removing the dams  However, in 2018, President Trump issued a Presidential Memorandum accelerating the process for a new management plan, requiring the biological opinion to be ready by 2020  The memorandum ordered the Secretary of the Interior and the Secretary of Commerce "to appropriately suspend, revise, or rescind any regulations or procedures that unduly burden" water infrastructure projects so they "are better able to meet the demands of their authorized purposes " How this will affect the fish endangerment finding is unclear at this time  The Southeastern Power Administration was created in 1950 by the Secretary of the Interior to carry out the functions assigned to the Secretary by the Flood Control Act of 1944 (P L  78-534) in 11 states (Alabama, Florida, Georgia, Illinois, Kentucky, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, and West Virginia)  SEPA is unique among the four PMAs in two ways  It is the smallest PMA, with just over 40 employees, and, unlike the other three agencies, SEPA does not operate or maintain any transmission facilities, and thus contracts with other utilities for transmitting the federal power it markets to more than 12 million consumers  Southeastern markets approximately 3,400 MW of power produced at 22 multipurpose water projects, operated and maintained by the Corps  SEPA's facilities are aging; for instance, in 2018 it reported that its Cumberland System customers have agreed to fund $1 2 billion of planned rehabilitations of the nine hydroelectric facilities in the Corps' Nashville District  According to SEPA, it has an overcapacity issue  Projections for electricity load growth (in consultation with its preference customers) made before the 2008 economic downturn reportedly led to SEPA acquiring additional capacity it currently does not use  As a result, municipalities and electric cooperatives in SEPA's service area will have to make economic decisions regarding how to handle this excess capacity
Report 2: 8 million and $20 2 million, respectively, in FY2017, finance small-scale enterprise and grassroots self-help activities aimed at assisting poor people  Most U S  assistance is now provided as a grant (gift) rather than a loan, so as not to increase the heavy debt burden carried by many developing countries  However, the forms a grant may take are diverse  The most common type of U S  development aid is project-based assistance (77% in FY2017), in which aid is channeled through an implementing partner to complete a project  Aid is also provided in the form of core contribution to international organizations such as the United Nations, technical assistance, and direct budget support (cash transfer) to governments  A portion of aid money is also spent on administrative costs ( Figure 3 )  Within these categories, aid may take many forms, as described below  Although it is the exception rather than the rule, some countries receive aid in the form of a cash grant to the government  Dollars provided in this way support a government's balance-of-payments situation, enabling it to purchase more U S  goods, service its debt, or devote more domestic revenues to developmental or other purposes  Cash transfers have been made as a reward to countries that have supported the United States' counterterrorism operations (Turkey and Jordan in FY2004), to provide political and strategic support (both Egypt and Israel annually for decades after the 1979 Camp David Peace Accord), and in exchange for undertaking difficult political and economic reforms  Assistance may be provided in the form of food commodities, weapons systems, or equipment such as generators or computers  Food aid may be provided directly to meet humanitarian needs or to encourage attendance at a maternal/child health care program  Weapons supplied under the military assistance program may include training in their use  Equipment and commodities provided under development assistance are usually integrated with other forms of aid to meet objectives in a particular social or economic sector  For instance, textbooks have been provided in both Afghanistan and Iraq as part of a broader effort to reform the educational sector and train teachers  Computers may be offered in conjunction with training and expertise to fledgling microcredit institutions  Since PEPFAR was first authorized in 2004, antiretroviral drugs (ARVs) provided to individuals living with HIV/AIDS have been a significant component of commodity-based assistance  Although once a significant portion of U S  assistance programs, construction of economic infrastructure—roads, irrigation systems, electric power facilities, etc —was rarely provided after the 1970s  Because of the substantial expense of these projects, they were to be found only in large assistance programs, such as that for Egypt in the 1980s and 1990s, where the United States constructed major urban water and sanitation systems  The aid programs in Iraq and Afghanistan supported the building of schools, health clinics, roads, power plants, and irrigation systems  In Iraq alone, more than $10 billion went to economic infrastructure  Economic infrastructure is now also supported by U S  assistance in a wider range of developing countries through the Millennium Challenge Corporation  In this case, recipient countries design their own assistance programs, most of which, to date, include an infrastructure component  Transfer of knowledge and skills is a significant part of most assistance programs  The International Military Education and Training Program (IMET) provides training to officers of the military forces of allied and friendly nations  Tens of thousands of citizens of aid recipient countries receive short-term technical training or longer-term degree training annually under USAID programs  More than one-quarter of Peace Corps volunteers are English, math, and science teachers  Other aid programs provide law enforcement personnel with anti-narcotics or anti-terrorism training  Many assistance programs provide expert advice to government and private sector organizations  The Department of the Treasury, USAID, and U S -funded multilateral banks all place specialists in host government ministries to make recommendations on policy reforms in a wide variety of sectors  USAID has often placed experts in private sector business and civic organizations to help strengthen them in their formative years or while indigenous staff are being trained  While most of these experts are U S  nationals, in Russia, USAID funded the development of locally staffed political and economic think tanks to offer policy options to that government  USAID, the Inter-American Foundation, and the African Development Foundation often provide aid in the form of small grants directly to local organizations to foster economic and social development and to encourage civic engagement in their communities  Grants are sometimes provided to microcredit organizations, such village-level women's savings groups, which in turn provide loans to microentrepreneurs  Small grants may also address specific community needs  Recent IAF grants, for example, have supported organizations that help resettle Salvadoran migrants deported from the United States and youth programs in Central America aimed at gang prevention  Under the Foreign Assistance Act of 1961, the President may determine the terms and conditions under which most forms of assistance are provided  In general, the financial condition of a country—its ability to meet repayment obligations—has been an important criterion of the decision to provide a loan or grant  Some programs, such as humanitarian and disaster relief programs, were designed from the beginning to be entirely grant activities  During the past two decades, nearly all foreign aid—military as well as economic—has been provided in grant form  While loans represented 32% of total military and economic assistance between 1962 and 1988, this figure declined substantially beginning in the mid-1980s, until by FY2001, loans represented less than 1% of total aid appropriations  The de-emphasis on loan programs came largely in response to the debt problems of developing countries  Both Congress and the executive branch have generally supported the view that foreign aid should not add to the already existing debt burden carried by these countries  In the FY2019 budget request, the Trump Administration encouraged the use of loans over grants when providing military assistance (Foreign Military Financing), but Congress did not include language in support of that proposal in the enacted FY2019 appropriation ( P L  116-6 )  Although a small proportion of total current aid, there are significant USAID-managed programs that guarantee loans, meaning the U S  government agrees to pay a portion of the amount owed in the case of a default on a loan  A Development Credit Authority (DCA) loan guarantee, in which risk is shared with a private sector bank, can be used to increase access to finance in support of any development sector  The DCA is to be transferred from USAID in 2019 to the new IDFC, established by the BUILD Act of 2018 ( P L  115-254 ), to enhance U S  development finance capacity  Under the Israeli Loan Guarantee Program, the United States has guaranteed repayment of loans made by commercial sources to support the costs of immigrants settling in Israel from other countries and may issue guarantees to support economic recovery  USAID has also provided loan guarantees in recent years to improve the terms or amounts of financing from international capital markets for Ukraine and Jordan  In these cases, assistance funds representing a fraction of the guarantee amount are provided to cover possible default  Between 1946 and 2016, the United States loaned $112 7 billion in foreign economic and military aid to foreign governments, and while most foreign aid is now provided through grants, $9 18 billion in loans to foreign governments remained outstanding at the end of FY2016  For nearly three decades, Section 620q of the Foreign Assistance Act (the Brooke amendment) has prohibited new assistance to the government of any country that falls more than one year past due in servicing its debt obligations to the United States, though the President may waive application of this prohibition if he determines it is in the national interest  The United States has also forgiven debts owed by foreign governments and encouraged, with mixed success, other foreign aid donors and international financial institutions to do likewise  In some cases, the decision to forgive foreign aid debts has been based largely on economic grounds as another means to support development efforts by heavily indebted, but reform-minded, countries  The United States has been one of the strongest supporters of the Heavily Indebted Poor Country (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI)  These initiatives, which began in the late 1990s, include participation of