Foreign Assistance: U.S. Assistance for the West Bank and Gaza, Fiscal Years 2015 and 2016
Released: 2018-08-08T00:00:00


Highlights: section_title: Why GAO Did This Study
paragraphs: Since 1993, the U.S. government has committed more than $5 billion in bilateral assistance to the Palestinians in the West Bank and Gaza. According to the Department of State, this assistance to the Palestinians promotes U.S. economic and political foreign policy interests by supporting Middle East peace negotiations and financing economic stabilization programs. USAID is primarily responsible for administering ESF assistance to the West Bank and Gaza.

Appropriations acts for fiscal years 2015 and 2016 included provisions for GAO to review the treatment, handling, and uses of funds provided through the ESF for assistance to the West Bank and Gaza. This report examines (1) the status of ESF assistance and projects provided to the West Bank and Gaza for fiscal years 2015 and 2016, including project assistance and payments to PA creditors, and (2) the extent to which USAID conducted required vetting of PA creditors to ensure that this assistance would not support entities or individuals associated with terrorism and assessed PA ministries' capacity to use ESF assistance as intended. GAO reviewed relevant laws and regulations and USAID financial data, policies, procedures, and documents. GAO also interviewed USAID and State Department officials.

section_title: What GAO Found
paragraphs: As of March 2018, the U.S. Agency for International Development (USAID) had allocated about $545 million of funding appropriated to the Economic Support Fund (ESF) for assistance in the West Bank and Gaza for fiscal years 2015 and 2016. USAID obligated about $544 million (over 99 percent) and expended about $351 million (over 64 percent) of the total allocations. Project assistance accounted for approximately $399 million of the obligated funds, while payments to Palestinian Authority (PA) creditors accounted for $145 million (see figure). USAID's obligations for project assistance in the West Bank and Gaza for fiscal years 2015 and 2016 supported three development objectives—Economic Growth and Infrastructure ($239 million), Investing in the Next Generation ($107 million), and Governance and Civic Engagement (about $25 million). In fiscal years 2015 and 2016, USAID made payments directly to PA creditors—two Israeli fuel companies, to cover debts for petroleum purchases, and a local Palestinian bank, to pay off a line of credit used for PA medical referrals to six hospitals in the East Jerusalem Hospital network.

USAID vetted PA creditors to ensure that the program assistance would not provide support to entities or individuals associated with terrorism and also conducted external assessments and financial audits of PA ministries of Health and Finance and Planning. USAID documentation showed that, as required, officials checked the vetting status of each PA creditor within 12 months before USAID signed its debt relief grant agreements with the PA. In addition, although USAID determined that it was not legally required to assess the PA Ministry of Health's medical referral services and the Ministry of Finance and Planning's petroleum procurement system, the agency commissioned external assessments of both ministries. These assessments found some weaknesses in both ministries' systems; however, USAID mission officials stated that these weaknesses did not affect USAID debt relief payments to the PA creditors. Nevertheless, USAID took additional steps to mitigate the identified weaknesses. For example, a USAID contractor worked with the Ministry of Health to update, revise, and approve guidelines for medical referrals. In addition, USAID commissioned financial audits of the debt relief grant agreements between USAID and the PA for direct payments to PA creditors in fiscal year 2015 and 2016. The audits did not identify any ineligible costs, reportable material weaknesses in internal control, or material instances of noncompliance with the terms of the agreements.

section_title: What GAO Recommends
paragraphs: GAO is not making recommendations in this report.

section_title: Letter
paragraphs: The West Bank and Gaza cover about 2,400 square miles and have a  combined population of about 4.6 million people. The Palestinian  Authority (PA) and Israel administer areas in the West Bank, and Hamas- controlled de facto authorities control Gaza. According to the Department  of State (State), U.S. economic and humanitarian assistance to the  Palestinians promotes the economic and political foreign policy interests  of the United States by supporting Middle East peace negotiations and  financing economic stabilization programs. The U.S. Agency for  International Development (USAID) has primary responsibility for  administering assistance for the West Bank and Gaza, most of which is  appropriated through the Economic Support Fund (ESF). In addition to  providing project assistance to the Palestinians in the West Bank and  Gaza, USAID entered into debt relief grant agreements with the PA using  fiscal year 2015 and 2016 funds. Under these agreements, according to  USAID, it agreed to pay PA creditors who provided goods and services to  the PA rather than to transfer cash directly to the PA for this purpose.

