Office of Inspector General

U.S. International Development Finance Corporation

Top Management Challenges Facing 

DFC in FY 2024
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DFC FY 2024 Top Management Challenges │ 3

TABLE OF CONTENTS

MESSAGE FROM THE INSPECTOR GENERAL........................................................ 4

INTRODUCTION........................................................................................................... 8

1. Improve Monitoring and Evaluating Actual Development Impact ................ 10

2. Improve Performance Management, Traceability, Accuracy, and Availability 

of Project Data as DFC’s Commitments Grow.......................................................... 11

3. Balance Expectations of Congress and Stakeholders While Managing 

Exposure to Reputational Risks .................................................................................. 12

4. Maintain Efficient Growth and Development................................................... 14

CONCLUSION .............................................................................................................. 16

MANAGEMENT’S COMMENTS............................................................................... 18
4 │ DFC Office ofInspectorGeneral

MESSAGE FROM THE INSPECTOR GENERAL

Inspector General Zakel

The U.S. International Development Finance Corporation (DFC) was created by the Better 

Utilization of Investments Leading to Development Act of 2018 (BUILD Act) and is authorized 

until October 2025. DFC began operations in January 2020,1consolidating the functions of its 

predecessor agencies, the Overseas Private Investment Corporation (OPIC) and the U.S. Agency 

for International Development’s (USAID) Development Credit Authority (DCA). DFC partners 

with the private sector to finance solutions to the most critical challenges facing the developing 

world today, thereby advancing economic growth and promoting U.S. national security interests. 

DFC supports development projects in a variety of sectors, including energy, healthcare, and 

infrastructure, by providing equity and debt financing, political risk insurance, and technical 

assistance. Through the BUILD Act, DFC was granted an expanded lending capacity of $60 billion 

and a more focused mission on development impact in lower income and lower-middle income 

countries. DFC had a portfolio of almost $40 billion in FY 2023 and added new commitments 

totaling more than $9 billion in FY 2023, which was a record year for DFC. (OPIC previously 

averaged around $4.5 billion of new commitments each year.) In FY 2023, DFC projects supported

information and communications technology, gender inequality, food insecurity, minerals, and 

helped combat the effects of climate change.

DFC Office of Inspector General (OIG) provides independent oversight of DFC programs and 

operations through audits and investigations designed to prevent, detect, and deter fraud, waste,

and abuse in DFC programs, and promote economy, effectiveness, and efficiency in DFC 

operations.

2 This helps ensure the U.S. Government supports economic growth, promotes U.S. 

national security interests, and maximizes return on investments. As part of this oversight, the 

Reports Consolidation Act of 2000 requires federal agencies to include in their performance and 

accountability reports a statement by their Inspector General summarizing the most serious 

1 Because DFC did not have appropriated budgetary authority until January 1, 2020, the FY 2020 first quarter projects were assigned 

to OPIC because those projects were authorized and OPIC appropriations was used to commit those projects.

2 The BUILD Act created a dedicated DFC Office of Inspector General (DFC OIG), which derives its authority from the Inspector 

General Act of 1978, as amended (IG Act).
DFC FY 2024 Top Management Challenges │ 5

management and performance challenges facing the agency, and progress in addressing those 

challenges.3 Recent DFC OIG audits and investigations have revealed the following four Top 

Management Challenges (TMCs) facing DFC in FY 2024. These challenges are similar to the 

TMCs identified in FY 2023.

4 This is not surprising given that DFC is a relatively new and evolving 

organization. Indeed, we expect these challenges to continue over the next several years.

1. Improve Monitoring and Evaluating Actual Development Impact. Project monitoring and 

measuring actual development impact are continued areas of improvement for DFC.

Effectively measuring development impact is critical to ensuring DFC meets the intended 

purpose of its investments. The BUILD Act requires DFC to develop standards and 

methods for ensuring development performance, including measurement of the projected 

and actual development impact of a project. DFC must continue to take action to ensure 

actual development impact is measured.

2. Improve Performance Management, Traceability, Accuracy, and Availability of Project 

Data as DFC’s Commitments Grow. DFC needs to improve performance management, 

traceability, accuracy, and availability of project data as its commitments grow. The 

BUILD Act requires DFC to assess the development performance of its portfolio. A 

weakness in this area is that DFC does not have formal procedures for the systematic 

collection and storing of documentation from site visits, which inhibits enterprise level 

tracking against strategic goals.

