U.S. Democracy Assistance in Burma: USAID and State Could Strengthen Oversight of Partners' Due Diligence Procedures
Published: 2017-07-28T00:00:00

Fast Facts:
Since 2011, Burma has been in transition from authoritarian rule toward democracy. Since 2012, USAID and State have obligated over $113 million to support this transition, including efforts to strengthen the country's democratic institutions.
USAID and State take steps to ensure that democracy projects support specified goals. However, they could do more to ensure that partners (e.g., non-governmental organizations) are doing what they can to prevent U.S. assistance from going to gross violators of human rights or other prohibited entities.
We recommended that USAID and State consider whether additional due diligence guidance is needed.

Highlights:
section_title: Why GAO Did This Study
paragraphs: U.S. policy toward Burma has been to promote the establishment of a democratically elected civilian government that respects the human rights of the Burmese people, according to State. Since 2011, Burma has been in transition from military, authoritarian rule toward parliamentary democracy. Congress included a provision in statute for GAO to review U.S. democracy programs in Burma. This report examines (1) USAID and State democracy projects, including coordination of these projects; (2) steps USAID and State have taken to help ensure that U.S. democracy projects and the U.S. Strategy for the Promotion of Democracy and Human Rights in Burma (Burma Democracy Strategy) address and support the specified purposes and groups, respectively, for Burma assistance funding; and (3) USAID and State efforts to ensure that U.S. democracy assistance is not provided to prohibited entities and individuals. GAO reviewed relevant agency documents; conducted fieldwork in Burma; and interviewed officials in Washington, D.C., and Burma.
section_title: What GAO Found
paragraphs: The U.S. Agency for International Development (USAID) and the Department of State (State) have funded 34 democracy projects in Burma since 2012, including efforts to strengthen the country's civil society and democratic institutions. These projects are primarily coordinated by the interagency Assistance Working Group (AWG) at the U.S. embassy in Burma, which approves all U.S. agencies' activities in Burma. However, State's Bureau of Democracy, Human Rights, and Labor (State/DRL) is not directly included in AWG proceedings because it does not have an embassy presence, and embassy policy limits participation in the AWG to those located at the embassy. As a result, the AWG has made decisions about State/DRL's projects without direct input from State/DRL and without State/DRL always receiving feedback. State officials said that they had recently begun an effort to identify more inclusive methods for coordinating with State/DRL and obtaining its input, which, if implemented properly, could improve coordination.
Dollars in millions
USAID and State take several steps to help ensure that their projects and the Burma Democracy Strategy address the specified purposes for Burma assistance funding. When designing projects, USAID and State both consider purposes for which assistance shall be made available. For example, GAO found that several current projects include objectives addressing purposes in the Consolidated Appropriations Act, 2016. Also, the Burma Democracy Strategy—an interagency strategy for promoting democracy in Burma—includes language supporting civil society, former prisoners, monks, students, and democratic parliamentarians, as required by the Consolidated Appropriations Act, 2014.
USAID and State make some efforts to ensure that U.S. democracy assistance is not provided to prohibited entities and individuals specified in law. USAID and State/DRL provide information to implementing partners on prohibited entities and individuals and the need for partners to conduct due diligence. However, USAID's Mission in Burma Office of Democracy and Governance (USAID/DG) and State/DRL only provide some guidance to partners on how to conduct due diligence and do not review partners' procedures. Partners GAO interviewed either did not conduct due diligence or expressed concerns about their due diligence procedures. Standards for internal control in the federal government call for management to review procedures and controls for relevance in addressing risks. Without providing more guidance and reviewing partner due diligence procedures, USAID/DG and State may miss opportunities to better ensure that U.S. assistance is not provided to prohibited entities and individuals.
section_title: What GAO Recommends
paragraphs: GAO recommends that USAID and State review their procedures and practices to determine whether additional guidance or reviews of implementing partners' due diligence procedures are needed. USAID and State both concurred with our recommendations.

section_title: Letter
paragraphs: U.S. policy toward Burma has been to promote the establishment of a  democratically elected civilian government that respects the human rights  of the Burmese people, according to the Department of State (State).  Since 2011, Burma has been in the process of a historic transition,  moving from military, authoritarian rule to a parliamentary democracy.  The landslide victory of Aung San Suu Kyi’s National League for  Democracy (NLD) in Burma’s November 2015 parliamentary elections  may prove to be a major step in the nation’s potential transition to a more  democratic government, according to a Congressional Research Service  report, though violence and discrimination against ethnic groups continue  to occur within Burma.
On April 4, 2012, the United States announced the reestablishment of the  U.S. Agency for International Development (USAID)’s Mission in Burma.   Since that time, USAID and State have obligated over $113 million in  democracy assistance to Burma. At the same time, the annual  appropriations acts have specified purposes for and restrictions on the  use of such assistance. The Consolidated Appropriations Act, 2014,  required that the Secretary of State, in consultation with the Administrator of USAID, submit a comprehensive strategy for the promotion of  democracy and human rights (democracy projects) in Burma and required  that the strategy address support for civil society and certain segments of  the population. In response, USAID and State developed the U.S.  Strategy for the Promotion of Democracy and Human Rights in Burma  (Burma Democracy Strategy).
The Consolidated Appropriations Act, 2016, includes a provision for us to  review U.S. democracy assistance in Burma. This report examines (1)  USAID and State democracy projects, including coordination of these  projects; (2) steps USAID and State have taken to help ensure that U.S.  democracy projects and the Burma Democracy Strategy address and  support the specified purposes and groups, respectively, for Burma  assistance funding; and (3) USAID and State efforts to ensure that U.S.  democracy assistance is not provided to prohibited entities and  individuals. In addition, we provide information about USAID’s and State’s  monitoring and evaluation of democracy projects in   appendix I.
To address these objectives, we reviewed relevant agency and  implementing partner documents and interviewed agency and  implementing partner officials in Washington, D.C., and in Burma. We  conducted fieldwork in Burma in October 2016 and November 2016. To  describe USAID and State democracy projects in Burma, we reviewed  project documents, including award agreements and quarterly reports. To  examine how U.S. democracy projects in Burma are coordinated, we  assessed existing coordination mechanisms against selected leading  collaboration practices identified in previous GAO work. To examine  steps USAID and State have taken to help ensure that U.S. assistance  and the Burma Democracy Strategy address the specified purposes of  Burma assistance funding, we reviewed fiscal years 2012-2016  appropriations acts (appropriations acts), relevant project documents, and  the Burma Democracy Strategy. To examine USAID and State efforts to  ensure that U.S. democracy assistance is not provided to prohibited  entities and individuals, we reviewed agreements and agency guidance  and interviewed implementing partners about their due diligence  procedures. To examine how USAID and State monitor and evaluate their  democracy projects, we identified monitoring and evaluation requirements  contained in agreements for all ongoing USAID and State projects. We  then reviewed recent monitoring and evaluation reports for ongoing  projects against the monitoring and evaluation requirements stipulated in  the agreements, as well as additional monitoring efforts.
We conducted this performance audit from May 2016 through July 2017  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives. See appendix II for a more  detailed discussion of our scope and methodology.
subsections: section_title: Background
subsections: section_title: Burma’s Population and Geography
paragraphs: Burma, with a population of over 56 million people, is located in  Southeast Asia between Bangladesh, India, China, Laos, and Thailand,  and borders the Andaman Sea and the Bay of Bengal (see fig. 1). The  country consists of seven divisions, seven states, and one union  territory. Burma is an ethnically diverse country with 135 officially  recognized ethnic groups.
section_title: Burma’s Political History and U.S. Relations
paragraphs: From 1962 until 2011, Burma was under military rule, with leaders  routinely restricting freedom of speech, religion, and movement and  committing other serious human rights violations against the Burmese  people, according to State documents. Further, the military government,  at times, condoned the use of forced labor and took military action against  ethnic minorities living within the country, according to State.