Appropriations acts for fiscal years 2015 and 2016 included provisions for  GAO to review the treatment, handling, and uses of funds provided  through the ESF—in this report, “ESF assistance”—for the West Bank  and Gaza. This report examines (1) the status of ESF assistance to the  West Bank and Gaza for fiscal years 2015 and 2016, including project  assistance and payments to PA creditors, and (2) the extent to which  USAID conducted required vetting of PA creditors to ensure that  assistance would not support entities or individuals associated with  terrorism and assessed PA ministries’ capacity to use ESF assistance as  intended.

To address our objectives, we reviewed appropriations legislation, related  budget justification documents, and fiscal year 2015 and 2016 financial  data, including expenditures as of March 31, 2018, that USAID provided.  We also reviewed relevant USAID documents, including notifications to  Congress, regarding the obligation of allocated funds. In addition, we  interviewed USAID and State officials in Washington, D.C., and  conducted telephone interviews with USAID West Bank and Gaza  mission officials in Tel Aviv, Israel. In addition, we reviewed statutory  requirements and relevant USAID documentation, such as USAID’s  antiterrorism policies and procedures, for vetting PA creditors to ensure  that assistance does not support entities or individuals associated with  terrorism. See appendix I for more information on our scope and  methodology.

We conducted this performance audit from September 2017 to August  2018 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: Since 1993, USAID has obligated more than $5 billion in bilateral  assistance to the Palestinians in the West Bank and Gaza, primarily using  funds appropriated through the ESF. According to State officials, through  the ESF, USAID provides project assistance and debt relief payments to  PA creditors. USAID, with overall foreign policy guidance from State,  implements most ESF programs, including programs related to private  sector development, health, water and road infrastructure, local  governance, civil society, rule of law, education, and youth development.  According to USAID officials, this assistance to the West Bank and Gaza  contributes to building a more democratic, stable, prosperous, and secure  Palestinian society—a goal that USAID described as being in the interest  of the Palestinians, the United States, and Israel. Figure 1 shows the  location of the West Bank and Gaza relative to surrounding countries.

USAID assistance to the West Bank and Gaza is conducted under  antiterrorism policies and procedures outlined in an administrative policy  document known as Mission Order 21. The stated purpose of the  mission order, as amended, is to describe policies and procedures to  ensure that the mission’s program assistance does not inadvertently  provide support to entities or individuals associated with terrorism.

We have previously reported on the status of ESF assistance to the  Palestinians and USAID’s antiterrorism policies and procedures in the  West Bank and Gaza.

section_title: Status of ESF Assistance to the West Bank and Gaza for Fiscal Years 2015 and 2016, Including Project Assistance and Payments to PA Creditors
paragraphs: As of March 31, 2018, USAID had obligated about $544.1 million (over 99  percent) and expended about $350.6 million (over 64 percent) of  approximately $544.5 million in ESF assistance allocated for the West  Bank and Gaza in fiscal years 2015 and 2016 (see table 1). USAID  obligated portions of the allocated funds for direct payments to PA  creditors—specifically, payments to two Israeli fuel companies, to cover  debts for petroleum purchases, and to a local Palestinian bank, to pay off  a line of credit used for PA medical referrals to six hospitals in the East  Jerusalem Hospital network.

Project assistance obligated for fiscal years 2015 and 2016 accounted for  about $215 million (74 percent) and $184 million (72 percent),  respectively, of USAID’s obligations of ESF assistance for the West Bank  and Gaza for those fiscal years (see fig. 1). Payments to the PA’s  creditors accounted for the remaining obligations—about $75 million (26  percent) of fiscal year 2015 obligations and about $70 million (28 percent)  of fiscal year 2016 obligations.

