Millennium Challenge Corporation: Review of Compact Records and Information Management Program
Published: 2013-06-20T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: MCC has approved 26 bilateral compact agreements, providing a total of about $9.3 billion to help eligible developing countries reduce poverty and stimulate economic growth. MCC is subject to the Federal Records Act, which requires that agencies preserve all records documenting its functions and other important transactions.
GAO was asked to review MCC's management of records and information. This report (1) examines MCC's records and information management program and practices and (2) assesses partner governments' implementation of MCC's information retention guidelines. GAO analyzed MCC documents, interviewed MCC officials, and tested MCC's ability to retrieve compact-related information from five closed compacts. GAO selected these compacts because they closed after May 2011, when MCC's Program Closure Guidelines went into effect.
section_title: What GAO Found
paragraphs: In 2006, the Millennium Challenge Corporation (MCC) established a records and information management program to maintain and preserve its federal records. The program includes policies related to compact management records--a subset of MCC's federal records. These policies also address the handling of other compact-related information generated by MCC partner governments' accountable entities, which typically manage compact implementation until the 5-year compacts close. MCC's policies require that the entities transfer their compact management records to MCC for storage before compact closure. MCC also requires that partner governments retain compact-related information not classified as records, such as survey data and data quality reviews, for at least 5 years after their compacts close, to facilitate audits and analysis of MCC assistance. However, MCC does not require, and has not conducted, periodic reviews to determine whether it has received all compact-management records from the accountable entities consistent with federal internal control standards. As a result, MCC cannot be sure that it is meeting the federal requirement that it preserve all records documenting its functions, activities, and other transactions.
In reviews of five closed compacts--Armenia's, Benin's, El Salvador's, Ghana's, and Mali's--GAO found variation in the accountable entities' implementation of MCC document retention requirements and the partner governments' ability to retrieve requested compact-related information after the compacts closed. As required by MCC's compact closure guidelines, all five program closure plans that we reviewed contained some discussion of retaining and storing documents, but each accountable entity addressed the guidelines' requirements differently. MCC's guidelines do not provide a list specifying standard types of compact-related information that most compacts should retain. Such variation in approaches to retaining and storing compact-related information will make it more difficult for MCC to verify that standard compact information is retained in all partner countries after the compacts close. In addition, in a test of MCC's ability to retrieve documents from the partner governments after compact closure, GAO found that four of the five governments provided all or most requested documents within 30 days, but Mali's, which is involved in political turmoil, provided no documents. Political turmoil in Madagascar, another compact-recipient country, has also impeded MCC's ability to obtain compact information that may be needed to conduct future audits, evaluate project impact, or inform future compact designs.
section_title: What GAO Recommends
paragraphs: To strengthen MCC's records and information management program, MCC's Chief Executive Officer should (1) develop a policy requiring--and conduct--periodic reviews of MCC's compact-management records to ensure they are complete, (2) revise guidelines to include a sample document retention schedule specifying standard types of compact-related information compacts should retain, and (3) review MCC's policy of delegating storage of most compact-related information to partner governments. MCC agreed with all three recommendations and stated that they have already taken steps to implement them.

section_title: Letter
paragraphs: The Millennium Challenge Corporation (MCC), a U.S. government  corporation, provides aid to developing countries that have demonstrated  a commitment to ruling justly, encouraging economic freedom, and  investing in people. MCC provides its assistance to eligible countries  through 5-year compact agreements with the specific goal of reducing  poverty by stimulating economic growth. Since its establishment in 2004,  MCC has signed 26 compacts with the governments of 25 low-income or  lower-middle-income countries, committing approximately $9.3 billion for  compact assistance. The partner governments vest accountable entities,  generally referred to as Millennium Challenge Accounts (MCAs), with  responsibility for implementing the compacts, including managing  compact records and other information, in accordance with MCC policies  and guidelines.