Through legislation and executive orders, political and economic  sanctions were imposed on Burma’s military government in response to  its violent suppression of the Burmese people. In May 1997, President  Clinton declared a national emergency with respect to Burma. Beginning  with this executive order, the United States prohibited new investment in  the country and later also imposed broad sanctions to prohibit the  exportation of financial services, certain imports, and transactions with  senior Burmese officials and others and provided limited assistance to the  country. The sanctions were developed through laws, such as the  Burmese Freedom and Democracy Act of 2003 and the Tom Lantos  Block Burmese JADE (Junta’s Anti-Democratic Efforts) Act of 2008, as  well as through presidential executive orders.
In 2011, the Burmese government began a transformation to a more open  and democratic society. In March 2011, the State Peace and  Development Council (SPDC), which had been in power since 1988 and  had restricted freedom of speech and committed human rights violations,  formally dissolved itself and transferred power to a semicivilian  government known as the Union Government, headed by President Thein  Sein. President Thein Sein, with the support of Burma’s Union  Parliament, implemented a number of political and economic reforms.  See figure 2 for a time line of significant events since 2011.
In response to the reforms made by the Burmese government starting in  2011, the U.S. government adopted a new policy of greater engagement  while maintaining existing sanctions. On April 4, 2012, the United States  announced the reestablishment of the USAID mission in Burma to  support further political and economic reforms. According to U.S. officials,  U.S. democracy assistance aims to deepen Burma’s political and  economic transition, strengthen human rights, ensure that reform benefits  everyday people, and support the development of a stable society that  reflects the diversity of the country.
In November 2015, Burma held nationwide parliamentary elections, from  which the NLD, Aung San Suu Kyi’s political party, emerged with an  absolute majority in both chambers of Burma’s Union Parliament. Using  its majority in both houses of parliament, the NLD elected Htin Kyaw,  Aung San Suu Kyi’s close advisor and long-time NLD supporter,  according to a Congressional Research Service report, as president.  Burma’s first civilian government after more than 5 decades of military  dictatorship was sworn into office in March 2016.
On October 7, 2016, President Obama issued an executive order that  ended the national emergency with respect to Burma that had been in  effect since 1997 and revoked five other executive orders that had  imposed, enforced, or waived economic sanctions on Burma. In addition,  the executive order waived the financial sanctions contained in the 2008  JADE Act, as allowed for in the act.
section_title: Current Challenges Facing the Burmese Government
paragraphs: Burma has made progress in its transition to a democratically elected  civilian government, according to U.S. officials, but the new government  still faces significant challenges, given the country’s history of corruption,  repression, human rights abuses, armed conflict, and isolation. There is  broad agreement among the international community that Burma’s  opening constitutes the most significant opportunity to advance  democracy and national reconciliation in the country in more than 60  years, according to USAID. However, the new government will need to  address many issues to continue its democratic transition.
A recent Congressional Research Service report identified several  challenges facing Burma’s new government, including managing relations  with the military, ending the ongoing civil war, dealing with internally  displaced minority ethnic groups, and releasing its political prisoners.  U.S. officials in Burma also identified many of these same issues.  Specifically, the main challenges identified were the following: managing relations with Burma’s military, known as the  Tatmadaw. Burma’s new government will need to work with the  military to get any reforms passed. By order of the Burmese  constitution, the military occupies 25 percent of the seats in  parliament, giving it the ability to block constitutional amendments. ending the civil war. For Burma’s new government to be successful,  it must bring about peace. For nearly 70 years, the Burmese  government and various ethnic armed organizations have engaged in  periods of active fighting and times of relative peace under negotiated  ceasefire agreements. The most recent ceasefire was signed in  October 2015, but not all ethnic armed organizations were signatories. ending the persecution of minority groups. Burma’s new  government faces international pressure to end widespread  persecution of minority groups. Burma has been plagued by the  continued persecution of minority ethnic groups, especially the  Rohingya, a Muslim group located in Rakhine State.  resettling internally displaced people. Burma’s new government  also faces international pressure to develop a solution that allows for  the safe resettlement of tens of thousands of internally displaced  people. In addition to the estimated 100,000 Rohingya located in  resettlement camps in Rakhine State, Burma has tens of thousands of  other internally displaced persons, mostly in Kachin State and Shan  State, the result of ongoing fighting between the Tatmadaw and  several ethnic militias.  releasing political prisoners. Lastly, Burma’s new government  needs to release all remaining political prisoners or risk facing  increased international scrutiny and pressure. The Burmese  Assistance Association for Political Prisoners asserts that as of July  31, 2016, at least 83 political prisoners remained in jail, along with 202  activists awaiting trial for political actions.
In addition, U.S. officials have also cited a low level of capacity as a major  challenge for Burma’s new government. USAID officials told us that many  of the members of the new government have little to no experience  governing. As a result, there is a need for capacity building.
section_title: U.S. Agencies Providing Democracy Assistance in Burma
paragraphs: U.S. democracy assistance in Burma is primarily provided by USAID’s  Mission in Burma Office of Democracy and Governance (USAID/DG),  USAID’s Bureau of Democracy, Conflict, and Humanitarian Assistance’s  Office of Transition Initiatives (USAID/OTI), and State’s Bureau of  Democracy, Human Rights, and Labor (State/DRL). USAID/DG and  USAID/OTI maintain staff at the U.S. embassy in Burma, while State/DRL  manages its projects in the country from its headquarters in Washington,  D.C., and through the human rights officer at the embassy, consistent  with State/DRL practice.
USAID/DG: Supports U.S. foreign policy in Burma by promoting  democracy and respect for the rule of law and human rights, building  transparent and accountable governance systems, supporting  independent media, and fostering a vibrant, tolerant civil society.
USAID/OTI: Supports U.S. foreign policy objectives by promoting  stability, peace, and democracy through fast, flexible, short-term  assistance targeted at key political transition and stabilization needs.  USAID/OTI works to enhance the ability of key stakeholders to  engage in the peace process, support civil society to advance  reforms, and reduce the influence of drivers of intercommunal conflict.
State/DRL: Supports U.S. foreign policy by promoting democracy,  protecting human rights and international religious freedom, and  advancing labor rights globally.
section_title: U.S. Strategies for Democracy Promotion in Burma
paragraphs: The Burma Democracy Strategy developed by USAID and State in 2015  includes five strategic goals:  1.  Develop the capacity of influential entities to employ principles of a  well-governed democratic state that is inclusive, accountable, and  responsive to its people.  2.  Support and strengthen civil society, and strengthen societal  foundations and institutions at all levels to reflect the will,  concerns, and participation of the Burmese people.  3.  Encourage responsible investment and greater respect for human  rights by the private sector.  4.  Support Burma’s peace process, while engaging the military on  human rights issues.  5.  Promote tolerance and support legitimate and sustainable  processes, which enable domestic stakeholders to pursue national  reconciliation and the establishment of a stable, inclusive  democratic union.
USAID and State also rely on two other, broader U.S. strategies when  developing their democracy projects for Burma, according to U.S.  officials.