According to USAID documents, ESF project assistance for the West  Bank and Gaza for fiscal years 2015 and 2016 was obligated for three  USAID development objectives: Economic Growth and Infrastructure  (about $239 million), Investing in the Next Generation (about $107  million), and Governance and Civic Engagement (about $25 million).  Program support—which sustains all development objectives, according  to USAID—accounted for about $29 million (see table 2).

Economic Growth and Infrastructure. The largest share—about 60  percent—of USAID’s ESF project assistance for the West Bank and  Gaza for fiscal years 2015 and 2016 supported the agency’s  Economic Growth and Infrastructure development objective.  According to USAID documents, as of March 31, 2018, the agency  had obligated about $239 million and expended approximately $89  million (about 37 percent) for projects under this objective. USAID  officials stated that the agency funded these projects under the  following standard State-budgeted program areas: health (including  water), infrastructure, private sector competiveness, and stabilization  operations and security sector reform. The largest project—the  Architecture and Engineering Services project—received about $20  million of fiscal year 2015 ESF assistance and $17 million of fiscal  year 2016 ESF assistance. The purpose of the project was to  rehabilitate and construct infrastructure through the procurement of  infrastructure services, including engineering design and construction  management, among other things. The contractor was required to  coordinate with relevant PA and Israeli entities, as well as with  USAID, to assist in the selection of PA water and wastewater projects  and in the planning and design of water projects such as small- to  large-scale water distribution systems, water treatment systems, and  institutional capacity building.

Investing in the Next Generation. The second-largest share—about  27 percent—of USAID’s fiscal years 2015 and 2016 ESF project  assistance for the West Bank and Gaza supported the agency’s  Investing in the Next Generation development objective. According to  USAID documents, as of March 31, 2018, the agency had obligated  about $107 million and expended approximately $79 million (about 74  percent) for projects under this objective. Program areas funded  included education, health, social and economic services and  protection of vulnerable populations. The largest project funded under  this objective—a grant to the World Food Program for assistance to  vulnerable groups—received $12 million in fiscal year 2015 and $15  million in fiscal year 2016 ESF assistance. The project focused on  ensuring food security, including meeting food needs, of the  nonrefugee population; increasing food availability and dietary  diversity for the most vulnerable and food-insecure nonrefugee  population; and establishing linkages with the Palestinian private  sector (shopkeepers, farms, and factories) to produce and deliver the  aid being provided to Palestinians. For example, the project directly  distributed a standard food ration through both direct food distribution  and electronic food vouchers to vulnerable nonrefugee families.

Governance and Civic Engagement. The smallest share—about 6  percent—of USAID’s fiscal years 2015 and 2016 ESF project  assistance for the West Bank and Gaza supported the agency’s  Governance and Civic Engagement development objective. According  to USAID documents, as of March 31, 2018, USAID had obligated  about $24.6 million and expended approximately $14.5 million (about  60 percent) for projects in program areas that included civil society,  good governance, and rule of law. The largest project funded under  this objective—a contract for the Communities Thrive Project— received about $5.2 million and $8 million in fiscal years 2015 and  2016 ESF assistance, respectively. The project aimed to help 55 West  Bank municipalities improve fiscal management, fiscal accountability  and transparency, and delivery and management of municipal  services, among other things.

Under debt relief grant agreements with the PA, USAID made direct  payments of ESF assistance to PA creditors totaling about $75 million  from fiscal year 2015 funds and $70 million from fiscal year 2016 funds.  USAID paid about $40 million from fiscal year 2015 funds and $45 million  from fiscal year 2016 funds to two oil companies to cover debts for  petroleum purchases. In addition, USAID paid about $35 million from  fiscal year 2015 funds and $25 million from fiscal year 2016 funds to the  Bank of Palestine, to pay off a PA line of credit that was used to cover PA  medical referrals to six hospitals in the East Jerusalem Hospital network.