The Federal Records Act of 1950, as amended, requires each federal  agency, including MCC, to make and preserve records that, among other  things, document the agency’s decisions, procedures, and essential  transactions. Since 2009, the National Archives and Records  Administration (NARA) has required agencies to complete an annual self- assessment of their records management practices, which it uses to rate  the agencies’ compliance with the Federal Records Act and other laws  and regulations related to records management. As our previous work  has shown, agencies with poorly managed records risk increased costs  when attempting to search their records in response to Freedom of  Information Act (FOIA) requests or litigation-related discovery actions.  Without effective management of the documentation of government  actions, the ability of the people to hold the government accountable is  jeopardized. In addition, effective records management is an important  tool for efficient government operation; without adequate and readily  accessible documentation, agencies may not have access to important  operational information to make decisions and carry out their missions.
You asked us to review MCC’s approach to records management,  including its practice of delegating the retention and storage of most  compact-related information to partner governments. This report (1)  examines MCC’s records and information management program and  practices and (2) assesses partner governments’ implementation of MCC  guidelines for retention and storage of compact-related information.
To describe MCC’s approach to records management, we reviewed  NARA’s records-management guidance and the self-assessment survey  that NARA administers to assess agencies’ compliance with federal  requirements. We also reviewed MCC’s policies and procedures and  interviewed cognizant officials at MCC and NARA. To assess the extent  to which MCAs have implemented MCC’s guidelines for information  retention, we selected five closed MCC compacts—with Armenia, Benin,  El Salvador, Ghana, and Mali—to use as case studies. We reviewed  certain documentation compiled by each MCA or partner government in  accordance with MCC’s guidelines and conducted a test of MCC’s ability  to retrieve compact-related information after compact closure. For this  test, we drew a random sample of MCA documents that had been used  for audits conducted by the U.S. Agency for International Development’s  (USAID) Office of the Inspector General in our case-study countries. We  provided MCC with a list of about 20 documents for each case-study  country and asked that the partner governments provide the documents  to us within a specific timeframe. (See app. I for further details of our  scope and methodology.)
We conducted this performance audit from September 2012 to June 2013  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.
subsections: section_title: Background
paragraphs: In accordance with the Federal Records Act and NARA’s implementing  regulations for records management and retention, MCC is responsible  for managing the records that it generates. MCC has established policies  and issued guidance intended to ensure that the records generated by  the governments receiving compact and threshold assistance are  properly identified and transferred to MCC for storage and management.
subsections: section_title: Federal Records Act Requirements
paragraphs: The Federal Records Act, as amended, requires each federal agency to  make and preserve records that (1) document the organization, functions,  policies, decisions, procedures, and essential transactions of the agency;  and (2) provide the information necessary to protect the legal and  financial rights of the government and of persons directly affected by the  agency’s activities. Such records must be managed and preserved in  accordance with the act’s provisions.
To ensure that they have appropriate systems for managing and  preserving their records, the act requires agencies to develop records  management programs. These programs are intended, among other  things, to provide for accurate and complete documentation of the policies  and transactions of each federal agency, to control the quality and  quantity of records they produce, and to provide for judicious preservation  and disposal of federal records. A records management program  identifies records and sources of records and provides records  management guidance, including agency-specific recordkeeping  practices that establish what records need to be created to conduct  agency business, among other things.
section_title: NARA Records Management Oversight and Requirements
paragraphs: Under the Federal Records Act, NARA has general responsibilities for  oversight of agencies’ federal records management. These  responsibilities include issuing guidance for records management;  working with agencies to implement effective controls over the creation,  maintenance, and use of records in the conduct of agency business;  providing oversight of agencies’ records management programs;  approving the disposition (destruction or preservation) of records; and  providing storage facilities for agency records on a fee-for-service basis.