The Burma Integrated Country Strategy: An interagency, multiyear,  overarching strategy that encapsulates U.S. policy priorities and  objectives and the means by which foreign assistance, among other  things, will achieve these priorities.
USAID’s Strategy on Democracy, Human Rights, and  Governance: A framework to support the establishment and  consolidation of inclusive and accountable democracies.
See appendix III for more information on how these strategies align with  the Burma Democracy Strategy.
section_title: USAID and State Have Funded 34 Democracy Projects in Burma since 2012, but Coordination of These Projects Has Been Incomplete
subsections: section_title: USAID and State Have Funded 34 Democracy Projects in Burma since 2012
paragraphs: USAID and State have obligated over $113 million in funding for 34  democracy projects in Burma, according to agency officials, since 2012,  when the USAID Mission in Burma reopened. Specifically, USAID/DG  and USAID/OTI obligated about $104 million from fiscal years 2012  through 2016, while State/DRL obligated about $9 million over the same  period. See table 1 for a breakout of USAID and State obligations for  democracy projects in Burma.
USAID/DG has initiated eight democracy projects in Burma since  2012, with obligations totaling more than $60 million. Total obligations  for each project have ranged from less than $1.2 million to $17.6  million, and the projects have had an average duration of 3-1/2 years.  According to USAID officials, USAID/DG projects have focused on  civil society participation, particularly on the elections held in  November 2015, and strengthening democratic institutions. For  example, one project focuses on strengthening core democratic  institutions at different governmental levels to address capacity  limitations.
USAID/OTI has initiated two projects that included more than 400  democracy activities in Burma since 2012, with obligations totaling  more than $43 million, according to USAID/OTI officials. USAID/OTI  officials said that the activities generally have lasted for 3 to 6 months,  with some lasting up to a year. The projects have primarily focused on  finding opportunities to bring government and civil society together  and supporting the ongoing peace process, according to USAID  officials. For example, USAID/OTI provided assistance to an  implementing partner for a human rights defenders’ skill-building  forum and assisted another implementing partner with three  workshops in three cities in the Mandalay region during the  International Day of Peace 2016.
State/DRL has initiated 24 democracy projects in Burma since 2012,  according to State/DRL officials, with obligations totaling more than $9  million. Obligations for these projects have averaged approximately  $500,000, and the projects typically have lasted 12 to 15 months,  according to State/DRL officials. Current State/DRL priorities in Burma  include addressing communal violence, inclusive economic growth,  and corruption and public financial management, according to a  State/DRL official. For example, one State/DRL project’s goal is to  reduce ethnic conflict and build social cohesion by bringing together  influential people of diverse backgrounds and training them in conflict  resolution.
As of September 30, 2016, USAID and State had 13 active democracy  projects in Burma (6 USAID/DG projects, 1 USAID/OTI project, and 6  State/DRL projects). See table 2 for information on the projects,  including the responsible office or bureau and the projects’ total estimated  cost. Appendix IV provides additional information on all 13 currently active  USAID and State projects.
In reviewing the scopes of work of USAID/DG’s, USAID/OTI’s, and  State/DRL’s 13 active democracy projects, we found that either the  purpose or objectives of each project support the strategic goals of the  Burma Democracy Strategy. The following are examples:
USAID/DG’s “Accountable to All: Strengthening Civil Society and  Media in Burma” project supports the strategy’s goal of strengthening  civil society.
USAID/OTI’s “Burma Transition Initiative-II” project supports the goal  of developing the capacity of key individuals to employ good  governance principles.
State/DRL’s “Multi-Religious Networks Promoting Religious Diversity  and Tolerance” project supports the goal of promoting tolerance and  supporting national reconciliation.
section_title: USAID and State Democracy Projects Are Primarily Coordinated through an Interagency Working Group Represented by Embassy Officials That Has Not Directly Included State/DRL
paragraphs: The U.S. embassy in Burma’s Assistance Working Group (AWG), the  primary mechanism for coordinating agencies’ democracy projects in  Burma, according to USAID officials, consists of representatives from  each agency located at the embassy, including USAID, State, and the  Department of Defense. Agencies submit all potential projects to the  AWG, which is co-chaired by the embassy’s Deputy Chief of Mission and  the USAID Mission Director. The AWG meets biweekly to review and  approve assistance projects and coordinate assistance among U.S.  agencies. The AWG ensures that all democracy projects align with  relevant strategies and address the legal and policy restrictions on U.S.  assistance, including projects that propose working with the government  of Burma, according to embassy officials.
According to embassy officials, the embassy does not directly include  State/DRL in AWG proceedings because its policies allow only entities  (including agencies, bureaus, or offices) with staff at the embassy to  participate. Embassy officials told us that entities without embassy-based  staff, including State/DRL, are not directly included in the AWG because  of the high number of project proposals and the logistical difficulties of  coordinating meeting times with entities in different locations around the  world. Instead, embassy officials noted, the embassy assigns each entity  without embassy-based staff, including State/DRL, an embassy  representative who presents the entity’s project proposals at the AWG.  Embassy officials also noted that the human rights officer at the embassy  serves as the representative for State/DRL in the AWG and that State/DRL channels all proposal documents for embassy feedback to its  representative through the Burma desk in Washington, D.C., and has  contact with its representative through monthly phone calls and quarterly  visits to Burma.
However, while the documents that State/DRL submits for project  proposals to the AWG contain all the information required by the AWG for  review, there is no formal mechanism for State/DRL to present its  analysis of the proposals as part of the AWG review, according to  State/DRL officials. Further, because State/DRL channels all proposal  documents through the Burma desk rather than directly to the State/DRL  embassy representative, the representative has not always had all the  necessary knowledge or information to fully represent State/DRL’s  proposals to the AWG, according to a State/DRL official. State/DRL also  lacks the opportunity to provide direct input on other agencies’ democracy  projects at the AWG, according to State/DRL officials. Moreover,  State/DRL does not always have the opportunity to provide input into  projects led by the embassy that are developed and implemented quickly.  State/DRL officials told us that the bureau has requested to participate  directly in AWG meetings via teleconference but that the embassy has  denied those requests. According to embassy officials, representatives  from any entity without an embassy presence, including State/DRL, may  attend the AWG if they are in Burma for official duty. In addition,  according to the embassy, other agencies and offices providing  democracy assistance at the embassy work to coordinate with State/DRL  outside of the AWG process through one-on-one consultations with  State/DRL officials and by allowing State/DRL to review technical  proposals prior to AWG review.
USAID officials told us that, while the AWG is the primary coordination  mechanism for U.S. agencies’ democracy projects in Burma, the  agencies conducting these projects use other methods to coordinate with  State/DRL. For example, according to USAID officials, USAID participates  in coordination meetings with State/DRL during the latter’s regular visits  to Burma, joins monthly calls between the embassy and State/DRL,  solicits and receives State/DRL input on democracy project designs, and  conducts ad hoc meetings and calls with State/DRL.
However, because State/DRL cannot regularly attend AWG meetings,  officials noted that they have not always received feedback on AWG  decisions on their projects. Embassy officials told us that for approved  projects, they do not provide additional information. For projects that the  AWG does not concur with, the embassy provides written feedback to the  Burma desk officer to share with State/DRL. A State/DRL official told us  that State/DRL had not received this feedback in the past. State officials  told us that starting in fiscal year 2016, this feedback has been provided  verbally to State/DRL as part of State/DRL’s project review process. In  addition, in May 2017, officials from the embassy, the Burma desk, and  State/DRL stated that they had recently initiated a process to identify  more efficient and inclusive methods for coordinating with and obtaining  State/DRL’s input on future democracy program decisions, partly as a  result of our review.