the World Bank, the International Monetary Fund, and other international financial institutions in a comprehensive debt workout framework for the world's poorest and most debt-strapped nations  The largest and most hotly debated debt forgiveness actions have been implemented for much broader foreign policy reasons with a more strategic purpose  Poland, during its transition from a communist system and centrally planned economy (1990—$2 46 billion); Egypt, for making peace with Israel and helping maintain the Arab coalition during the Persian Gulf War (1990—$7 billion); and Jordan, after signing a peace accord with Israel (1994—$700 million), are examples  Similarly, the United States forgave about $4 1 billion in outstanding Saddam Hussein-era Iraqi debt in November 2004 and helped negotiate an 80% reduction in Iraq's debt to creditor nations later that month  Most development and humanitarian assistance activities are not directly implemented by U S  government personnel but by private sector entities, such as individual personal service contractors, consulting firms, universities, private voluntary organizations (PVOs), or public international organizations (PIOs)  Generally speaking, U S  government foreign service and civil servants determine the direction and priorities of the aid program, allocate funds while keeping within legislative requirements, ensure that appropriate projects are in place to meet aid objectives, select implementers, and monitor the implementation of those projects for effectiveness and financial accountability  Both USAID and the State Department have promoted the use of public-private partnerships, in which private entities such as corporations and foundations are contributing partners, not paid implementers, in situations where business interests and development objectives coincide  In FY2017, the United States provided some form of bilateral foreign assistance to more than 150 countries  Aid is concentrated heavily in certain countries, reflecting the priorities and interests of United States foreign policy at the time  Table 2 identifies the top 15 recipients of U S  foreign assistance for FY1997, FY2007 and FY2017  As shown in the table above, there are both similarities and sharp differences among country aid recipients for the three periods  The most consistent thread connecting the top aid recipients over the past two decades has been continuing U S  strategic interests in the Middle East, with large programs maintained for Israel and Egypt and, for Iraq, following the 2003 invasion  Two key countries in the U S  counterterrorism strategy, Afghanistan and Pakistan, made their first appearances on the list in FY2002 and continued to be among the top recipients in FY2017  In FY1997, one sub-Saharan African country appeared among leading aid recipients; in FY2017, 7 of the 15 are sub-Saharan African  Many are focus countries under the PEPFAR initiative to address the HIV/AIDS epidemic; South Sudan receives support as a newly independent country with multiple humanitarian and development needs  In FY1997, three countries from Eastern Europe and the former Soviet Union made the list, as many from the region had for much of the 1990s, representing the effort to transform the former communist nations to democratic societies and market-oriented economies  None of those countries appear in the FY2017 list  In FY1997, four Latin American countries make the list; no countries from the region appear in FY2017  On a regional basis, the Middle East/North Africa (MENA) region has received the largest share of U S  foreign assistance for many decades  Although economic aid to the region's top two recipients, Israel and Egypt, began to decline in the late 1990s, the dominant share of bilateral U S  assistance consumed by the MENA region was maintained in FY2005 by the war in Iraq  Despite the continued importance of the region, its share slipped substantially by FY2017 as the effort to train and equip Iraqi forces diminished  Since September 11, 2001, South and Central Asia has emerged as a significant target of U S  assistance, rising from a roughly 3% share 20 years ago to 16% in FY2007 and 15% in FY2017, largely because of aid to Afghanistan and Pakistan  Similarly, the share represented by African nations has increased from 10% and 19%, respectively, in FY1997 and FY2007, to 25% in FY2017, largely due to the HIV/AIDS initiative that funnels resources mostly to African countries and to a range of other efforts to address the region's development challenges  Meanwhile, the share of aid to Europe/Eurasia, which greatly surpassed that of Africa in FY1997, has declined significantly in the past decade, to about 4% in FY2017, with the graduation of many East European aid recipients and the termination of programs in Russia  The Ukraine was responsible for about one third of aid to that region in FY2017  East Asia/Pacific has remained at a low level during the past two decades, while Latin America's share has risen and fallen based on U S  interest in Colombia and a few Central American countries as aid has shifted to regions of more pressing strategic interest (see Figure 4 )  There are several methods commonly used for measuring the amount of federal spending on foreign assistance  Amounts can be expressed in terms of budget authority (funds appropriated by Congress), obligations (amounts contractually committed), outlays or disbursements (money actually spent)  Assistance levels are also sometimes measured as a percentage of the total federal budget, as a percentage of total discretionary budget authority (excluding mandatory and entitlement programs), or as a percentage of the gross domestic product (GDP) (for an indication of the national wealth allocated to foreign aid)  By nearly all of these measures, foreign aid resources fell gradually on average over several decades since the historical high levels of the late 1940s and early 1950s ( Appendix A )  This downward trend was sporadically interrupted, largely due to major foreign policy initiatives such as the Alliance for Progress for Latin America beginning in 1961, the infusion of funds to implement the Camp David Middle East Peace Accords in 1979, and an increase in military assistance to Egypt, Turkey, Greece and others in the mid-1980s  The lowest point in U S  foreign aid spending since World War II came in 1997, when foreign assistance obligations fell to just above $20 billion (in 2017 dollar terms)  ( Figure 5 ) While foreign aid consistently represented just over 1% of U S  annual gross domestic product in the decade following World War II, it fell gradually to between 0 2% and 0 4% for most years in the past three decades  Foreign assistance spending has comprised, on average, around 3% of discretionary budget authority and just over 1% of total budget authority each year since 1977, though the percentages have sometimes varied considerably from year to year  Foreign aid dropped from 5% of discretionary budget authority in 1979 to 2 4% in 2001, before rising sharply in conjunction with U S  activities in Afghanistan and Iraq starting in 2003  As a portion of total budget authority, foreign assistance reached 2 5% in 1979, but has hovered below 1 5% since 1987  In 2017, foreign assistance was estimated to account for 4 1% of discretionary budget authority and 1 2% of total budget authority ( Figure 6 ; Appendix A )  As previously discussed, since the September 11, 2001, terrorist attacks, foreign aid funding has been closely tied to U S  counterterrorism strategy, particularly in Iraq, Afghanistan, and Pakistan  Bush and Obama Administration global health initiatives, the creation of the Millennium Challenge Corporation, and growth in counter-narcotics activities have driven funding increases as well  The Budget Control Act of 2011, and the drawdown of U S  military forces in Iraq, and to some degree Afghanistan, led to a notable dip in aid obligations in FY2013, but aid levels have risen again with efforts to address the crisis in Syria, counter-ISIL activities, and humanitarian aid  The use of the Overseas Contingency Operations (OCO, discussed below) designation has enabled this growth despite the BCA limitations  Figure 7 shows how trends in foreign aid funding in recent decades can be attributed to specific foreign policy events and presidential initiatives  The Obama Administration's FY2012 international affairs budget proposed that the overseas contingency operations (OCO) designation, which had been applied since 2009 to war-related Defense appropriations, including to DOD assistance programs such as ISFF, ASFF and CERP, be extended to include "extraordinary, but temporary, costs of the Department of State and USAID in the front line states of Iraq, Afghanistan and Pakistan " Congress not only adopted the OCO designation in the FY2012 SFOPS appropriations legislation, but expanded it to include funding for additional accounts and countries  In every fiscal year since, a portion of certain foreign assistance accounts—primarily ESF, FMF, IDA, MRA and INCLE—has been appropriated with the OCO designation  The OCO designation is significant because the Budget Control Act of 2011 (BCA), which set annual caps on discretionary funding from FY2013 through FY2021, specified that funds designated as OCO do not count toward the discretionary spending limits established by the act  OCO designation makes it possible to prevent war-related funding from crowding out core international affairs activities within the budget allocation  The OCO approach is reminiscent of the use of supplemental international affairs appropriations for the first decade after the September 11, 2001, terrorist attacks  Congress appropriated significant emergency supplemental funds for foreign operations and Defense assistance programs every year from FY2002 through FY2010 for activities in Iraq, Afghanistan, and elsewhere, which were not counted toward subcommittee budget allocations  Since the OCO designation was first applied to foreign operations in FY2012, supplemental appropriations for foreign aid have declined significantly  In the FY2019 and FY2020 budget requests, the Trump Administration did not request OCO funding within the international affairs budget, but did request OCO funding for the Department of Defense, including for DOD aid accounts  Congress used the OCO designation for both DOD and State/USAID accounts in the FY2019 appropriation, P L  116-6 , but a smaller portion of aid was designated as OCO compared to FY2018  It remains to be seen whether this is the beginning of a downward trend in OCO use for foreign aid  Congress historically sought to enhance the domestic benefits of foreign aid by requiring that most U S  foreign aid be used to procure U S  goods and services  The conditioning of aid on the procurement of goods and services from the donor-country is sometimes called "tied aid," and while quite common for much of the history of modern foreign