NARA has issued regulations requiring that records be effectively  managed throughout their life cycle, including records creation and  receipt, maintenance and use, and disposition. One key records  management process is scheduling, the means by which NARA and  agencies identify federal records and determine timeframes for  disposition. Creating records schedules involves identifying and  inventorying records, appraising their value, determining whether they are  temporary or permanent, and determining how long they should be kept  before they are destroyed or turned over to NARA for archiving.  Scheduling records requires agencies to invest time and resources to  analyze the information that an agency receives, produces, and uses to  fulfill its mission. Such an analysis allows an agency to set up processes  and structures to associate records with schedules and other information  to help it find and use records during their useful lives and dispose of  those no longer needed. Scheduling involves broad categories of records  rather than individual documents or file folders.
Since 2009, NARA has required federal agencies to complete an annual  self-assessment of their records management practices, to determine  whether the agencies are compliant with statutory and regulatory records  management requirements. The 2012 self-assessment survey called for  agencies to evaluate themselves in four areas: (1) records management  activities, (2) oversight and compliance, (3) records disposition, and (4)  electronic records. NARA scores the self-assessments, and the  accompanying agency documentation, and uses the scores to categorize  each agency as low, moderate, or high risk in terms of compliance with  federal regulations.
section_title: MCC Has Established a Records and Information Management Program but Has Not Reviewed Its Inventory of Compact Management Records
paragraphs: Beginning in 2006, MCC established a records and information  management program and subsequently established guidelines for  handling compact management records and other compact-related  information. However, MCC has not created a policy for—or conducted— periodic reviews of the extent to which it has received the compact  management records that it requires MCAs to provide to MCC for  storage. In 2012, MCC’s score on the NARA survey placed the agency in  the moderate risk category—an average rating—for compliance with  federal requirements.
subsections: section_title: MCC’s Records and Information Management Program Includes Guidelines Defining Records
paragraphs: MCC established its records and information management program in  2006. The program’s stated objectives, according to the 2011 version of  its Records and Information Management Policy, are to create, maintain,  and preserve adequate and proper documentation of its policies,  transactions, and decisions; ensure the security and integrity of MCC’s  federal records, including the safeguarding of records against  unauthorized access or disposition; and prevent the removal of records  and control the removal of other materials from the agency.
MCC’s Records and Information Management Policy defines “federal  record” consistently with the Federal Records Act’s definition of “record.”  According to the policy, MCC catalogues its federal records into four  major series, based on the records’ functions.
Administrative: Records commonly found at any federal agency,  such as accounting and finance files, and budget, personnel, and  procurement files.
Governance: Records related to the Millennium Challenge Act of  2003, authorities, laws, and legislation, such as Board of Directors  meeting minutes and resolutions, legal opinions, and ethics program  records.
Communications: Exchanges with external entities, such as MCC’s  annual report, congressional notifications, press releases, and official  speeches, among other things.
Millennium Challenge Account Assistance: MCC mission  development, implementation, oversight, results, and closeout  information pertaining to threshold programs and compacts. This  category also includes compact management records, which are  generated at least in part by the MCAs.
section_title: MCC Has Issued Guidance for Managing Compact Management Records and Other Compact-related Information
paragraphs: MCC provides guidance regarding the maintenance of compact  management records and the retention and storage of compact-related  information. In 2007, MCC issued Policy and Procedures for Compact- Related Federal Recordkeeping, which was updated in 2012. The policy  outlines specific policies and procedures regarding compact management  records—which MCC refers to as a subset of federal records—and other  compact-related information. The policy also includes a list specifying  the types of documents that MCC classifies as compact management  records. The policy and procedures apply regardless of whether the  records and other compact-related information are created by MCC staff,  partner governments, MCA entities, contractors, or other parties.
Maintenance of compact management records. According to  MCC’s Policy and Procedures for Compact-Related Federal  Recordkeeping, all information defined as a compact management  record must be maintained at MCC headquarters during compact  development and implementation and after compact closure. For  example, under the policy, the following monitoring and evaluation  documents are classified as compact management records, to be  maintained at headquarters: indicator tracking tables, monitoring and  evaluation plans and revisions, reviews and final impact evaluations,  and data quality reviews.