We assessed the embassy’s AWG in relation to key features of  interagency collaboration that GAO previously identified and found that  the AWG generally displayed six of the seven features. For example, we  found that the AWG had clearly defined roles, responsibilities, and  leadership, outlined in documents that were circulated to, and approved  by, all participating bureaus and offices within the embassy. However,  prior to the recent actions taken to improve coordination, the AWG had  not adequately ensured that relevant participants were included in  collaborative efforts. If State’s recent efforts to improve coordination with  State/DRL are properly implemented, these efforts could potentially  address this feature of effective collaboration for the AWG.
section_title: USAID and State Have Taken Steps to Help Ensure That Democracy Projects and the Burma Democracy Strategy Address and Support the Specified Purposes and Groups, Respectively, for Burma Assistance Funding
paragraphs: Several annual appropriations acts have stated that assistance for Burma  shall be made available for certain types of activities. For example, the  Consolidated Appropriations Act, 2016, states that appropriated funds for  assistance for Burma shall be made available  to strengthen civil society organizations in Burma, including as core  support for such organizations;  for projects to promote ethnic and religious tolerance, including in  Rakhine and Kachin states; and  for the implementation of the Burma Democracy Strategy.
Other annual appropriations acts from 2012-2015 contained similar  specified purposes for Burma assistance funding, with some variations.
USAID and State take several actions to ensure that their democracy  projects support these purposes. USAID officials stated that as new  project activities are designed, annual appropriations act language for  Burma is taken into account as part of the project design process. A  State/DRL official told us that State/DRL chooses the projects it pursues in Burma based on overall State/DRL policy objectives, which are in  general alignment with the purposes found in annual appropriations acts  for the types of projects that shall receive funding. In addition, in  reviewing proposed assistance projects, the AWG works to ensure that  USAID and State projects address these purposes.
Through our analysis of project documents, we found several examples of  USAID and State democracy projects where the stated objectives of the  project generally addressed one of the specified purposes in the  Consolidated Appropriations Act, 2016. See table 3 for examples.
Further, the Consolidated Appropriations Act, 2014, required that the  Burma Democracy Strategy include support for civil society, former  prisoners, monks, students, and democratic parliamentarians. We  reviewed the Burma Democracy Strategy and determined that it includes  language regarding supporting all of the specified groups, as shown in  table 4.
section_title: USAID and State Make Some Efforts to Prevent U.S. Democracy Assistance from Being Provided to Prohibited Entities and Individuals, but Partners Indicate They Could Benefit from Further Guidance, and USAID/DG and State Do Not Review Partners’ Procedures
paragraphs: Annual appropriations acts have included provisions that state U.S.  democracy assistance may not be provided to certain categories of  prohibited entities and individuals. We found that USAID/DG,  USAID/OTI, and State/DRL inform their implementing partners about  these restrictions and include due diligence requirements in their award  agreements to address these restrictions. However, some partners  indicated that they could benefit from additional guidance on how to  conduct these activities, and USAID/DG and State/DRL do not review  implementing partners’ due diligence procedures. We found that some  implementing partners do not conduct due diligence, while others use a  range of approaches and expressed concerns about whether they are  meeting their responsibilities. Standards for Internal Control in the Federal  Government call for management to periodically review policies,  procedures, and related control activities for continued relevance and  effectiveness in addressing related risks. Providing only some guidance  on how to conduct due diligence to partners unclear on appropriate  procedures for undertaking such procedures, and not conducting reviews  of partners’ due diligence processes, may limit USAID’s and State’s ability  to avoid making U.S. democracy assistance available to prohibited  entities and individuals.
subsections: section_title: Appropriations Acts Prohibit U.S. Democracy Assistance from Being Provided to Prohibited Entities and Individuals in Burma
paragraphs: Annual appropriations acts have included provisions that state that U.S.  assistance cannot be provided to certain categories of entities and  individuals. These restrictions have varied over the years in number,  breadth, and applicability. Depending on the project’s purpose, funding  year, and source of funds for each democracy project, different  restrictions apply.
The active democracy projects we reviewed were funded by funds from a  variety of fiscal years and accounts to which different restrictions apply.  However, as an illustrative example, the Consolidated Appropriations Act,  2016, states that assistance may not be made available  for budget support for the Government of Burma;  to any successor or affiliated organization of the SPDC controlled by  former SPDC members that promotes the repressive policies of the  SPDC;  to any individual or organization credibly alleged to have committed  gross violations of human rights, including against Rohingya and other  minority groups;  to any organization or individual the Secretary of State determines  and reports to the appropriate congressional committees that  advocates violence against ethnic or religious groups and individuals  in Burma, including such organizations as Ma Ba Tha.
section_title: USAID and State Provide Information about Prohibited Entities and Individuals and the Need for Due Diligence
paragraphs: USAID/DG and USAID/OTI have taken various steps to inform all  implementing partners of the restrictions, including by providing a  description of certain categories of entities and individuals that are  prohibited from receiving assistance in all of their award agreements and  responding to questions from implementing partners about the  restrictions, according to USAID officials. Specifically, USAID/DG and  USAID/OTI have both included language regarding the restriction against  providing assistance to any individual or organization credibly alleged to  have committed gross violations of human rights in all of the project  awards for the active projects in 2016. In addition, the USAID Mission’s  legal advisor held several training sessions on the restrictions, including  on the need to conduct due diligence, during events such as post-award  conferences and standalone training sessions.
According to a State/DRL official, for programmatic reasons, State/DRL  started including information on the restriction against providing  assistance to any individual or organization credibly alleged to have  committed gross violations of human rights in its project awards in 2016,  in response to language in the Consolidated Appropriations Act, 2016.  State did this even though the projects utilized funding for which this  restriction was not applicable. Three of the five awards signed in 2016  included information specifically about the need for conducting due  diligence to identify potential recipients alleged to have committed gross  violations of human rights. In addition, one award signed prior to 2016 included an amendment in September 2016 that added similar  information on the restriction and the need to conduct due diligence. This  project utilized funding for which the restriction against providing  assistance to any individual or organization credibly alleged to have  committed gross violations of human rights was applicable. State/DRL  officials told us that they are considering the bureau’s approach going  forward on due diligence requirements for implementing partners.
According to USAID and State, the restrictions in the annual  appropriations acts can change from year to year, and their applicability  can vary depending on, for example, the funding account or purpose of  the program. USAID and State/DRL said that they review the legal  restrictions each year and inform implementing partners of any changes  in the restrictions. USAID officials also said that they update their training  materials with current information as part of their annual review or in  response to partner questions.