3. Balance Heightened Expectations of Congress and Stakeholders While Managing 

Reputational Risks. DFC has many stakeholders, in the United States and around the 

world, who are interested in what it does and how it achieves its goals. Under the BUILD 

Act, when evaluating development projects, DFC must consider factors relating to 

environmental and social impact, worker rights, and human rights, among other 

considerations. DFC faces difficult choices in making investments that balance the 

competing interests of development impact, foreign policy, and financial performance. 

Finding the proper balance between these competing priorities presents a significant 

challenge. DFC OIG believes DFC will face significant challenges in the constantly 

evolving global environment to advance development through its investments while 

meeting the expectations of Congress and other stakeholders.

4. Maintain Efficient Growth and Development. Maintaining efficient growth and 

development has been a challenge for DFC since its inception. Now that DFC has a Chief 

Executive Officer (CEO), Deputy CEO, Chief Risk Officer (CRO), and Chief 

Development Officer (CDO), DFC has the leadership capability to make major 

improvements in this area. In many ways, DFC is still a new organization and accordingly, 

DFC OIG has identified efficient growth and development as a top management challenge 

for the past three years. This challenge is a significant element in DFC’s plan to ensure it 

efficiently and effectively accomplishes its goals and objectives. This plan should include 

3 Reports Consolidation Act of 2000, (Public Law 106-531), section (5)(b), states: “[E]ach program performance report shall contain 

an assessment by the agency head of the completeness and reliability of the performance data included in the report. The assessment 

shall describe any material inadequacies in the completeness and reliability of the performance data, and the actions the agency can 

take and is taking to resolve such inadequacies.” Although DFC does not fall under the jurisdiction of the Reports Consolidation Act, 

DFC OIG proactively publishes its Top Management Challenges each fiscal year as a government-wide best practice.

4 Top Management Challenges Facing DFC in FY 2023
6 │ DFC Office ofInspectorGeneral

building a mission-critical workforce, developing an ideal organization structure, growing 

its support staff, and managing potential budgetary constraints.

Each challenge is discussed in greater detail in this report. Please contact me if you would like 

to discuss the report or have any questions about it.

Sincerely,

 Anthony “Tony” Zakel

 Inspector General 
DFC FY 2024 Top Management Challenges │ 7

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8 │ DFC Office ofInspector General

INTRODUCTION

The U.S. International Development Finance Corporation (DFC) is the United States’ official 

development financial institution. DFC partners with the private sector to finance up to $60 billion 

in solutions to the most critical challenges facing the developing world today, while also advancing 

U.S. foreign policy priorities. DFC uses development finance tools, such as loans, guarantees, 

equity, and political-risk insurance, to facilitate a positive – and measurable – developmental

impact. DFC facilitates investments the private sector might not otherwise make due to heightened 

risks in developing countries. These investments also provide developing countries an alternative 

to state-directed investments by authoritarian governments and U.S. strategic competitors. DFC’s 

seven-year authorization expires in September 2025, making the next two years critical to ensuring 

it meets expectations.

DFC’s development portfolio has reached almost $40 billion and is expected to grow in the coming 

years, especially in economies that may not have adequate safeguards to address fraud and 

corruption. DFC has development initiatives in various regions including Africa and the Middle 

East; Latin America and the Caribbean; and Indo-Pacific. DFC must also support certain energy 

and energy-related investments in eligible European and Eurasian countries without regard to hostcountry income classification. DFC Office of Inspector General’s (OIG) mission is to prevent, 

detect, and deter fraud, waste, and abuse by conducting and supervising audits and investigations 

of DFC’s programs and operations worldwide.5 This is DFC OIG’s fourth year publishing top 

management challenges facing DFC. The Top Management Challenges for the three prior years 

are highlighted below.

FY 2021 FY 2022 FY 2023

Manage Risks While 

Balancing Revenues Against 

Operating Costs.

Manage Risks While 

Balancing Revenues Against 

Operating Costs.

Improve Monitoring and 

Evaluating Actual 

Development Impact.

Increase Partnerships with 

Agencies to Efficiently and 

Effectively Advance U.S. 