Retention and storage of compact-related information. MCC’s  Policy and Procedures for Compact-Related Federal Recordkeeping  further states that the partner governments must retain, for at least 5  years after compact closure, types of information that are not defined  as records but are important to the implementation and closure of  compacts. The policy specifies, as examples of such information, (1)  documents to support audits by MCC’s Office of the Inspector General  and GAO and (2) program evaluation documents to support ongoing  analysis of MCC assistance. In another policy document, Program  Closure Guidelines, MCC also requires MCAs to provide to MCC  certain compact-related information for storage at MCC headquarters.  For example, MCAs are required to provide the following information  related to compact monitoring and evaluation: all MCC-funded survey  data sets and supporting materials, such as questionnaires,  enumerator field guides, data entry manuals, data dictionaries, and  final reports; other analyses; evaluations; and data quality reviews  and special studies that were funded through the compact’s  monitoring and evaluation budget.
Table 1 describes compact management records and other compact- related information.
Type of information  Compact management  records  Description  A subset of the Millennium Challenge Account  Assistance series of federal records that must be  maintained by MCC headquarters during  implementation and after compact closure.
To be retained by partner  governments for at least 5  years after compact  closure.
Documents that may be needed to support future  audits or analysis of MCC assistance.
To be provided by MCAs  for storage by MCC  headquarters.
Documents or copies of documents that must be  provided to MCC during implementation or at  compact closure, such as survey data sets and  supporting materials.
MCC’s Policy and Procedures for Compact-Related Federal  Recordkeeping assigns the responsibility for ensuring that the country’s  compact management records are transmitted and received at MCC  headquarters to the MCC Resident Country Director serving in each  partner country. The policy states that MCC has the responsibility to  ensure that MCAs are taking reasonable steps to meet records  management requirements. The policy also states that MCC is  responsible for ensuring that the partners understand (1) what is covered  by both compact management records and other compact-related  information and (2) that MCC or a U.S. government audit, legal, or  oversight entity may need to have access to such information for at least  5 years after the compact end date.
section_title: MCC Has Not Reviewed Its Compact Management Records for Completeness
paragraphs: MCC policy does not call for, and MCC has not performed, reviews of the  extent to which it has received the compact management records that it  requires MCAs to provide to MCC for storage. According to Standards for  Internal Control in the Federal Government, a federal agency should  have in place control activities—that is, policies, procedures, techniques,  and mechanisms, including reviews of performance—to help ensure that  management’s directives are carried out. MCC’s Policy and Procedures  for Compact-Related Federal Recordkeeping assigns to the MCC  Resident Country Director in each partner country the responsibility for  ensuring the transmittal and receipt of the country’s compact  management records at MCC headquarters. However, MCC policy does  not require periodic reviews of the records received from the MCAs to  ensure that all required records have been transferred. In addition, MCC’s  Records Management Officer stated that MCC has not reviewed the  compact management records it has received, for the following reasons:  (1) the first compacts ended only recently, and (2) the records  management program has limited resources. However, of the 11  compacts that have closed or been terminated, 5 ended in 2011 and 2  ended in 2010. Without periodically reviewing the compact management  records it receives from the MCAs, MCC cannot be sure that it is meeting  the Federal Records Act’s requirement that it preserve all records  documenting its functions, activities, decisions, and other important  transactions.
section_title: MCC’s Records Management Program Received an Average Rating on NARA Survey in 2012
paragraphs: In 2012, MCC received a revised score of 77 out of 100 on NARA’s self- assessment survey, which placed MCC in the moderate risk category in  terms of compliance with federal requirements (see table 2). A NARA  official characterized this score as an “average rating” for federal  agencies. In the previous 3 years, MCC received the following scores: 92  (2009), 83 (2010), and 76 (2011) (see app. II for more information.)  MCC’s Records Management Officer also stated that meeting NARA  requirements, especially for electronic records, is difficult for small federal  agencies with limited resources and that MCC, in conjunction with other  small agencies, has appealed to NARA for assistance.