We found that all 13 of USAID/DG’s, USAID/OTI’s, and State/DRL’s  current implementing partners were generally aware of the current  restrictions and the need for them to conduct due diligence on potential  assistance recipients, where restrictions were applicable.
section_title: USAID and State Provide Some Guidance on Due Diligence, but USAID/DG and State/DRL Do Not Review Partners’ Processes
paragraphs: USAID and State have provided some guidance to their implementing  partners on how to conduct due diligence to address appropriations acts  restrictions. However, USAID/DG and State/DRL do not review partners’  due diligence processes, according to agency officials. USAID/OTI  communicates frequently with its partner about conducting due diligence.  According to USAID/OTI officials, they are in daily contact and hold three  weekly meetings with the partner about activity design, which involves  partner selection for the activities and conducting due diligence. In  addition, USAID/OTI officials stated that they conferred with the partner  regarding due diligence procedures as appropriate during weekly “Senior  Management Team” meetings. USAID/DG officials stated that they used trainings and individual meetings with partners to provide guidance and  answer questions on conducting due diligence. In the USAID Mission’s  March 2016 training session, the USAID legal advisor provided  information on, for example, using U.S. government websites to check for  prohibited entities and individuals. However, training on how to conduct  due diligence to identify parties alleged to have committed gross  violations of human rights was limited to instructing partners to “search  public sources” and providing several search terms. Since the March  2016 training, USAID/DG has not provided additional written information  to its implementing partners on how to conduct due diligence. Similarly,  State/DRL has provided some guidance to only a few implementing  partners on conducting due diligence. We found that three of the four  State/DRL awards we identified earlier as including information on the  restriction against providing assistance to any individual or organization  credibly alleged to have committed gross violations of human rights  stated that a review of open-source documents must be conducted, with  nothing further on due diligence. The fourth award included more detailed  language on the due diligence process, including requirements to check  recipients against existing sanctions lists and conduct searches in both  Burmese and English. State/DRL did not provide any other written guidance to its implementing partners on how to conduct due diligence,  according to agency officials.
Moreover, for those projects active in 2016, USAID/DG and State/DRL  did not review their implementing partners’ due diligence procedures,  leaving it to the partners to design and conduct their own procedures,  according to USAID/DG and State/DRL officials. These officials told us  that implementing partners report the results of due diligence only when  they have found derogatory information about an individual or  organization, as is required of the partners by the agreements for those  projects that were active in 2016; the AWG then makes a final  determination of that individual’s or organization’s eligibility for  assistance.
Standards for Internal Control in the Federal Government states that  management should periodically review policies, procedures, and related  control activities for continued relevance and effectiveness in addressing  related risks. By providing only some guidance on how to conduct due  diligence and by not reviewing partners’ procedures, USAID/DG and  State/DRL miss opportunities to help partners strengthen their due  diligence efforts. Further, the agencies limit their ability to address any  risks that assistance may be provided to prohibited entities and  individuals.
section_title: Implementing Partner Representatives Expressed Concern about Adequacy of Due Diligence Procedures and That They Could Benefit from Additional Guidance
paragraphs: Representatives of the USAID/DG, USAID/OTI, and State/DRL  implementing partners active in 2016 told us they use a variety of  procedures to conduct due diligence, and some expressed concerns  about the due diligence process. These partners ranged from large,  international nongovernmental organizations to smaller, more locally  based groups. One USAID implementing partner stated that their  organization did not conduct any due diligence, despite a requirement to  do so. Representatives of the other partners reported using a variety of  due diligence procedures. Examples included conducting open-source  searches, using personal networks to check on individuals’ credentials, or  using their organization’s established due diligence procedures that are  used in all relevant countries.
Implementing partner representatives also expressed concerns about the  adequacy of their organizations’ due diligence procedures and about how  to conduct due diligence in certain situations, such as the following:
One representative told us they had requested, but had not received,  additional information beyond the training session held by the USAID  Mission’s legal advisor. The representative noted that the term  “substantive checking” was not explained in USAID due diligence  procedures and that USAID had not responded to a request for an  explanation.
Another representative said that they were unsure whether their  organization’s due diligence procedures were sufficient to satisfy their  obligations under their award from USAID and expressed a desire for  more guidance.
Another representative said that their organization lacked the capacity  to conduct Internet searches in Burmese because it does not employ  local staff.
Another representative observed that many people in Burma have the  same name or have multiple names, which can complicate the due  diligence process, and expressed uncertainty about the correct  procedure in those situations.
Several representatives told us about instances in which their  organizations received the attendee list for a project activity, such as a  training class, just prior to the event. The representatives said that  their organizations lacked the ability to quickly conduct due diligence  on these attendees and instead had to complete due diligence after  the event, if at all. Similarly, another representative said that the need  to assist a local project can arise quickly, allowing little time for his  organization to conduct due diligence on potential recipients.
In addition, USAID Mission officials stated that conducting due diligence  to identify those credibly alleged to have committed gross violations of  human rights is burdensome and creates a large compliance issue for  implementing partners while syphoning off resources from the projects.
section_title: Conclusions
paragraphs: Since 2012, the U.S. government has committed increasing diplomatic  and financial resources to helping Burma transition to a democratically  elected civilian government, obligating over $113 million for 34  democracy projects. USAID and State have taken some actions to ensure  that their democracy projects support the specified purposes of annual  appropriations act provisions regarding assistance to Burma. However,  some partner representatives are concerned about the sufficiency of  guidance they have received from State and USAID regarding how they  should conduct due diligence to ensure that U.S. assistance is not  provided to prohibited entities and individuals. Further, the lack of  USAID/DG and State/DRL review of partners’ due diligence procedures  limits the agencies’ ability to help strengthen these efforts. Additional  agency involvement in the due diligence process could better ensure that  implementing partners do not provide U.S. democracy assistance to  prohibited entities or individuals. The importance of this is highlighted by  the history of human rights abuses in Burma and the reported clashes  between Burma’s military and various ethnic groups in Burma.
section_title: Recommendations for Executive Action
paragraphs: To better ensure that sufficient due diligence is undertaken by  implementing partners of U.S. democracy assistance in Burma, where  appropriate, to help ensure that assistance is not made available to  prohibited entities or individuals, we are making the following two  recommendations:
We recommend that the Administrator of USAID direct the Mission in  Burma to review its procedures and practices regarding due diligence  for democracy projects to determine whether additional guidance or  reviews of implementing partners’ due diligence procedures would be  appropriate.
We recommend that the Secretary of State direct the Bureau of  Democracy, Human Rights, and Labor to review its procedures and  practices regarding due diligence for Burma democracy projects to  determine whether additional guidance or reviewing implementing  partners’ due diligence procedures would be appropriate.
section_title: Agency Comments
paragraphs: We provided a draft of this report to State and USAID for comment. In  their written comments, reproduced in appendix V and VI, both State and  USAID concurred with our recommendations. USAID disagreed with our  characterization of their due diligence guidance, stating that it has  provided extensive training to implementing partners on legal restrictions  and due diligence requirements.  We found that all USAID implementing  partners we spoke with were aware of the current restrictions and the  need for them to conduct due diligence.  However, we note that several  USAID partners were uncertain as to whether their actions to conduct due  diligence were adequate. Further, USAID noted that some of the awards  included in our assessment do not require implementing partners to  conduct due diligence.  We reported that USAID and State officials told us  that due diligence is not a legal obligation under the annual appropriations  acts but rather is a tool that is used to further implementation of legal  restrictions or for risk mitigation.  Moreover, we found that all current  USAID projects included in this review contained language in the award  agreements establishing a restriction against providing assistance to any  individual or organization credibly alleged to have committed gross  violations of human rights. State and USAID also provided technical  comments, which we incorporated as appropriate.
We are sending copies of this report to the appropriate congressional  committees, the Secretary of the Department of State, and the  Administrator of the U.S. Agency for International Development.