Foreign Policy and Security 

Objectives

Increase Partnerships with 

Agencies to Efficiently and 

Effectively Advance U.S. 

Foreign Policy and Security 

Objectives

Balance Heightened 

Expectations of Congress and 

Stakeholders While Managing 

Risks

Improve Performance 

Management, Transparency, 

Accuracy and Availability of 

Project Data as DFC’s 

Commitments Grow

Improve Performance 

Management, Transparency, 

Accuracy and Availability of 

Project Data as DFC’s 

Commitments Grow

Improve Performance 

Management, Transparency, 

Accuracy, and Availability of 

Project Data as DFC’s 

Commitments Grow

Organizational Transition and 

Additional Responsibilities

Organizational Transition and 

Additional Responsibilities

Maintain Organizational 

Transition While Building 

Internal Controls Around 

Core Management Systems

5 Congress established DFC OIG through the Better Utilization of Investments Leading to Development Act of 2018 (BUILD Act). 

DFC OIG derives its authority from the Inspector General Act of 1978, as amended (5 U.S.C. Chapter 4).
DFC FY 2024 Top Management Challenges │ 9

This year’s Top Management Challenges Facing DFC in FY 2024 includes information and 

insights from DFC OIG’s recent oversight work, including the audit of DFC Can Improve 

Oversight of Renewable Energy and Financing Projects in India and the management advisory 

report, Key Considerations to Inform DFC’s Response in Ukraine. The OIG is dedicated to 

fulfilling its role of providing oversight that promotes the efficiency and effectiveness of DFC 

programs and operations and has identified the following Top Management Challenges (TMCs) 

that DFC should consider. 

Top Management Challenges Facing DFC in FY 2024

Improve Monitoring and Evaluating Actual 

Development Impact

Improve Performance Management, 

Traceability, Accuracy, and Availability of 

Project Data as DFC’s Commitments Grow

Balance Expectations of Congress and 

Stakeholders While Managing Exposure to 

Reputational Risks

Maintain Efficient Growth and Development
10 │ DFC Office ofInspector General

1. Improve Monitoring and Evaluating Actual Development Impact

DFC OIG continues to believe that project monitoring and 

measuring actual development impact are ongoing areas of 

improvement for DFC. Effectively measuring development 

impact is critical to ensuring DFC meets the intended purpose of 

its investments. The BUILD Act requires DFC to develop 

standards and methods for ensuring development performance, 

including measurement of the projected and actual development 

impact of a project. DFC must continue to take action to ensure 

actual development impact is measured. 

DFC’s FY 2022-2026 Strategic Plan6includes impact management monitoring, measurement, 

and learning as one of its goals. DFC utilizes the Impact Quotient (IQ) to monitor and measure 

the development impact of every project during its life cycle and across multiple categories, 

including the local economy, inclusion of underserved populations, and innovation. DFC has 

revised the IQ measurement by implementing a scoring system that rates projects as 

exceptionally impactful, highly impactful, impactful, limited impact, or indeterminate. DFC 

plans to enhance the IQ framework to monitor and measure the development impact of every 

project and improve how DFC evaluates future projects. DFC also plans to modernize IT data 

governance capabilities to improve their evaluation of development impact and plans to use IT 

capabilities to assist in analyzing data that measures development impact. DFC believes this 

will further guide future investment decisions. In addition, DFC established the Impact 

Management, Measurement, and Learning (IMML) division in its Office of Development 

Policy (ODP) to review, analyze, and manage the development impact of the DFC portfolio. 

Furthermore, DFC uses the Impact Thesis and Development Outcome Survey to assess project 

impact. 

OIG believes DFC has made progress in this area, particularly in estimating development 

impact as part of its investment decision-making process. However, DFC must develop a 

strategic plan and goals for site visit monitoring. 

DFC OIG’s audit report, DFC Can Improve Oversight of Renewable Energy and Financing 

Projects in India, found that DFC:

1. Does not systematically gather and store documentation from site visits, which inhibits 

any enterprise level tracking against strategic goals. 

2. Was unable to readily provide information regarding the number of site visits 

performed in the last year. 

3. Does not have strategic level objectives, plans, and measurable goals for project site 

visit monitoring. 