assistance, has become increasingly disfavored in the international community  Studies have shown that tying aid increases the costs of goods and services by 15%-30% on average, and up to 40% for food aid, reducing the overall effectiveness of aid flows  The United States joined other donor nations in committing to reduce tied aid in the Paris Declaration on Aid Effectiveness in March 2005, and the portion of tied aid from all donors fell from 70% of total bilateral development assistance in 1985 to an average of 12% in 2016  However, an estimated 32% of U S  bilateral development assistance was tied in 2016, the highest percentage among major donors, perhaps reflecting the perception of policymakers that maintaining public and political support for foreign aid programs requires ensuring direct economic benefit to the United States  About 67% of U S  foreign assistance funds in FY2017 were obligated to U S -based entities  A considerable amount of U S  foreign assistance funds remain in the United States, through domestic procurement or the use of U S  implementers, but the portion differs by program and is hard to identify with any accuracy  For some types of aid, the legislative requirements or program design make it relatively easy to determine how much aid is spent on U S  goods or services, while for others, this is more difficult to determine  USAID  Most USAID funding (Development Assistance, Global Health, Economic Support Fund) is implemented through contracts, grants, and cooperative agreements with implementing partners  While many implementing partner organizations are based in the United States and employ U S  citizens, there is little information available about what portion of the funds used for program implementation are used for goods and services provided by American firms  Procurement reform efforts initiated by USAID in 2010 have aimed to increase procurement and implementation by host country entities as a means to enhance country ownership, build local capacity, and improve sustainability of aid programs  Food assistance commodities, until recently, were purchased wholly in the United States, and generally required by law to be shipped by U S  carriers, suggesting that the vast majority of food aid expenditures are made in the United States  Starting in FY2009, a small portion of food assistance was authorized to be purchased locally and regionally to meet urgent food needs more quickly  Successive Administrations and several Members of Congress have proposed greater flexibility in the food aid program, potentially increasing aid efficiency but reducing the portion of funds flowing to U S  farmers and shippers  To date, these proposals have been largely unsuccessful  Foreign Military Financing , with the exception of certain assistance allocated to Israel, is used exclusively to procure U S  military equipment and training  Millennium Challenge Corporation  The MCC bases its procurement regulations on those established by the World Bank, which calls for an open and competitive process, with no preference given to donor country suppliers  Between FY2011 and FY2017, the MCC awarded roughly 15% of the value of compact contracts to U S  firms  Multilateral development aid  Multilateral aid funds are mixed with funds from other nations and the bulk of the program is financed with borrowed funds rather than direct government contributions  Information on the U S  share of procurement financed by MDBs is unavailable  In addition to the direct benefits derived from aid dollars used for American goods and services, many argue that the foreign aid program brings significant indirect financial benefits to the United States  For example, analysts maintain that provision of military equipment through the military assistance program and food commodities through the Food for Peace program helps to develop future, strictly commercial, markets for those products  More broadly, as countries develop economically, they are in a position to purchase more goods from abroad and the United States benefits as a trade partner  Since an increasing majority of global consumers are outside of the United States, some business leaders assert that establishing strong economic and trade ties in the developing world, using foreign assistance as a tool, is key to U S  economic and job growth  Since World War II, with the exception of several years between 1989 and 2001, during which Japan ranked first among aid donors, the United States has led the developed countries in net disbursements of economic aid, or "Official Development Assistance (ODA)" as defined by the Organization for Economic Cooperation and Development's (OECD) Development Assistance Committee (DAC)  In 2017, the most recent year for which data are available, the United States disbursed $34 12 billion in ODA, or about 24% of the $144 71 billion in total net ODA disbursements by DAC donors that year  Germany ranked second at $24 16 billion, the United Kingdom followed at $18 59 billion, Japan ranked fourth at $11 85 billion, and France rounded out the top donors with $11 03 billion in 2017 (see Figure 8 )  While the top five donors have not varied for more than a decade, there have been shifts lower down the ranking  For example, Turkey has become a much more prominent ODA donor in recent years (ranked 6 th in 2017, with $9 08 billion in ODA, compared to 21 st in 2006), reflecting large amounts of humanitarian aid to assist Syrian refugees  Even as it leads in dollar amounts of aid flows to developing countries, the United States often ranks low when aid is calculated as a percentage of gross national income (GNI)  This calculation is often cited in the context of international donor forums, as a level of 0 7% GNI was established as a target for donors in the 2000 U N  Millennium Development Goals  In 2017, the United States ranked at the bottom among major donors at 0 18% of GNI, slightly lower than Portugal and Spain (0 18% and 0 19%, respectively)  The United Arab Emirates, which has significantly increased its reported ODA in recent years, ranked first among top donors at 1 03% of GNI, followed by Sweden at 1 02% and Luxembourg at 1 00%  There has also been an increase in ODA from non-DAC countries  Between 2000 and 2014, China spent $81 1 billion in ODA, more than tripling its ODA commitments during this period  While reported Chinese ODA is still relatively small compared to that of major donor countries, policymakers are paying increasing attention to growing Chinese investments in developing countries that do not meet the ODA definition  China has touted its "Belt and Road" initiative as an effort to boost development and connectivity across as many as 125 countries to create "strategic propellers" for its own development  However, China has provided little official aggregate information on the initiative, including on the number of projects, countries involved, the terms of financing, and metrics for success  Numerous congressional authorizing committees and appropriations subcommittees maintain responsibility for U S  foreign assistance  Several committees have responsibility for authorizing legislation establishing programs and policy and for conducting oversight of foreign aid programs  In the Senate, the Committee on Foreign Relations, and in the House, the Committee on Foreign Affairs, have primary jurisdiction over bilateral development assistance, political/strategic and other economic security assistance, military assistance, and international organizations  Food aid, primarily the responsibility of the Agriculture Committees in both bodies, is periodically shared with the Foreign Affairs Committee in the House  U S  contributions to multilateral development banks are within the jurisdiction of the Senate Foreign Relations Committee and the House Financial Services Committee  The large nontraditional aid programs funded by DOD, such as Nunn-Lugar Cooperative Threat Reduction programs and the military aid programs in Afghanistan and Iraq, come under the jurisdiction of the Armed Services Committees  Some global health assistance, such as research and other activities done by the Centers for Disease Control and Prevention, may fall under the jurisdiction of the House Energy and Commerce and Senate HELP committees  Traditionally, most foreign aid appropriations fall under the jurisdiction of the SFOPS Subcommittees, with food assistance appropriated by the Agriculture Subcommittees  As noted earlier, however, certain military, global health, and other activities that have been reported as foreign aid have been appropriated through other subcommittees in recent years, including the Defense and the Labor, Health and Human Services, Education and Related Agencies subcommittees  (For current information on SFOPS Appropriations legislation, see CRS Report R45168, Department of State, Foreign Operations and Related Programs: FY2019 Budget and Appropriations , by Susan B  Epstein, Marian L  Lawson, and Cory R  Gill ) The most significant permanent foreign aid authorization laws are the Foreign Assistance Act of 1961, covering most bilateral economic and security assistance programs (P L  87-195; 22 U S C  2151); the Arms Export Control Act (1976), authorizing military sales and financing (P L  90-629; 22 U S C  2751); the Agricultural Trade Development and Assistance Act of 1954 (P L  480), covering food aid (P L  83-480; 7 U S C  1691); and the Bretton Woods Agreement Act (1945), authorizing U S  participation in multilateral development banks (P L  79-171; 22 U S C  286)  In the past, Congress usually scheduled debates every two years on omnibus foreign aid legislation that amended these permanent authorization measures  Congress has not enacted into law a comprehensive foreign assistance authorization measure since 1985, although foreign aid authorizing bills have passed the House or Senate, or both, on numerous occasions  Foreign aid bills have frequently stalled at some point in the debate because of controversial issues, a tight legislative calendar, or executive-legislative foreign policy disputes  In contrast, DOD assistance is authorized in annual National Defense Authorization legislation  In lieu of approving a broad State Department/USAID authorization bill, Congress has on occasion authorized major foreign assistance initiatives for specific regions, countries, or aid sectors in stand-alone legislation or within an appropriation bill  Among these are the SEED Act of 1989 ( P L  101-179 ; 22 U S C  5401); the FREEDOM Support Act of 1992 ( P L  102-511 ; 22 U S C  5801); the United States Leadership Against HIV/AIDS, Tuberculosis, and Malaria Act of 2003 ( P L  108-25 ; 22 U S C  7601); the Tom Lantos and Henry J  Hyde United States Global Leadership Against HIV/AIDS, Tuberculosis, and Malaria Reauthorization Act of 2008 ( P L  110-293 ); the Millennium Challenge Act of 2003 (Division D, Title VI of P L  108-199 ); the Enhanced Partnership With Pakistan Act of 2009 ( P L  111-73 ; 22 U S C  8401); the Global Food Security Act of 2016 ( P L  114-195 ; 22 U S C  9306), and the BUILD Act ( P L  115-254 )  In the absence of regular enactment of foreign aid authorization bills, appropriation measures considered annually within the SFOPS spending bill have assumed greater significance for Congress in influencing U S  foreign aid policy  Not only do appropriations bills set spending levels each year for nearly every foreign assistance account, SFOPS appropriations also incorporate new policy initiatives that would otherwise be debated and enacted as part of authorizing legislation  Appendix A  Data Table Appendix B  Common Foreign Assistance Abbreviations