section_title: Partner Countries’ Implementation of MCC Document Retention Requirements and Their Ability to Provide Requested Documents Vary
paragraphs: For the five closed compacts that we reviewed—MCC’s compacts with  Armenia, Benin, El Salvador, Ghana, and Mali—the MCAs provided  varying levels of detail about their plans for retaining compact-related  information to address MCC requirements. In addition, the five partner  governments showed varying capacity to provide the documents that we  asked MCC to retrieve.
subsections: section_title: MCAs Provided Varying Levels of Detail about Document Retention Plans
paragraphs: For the five compacts that we reviewed, the MCAs provided varying  levels of detail about their plans for retaining compact-related information.  MCC’s Program Closure Guidelines instruct accountable entities to  develop program closure plans describing their strategy for retaining and  storing compact-related information. The guidelines state that each  accountable entity should provide the following three items for MCC  approval prior to the compact end date: a list of the types of documents the partner government will retain, a document retention schedule, and a brief description of the form and manner in which the documents will  be stored.
MCC’s compact closure guidelines do not provide a sample document  retention schedule specifying standard types of compact-related  information that most compacts would need to retain or provide.
All five program closure plans that we reviewed contained some  discussion of filing and storing documents, but each MCA addressed the  guidelines’ three requirements differently. Such variation in approaches to  scheduling and storing compact documentation will make it more difficult  for MCC to verify that standard compact information is being retained in  all partner countries after the compacts have closed.
Types of documents to be retained. The program closure plans for the  Armenia, Ghana, and Mali compacts specified that the respective partner  governments would retain all compact-related information. The program  closure plan for the Benin compact did not list the types of documents  that the government would retain but stated that the MCA would provide  further information in the document retention schedule. The program  closure plan for the El Salvador compact stated that the government,  through a contractor, would retain original files related to personnel,  projects, procurement, finance, monitoring and evaluation, and studies.
Document retention schedule. The MCAs’ document retention  schedules also varied. Armenia and Benin did not provide document  retention schedules. El Salvador provided a comprehensive listing, by  category, of all documents to be retained; however, it provided this list for  the purposes of our review in April 2013, after the compact end date.  Ghana’s schedule, submitted after the compact end date but within the 3- month compact closure period, specified document types to be retained.  Mali provided an undated printout of its electronic file system. According  to MCC officials, the disparity among the MCAs’ document retention  schedules stemmed from insufficiently specific guidance provided by  MCC.
Form and manner of document storage. The MCAs’ program closure  plans specified varying forms and manners of storage for compact-related  information after compact closure. According to the plans:
Armenia will store the documents at three different government  agencies: the state archives, the Ministry of Transport and  Communications, and the Foreign Financing Projects Management  Center (a foreign donor coordination unit);
Benin will store the documents at its national archives;
El Salvador has made a contractor responsible for the safekeeping of  compact-related files and documents;
Ghana’s MCA will continue as a foreign donor coordination unit after  compact closure and will retain all MCC documents; and
Mali will store compact-related information at the Office of the  Secretary General of the President (the “Office of the Segal”), which  was the office of the principal government representative under the  compact.
section_title: Countries’ Ability to Provide Specific Documents Varied
paragraphs: Our test of MCC’s ability to retrieve compact-related information from the  five countries produced varying results that depended on the stability of  the governments. Four of the governments provided all or most of the  documents we requested. In contrast, Mali’s government, which is in  transition, provided none of the requested documents. Figure 1 displays  the test results.