4. Lacked a formal process for DFC divisions to develop a yearly site visit monitoring 

plan that would be linked to strategic plans and goals. DFC’s current site visit 

6 US International Development Finance Corporation Strategic Plan FY 2022-2026
DFC FY 2024 Top Management Challenges │ 11

monitoring process at the division level is ad hoc, informal, and not driven by strategic 

goals. 

DFC OIG made several recommendations in the report regarding DFC’s project monitoring. 

DFC agreed with these recommendations and stated it would update policies and procedures 

to formalize the process for setting annual goals for site visit monitoring. Improving project 

monitoring will help DFC meet the BUILD Act requirements to assess development 

performance of individual transactions and its overall portfolio.

In addition, DFC OIG issued a management advisory report, Key Considerations to Inform 

DFC’s Response in Ukraine, highlighting issues DFC should consider during its evolving 

response to the war in Ukraine. This report urges DFC to establish sound monitoring and 

evaluation policies across DFC’s Ukraine portfolio. The report emphasized that these practices 

would help proactively prevent fraud and address risks. 

As DFC continues to increase the size of its investment portfolio, it must seek to improve 

assessment and reporting of actual development impact achieved and promotion of our nation’s 

foreign policy as the primary metrics of its success, not the dollar value of its investment 

portfolio.

2. Improve Performance Management, Traceability, Accuracy, and 

Availability of Project Data as DFC’s Commitments Grow

DFC OIG believes that DFC needs to improve performance 

management, traceability, accuracy, and availability of project 

data as its commitments grow. The BUILD Act requires DFC 

to assess the development performance of its portfolio. A 

weakness in this area is DFC does not have formal procedures 

for the systematic collection and storing of documentation 

from site visits, which inhibits enterprise level tracking 

against strategic goals.

With investments in strategically important locations throughout the world, DFC’s ability to 

effectively conduct performance management is critically important. DFC needs to ensure that 

financial information and workflow transactions can be traced throughout its portfolio. DFC 

plans to assess performance by conducting portfolio performance evaluations on attributes 

including sector, impact theme, geography, DFC product line, and DFC initiative. As DFC’s 

portfolio grows it is important to maintain visibility in areas such as credit monitoring and 

portfolio servicing activities, risk management and internal controls, and data collection and 

analysis reporting.

DFC OIG’s audit report, DFC Can Improve Oversight of Renewable Energy and Financing 

Projects in India, found that DFC’s records management system can be unreliable in compiling 

a complete set of documents for individual projects. This was caused by DFC using two 

systems that do not interface properly to store project information and documentation. The 

audit also found that data is not tracked for management analysis and strategic plan monitoring. 
12 │ DFC Office ofInspector General

DFC OIG made recommendations to update DFC’s records management process. DFC agreed

with these recommendations and stated it would address the root causes of system interface 

issues. Improving records management will help DFC meet the BUILD Act requirements to 

assess development performance of individual transactions and its overall portfolio.

The Government Performance and Results Act Modernization Act of 2010 (GPRAMA) 

requires agencies to develop a performance management framework that includes strategic 

plans, performance plans, and performance reports. Further, the BUILD Act requires DFC to 

create a performance measurement system to evaluate and monitor projects, and to guide plans 

for future projects. While DFC has made progress in its performance management, this remains 

a challenge. Previous audits have identified areas to improve DFC’s performance management 

system, as well as measure the projected effects of development projects. To ensure DFC meets 

its obligations under GPRAMA and the BUILD Act – and to make sound investment decisions 

– DFC must continue to improve its performance management.

3. Balance Expectations of Congress and Stakeholders While Managing 

Exposure to Reputational Risks

DFC has many stakeholders, in the United States and around 

the world, who are interested in what it does and how it 

achieves its goals. Under the BUILD Act, when evaluating 

development projects, DFC must consider factors relating to 

environmental and social impact, worker rights, and human 

rights, among other considerations. DFC faces difficult 

choices in making investments that balance the competing 

interests of development impact, foreign policy, and 

financial performance. Finding the proper balance between 

these competing priorities presents a significant challenge. 

DFC OIG believes DFC will face significant challenges in the constantly evolving global 

environment to advance development through its investments while meeting the expectations 

of Congress and other stakeholders.