ground_truth: SNAP is the largest federally funded nutrition assistance program. In fiscal year 2017, it provided about $63 billion in benefits. USDA and the states jointly administer SNAP and partner to address issues that affect program integrity, including improper payments and fraud. GAO has previously reported on various aspects of SNAP, including state SNAP E&T programs, improper payment rates, recipient fraud, and retailer trafficking. This testimony discusses GAO's prior and ongoing work on (1) SNAP E&T programs, including program participants, design, and USDA oversight, and (2) USDA's efforts to address SNAP program integrity, including improper payments, as well as recipient and retailer fraud. As part of its ongoing work on SNAP E&T programs, GAO analyzed E&T expenditures and participation data from fiscal years 2007 through 2016, the most recent data available; reviewed relevant research from USDA; and interviewed USDA and selected state and local officials. The prior work discussed in this testimony is based on four GAO products on E&T programs (GAO-03-388), improper payments (GAO-16-708T), recipient fraud (GAO-14-641), and retailer trafficking (GAO-07-53). Information on the scope and methodology of our prior work is available in each product. Overseen by the U.S. Department of Agriculture (USDA) and administered by states, Supplemental Nutrition Assistance Program (SNAP) Employment and Training (E&T) programs served about 0.5 percent of the approximately 43.5 million SNAP recipients in an average month of fiscal year 2016, according to the most recent USDA data available. These programs are generally designed to help SNAP recipients increase their ability to obtain regular employment through services such as job search and training. Some recipients may be required to participate. According to USDA, about 14 percent of SNAP recipients were subject to work requirements in an average month of fiscal year 2016, while others, such as children and the elderly, were generally exempt from these requirements. States have flexibility in how they design their E&T programs. Over the last several years, states have 1) increasingly moved away from programs that mandate participation, 2) focused on serving able-bodied adults without dependents whose benefits are generally time-limited unless they comply with work requirements, and 3) partnered with state and local organizations to deliver services. USDA has taken steps to increase support and oversight of SNAP E&T since 2014, including collecting new data on participant outcomes from states. GAO has ongoing work reviewing SNAP E&T programs, including USDA oversight. USDA and the states partner to address issues that affect program integrity, including improper payments and fraud, and USDA has taken some steps to address challenges in these areas, but issues remain. Improper Payments. In 2016, GAO reviewed SNAP improper payment rates and found that states' adoption of program flexibilities and changes in federal SNAP policy in the previous decade, as well as improper payment rate calculation methods, likely affected these rates. Although USDA reported improper payment estimates for SNAP in previous years, USDA did not report an estimate for benefits paid in fiscal years 2015 or 2016 due to data quality issues in some states. USDA has since been working with the states to improve improper payment estimates for the fiscal year 2017 review. Recipient Fraud. In 2014, GAO made recommendations to USDA to address challenges states faced in combatting recipient fraud. For example, GAO found that USDA's guidance on the use of transaction data to uncover potential trafficking lacked specificity and recommended USDA develop additional guidance. Since then, USDA has provided technical assistance to some states, including on the use of data analytics. GAO has ongoing work reviewing states' use of data analytics to identify SNAP recipient fraud. Retailer Trafficking. In 2006, GAO identified several ways in which SNAP was vulnerable to retailer trafficking—a practice involving the exchange of benefits for cash or non-food items. For example, USDA had not conducted analyses to identify high-risk retailers and target its resources. Since then, USDA has established risk levels for retailers based on various factors. GAO has ongoing work assessing how USDA prevents, detects, and responds to retailer trafficking and reviewing the usefulness of USDA's estimates of the extent of SNAP retailer trafficking. GAO is not making new recommendations. USDA generally concurred with GAO's prior recommendations.

prompt_front: You are given two reports by the government agency.



Question: Write a one-page summary of the report 2.

Report 1: USDA’s Food and Nutrition Service (FNS) is responsible for promulgating SNAP program regulations, ensuring that state officials administer the program in compliance with program rules, and authorizing and monitoring retailers from which recipients may purchase food  States are responsible for determining applicant eligibility, calculating the amount of their benefits, issuing benefits on Electronic Benefit Transfer (EBT) cards—which can be used like debit cards to purchase food from authorized retailers—and investigating possible program violations by recipients  SNAP recipients are subject to various work requirements  Generally, all SNAP recipients ages 16 through 59, unless exempted by law or regulation, must comply with work requirements, including registering for work, reporting to an employer if referred by a state agency, accepting a bona fide offer of a suitable job, not voluntarily quitting a job or reducing work hours below 30 hours a week, and participating in a SNAP E&T program or a workfare program—in which recipients perform work on behalf of the state—if assigned by the state agency  SNAP recipients are generally exempt from complying with these work requirements if they are physically or mentally unfit, responsible for caring for a dependent child under age 6 or an incapacitated person, employed for 30 or more hours per week or receive weekly earnings which equal the minimum hourly rate set under federal law multiplied by 30, or are a bona fide student enrolled half-time or more in any recognized school training program, or institution of higher education, amongst other exemptions  SNAP recipients subject to the work requirements—known as work registrants— may lose their eligibility for benefits if they fail to comply with these requirements without good cause  One segment of the work registrant population, SNAP recipients ages 18 through 49 who are “able-bodied,” not responsible for a dependent child, and do not meet other exemptions—able-bodied adults without dependents (ABAWDs)—are generally subject to additional work requirements  In addition to meeting the general work requirements, ABAWDs must work or participate in a work program 20 hours or more per week, or participate in workfare, in which ABAWDs perform work to earn the value of their SNAP benefits  Participation in SNAP E&T, which is a type of work program, is one way for ABAWDs to meet the 20 hour per week ABAWD work requirement, but other work programs are acceptable as well  Unless ABAWDs meet these work requirements or are determined to be exempt, they are limited to 3 months of SNAP benefits in a 36-month period  At the request of states, FNS may waive the ABAWD time limit for ABAWDs located in certain areas of a state or an entire state under certain circumstances  A waiver may be granted if the area has an unemployment rate of over 10 percent or there are an insufficient number of jobs to provide employment for these individuals  If the time limit is waived, ABAWDs are not required to meet the ABAWD work requirement in order to receive SNAP for more than 3 months in a 36-month period yet they must still comply with the general work requirements  Federal requirements for state SNAP E&T programs were first enacted in 1985 and provide state SNAP agencies with flexibility in how they design their SNAP E&T programs, including who to serve and what services to offer  The state has the option to offer SNAP E&T services on a voluntary basis to some or all SNAP recipients, an approach commonly referred to as a voluntary program  Alternatively, the state can require some or all SNAP work registrants to participate in the SNAP E&T program as a condition of eligibility, an approach commonly referred to as a mandatory program  Further, states determine which service components to provide participants through their SNAP E&T programs, although they must provide at least one from a federally determined list  This list includes job search programs, job search training programs, workfare, programs designed to improve employability through work experience or training, education programs to improve basic skills and employability, job retention services, and programs to improve self-sufficiency through self- employment  Total federal expenditures on SNAP E&T programs were more than $337 million in fiscal year 2016  States are eligible to receive three types of federal funding available for state SNAP E&T programs: 100 percent funds—formula grants for program administration, 50 percent federal reimbursement funds, and ABAWD pledge funds—grants to states that pledge to serve all of their at-risk ABAWDs  The Office of Management and Budget has designated SNAP as a high- priority program due to the estimated dollar amount in improper payments—any payments that should not have been made or were made in an incorrect amount (including overpayments and underpayments) under statutory, contractual, administrative, or other legally applicable requirements  According to USDA’s fiscal year 2015 agency financial report, $2 6 billion, or 3 66 percent, of all SNAP benefits paid in fiscal year 2014 were improper, the most recent year for which data are available  SNAP improper payments are caused by variances in any of the key factors involved in determining SNAP eligibility and benefit amounts, and, according to USDA, household income was the most common primary cause of dollar errors  States review the accuracy of SNAP payments to recipients on an ongoing basis, and FNS assesses the accuracy of state reviews and