If you or your staff have any questions about this report, please contact  me at (202) 512-3149, or GootnickD@gao.gov . Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made key contributions to this  report are listed in appendix VII.
section_title: Appendix I: USAID and State Use Several Tools to Monitor and Evaluate Their Democracy Projects in Burma
paragraphs: The U.S. Agency for International Development (USAID) and the  Department of State (State) use, among other things, written reports and  site visits to monitor their democracy projects in Burma. We found that  USAID’s implementing partners met all monitoring report requirements  specified in the agreements, while State’s Bureau of Democracy, Human  Rights, and Labor’s (State/DRL) implementing partners generally met the  reporting elements. USAID and State require evaluative components in  partners’ final reports, which partners provided. In addition, USAID and  State have conducted some external evaluations.
subsections: section_title: USAID and State Use Written Reports and Site Visits to Monitor Democracy Projects in Burma, and Implementing Partners’ Reporting Generally Responded to Reporting Elements
subsections: section_title: USAID and State Use Several Tools to Monitor Their Democracy Projects
paragraphs: USAID Burma Mission’s Office for Democracy and Governance  (USAID/DG), USAID’s Bureau for Democracy, Conflict, and Humanitarian  Assistance’s Office of Transition Initiatives (USAID/OTI), and State/DRL  stated that they use written reports, site visits, and frequent informal  communications (such as e-mail, phone calls, meetings, and weekly  reports in some cases) as parts of their monitoring efforts.
USAID/DG, USAID/OTI, and State/DRL rely on quarterly reporting by  their implementing partners, as stipulated in their award agreements, as a  component of monitoring projects in Burma. We reviewed the award  agreements for all 13 active USAID/DG, USAID/OTI, and State/DRL  projects and found that they all called for quarterly reporting. The  reporting elements varied, as follows:
USAID/DG: All six award agreements included reporting elements  focused on progress or results and problems or challenges  encountered in the implementing partners’ quarterly reports. The  other elements varied based on the individual award agreement.
USAID/OTI: The agreement calls for a summary of the country  situation; political updates; program highlights, achievements, and  major activities; budget information; a summary of grant  implementation and appraisal; and problems encountered and  proposed remedial actions.
State/DRL: Four of the six award agreements we reviewed requested  that the same elements be included in the quarterly reporting. The  other two agreements differed only slightly in what was to be included  in the reports. All agreements called for a discussion of sustainability  efforts.
Agency officials from all three entities told us that they work with  implementing partners to develop monitoring and evaluation plans that  include the use of indicators agreed upon by the respective entity and the  implementing partner. In addition,
USAID/DG officials in Burma stated that the Mission conducts  biannual portfolio reviews, and
USAID/OTI officials stated that they conduct internal assessment  processes on average every three months.
section_title: USAID Implementing Partners Provided Information on All Reporting Elements, While State/DRL Implementing Partners Provided Information on Most Elements
paragraphs: USAID implementing partners reported on all requested elements in their  monitoring reports, and State/DRL partners provided most of the  requested elements. We reviewed all relevant fiscal year 2016 monitoring  reports for the six active USAID/DG projects and found that all  implementing partners had submitted their required reports, including a  narrative report as well as progress toward their agreed-upon indicators.  We also found that all reporting met the requirements as set out in the  agreements. In addition, we reviewed all relevant fiscal year 2016  monitoring reports for the six active State/DRL projects and found that all  partners had submitted the required reports, including both the narrative  report and documentation showing progress against the required  indicators. We also found that while implementing partners included most  of the information requested, but not required, in the award agreements,  implementing partners did not provide information on how the recipient  was pursuing sustainability. However, a State/DRL official told us that  sustainability efforts are discussed during site visits or in other channels  of communication, and if the program officer is satisfied with the answer,  he or she will not necessarily ask the implementing partner to go back  and update their written reports to record that sustainability was in fact  being considered. Further, State/DRL officials told us that sustainability is  an important aspect of all State/DRL projects in Burma; not only does  State/DRL request updates on sustainability efforts in the implementing  partners’ reporting, but sustainability is also one of seven criteria against  which all DRL project proposals are reviewed.
section_title: USAID and State Conducted Site Visits to Monitor Their Democracy Projects
paragraphs: USAID/DG, USAID/OTI, and State/DRL officials stated that conducting  numerous site visits and communicating frequently with implementing  partners were other components of monitoring their projects in Burma.
USAID/DG: Officials reported conducting 28 site visits in 2016, with  each project getting at least 1 visit. A trip report from one of these site  visits included information such as a discussion of observations from  the USAID staff, as well as recommendations for project adaptations.  Three of the six active projects received multiple site visits in 2016.  The projects that only received one visit in 2016 were primarily  projects located in difficult to reach or conflict-prone areas, such as  Rakhine State. In addition to site visits, all active implementing  partners reported frequent informal communication with USAID staff,  and two reported providing informal weekly reporting to USAID.
USAID/OTI: Officials reported that USAID/OTI staff conducted seven  official site visits in 2016. In addition, USAID/OTI officials reported that  they hold three weekly in-person meetings with the implementing  partner: an ideas meeting where new project ideas are raised and  discussed, a management meeting where any administrative issues  that need to be handled are discussed, and a portfolio review meeting  where the ongoing activities for the project are discussed. In addition,  USAID/OTI staff reported discussing activities with the implementing  partner on a daily basis via email, telephone calls, and in-person  meetings.
State/DRL: Officials reported that they typically make three trips to  Burma each year and attempt to visit each project at least once a  year. In 2016, State/DRL made three site visits—one in February, one  in July, and one in October. The trip reports from the October visit  included high-level problems or concerns that needed to be brought to  the attention of the front office, summaries and observations from  program and site visits conducted during the trip, and any action items  to follow up on after the trip. In addition to site visits, all active  implementing partners reported frequent, informal communication with  State/DRL staff.
section_title: USAID and State Require and Receive Evaluative Components in Implementing Partners’ Final Reports and Have Conducted Some External Evaluations of Their Democracy Projects in Burma
subsections: section_title: USAID and State/DRL Require Final Evaluative Reporting, and All Implementing Partners Met Reporting Requirements
paragraphs: USAID/DG, USAID/OTI, and State/DRL award agreements require that  the final reports submitted by the implementing partners include several  evaluative elements. Our review of final reports submitted shows that  partners had provided these elements in their reports.
USAID/DG: The agreements we reviewed called for the final performance  report to include, among other things, an overall description of the activities under the project and the  significance of these activities; and  results toward achieving the project objectives and the performance  indicators, as well as an analysis of how the indicators illustrate the  project’s impact.
USAID/DG conducted a total of 8 democracy projects in Burma since  2012, of which 3 had been completed, as of December 2016. We  reviewed the final reports for two of the completed projects. Both of the  final reports met all requirements specified in the agreements regarding  evaluative components. Tools used by the various projects to evaluate  the assistance included analysis of progress using both quantitative and  qualitative data, surveys of participants, interviews, and focus group  discussions.
USAID/OTI: The award agreement we reviewed required a final report  that includes, among other things, program highlights, achievements, and major activities; a summary of grant implementation and an appraisal; and problems encountered and how they were solved.
USAID/OTI’s initial project in Burma was completed in mid-2016. Upon  completion, a final report was submitted. We found that the report met all  the required elements as specified in the initial award agreement. Tools  used to evaluate the assistance included analysis of progress using both  quantitative and qualitative data.
State/DRL: The agreements we reviewed called for the final performance  report to include, among other things, an in-depth impact assessment  and/or project evaluation.