DFC was created as an alternative to state-owned solutions in the developing world that do not 

place an emphasis on environmental and socials standards. DFC is positioned to compete with 

China and assist the U.S. Government for strategic priorities and must consider reputational 

risk when making investment decisions. DFC OIG’s audit, DFC Can Improve Oversight of 

Renewable Energy and Financing Projects in India, found DFC did not adequately support a 

waiver of environment and social (E&S) policy standards on one of its projects, resulting in 

$54.91 million in unsupported questioned costs. DFC’s justification for approving the blanket

waiver stated the investment was highly developmental and aligned with U.S. foreign policy 

interests. This justification has been used for most DFC projects, however, the justification 

does not explain why this particular project was unique. By waiving IFC Performance 

Standards, DFC undermined its BUILD Act mandate to adhere to best practices concerning 

environmental and social safeguards. DFC concurred with the audit findings and 

recommendations, but did not agree with the unsupported questioned costs, stating they believe 

adequate documentation was provided.
DFC FY 2024 Top Management Challenges │ 13

The same audit also identified that DFC needs to improve tracking and reporting significant 

environmental and social events, particularly fatalities and serious injuries. DFC lacks a 

centralized reporting system and clear monitoring policies and procedures concerning 

significant E&S events. This makes it challenging for officials across the corporation to 

properly monitor projects, particularly projects it has identified as high risk for significant 

adverse environmental or social impacts. The audit found there were three fatalities and 

multiple serious injuries on projects we reviewed. The audit made several recommendations 

addressing treatment of E&S events. DFC agreed with these recommendations and stated it 

would develop a system to track and report E&S events and data to the Board of Directors and 

in its Annual Report.

DFC has stated it understands the importance of evaluating E&S factors early in the process.

In FY 2024, DFC intends to target investments in critical minerals supply chains to support 

U.S. national security and economic competitiveness. DFC also intends to improve their 

process for reviewing E&S development impact in FY 2024. This includes leveraging its 

resources to evaluate E&S factors early in the process. DFC intends to continue building its 

capacity to monitor project results and partner with other agencies to communicate U.S. 

accomplishments.

DFC faces difficult choices in making investments that balance the competing interests of 

foreign policy, financial performance, and development impact. Further, in accordance with 

the BUILD Act, DFC is required to be values-based and must hold its project sponsors to higher 

standards for integrity and compliance with environmental, social, and governance standards 

than its strategic competitors. DFC should continue to mitigate reputational risk that could 

occur from its investments. Reputational risk is a danger to the good name or standing of an 

organization. This risk could occur through a number of ways, including actions of the 

corporation, its employees, or its partners and suppliers. DFC is taking steps to mitigate 

associated risks, including improving the monitoring and evaluation of E&S impact of its

projects and partnering with other agencies to communicate U.S. accomplishments. DFC OIG 

believes DFC will continue to face significant challenges in the evolving global environment 

to advance development while meeting the expectations of Congress and other stakeholders.
14 │ DFC Office ofInspector General

4. Maintain Efficient Growth and Development

Maintaining efficient growth and development has been a 

challenge for DFC since its inception. Now that DFC has a 

CEO, Deputy CEO, CRO, and CDO, DFC has the leadership 

capability to make major improvements in this area. In many 

ways, DFC is still a new organization. Accordingly, DFC OIG 

has identified efficient growth and development as a top 

management challenge for the past three years. This challenge 

is a significant element in DFC’s plan to ensure it efficiently 

and effectively accomplishes its goals and objectives. This 

plan should include building a mission-critical workforce, 

developing an ideal organization structure, growing its support staff, and managing potential 

budgetary constraints.

Mission-Critical Workforce

DFC plans to grow its workforce to approximately 730 by the end of FY 2024. DFC is 

increasing investments in human resources management so the corporation can grow quickly. 