Owing to its policy of relying on partner governments to retain and store  compact-related information, MCC lost access to this information for 2 of  the 11 closed compacts when, because of political turmoil, it terminated  its compacts with Mali and Madagascar. Mali’s government has been in  transition since March 2012, when the administration at that time was  overthrown. According to MCC, the transitional government in Mali will  establish an office to handle post-compact issues but has not provided a  point of contact. As a result, MCC officials reported that although they  believe the information related to the Mali and Madagascar compacts  exists and has been maintained in an organized fashion, they are  currently unable to access the requested documents. MCC has previously  noted that political turmoil in Madagascar, whose government was  overthrown in 2009, impeded MCC’s ability to access documents.
MCC officials stated that they considered the response rate to our test to  be good, particularly since the people retrieving the documents were not  necessarily the same people who created or stored them. Previously,  MCC has stated that its ability to retrieve documents from partner  countries is reliant on its ability to access key individuals. MCC officials  further stated that the difference in document return rates among the four  countries that provided all or most of the requested documents may have  been due to our test methodology. According to these officials, some of  the documents we requested were not “critical path” documents, and our  descriptions of the documents may not have been specific enough to  allow the partner countries to identify them. However, all of the  documents we requested were used in audits by the USAID’s Office of  the Inspector General. They thus serve as examples of the types of  documents that might be needed to support future audits—one of the  purposes for which MCC requires the partner governments to retain  compact-related information for at least 5 years.
section_title: Conclusions
paragraphs: Records and information management is important in all government  agencies, in part because it helps ensure that the agencies remain  transparent and accountable to the public and allows for congressional  and executive branch oversight. MCC established a records management  program that, according to NARA, is comparable to many others in the  federal government. Yet, as an international aid agency providing bilateral  assistance to partner governments, MCC’s situation regarding records  and information management is atypical: Much of the information related  to its core business is generated by the partner governments’  accountable entities, the MCAs. In accordance with NARA guidelines,  MCC has established policies and guidelines stipulating that the MCAs  must provide it with the compact management information it classifies as  U.S. federal records. However, because its policies do not call for, and it  does not conduct, systematic reviews of the records it receives, MCC  cannot be sure that it is meeting the Federal Records Act’s requirement  that it preserve all records documenting its functions, activities, decisions,  and other important transactions.
MCC also has established policies that require partner governments to  retain other compact-related information for at least 5 years after the  compact closes, to support audits and its own program evaluations.  However, for the five closed compacts that we reviewed, the variations in  the partner governments’ plans for retaining compact-related information  could make it difficult for MCC to verify that the appropriate information is  being retained. While MCC provides the partner governments a list  specifying what types of documents it classifies as compact management  records needed for storage at MCC headquarters, it does not provide  such a list for other compact-related information expected to be retained  in-country by the partner governments. A standardized schedule of  compact-related information to be retained by each partner government  would improve MCC’s ability to find and use this information and increase  MCC’s efficiency in comparing similar information across compacts.
Last, while four of the five partner governments were able to provide the  information we requested in our test of MCC’s system, the inability of one  country—Mali, whose government is in transition—to produce any of the  requested documents calls into question MCC’s policy of relying on  partner governments to retain and store most compact-related  information. While the situation in Mali is unusual, the recent political  turmoil in Madagascar, another former MCC partner, shows that such  situations are not unique. Given that the countries that MCC targets for  aid are, by definition, in transition, MCC could benefit from taking  precautionary steps—such as weighing the costs and benefits of storing  more compact-related information at MCC headquarters—to protect and  ensure access to compact-related information.
section_title: Recommendations
paragraphs: We recommend that MCC’s Chief Executive Officer take the following  three actions to strengthen MCC’s records and information management  program:  1.  Develop a policy requiring—and conduct—periodic reviews of each  set of compact management records that MCC receives from partner  governments, to ensure that the records are complete.  2.  Revise program closure guidelines to include a sample document  retention schedule, specifying standard types of compact-related  information that most compacts would need to retain.  3.  Review MCC’s policy of delegating the storage of compact-related  information to partner governments, weighing the costs and benefits  of storing more of this information at MCC headquarters.
section_title: Agency Comments and Our Evaluation
paragraphs: In written comments about a draft of this report, MCC stated that it agrees  with our recommendations and is taking steps to implement them.