State/DRL conducted a total of 24 democracy projects in Burma since  2012, of which 7 had been completed and had submitted final reports, as  of August 2016. In reviewing the seven final reports, we found that all  seven met the requirements specified in the award agreements. Tools  used by the various projects to evaluate the assistance included analysis  of progress using indicators, formal surveys of participants,  semistructured interviews, and focus group discussions.
section_title: USAID and State Have Conducted Some External Evaluations
paragraphs: According to USAID policy, not all USAID/DG award agreements are  required to have a final external evaluation. Plans for evaluations, if they  are to be conducted, are developed in the project design phase as part of  the monitoring and evaluation plan. We found that one final external  evaluation had been completed as of December 2016. In addition,  although not required in the agreements, USAID/DG completed a  midpoint evaluation of one project in July 2015, and two USAID projects  were undergoing midterm evaluations that were scheduled to be  completed by April 2017.
The USAID/OTI award agreement we reviewed stated that within 3  months prior to close-out, USAID/OTI may organize, and the  implementing partner will cooperate with and contribute to, a final external  evaluation of the program. This final evaluation will include an  assessment of the impact or results of activities managed by the  implementing partner. An external evaluation was completed at the end of  the first USAID/OTI award agreement.
According to a State/DRL official, external final evaluations were not  required for any of the Burma projects because of the short-term nature  and fairly small budgets of projects (for example, budgets less than  $350,000). According to officials, under State/DRL guidance, an external  evaluation is not a requirement for State/DRL projects, but proposals that  include one tend to be rated more competitively by State/DRL. We found  that two external evaluations had been completed as of December 2016.  State/DRL does not typically conduct midterm evaluations, again because  of the relatively short average length of the projects.
Both USAID and State officials told us that the nature of democracy  projects makes measuring effectiveness difficult. Issues cited by officials  included the long-term nature of the programs where results are often  seen years later, and the difficulty in measuring the impact of democracy  projects, particularly relative to other influencing factors. We have  previously reported on the difficulties in evaluating democracy  assistance.
section_title: Appendix II: Objectives, Scope, and Methodology
paragraphs: Our objectives were to examine (1) U.S. Agency for International  Development (USAID) and Department of State (State) democracy  projects, including coordination of those projects; (2) steps USAID and  State have taken to ensure that U.S. democracy projects and the U.S.  Strategy for the Promotion of Democracy and Human Rights in Burma  (Burma Democracy Strategy) address and support the specified purposes  and groups, respectively, for Burma assistance funding; and (3) USAID  and State efforts to ensure that U.S. democracy assistance is not  provided to prohibited entities and individuals. We also provide  information about USAID’s and State’s monitoring and evaluation of their  democracy projects in appendix 1, and appendix IV includes details on  USAID and State democracy projects, including implementation and  results. We conducted fieldwork in Hpa’ An, Mandalay, Mawlymyaing,  Naypyidaw, and Rangoon, Burma, in October 2016 and November 2016.
To describe USAID and State democracy projects in Burma, we reviewed  project award documents, including relevant modifications, for 13 projects  funded by USAID and State’s Bureau of Democracy, Human Rights, and  Labor (State/DRL) that were active as of September 30, 2016. We also  obtained agency funding data on obligations for all USAID and State  democracy projects that were active between fiscal years 2012 and 2016.  To assess the reliability of those data, we interviewed knowledgeable  agency officials and sent them a set of questions that asked about data  collection, validation, and related issues. We determined thathese data  are sufficiently reliable for the purpose of reporting USAID’s and State’s  obligations to Burma between 2012 and 2016. In addition, we reviewed  the award documents for the 13 projects that were active as of  September 30, 2016, and created a table containing the total project  values from them. These values were the initial award amounts and do  not reflect any modifications that were made subsequently. We also  interviewed officials from USAID and State in Washington, D.C., and  Burma about their active projects. Additionally, we compared the  purposes and objectives of USAID’s and State’s democracy projects with  the goals of the Burma Democracy Strategy.
To examine how the projects are coordinated, we reviewed agency  documents and interviewed agency officials about coordination and, in  particular, the embassy in Burma’s Assistance Working Group (AWG).  We reviewed the AWG as a coordination mechanism against GAO’s Key  Considerations for Implementing Interagency Collaborative Mechanisms.  We analyzed information collected from our document review, including  the terms of reference for the AWG, and interviews with agency officials  and compared this information against the seven key considerations  listed in a prior GAO report. To assess the extent of interagency  coordination, we compared the evidence we collected against the key  considerations, which include outcomes and accountability, bridging  organizational cultures, leadership, clarity of roles and responsibility,  participants, resources, and written guidance and agreements. Two  analysts independently completed this analysis, identifying  characteristics, practices, or other evidence that generally aligned with  the criteria for each key consideration. They then compared their  responses and resolved any initial differences. They only judged a  consideration to be lacking if no evidence of generally aligning with that  characteristic was identified by either analyst.
To examine steps USAID and State have taken to help ensure that U.S.  democracy projects and the Burma Democracy Strategy address and  support the specified purposes and groups, respectively, for Burma  assistance funding, we reviewed the specified purposes for Burma  assistance funding in the Consolidated Appropriations Act, 2016, as well  as the specified groups for the Burma Democracy Strategy in the  Consolidated Appropriations Act, 2014. We also interviewed USAID and  State officials in Washington, D.C., and at the embassy in Rangoon,  Burma. We then analyzed the Burma Democracy Strategy to identify  whether it supported each of the five specified groups: civil society,  former prisoners, monks, students, and democratic parliamentarians. We  also identified the purposes for which funds shall be made available in the  Consolidated Appropriations Act, 2016. We analyzed project award  documents for projects active as of September 30, 2016, that received  fiscal year 2016 funding to which the purposes applied, and compared the  stated purpose and objectives of the projects to the purposes for which  funding shall be made available in the act. From this process we found  examples, which we included in our report, where the project’s purpose and objectives were broadly consistent with the purposes specified in the  act.
To examine USAID and State efforts to help ensure that U.S. democracy  assistance is not provided to prohibited entities and individuals, we  identified restrictions applicable to assistance funding for Burma in the  Consolidated Appropriations Act, 2016, for illustrative purposes. We  reviewed USAID documents, including presentations and emails, used to  train implementing partners on the restrictions. We reviewed USAID’s and  State’s active project awards for information related to the restrictions or  the need to conduct due diligence to identify prohibited entities and  individuals. We also interviewed officials from USAID and State to  discuss, among other things, whether and how they provide information to  implementing partners about the restrictions and the due diligence  process. Further, we interviewed all 13 USAID and State implementing  partners about their due diligence processes and their interactions with  agency officials related to conducting due diligence for prohibited entities  and individuals.
To examine USAID’s and State’s monitoring and evaluation of their  democracy projects in Burma, we reviewed documents and interviewed  agency officials in Washington, D.C., and at the U.S. embassy in Burma.  We also interviewed all current implementing partners in Burma. We  reviewed award agreements for 13 ongoing democracy projects as of  September 30, 2016—6 USAID/DG projects, 1 USAID/OTI project, and 6  State/DRL projects—to identify any monitoring and evaluation  requirements contained in the agreements. We then reviewed all fiscal  year 2016 monitoring reports for those projects and analyzed them  against the monitoring requirements stipulated in the agreements, to  assess compliance. We also reviewed final reports from all USAID and  State democracy projects that had been completed since 2012. We  analyzed these reports against the requirements that we identified from  the individual award agreements for each project, to assess compliance.  These requirements include elements such as an overall description,  results summary, and description of problems encountered. We had two  analysts independently assess whether these elements were present or  absent in the final reports and then meet to reconcile any initial  differences. We did not make any attempt to evaluate the quality of the  information included in the monitoring or final reports. Additionally, we  interviewed agency officials about their use of other tools to monitor and  evaluate their democracy projects, and reviewed trip reports from site  visits, where relevant. We also discussed agency monitoring and  evaluation efforts with the implementing partners from the 13 ongoing  projects in-country to verify that their experiences matched up with what  agencies reported doing.