determines a national improper payment rate annually  FNS and states share responsibility for addressing SNAP fraud, which can occur through the eligibility process and when benefits are being used  Specifically, recipients may commit eligibility fraud when they misrepresent their household size, income, or expenses in order to fraudulently obtain SNAP benefits  Another type of fraud—trafficking— occurs when recipients exchange benefits with authorized retailers or other individuals for cash or non-food items (e g  rent or transportation)  In a typical retailer trafficking situation, for example, a retailer may charge $100 to a recipient’s EBT card and give the recipient $50 in cash instead of $100 in food  The federal government reimburses the retailer $100, which results in a fraudulent $50 profit to the retailer  State agencies are directly responsible for preventing, detecting, investigating, and prosecuting recipient fraud, including eligibility fraud and trafficking by SNAP recipients, under the oversight and guidance of FNS  States play a key role in preventing fraud when determining eligibility for SNAP  State agencies collect applicant information, such as household income and employment, and verify it through data matches with other information sources  After benefits are issued, the agencies may monitor EBT transaction data to identify spending patterns that may indicate trafficking  If an individual or household intentionally violates SNAP rules, such as by trafficking or making false or misleading statements in order to obtain benefits, states conduct administrative disqualification hearings or, in some cases, refer the case for criminal prosecution  FNS is responsible for authorizing and overseeing retailers who participate in the program—totaling more than 263,000 in fiscal year 2017—including investigating potential retailer trafficking  In order to participate in SNAP, a retailer applies to FNS and demonstrates that they meet program requirements, such as those on the amount and types of food that authorized stores must carry  FNS verifies a retailer’s compliance with these requirements and generally authorizes retailers for 5 years  FNS then monitors retailers’ continued compliance with program requirements and administratively disqualifies, or assesses money penalties on, those who are found to have trafficked benefits  To this end, FNS officials collect and monitor EBT transaction data to detect irregular patterns of transactions that may indicate trafficking and also conduct undercover investigations  If found to be trafficking, retailers are generally permanently disqualified from SNAP or incur a monetary penalty in lieu of permanent disqualification  According to FNS data, about 14 percent of SNAP recipients, or about 6 1 million, were work registrants who were subject to work requirements, and about 0 5 percent of SNAP recipients, or about 200,000, participated in state SNAP E&T programs, in an average month of fiscal year 2016  (See fig  1 ) According to FNS, most SNAP recipients are exempt from work requirements  For example, according to FNS, almost two-thirds of SNAP recipients were children, elderly, or adults with a disability in an average month of fiscal year 2016—groups that are generally exempt  Further, adults who are already working at least 30 hours a week are also exempt from SNAP work requirements, and according to FNS data, more than 31 percent of non-elderly adult SNAP recipients were employed in an average month of fiscal year 2016  SNAP work registrants who are not participating in SNAP E&T programs may be participating in other activities to meet work requirements or eligible for other exemptions  FNS officials told us that the state data reported to FNS on SNAP E&T participants are the best and most recent data available on this group, yet they also have limitations, which we will continue to explore in our ongoing work  In recent years, the number and percentage of SNAP recipients and work registrants participating in SNAP E&T programs appears to have decreased, according to FNS data  From fiscal year 2008 through fiscal year 2016, the average monthly number of SNAP E&T participants decreased from about 256,000 to about 207,000, or by 19 percent, according to state data on SNAP E&T participants reported to FNS  (See fig  2 ) However, over the same time period, the average monthly number of SNAP recipients appears to have increased from about 27 8 million to about 43 5 million, and work registrants appears to have increased from about 3 million to about 6 1 million, according to FNS data  As a result, the percentage of total SNAP recipients participating in SNAP E&T programs decreased from about 0 9 to about 0 5 percent, and the percentage of SNAP work registrants participating in these programs decreased from approximately 8 1 percent to 3 4 percent, from fiscal year 2008 through fiscal year 2016  Available information suggests the characteristics of SNAP E&T participants are generally similar to those of SNAP work registrants who do not participate in these programs  A recent FNS study, which surveyed SNAP E&T participants and SNAP work registrants who had not participated in SNAP E&T, found that members of the two groups had similar demographic characteristics, including age and gender, and received similar monthly SNAP benefit amounts  Further, at the time they were surveyed, about one third of each group were employed, and their average wage rates were similar, at about $10 per hour  State SNAP agencies have broad flexibility in how they design their SNAP E&T programs, and the characteristics of these programs have changed in several ways over the last decade  For example, states have increasingly moved from mandatory to voluntary programs, focused on serving ABAWDs, and partnered with state and local organizations to deliver services  According to FNS data, states have increasingly moved from mandatory to voluntary SNAP E&T programs in recent years  In fiscal year 2010, 17 states operated voluntary programs; however, by fiscal year 2017, 35 states operated voluntary programs, according to FNS data  (See fig  3 ) FNS officials told us that they have been actively encouraging states to provide more robust employment and training services, such as vocational training or work experience, through voluntary programs  They said that they believe these types of robust services are more effective in moving participants toward self-sufficiency, but that funding may not be sufficient to provide these to the large numbers of participants served in mandatory programs  In addition, FNS officials told us that voluntary programs are less administratively burdensome than mandatory programs, as they allow states to focus on serving motivated participants rather than sanctioning non-compliant individuals  According to FNS officials, when states move to a voluntary program, they generally experience a decline in SNAP E&T participation—a trend consistent with our analysis of FNS data—which may have contributed to the decline in overall SNAP E&T participation  Of the 22 states or territories that changed from a mandatory to a voluntary program from fiscal year 2010 through fiscal year 2016, according to FNS data, 13 experienced a decrease in SNAP E&T participation—ranging from a 21 percent decrease to a 93 percent decrease  Overall, voluntary programs are generally smaller than mandatory programs, according to our analysis of FNS data  In fiscal year 2016, for example, the 32 states or territories operating voluntary programs together served less than half of the total number of SNAP E&T participants served by the 21 states or territories operating mandatory programs, although these two groups of states had similar numbers of new work registrants  Furthermore, states operating voluntary programs served an average of nearly 7,000 SNAP E&T participants per state, while states operating mandatory programs served an average of 23,000 SNAP E&T participants per state  Evidence suggests that states have increased their focus on serving ABAWDs—a sub-population of SNAP recipients subject to benefit time limits and additional work requirements—through SNAP E&T, as related waivers have expired in recent years, according to FNS data  During and after the 2007-2009 recession, the majority of states operated under statewide waivers of the ABAWD time limit due to economic conditions  However, as the economy recovered, most statewide waivers expired, and the ABAWD time limit was reinstated  For example, according to FNS data, in fiscal year 2011, 45 states or territories had a statewide waiver and 7 states had a partial waiver—one applying to certain localities  By fiscal year 2017, the number of states or territories with a statewide waiver had decreased to 9, while 27 states had partial waivers  FNS officials and state SNAP agency officials we spoke with in some states told us that, as the waivers have ended, state SNAP E&T programs have become increasingly focused on serving ABAWDs  Although state data on SNAP E&T programs reported to FNS suggest a greater percentage of ABAWDs have been participating in these programs in recent years, according to FNS officials, these data have limited usefulness in assessing state trends in serving ABAWDs for several reasons  For example, in recent years, FNS officials learned that there was widespread confusion among states regarding the need to track ABAWDs when waivers were in place, and that as a result, some states had not been tracking ABAWDs or properly documenting SNAP recipients’ ABAWD status  This is consistent with what some of the selected states we spoke with reported  As part of our ongoing work, we are continuing to explore the availability and reliability of data on ABAWDs  State SNAP agencies have increasingly partnered with other state and local organizations, such as workforce agencies, community-based social service providers, and community colleges, to provide services to SNAP E&T participants in recent years, according to FNS and states we selected for our review  In fiscal year 2018, nearly all states partnered with at least one other organization to deliver SNAP E&T services, with the majority partnering with more than one, according to an analysis by FNS  In recent years, FNS has urged states to make use of the broad network of American Job Centers  The American Job Centers, also known as one- stop centers, are funded through the Department of Labor’s Employment and Training Administration and designed to provide a range of employment-related services, such as training referrals, career counseling, job listings, and similar employment-related services, to job seekers under one roof  Our prior work has highlighted the value of coordination between federally funded employment and training programs to ensure the efficient and effective use of resources  Despite encouraging such partnerships, FNS officials said that American Job Centers typically provide