DFC depends on a knowledgeable workforce with expertise in areas such as finance, 

management, and global business development. DFC has identified that additional 

administrative support in FY 2024 is needed to grow in the following areas: 

1. Expanding overseas presence to source better deals in local markets; 

2. Expanding underwriting capacity to grow its portfolio;

3. Improving monitoring and evaluation of its developmental impact; and

4. Scaling mission support functions to meet staff and mandate growth. 

DFC OIG’s reports have noted areas where DFC staffing was insufficient. The DFC OIG’s 

BUILD Act7

audit found that DFC has faced challenges, including multiple changes in 

administration and leadership. The India audit8found that DFC’s Office of Development Policy 

(ODP) staffing appeared to be insufficient to perform robust site visits in comparison to peer 

development finance institutions. The India audit also found staffing variances between DFC 

and other development finance institutions.9

Organization Restructuring

DFC is still generally organized like its predecessor, OPIC.10 This prompts the question: Given 

the change in its mission, is DFC making the right decisions in where and who to hire? A recent 

reorganization announcement resulted in DFC postponing implementation to allow greater 

7 DFC Made Significant Progress Implementing Provisions of the Better Utilization of Investments Leading to Development Act

(Report Number DFC-22-005-C, issued September 22, 2022). 

8 DFC Can Improve Oversight of Renewable Energy and Financing Projects in India (Report Number DFC-24-002-C issued 

November 13, 2023)

9 According to 2017 reports 

10 The BUILD Act consolidated the U.S. Government's development finance capabilities by merging the Overseas Private Investment 

Corporation (OPIC) and the Development Credit Authority (DCA) of the U.S. Agency for International Development (USAID) into a

new government corporation. 
DFC FY 2024 Top Management Challenges │ 15

employee participation in the reorganization process. DFC plans to reorganize the current 

department structure and change the way it does business internally. DFC is working with the

Boston Consulting Group on a study that will help answer the question of how to best organize,

as well as develop a hiring strategy. DFC is faced with the challenge of changing an 

organization structure that has been in place for well over two decades while operating in a 

way that allows it to be as successful as possible in meeting its new mission, as defined by the 

BUILD Act. 

Support Staff

DFC relies on support staff that perform travel, accounting, finance, and human resource

activities and processes that directly assist other departments to help improve productivity. 

These professionals are critical to keeping DFC’s operations moving efficiently and effectively. 

DFC should continue to grow its support staff professionals to keep up with DFC’s overall 

growth. 

Potential Budgetary Constraints

The Continuing Resolution (CR)11 impacts the budgets of all federal agencies. The GAO has 

found that CRs have resulted in administrative inefficiencies and limited management options 

in areas such as hiring and travel. Because DFC is a new entity charged with growing the 

agency to accomplish its mission, budget limitations can impact its ability to hire additional 

staff. DFC has expressed that additional hiring is needed in FY 2024 to sustain existing work 

and support future development growth in financing, insurance, and equity activities, as well 

as evaluation and monitoring activity. Some sources have suggested that moving DFC’s 

workforce to the higher pay scale used by FDIC, SEC, and others would enable it to compete 

for experienced professionals that will accelerate hiring and retaining skilled and qualified

career staff. Indeed, DFC has had difficulty implementing its newest tool – equity investments 

– because many candidates declined offers for equity investment positions due to salary 

constraints.

12

According to media reports,13 DFC hires unpaid interns to fill various roles despite President 

Biden’s 2021 executive order directing agencies to reduce reliance on unpaid interns. While 

DFC still employs some unpaid interns, they have now started paying certain interns.

The OIG plans to conduct a workforce assessment performance audit in FY 2024 to examine 

some of these issues; however, this is budget dependent. There is a risk that a full-year CR will 

negatively impact DFC’s growth. There is also a risk that the limited hiring DFC can do under 

a CR may be negatively impacted if it is not done strategically to best meet DFC’s mission.

11 Selected Agencies and Programs Used Strategies to Manage Constraints of Continuing Resolutions (GAO-22-104701, issued June 

2022) “CRs generally continue the level of funding from the prior year’s appropriations or the previously approved CR from the 

current year. Full-year CRs provide appropriations for the remainder of the fiscal year and are functionally similar to final 

appropriations. A CR can include changes from the prior year’s budget that could (1) alter the rate at which funds are utilized, (2) 

extend an expiring program authority, or (3) provide a specific dollar amount of funding to a program during the CR.”

12 Wither the DFC: How the U.S.'s newest foreign policy agency should define success for impact, Just Security, June 15, 2023. 