With respect to our first recommendation—to develop a policy  requiring, and to conduct, periodic reviews of each set of compact  management records received from partner governments—MCC  stated that, although it has been conducting selected reviews of  compliance with compact records management requirements, making  the practice more systematic would be useful. To that end, its  Department of Compact Operations will ensure that reviews of MCC  and MCA compliance with compact management records polices are  incorporated in both implementation and close-out procedures.
With respect to our second recommendation—to revise program  closure guidelines to include a sample document retention schedule— MCC stated that it will consider how best to structure a standardized  list of core documents that also preserves a country’s flexibility to  tailor its document retention schedule in light of local laws and the  specific types of compact projects.
With respect to our third recommendation—to weigh the costs and  benefits of storing more compact-related information at MCC  headquarters—MCC stated that it will review, and revise as  necessary, its Policy and Procedures for Compact-Related Federal  Record Keeping to ensure that it specifies all documents that should  be defined as federal records.
We have reprinted MCC’s comments in appendix III. We have also  incorporated technical comments from MCC in our report where  appropriate.
NARA also provided technical comments on a draft of this report, which  we have incorporated as appropriate. In addition, NARA stated that  having reviewed our description of MCC’s classification of federal records  and “non-records” as they pertain to the MCAs, it will contact MCC to  ensure that proper classification is occurring.
We are sending copies of this report to interested congressional  committees and the Millennium Challenge Corporation. In addition, this  report is available at no charge on the GAO website at  http://www.gao.gov.
If you or your staff members have any questions about this report, please  contact David Gootnick 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 members  who made major contributions to this report are listed in appendix IV.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: Our objectives were to (1) examine the Millennium Challenge  Corporation’s (MCC) records and information management program and  practices and (2) assess partner-country governments’ implementation of  MCC guidelines for retention and storage of compact-related information.
To examine MCC’s records and information management program and  practices, we reviewed MCC’s policies and guidelines regarding records  and information management, focusing in particular on three documents:  Records and Information Management Policy (June 2011), Policy and  Procedures for Compact-Related Federal Recordkeeping (September  2012), and Program Closure Guidelines (May 2011). We also reviewed  the results of MCC’s annual self-assessment surveys from 2009 through  2012, a tool that the National Archives and Records Administration  (NARA) developed to assess agencies’ self-compliance with the Federal  Records Act and other laws and regulations related to records  management, and we reviewed relevant laws, regulations, and circulars  produced by the Office of Management and Budget. In addition, we  interviewed officials at MCC and NARA.
To assess partner governments’ implementation of MCC’s guidelines for  retention and storage of compact-related information, we selected five  closed compacts—Armenia’s, Benin’s, El Salvador’s, Ghana’s, and  Mali’s—to use as case studies. We chose these compacts because they  closed after May 2011 and therefore were subject to MCC’s Program  Closure Guidelines, which were finalized that month. We reviewed the  documentation that the partner governments or their accountable entities  (usually referred to as Millennium Challenge Accounts, or MCAs) had  provided to MCC in response to those guidelines. Regarding MCC’s  requirement that the partner governments make provisions for the form  and manner of document storage, we reviewed the compacts’ program  closure plans to ensure that provisions for document storage were  included, but we did not verify that specific storage requirements—such  as security and acclimatization—were met.
We also conducted a test of MCC’s ability to retrieve compact-related  information from partner governments after compact closure. For this test,  we asked MCC to request that the partner governments for the case- study compacts provide copies of documents that the U.S. Agency for  International Development’s (USAID) Office of the Inspector General  (OIG) had collected during the course of performance and financial audits  of the five countries.  We selected the audits from a list that the OIG  provided, and we drew from those audits a random sample of documents  that we requested from the partner governments. We used OIG files  because it has conducted audits in all 5 countries, whereas GAO has not.