lighter touch services to SNAP E&T participants, such as job search and job search training, and they therefore may not be well suited for SNAP E&T participants who have multiple barriers to employment  In our 2003 work on SNAP E&T, we found that while workforce system programs offered some of the activities needed by SNAP E&T participants, officials from 12 of the 15 states we contacted said that most participants were not ready for these activities, in part, because they lacked basic skills, such as reading and computer literacy, that would allow them to successfully participate  An alternative service delivery strategy that FNS has promoted is the development of third party partnerships with community-based social service providers, community colleges, and other entities to help states enhance their SNAP E&T programs  According to FNS, in this model, third party organizations use non-federal funding to provide allowable SNAP E&T services and supports, which are then eligible for 50 percent federal reimbursement funds through the state’s SNAP E&T program  According to FNS officials, third party partnerships enable states to leverage additional resources, grow their SNAP E&T programs, and reach more SNAP participants  In addition, FNS officials said that these partnerships allow states to improve their program outcomes by tapping into providers currently serving communities that include SNAP recipients  Federal 50 percent reimbursement funds expended increased from nearly $182 million to more than $223 million, or by 23 percent, from fiscal year 2007 to fiscal year 2016  FNS has taken steps to increase federal support of states’ SNAP E&T programs by increasing the number of federal staff responsible for SNAP E&T and providing additional technical assistance to states  Specifically, FNS officials said that in 2014, they created the Office of Employment and Training to provide support and oversight for the SNAP E&T program and expanded SNAP E&T staff in FNS headquarters from one to five fulltime employees  FNS has also taken steps to increase technical assistance to states  For example, they have developed tools, including the SNAP E&T Operations Handbook, intended to help states implement and grow their program, and by adding a dedicated SNAP E&T official in each of FNS’s seven regional offices  According to FNS, regional officials have targeted technical assistance to states on, for example, developing third-party partnerships, and they have emphasized evidence-based approaches to administering the program, such as providing skills-based training for in-demand occupations  FNS officials rely on various information sources to oversee states’ SNAP E&T programs, including participant outcome data reported by states for the first time in January 2018  For example, FNS officials conduct management evaluation reviews of states, annually review states’ SNAP E&T plans for compliance, and collect data from states on program participation and expenditures  In addition, as of January 2018, FNS has begun receiving new data on SNAP E&T program participants and outcomes from states  These data include employment outcomes, such as the number of SNAP E&T participants in unsubsidized employment after participation in the program, and participant characteristics, such as the number of participants entering the program with a high school degree or equivalent  FNS officials said that although states generally submitted the new data on time, states experienced challenges that likely affected the accuracy of the data  For example, some states needed to manually collect data on participant characteristics due to the limited capacity of their data systems  Further, according to FNS officials, some states did not correctly interpret certain reporting definitions or time periods  To address these challenges, FNS officials have been providing technical assistance to states to help them refine their participant and outcome data reports  Officials told us that they expect the states to submit revised reports by May 2018; we will examine these data and related issues in our ongoing work  FNS and the states partner to address issues that affect program integrity, including improper payments and fraud, and FNS has taken some steps to address challenges in these areas, but concerns remain  For example, regarding SNAP recipient and retailer fraud, FNS has taken some steps to address challenges identified in our 2006 and 2014 reports related to fraud committed by SNAP recipients and authorized retailers, but more remains to be done  We currently have ongoing work to assess the steps FNS and states have taken to address our recommendations related to recipient and retailer fraud and other program vulnerabilities  In 2016, we reviewed SNAP improper payment rates and found that states’ adoption of program flexibilities and changes in federal SNAP policy in the previous decade, as well as improper payment rate calculation methods, likely affected these rates  For example, when states adopted available SNAP policy flexibilities that simplified or lessened participant reporting requirements, these changes reduced the opportunity for error and led to a decline in the improper payment rate, according to a USDA study  In addition, we found that the methodology SNAP used to calculate its improper payment rate was generally similar to the methodologies used for other large federal programs for low- income individuals, including Medicaid, Earned Income Tax Credit, and Supplemental Security Income  However, we also found that some of the procedural and methodological differences in the rate calculation among these programs likely affected the resulting improper payment rates, such as how cases with insufficient information or certain kinds of errors were factored into the improper payment rate  In 2014, USDA identified SNAP improper payment data quality issues in some states and has since been working with the states to improve improper payment estimates  Although USDA reported national SNAP improper payment estimates for benefits paid through fiscal year 2014, USDA did not report a national SNAP improper payment estimate for benefits paid in fiscal years 2015 or 2016  In response to a report from USDA’s Office of Inspector General that identified concerns in the application of SNAP’s quality control process, which is used to identify improper payments, USDA began a review of state quality control systems in all states in 2014  According to USDA, due to the data quality issues uncovered in 42 of 53 states during the reviews, the improper payment rates for those states could not be validated, and the department was unable to calculate a national improper payment rate for benefits paid in fiscal year 2015  To address the data quality concerns, USDA updated guidance, provided training to relevant state and federal staff, and worked with states to update their procedures to ensure consistency with federal guidelines  According to USDA, the department also required individual states to develop corrective action plans to address issues identified and monitored progress to ensure states took identified actions  On June 30, 2017, USDA notified the states that the department would not release a national SNAP improper payment rate for benefits paid in fiscal year 2016 and remained focused on conducting the fiscal year 2017 review  FNS has increased its oversight of state anti-fraud activities in recent years by developing new guidance and providing training and technical assistance to states on detecting fraud by SNAP recipients and reporting on anti-fraud activities to FNS  In 2014, we reported on 11 selected states’ efforts to combat SNAP recipient fraud and made several recommendations to FNS to address the challenges states faced  We found that FNS and states faced challenges in the following areas: Guidance on use of data tools to detect fraud: States faced challenges using FNS-recommended data tools to detect fraud, and FNS is in the process of developing improved guidance to address this concern  Specifically, FNS’s guidance on the use of EBT transaction data to uncover potential patterns of benefit trafficking lacked the specificity states needed to uncover such activity, and we recommended FNS develop additional guidance  Since then, FNS contracted with a private consulting firm to provide 10 states with technical assistance in recipient fraud prevention and detection, which included exploring the use of data analytics to analyze and interpret eligibility and transaction data to identify patterns or trends and create models that incorporate predictive analytics  FNS officials also recently told us that the agency is developing a SNAP Fraud Framework to provide guidance to states on improving fraud prevention and detection  FNS officials anticipated releasing the framework in mid- 2018  Tools for monitoring e-commerce websites: We also found FNS- recommended tools for automatically monitoring potential SNAP trafficking on e-commerce websites to be of limited use and less effective than manual searches, and FNS has developed but not finalized guidance on using such tools  We recommended that FNS reassess the effectiveness of its current guidance and tools for states to monitor e-commerce and social media websites  In August 2017, FNS officials told us that they had developed revised guidance for states on using social media in detection of SNAP trafficking  According to FNS, the guidance will be incorporated into the SNAP Fraud Framework  Staff levels: During the time of our 2014 work, most of our 11 selected states reported difficulties conducting fraud investigations due to reduced or stagnant staff levels while numbers of SNAP recipients had greatly increased, but FNS decided not to make changes to address this issue  Specifically, 8 of the 11 states we reviewed reported inadequate staffing due to attrition, turnover, or lack of funding  Some states suggested changing the financial incentive structure to promote fraud investigations because agencies were not rewarded for cost-effective, anti-fraud efforts that could prevent ineligible people from receiving benefits  Specifically, when fraud by a SNAP recipient is discovered, a state may generally retain 35 percent of any recovered overpayments  However, there are no recovered funds when a state detects potential fraud by an applicant and denies the application  To help address states’ concerns about resources needed to conduct investigations, we recommended in our 2014 report that FNS explore ways that federal financial incentives could be used to better support cost-effective anti-fraud strategies  FNS reported that it took some steps to explore alternative financial incentives, through a review of responses to a Request for Information in the Federal Register  However, FNS decided not to pursue bonus awards for anti-fraud and program integrity activities  Given that FNS has not made changes in this area, state