13 I took an unpaid internship to gain public experience. But experience doesn't pay the bills, The Hill, July 30, 2023
16 │ DFC Office ofInspector General

CONCLUSION

DFC OIG offers this report to help inform discussions between DFC, Congress, the Biden 

Administration, and other stakeholders regarding effective stewardship of U.S. funds dedicated 

to international financial development. DFC has made significant progress in becoming 

America’s financial development institution. However, as discussed in this report, more work 

is needed to address the following challenges it faces.

Top Management Challenges Facing DFC in FY 2024

DFC OIG remains committed to conducting thorough and timely audits and investigations of 

DFC programs and operations, and to recommending actions to help address the issues and 

challenges we identify. Our goal is to work together with DFC to ensure its success in fulfilling

its mission, and re-authorization in 2025, in the same bipartisan fashion in which DFC was 

authorized in 2018.
DFC FY 2024 Top Management Challenges │ 17

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18 │ DFCOffice of Inspector General

MANAGEMENT’S COMMENTS

DFC 

I 

U.S. International 

Development 

Finance Corporation 

MEMORANDUM 

TO: 

FROM: 

Anthony Zakel 

Inspector General 

DFC - Office of the Inspector General 

Scott Nathan 0< lj Chief Executive Officer ~ 

November 14, 2023 

SUBJECT: DFC's Management Response to "Top Management Challenges Facing 

DFC in FY 2024" 

The U.S. International Development Finance Corporation concurs with the challenges 

identified in the Inspector General's Top Management Challenges Facing DFC in FY 

2024 report ("TMC"): 

• Improving Monitoring and Evaluating Actual Development Impact 

• Improving Performance Management, Traceability, Accuracy, and Availability of 

Project Data as DFC's Commitments Grow 

• Balancing Expectations of Congress and Stakeholders While Managing Exposure 

to Reputational Risks 

• Maintaining Efficient Growth and Development 

This TMC mirrors many of the OIG's positions stated in the report "DFC Can Improve 

Oversight of Renewable Energy and Financing Projects in India." While DFC 

management concurred with the OIG's recommendations in that report, the Corporation 

disagrees with some of the conclusions reached in this TMC. 

Commitments made at DFC have risen due to the increased authorities and resources 

that Congress has granted to DFC. DFC agrees that "[e]ffectively measuring 

development impact is critical to ensuring DFC meets the intended purpose of its 

investments." However, DFC disagrees with the OIG's position that DFC values or 

emphasizes the dollar amount of its investment portfolio at the expense of its assessment 

and reporting on actual development impact achieved and promotion of U.S. foreign 

policy. The size of the investment portfolio certainly matters because greater 

development impact will not be achieved in the countries in which the Corporation 

operates without an increasing mobilization of capital. But our internal and external 

messaging has consistently confirmed that DFC must balance the strength of its financial 

portfolio with achieving measurable development impact and advancing U.S. foreign 

policy goals. A chief example of this messaging is in DFC's Annual Report which includes 

development impact data collected throughout the year-further indication of the 

importance of different metrics used to tell DFC's story. DFC has also prioritized its 

resource allocation to the review, analysis, and management of its portfolio's 

development impact by supporting staffing growth in the Impact Management, 

Measurement, and Learning (IMML) division of its Office of Development Policy (ODP). 

IMML's headcount more than doubled in FY 2023 and this has allowed DFC to provide 

even greater focus on publicly reporting development impact data, from 52 DFC-
DFC FY 2024 Top Management Challenges │ 19

supported projects in FY 2022 to 121 in FY 2023. However, DFC agrees with the OIG 

that even more support is needed to facilitate greater transparency and reporting, and to 

that extent, increasing IMML's capacity is a priority in DFC's FY 2025 budget request to 

0MB. 

As DFC stated in the management response to the India audit, there is disagreement 

with the OIG as to the adequacy of support for the waiver of environmental and social 

policy standards on a particular project. DFC did not concur with the OIG's determination 

that the waiver was not appropriately documented or that one specific aspect of the 

project's approval record was sufficient grounds to deem the entirety of the project's 

record as inadequate and an "unsupported questioned cost." Furthermore, DFC 

disagreed with the OIG's calculation of such costs. 

2 
Office of Inspector General

U.S. International Development Finance Corporation

1100 New York Avenue, NW

Suite 270 West

Washington, DC 20527

https://www.dfc.gov/oig

Hotline

Call Toll Free 1-833-OIG-4DFC

Or visit: DFC OIG Hotline