Selection of performance and financial audits. The OIG provided a  list of 10 performance and 4 financial audits that it considered relevant  to our case studies. We removed one performance audit from the list,  because the OIG had conducted the audit prior to any MCC  compact’s entry into force and the audit therefore would not yield valid  documents. We then selected three performance audits and one  financial audit to review for each of the case-study compacts (except  Armenia’s, for which the OIG did not conduct a financial audit).  Several of the performance audits on the OIG’s list covered more than  one of the case-study compacts. Because Armenia and Benin’s  compacts were both covered in two performance audits and Mali’s  compacts was covered by three performance audits, we included all  of these audits in our sample. Because Ghana’s and El Salvador’s  compacts were each covered by more than three performance audits,  we randomly selected among the relevant audits. Because the OIG  conducted only one financial audit per compact (except Armenia’s),  we selected all of the listed financial audits. See table 3 for a list of the  audits that we selected from which we randomly drew supporting  documents for our case studies.
Random sample of audit documents. Each audit contained multiple  files, from which we randomly drew a sample of 93 documents: 20  documents for Benin’s, Ghana’s, and Mali’s compacts; 18 documents  for El Salvador’s compact; and 15 documents for Armenia’s compact.  The number of documents that we sampled per compact varied for  two reasons: (1) because the OIG has not conducted a financial audit  for Armenia’s compact, we were unable to select any financial-audit- related documents for our sample, and (2) the performance audit files  for El Salvador’s compact contained only 18 appropriate documents.  Table 4 shows the number of documents we sampled per compact, by  type of audit (financial or performance).
Requests for sampled documents. We provided a list of the  randomly sampled documents for each case-study compact to MCC.  We identified each document using, as appropriate, its title, date, and  other identifying information (e.g., contract number, payment order  number, beneficiary name, letter recipient). For Benin’s, Ghana’s, El  Salvador’s, and Mali’s compacts, we listed the document titles and  other information in the document’s original language (English,  French, or Spanish). For Armenia, we translated the title and other  information into English when necessary. We asked MCC to share  these lists with the five partner governments and to request that they  send us copies of the documents, either electronic or paper, within 20  business days, in keeping with the Freedom of Information Act’s  (FOIA) requirement. In response to an MCC comment that the  documents we requested would not, as “non-records,” be subject to  the FOIA requirement, we have reported the numbers of documents  that the partner governments returned within 30 calendar days—the  requirement stated in MCC’s Program Closure Guidelines. However,  the numbers of documents returned within 20 business days were  identical to the numbers returned within 30 calendar days.
Verification of requested documents. To verify that the partner  governments provided the documents we requested, we conducted  two separate comparisons of the documents we received with  corresponding electronic copies, which USAID’s OIG had allowed us  to retain in our files.
We conducted this performance audit from September 2012 to June 2013  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 the  evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
section_title: Appendix II: MCC Scores on NARA Self- Assessment Survey, 2009-2012
paragraphs: Since 2009, the National Archives and Records Administration (NARA)  has administered a survey to assess federal agencies’ compliance with  federal records-keeping laws and regulations. The Millennium Challenge  Corporation (MCC) has received the following scores: 92 (2009), 83  (2010), 76 (2011), and 77 (2012). See tables 5 through 8 below for more  information.
section_title: Appendix III: Comments from the Millennium Challenge Corporation
section_title: Appendix IV: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Emil Friberg, Jr. (Assistant  Director) and Miriam Carroll Fenton made key contributions to this report.  Additional technical assistance was provided by Reid Lowe, Christopher  Mulkins, Justin Fisher, Martin de Alteriis, Nancy Hunn, Mark Bird, Etana  Finkler, and Ernie Jackson.