SNAP fraud agencies may continue to report resource concerns in addressing fraud  Reporting guidance: We also found that FNS did not have consistent and reliable data on states’ activities because of unclear reporting guidance, and FNS has since revised its data collection form and provided training on the changes  To improve FNS’s ability to monitor states and obtain information about more efficient and effective ways to combat recipient fraud, we recommended in 2014 that FNS take steps, such as providing guidance and training, to enhance the consistency of what states report on their anti-fraud activities  In response, FNS revised the form used to collect recipient integrity information and changed the reporting frequency from annual to quarterly, effective fiscal year 2017  FNS officials also reported providing training to approximately 400 state agency and FNS regional office personnel on the updates to the form and related instructions  In our ongoing work, we are further reviewing states’ use of data analytics to identify SNAP recipient fraud, including that which may be occurring during out-of-state transactions  Because transactions that may appear suspicious—such as those made out-of-state—may in fact be legitimate, states may use data analytic techniques to include additional factors that may help them better target their efforts to identify potential fraud  However, states may have different levels of capacity for using data analytics to detect fraud  We are examining how 7 selected states are using data analytics and identifying the advantages and challenges states have experienced in doing so  We are also assessing FNS’s efforts to assist states in implementing GAO’s leading practices for data analytics outlined in GAO’s Framework for Managing Fraud Risks in Federal Programs outlined in GAO’s Framework for Managing Fraud Risks in Federal Programs  In addition, we are conducting our own analysis of EBT out-of-state SNAP transaction data  We expect to report on our findings later this year  FNS has taken some steps to prevent, detect, and respond to retailers who traffic SNAP benefits since our last report on the issue in 2006, but trafficking continues to be a problem  For example, in February 2018, a federal jury convicted a grocery store operator in Baltimore on charges of wire fraud in connection with a scheme to traffic more than $1 6 million in SNAP benefits for food sales that never occurred  The grocery store operator paid cash for SNAP benefits, typically paying the recipient half the value of the benefits and keeping the other half for himself  In our 2006 report, we found that SNAP was vulnerable to retailer trafficking in several areas, including: Requirements for food that retailers must stock to participate in SNAP: In 2006, we found that FNS had minimal requirements for the amounts of food that retailers must stock, which could allow retailers more likely to traffic into the program, although the agency has since taken steps to increase these requirements  In our 2006 report, FNS officials said that they authorized stores with limited food stock to provide access to food in low-income areas where large grocery stores were scarce  At that time, retailers were generally required to stock a minimum of 12 food items (at least 3 varieties of 4 staple food categories, such as fruits and vegetables), but FNS rules did not specify how many items of each variety would constitute sufficient stock  FNS officials told us that a retailer that only carries small quantities of food, such as a few cans of one kind of vegetable, may intend to traffic  In 2016, FNS promulgated a final rule increasing food stock requirements  FNS officials told us that these new rules are designed to encourage stores to provide more healthy food options for recipients and discourage trafficking  According to FNS, retailers are now generally required to stock at least 36 food items (a certain variety and quantity of staple foods in each of the 4 staple food categories)  Focus on high-risk retailers: We also found in 2006 that FNS had not conducted analyses to identify characteristics of retailers at high risk of trafficking and to target its resources—a shortcoming FNS has since taken some steps to address  For example, we reported that some stores may be at risk of trafficking because one or more previous owners had been found trafficking at the same location  However, FNS did not have a system in place to ensure that these retailers were quickly targeted for heightened attention  In addition, once a store was authorized to participate in the program, FNS staff typically would not inspect the store again until it applied for reauthorization 5 years later  We recommended that FNS identify the stores most likely to traffic and provide earlier, more targeted oversight to those stores  In 2009, FNS began establishing risk levels for each authorized retailer, identifying high-risk stores as those with a prior permanent disqualification at that location or a nearby location  In 2013, FNS required all high-risk retailers to go through reauthorization and to provide additional documentation regarding store ownership  That same year, FNS also consolidated its retailer management functions, including those for authorizing stores and analyzing EBT transaction data, into a single national structure known as the Retailer Operations Division  FNS officials told us that this structure enables the agency to identify and deploy their investigative resources to the areas of highest risk nationally, rather than within a given region  Penalties to deter retailer trafficking: We also found in our 2006 report that FNS’s penalties for retailer trafficking may be insufficient to deter traffickers, and since then, FNS has proposed—but not finalized—rules to increase them  FNS imposes administrative penalties for retailer trafficking—generally a permanent disqualification from the program or a monetary penalty  FNS relies on the USDA Office of Inspector General (OIG) and other law enforcement entities to conduct investigations that can lead to criminal prosecutions  In our 2006 report, we recommended that FNS develop a strategy to increase penalties for trafficking  The Food, Conservation, and Energy Act of 2008 (known as the 2008 Farm Bill) gave USDA authority to impose higher monetary penalties, and the authority to impose both a monetary penalty and program disqualification on retailers found to have violated relevant law or regulations (which includes those found to have trafficked)  In 2012, FNS proposed regulatory changes to implement these authorities  However, FNS has not finalized these rules, and as of fall 2017, the rules were considered “inactive ” In our ongoing work, we are continuing to assess FNS’s efforts to prevent, detect, and respond to retailer trafficking, as well as examining what is known about the extent of retailer trafficking nationwide  As part of this work, we are continuing to review FNS’s response to our prior recommendations, as well as related recommendations made by USDA’s OIG  We are also studying FNS’s periodic estimates of the rate of retailer trafficking, expressed as the dollar value and percentage of all SNAP benefits that were trafficked and the percentage of retailers involved  These data suggest an increase in the estimated rate of retailer trafficking since our 2006 report  However, we and others, including a group of experts convened by FNS, have identified some limitations with the retailer trafficking estimates  For example, the trafficking rate is calculated based on a sample of retailers that FNS considers most likely to traffic  Although FNS adjusts the data to better represent the broader population of authorized retailers, it is uncertain whether the resulting estimates accurately reflect the extent of trafficking nationwide  We are reviewing these limitations and FNS’s efforts to address them in our ongoing work  Chairman Jordan, Chairman Palmer, Ranking Member Krishnamoorthi, Ranking Member Raskin, and Members of the Subcommittees, this completes my prepared statement  I would be pleased to respond to any questions that you may have at this time  If you or your staff have any questions about this testimony, please contact Kathryn Larin, Director, Education, Workforce, and Income Security Issues at (202) 512-7215 or LarinK@gao gov  Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this statement  GAO staff who made key contributions to this testimony include Rachael Chamberlin, Celina Davidson, Swati Deo, Rachel Frisk, Alexander Galuten, Danielle Giese, Kristen Jones, Morgan Jones, Lara Laufer, Monica Savoy, and Kelly Snow  This is a work of the U S  government and is not subject to copyright protection in the United States  The published product may be reproduced and distributed in its entirety without further permission from GAO  However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately 


Report 2:  As of 2018, at least one preference customer has terminated its contract with SEPA due to this issue  Section 5 of the Flood Control Act of 1944 (P L  78-534) established the Southwestern Power Administration  SWPA markets hydroelectric power in Arkansas, Kansas, Louisiana, Missouri, Oklahoma, and Texas from 24 multipurpose Corps dams with a combined capacity of 2,194 MW  SWPA serves more than 100 preference customer utilities with more than 8 million end-use customers  The agency manages nearly 1,400 miles of high-voltage transmission lines  SWPA is the only U S  electrical balancing area supported solely by hydroelectric generation, and its use of the reservoirs and river systems within the SWPA marketing area must be balanced with flood control and other required uses so that the power needs of its customers can be met  SWPA states that it uses alternative financing and offsetting collection authorities to fund expenses and purchase power to help SWPA meet its obligations while minimizing congressional appropriations  Periodically, SWPA has been challenged by low water conditions  It has a rain-based water supply—rather than one that is snow-based, like the mountain snowpack water supply of WAPA and BPA—and sells power from a comparatively small reservoir system which stores that water  Extended dry periods sometimes mean that SWPA must purchase replacement power and energy to meet its contractual obligations  This means that SWPA requires congressional authority to use its revenues from power sales over the long term—across high and low water years  Prior year balances have been available to Southwestern so that we are financially prepared and able to achieve rate stability for our customers  This authority is critical to operating our program according to sound business principles  Southwestern's program is funded by authority to use receipts, alternative financing, and other authorities approved by Congress, including appropriations, which represent only 6 5% of Southwestern's total program  