To examine how the Burma Democracy Strategy aligns with other U.S.  strategies, we analyzed and compared the goals of the Burma  Democracy Strategy to the objectives of the Burma Integrated Country  Strategy and the objectives of the USAID Strategy on Democracy, Human  Rights, and Governance.
We conducted this performance audit from May 2016 through July 2017  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
section_title: Appendix III: The U.S. Strategy for the Promotion of Democracy and Human Rights in Burma Aligns with Broader U.S. Strategies
paragraphs: The Consolidated Appropriations Act, 2014, required the Secretary of  State, in consultation with the Administrator of the U.S. Agency for  International Development (USAID), to submit a comprehensive strategy  for the promotion of democracy and human rights in Burma, which  became the Strategy for the Promotion of Democracy and Human Rights  in Burma (Burma Democracy Strategy).
To examine how the Burma Democracy Strategy aligns with other  relevant strategies, we reviewed its objectives and compared them to  objectives contained in other relevant strategies (i.e., the Burma  Integrated Country Strategy and USAID’s Democracy, Human Rights,  and Governance Strategy). We also interviewed USAID and Department  of State (State) officials in Washington, D.C., and at the U.S. embassy  and USAID Mission in Rangoon, Burma.
To continue moving Burma toward a well-governed democratic state that  is inclusive, accountable, and responsive to its people, the Burma  Democracy Strategy includes five strategic goals:  1.  Develop the capacity of influential entities to employ principles of a  well-governed democratic state that is inclusive, accountable, and  responsive to its people.  2.  Support and strengthen civil society, and strengthen societal  foundations and institutions at all levels to reflect the will,  concerns, and participation of the Burmese people.  3.  Encourage responsible investment and greater respect for human  rights by the private sector.  4.  Support Burma’s peace process, while engaging the military on  human rights issues.  5.  Promote tolerance and support legitimate and sustainable  processes, which enable domestic stakeholders to pursue national  reconciliation and the establishment of a stable, inclusive  democratic union.
We found that the Burma Democracy Strategy aligns with broader U.S.  strategies on Burma and democracy promotion. For example, the  strategic goals of the Burma Democracy Strategy align with objectives  included in the U.S. embassy’s Burma Integrated Country Strategy. The  Integrated Country Strategy is a multiyear, overarching strategy that  encapsulates U.S. policy priorities and objectives and the means by  which foreign assistance, among other things, will achieve these priorities  in a country. U.S. embassy officials said that the requirements for the  Burma Democracy Strategy in the Consolidated Appropriations Act, 2014,  were already included in the Integrated Country Strategy. The current  Burma Integrated Country Strategy runs through 2017, and embassy staff  are revising the Integrated Country Strategy concurrent with the revision  of the Burma Democracy Strategy.
Our analysis of the Burma Democracy Strategy and the Integrated  Country Strategy found that each goal of the Burma Democracy Strategy  aligns with at least two objectives from the Integrated Country Strategy.  For example, the first goal of the Burma Democracy Strategy aligns with  the fourth and fifth objectives of the Integrated Country Strategy, as  shown in table 5 .
In addition, we found that the five goals of the Burma Democracy Strategy  align with the development objectives in USAID’s Strategy on Democracy,  Human Rights, and Governance (USAID’s DHRG Strategy). USAID’s  DHRG Strategy provides a framework to support the establishment and  consolidation of inclusive and accountable democracies and lays out  USAID’s vision to support democracy, human rights, and governance as  essential to achieving the agency’s broader social and economic  development goals. USAID officials said that the Burma Democracy  Strategy is derived from USAID’s broader, agency-wide DHRG Strategy.
Our analysis found that each goal of the Burma Democracy Strategy  aligns with at least two development objectives in USAID’s DHRG  Strategy. For example, the second goal of the Burma Democracy  Strategy aligns with three objectives from USAID’s DHRG Strategy, as  shown in table 6 .
section_title: Appendix IV: Summaries of Active USAID and State/DRL Democracy Projects in Burma as of the End of Fiscal Year 2016
paragraphs: The following is a summary of information on 13 democracy projects in  Burma that were active as of July 1, 2016 — 6 U.S. Agency for  International Development (USAID) Mission in Burma Office of  Democracy and Governance (USAID/DG) projects; 1 USAID Office of  Transition Initiatives project; and 6 Department of State (State) Bureau of  Democracy, Human Rights, and Labor (State/DRL) projects. We  reviewed the award agreements, modifications and obligation data as well  as the fiscal year 2016 fourth quarter progress reports submitted by the  implementing partners. We present an illustrative sample of activities  reported in those progress reports for each project.
subsections: section_title: USAID/DG Democracy Projects in Burma (Active as of the End of Fiscal Year 2016)
subsections: section_title: Accountable to All: Strengthening Civil Society and Media in Burma
paragraphs: This award agreement totals $20,000,000 and runs from September 25,  2014, through September 24, 2018 (see table 7).
This award agreement totals $1,171,781 and ran from September 16,  2014, through February 16, 2017 (see table 8).
This award agreement totals $1,999,999 and runs from September 30,  2013, through October 15, 2017 (see table 9).
This award agreement totals $5,000,000 and runs from January 4, 2016,  through July 3, 2018 (see table 10).
This award agreement totals $15,956,101 and runs from October 1, 2013,  through September 30, 2018 (see table 11).
This award agreement totals $23,200,000 and runs from July 1, 2016,  through June 30, 2021 (see table 12).
section_title: USAID/OTI Democracy Projects in Burma (Active as of the End of Fiscal Year 2016)
subsections: section_title: Burma Transition Initiative-II (Kann Let)
paragraphs: This award agreement has a ceiling total of $31,204,695, of which  $5,750,000 has been obligated, and runs from March 2016 through  March 2018 (see table 13).
section_title: State/DRL Democracy Projects in Burma (Active as of the End of Fiscal Year 2016)
subsections: section_title: Multi-Religious Networks Promoting Religious Diversity and Tolerance
paragraphs: This award agreement totals $396,039 and runs from August 11, 2015,  through August 31, 2017 (see table 14).
This project’s obligated funding totals $792,078 and runs from September  3, 2013, through December 31, 2017 (see table 15).
This project’s obligated funding totals $817,500 and ran from September  19, 2013, through November 30, 2016 (see table 16).
This award agreement totals $371,287 and runs from May 13, 2016,  through November 30, 2017 (see table 17).
This project’s obligated funding totals $469,874 and ran from August 14,  2015, through April 30, 2017 (see table 18).
This award agreement totals $517,028 and runs from August 14, 2015,  through August 31, 2018 (see table 19).
section_title: Appendix V: Comments from the Department of State
section_title: Appendix VI: Comments from United States Agency for International Development
section_title: Appendix VII: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact:
section_title: Staff Acknowledgments:
paragraphs: In addition to the contact named above, Leslie Holen (Assistant Director),  Michael Maslowski (Analyst-in-Charge), Christopher Hayes, Julio Jebo  Grant, and Debbie Chung made key contributions to this report. In  addition, Martin de Alteriis, Mark Dowling, Reid Lowe, Sarah Veale, and  Alex Welsh provided technical assistance.