Created by the Department of Energy Organization Act of 1977 ( P L  95-91 ), WAPA is the newest and largest of the PMAs in terms of service area  WAPA's service area covers 1 3 million square miles, and its power—transmitted by a high voltage grid over 17,000 miles long—serves customers in 15 western states  WAPA markets and transmits hydropower from 56 federal dams operated by BOR, and the Corps  It also sells hydropower power produced by facilities administered by the International Boundary and Water Commission, and markets the United States' 24 3% share (547 megawatts) of the coal-fired Navajo Generating Station in Arizona  In addition to the types of public bodies traditionally served as preference customers by the other PMAs, WAPA has developed a policy to give preference to Native American tribes regardless of their utility status  WAPA has been working with other regional entities to address the changing electric power needs of its customers  In 2014, WAPA published its Strategic Roadmap 2024, titled "Powering the Energy Frontier " The document is intended to serve as WAPA's strategic plan to guide the agency's actions for the next 10 years  However, according to some, the developing Energy Imbalance Market in the West may provide additional options for WAPA to address transmission development needs to balance regional generation and demand  An issue of continuing importance to WAPA is its role in relieving transmission congestion within its marketing area  There are a number of constrained transmission paths in the West whose limited capacity to transfer power may reduce the ability of utilities to serve electric loads on a seasonal or ongoing basis  In 2009, Section 402 of the American Recovery and Reinvestment Act ( P L  111-5 ) amended the Hoover Power Plant Act of 1984 to give WAPA authority to borrow up to $3 25 billion from the U S  Treasury to pursue transmission projects that integrate renewable generation sources into the electric transmission grid  The law provides authority to construct and upgrade transmission lines to help deliver renewable resources to market  Western created the Transmission Infrastructure Program, also known as TIP, to implement this new initiative  Several transmission projects have been initiated under the program  Previous budget proposals and legislation have proposed repealing WAPA's loan authority, but to date, none of these proposals have been enacted  In 2015, WAPA's Upper Great Plains (UGP) region joined the Southwest Power Pool (SPP), a Regional Transmission Organization (RTO)  Under the operating agreement with SPP, WAPA was required to transfer functional control of UGP's eligible transmission facilities to SPP  WAPA is the first PMA to formally join an RTO, and states that benefits to date from joining SPP have significantly exceeded the original estimate of $11 5 million per year  WAPA reports that two of its other regions are considering joining SPP  For Water Year 2017, WAPA reported that it delivered 26,148 gigawatt-hours of hydroelectric power to its customers, which is 101% of average annual power sales  The West has been experiencing periodic droughts for a number of years, resulting in lower snowmelts and less water in storage and available for power generation  To help smooth the resulting annual differences, a "drought-adder" reduction program has been implemented in recent years  A drought-adder charge was levied to help repay deferred drought costs accrued during the 2000s in the Rocky Mountain and Upper Great Plains regions  The balance was paid a year ahead of schedule and, as of this year, has resulted in $40 million annual savings for more than 50 percent of WAPA's customers in Colorado, Wyoming, Montana, Kansas, Nebraska, the Dakotas and the western sections of Minnesota and Iowa  This is the second year that 417 of WAPA's customers, out of 700, have had a rate reduction  The drought-adder component of the rate remains available to WAPA to adjust to the variable hydropower resource—a lasting risk if drought conditions persist in WAPA's territory  Moderate to extreme drought conditions have been reported in parts of the western United States  In addition to issues specific to individual PMAs, some recent proposals have applied to multiple PMAs  In 2018, the Trump Administration proposed to sell the transmission assets owned and operated by the federal Power Marketing Administrations  The proposal suggested that "eliminating or reducing" the federal government's role in owning and operating transmission assets and increasing the private sector role would "encourage a more efficient allocation of economic resources and mitigate unnecessary risk to taxpayers " The proposal calls for federal transmission infrastructure assets (lines, towers, substations, and/or rights of way) to be sold, with the private sector and/or state and local entities potentially taking over the transmission functions now provided by the PMAs  The Federal entities that would result after such sales could contract with other utilities to provide transmission service for the delivery of Federal power just as the Southeastern Power Administration, which does not own transmission lines, already does  The proposal reports that according to the Administration's FY2019 budget justification, the sale of federal transmission assets would result in a net budgetary savings of $9 5 billion, in total, over a 10-year window  Reportedly, the Administration dropped the plan due to stakeholder opposition, with the Department of Energy stating that such a sale of PMA transmission assets would not proceed unless directed by Congress  Proposals to sell all or part of the PMAs are not new, and have been made in some form by almost every President since Reagan  However, Congress has sought to prevent executive branch alterations of PMA structures and authority  Under Section 208 of the Urgent Supplemental Appropriations Act, 1986 ( P L  99-349 ), the executive branch is prohibited from spending funds to study or draft proposals to transfer from federal control any portion of the assets of the PMAs unless specifically authorized by Congress  The Trump Administration divestment proposal could have had an indirect impact on the original congressional intent for the PMAs to provide electricity at the lowest possible cost  This in turn could require changes to the following provisions: Flood Control Act of 1944, as amended (FCA; 16 U S C  §825s et seq  ); The 1937 Bonneville Project Act (BPA; 16 U S C  §832c ); and The Reclamation Project Act of 1939 (RPA; 43 U S C  §485h(c))   These laws also stipulate a preference of public bodies for the sale of federal power  Selling federally owned transmission assets could potentially affect the "lowest possible" rates of sale, and the statutory preference for publicly or cooperatively owned utilities to be the vehicle for sale of electric power produced by federal facilities 

ground_truth: The federal government, through the Department of Energy, operates four regional power marketing administrations (PMAs), created by statute: the Bonneville Power Administration (BPA), the Southeastern Power Administration (SEPA), the Southwestern Power Administration (SWPA), and the Western Area Power Administration (WAPA). Each PMA operates in a distinct geographic area. Congressional interest in the PMAs has included diverse issues such as rate setting, cost and compliance associated with the Endangered Species Act (ESA; P.L. 93-205; 16 U.S.C. §§1531 et seq.), and questions of privatization of these federal agencies. In general, the PMAs came into being because of the government's need to dispose of electric power produced by dams constructed largely for irrigation, flood control, or other purposes, and to achieve small community and farm electrification—that is, providing service to customers whom it would not have been profitable for a private utility to serve. With minor exceptions, these agencies market the electric power produced by federal dams constructed, owned, and operated by the U.S. Army Corps of Engineers (Corps) and the Bureau of Reclamation (BOR). By statute, PMAs must give preference to public utility districts and cooperatives (e.g., "preference customers"), and sell their power at cost-based rates set at the lowest possible rate consistent with sound business principles. The Federal Energy Regulatory Commission regulates PMA rates to ensure that they are set high enough to repay the U.S. Treasury for the portion of federal facility costs allocated to hydropower beneficiaries. With energy and capacity markets changing in the western United States (especially with the growing need to integrate increasing amounts of variable renewable sources), and the development of the Energy Imbalance Market in the West, BPA and WAPA may have to adapt their plans with regard to generation needs and how transmission systems are developed. In 2018, the Trump Administration proposed to sell the transmission assets (lines, towers, substations, and/or rights of way) owned and operated by the federal Power Marketing Administrations. The proposal suggested that "eliminating or reducing" the federal government's role in owning and operating transmission assets, and increasing the private sector's role, would "encourage a more efficient allocation of economic resources and mitigate unnecessary risk to taxpayers." The resulting PMA entities would then contract with other utilities to provide transmission services for the delivery of federal power, similar to what SEPA does currently. Reportedly, the proposed sale of PMA assets was dropped after opposition to the plan emerged from stakeholders. Under Section 208 of the Urgent Supplemental Appropriations Act, 1986 (P.L. 99-349), the executive branch is prohibited from spending funds to study or draft proposals to transfer from federal control any portion of the assets of the PMAs unless specifically authorized by Congress. Environmental, fishing, and tribal advocates have sued the federal government over concerns that operating rules for hydropower dams on the Columbia and Snake Rivers (i.e., the National Marine Fisheries Service Biological Opinion) are inadequate to ensure survival of species threatened or endangered under the ESA. In 2016, a federal judge overturned a previous management plan for the dams, finding that it would not be sufficient to protect salmon runs, and ordered a new management plan that could include removing the dams. However, in 2018, President Trump issued a Presidential Memorandum accelerating the process for a new management plan, requiring the biological opinion to be ready by 2020. Since FY2011, power revenues associated with the PMAs have been classified as discretionary offsetting receipts (i.e., receipts that are available for spending by the PMAs), thus the agencies are sometimes noted as having a "net-zero" spending authority. Only the capital expenses of WAPA and SWPA require appropriations from Congress.