section_title: USAID Vetted PA Creditors and Conducted External Assessments and Financial Audits of PA Ministries
paragraphs: Before using fiscal years 2015 and 2016 ESF assistance to pay PA  creditors, USAID vetted the creditors to ensure that the assistance would  not provide support to entities or individuals associated with terrorism, as  required by its policies and procedures. USAID determined that certain  legal requirements, including the requirement for an assessment of the  PA Ministry of Finance and Planning, were not applicable for direct  payments of these funds to PA creditors. Nevertheless, USAID continued  to commission external assessments and financial audits of the PA  Ministries of Health and Finance and Planning.
subsections: section_title: USAID Vetted PA Creditors as Required by Its Policies and Procedures for Direct Payments to Creditors
paragraphs: USAID documentation for payments to creditors shows that before  signing debt relief agreements with the PA, mission officials checked, as  required by Mission Order 21, the vetting status of PA creditors who  would receive direct payments under the agreements, to ensure their  eligibility before any payment was made. USAID Mission Order 21  requires that before payments to PA creditors are executed, the creditors  must be vetted—that is, the creditors’ key individuals and other identifying  information must be checked against the federal Terrorist Screening  Center database and other information sources to determine whether  they have links to terrorism. According to USAID policies and  procedures, each PA creditor must be vetted if more than 12 months  have passed since the last time the creditor was vetted and approved to  receive ESF payments. We found that for payments made to PA creditors  using fiscal years 2015 and 2016 ESF assistance, USAID vetted each PA  creditor that received payments and completed the vetting during the 12-  month period before the debt relief agreements with the PA were signed  (see table 3).

section_title: USAID Determined Certain Legal Requirements Were Not Applicable to Payments to PA Creditors
paragraphs: USAID determined that certain legal requirements applicable to cash  transfers to the PA were not applicable to direct payments to PA creditors  of fiscal years 2015 and 2016 ESF assistance. In September 2015, we  reported that USAID ceased making cash payments directly to the PA in  2014 and began making payments of ESF assistance directly to PA  creditors. In reviewing USAID’s compliance with key legal requirements,  we found that USAID had complied with the requirements when making  cash transfers to the PA in fiscal year 2013. However, USAID had  determined that some requirements were not applicable to direct  payments made to PA creditors in fiscal year 2014, because no funds  were being provided directly to the PA.

After fiscal year 2015, USAID further defined the scope of statutory  requirements it deemed applicable to payments to PA creditors using  fiscal years 2015 and 2016 ESF assistance, under the rationale that  these payments do not constitute direct payments to the PA.  Specifically, according to USAID, the agency determined that the  following statutory requirements discussed in our prior report were not  applicable to direct payments to PA creditors.

A requirement to notify the Committees on Appropriations 15 days  before obligating funds for a cash transfer to the PA

A requirement for the PA to maintain cash transfer funds in a separate  account

A requirement for the President to waive the prohibition on providing  funds to the PA and to submit an accompanying report to the  Committees on Appropriations

A requirement for the Secretary of State to provide a certification and  accompanying report to the Committees on Appropriations when the  President waives the prohibition on providing funds to the PA

Requirements for direct government-to-government assistance,  including an assessment of the PA Ministry of Finance and Planning  According to USAID officials, they currently do not plan to resume cash  payments to the PA, because making direct payments to creditors  minimizes the misuse of funds and assures full transparency and  appropriateness of transfers.

section_title: USAID Commissioned External Assessments and Financial Audits of PA Creditors before Executing Payments
paragraphs: Although USAID concluded that the statutory requirement mandating  assessments of the PA Ministry of Finance and Planning did not apply to  direct payments to PA creditors, the West Bank and Gaza mission  commissioned external assessments of the PA Ministry of Health’s  medical referral services and Ministry of Finance and Planning’s  petroleum procurement system. According to a USAID document, while  the payments to the creditors did not constitute direct budget support to  the PA, the agency chose to commission external assessments to  determine whether the PA’s financial systems were sufficient to ensure  adequate accountability for USAID funds consistent with legislative  requirements for direct budget support funds. These external  assessments identified weaknesses in both systems.

Ministry of Health medical referrals. The assessment report stated  that the ministry did not have approved policies and procedures for  the medical referral process, a list of medical services covered by the  referral system, and written criteria for selecting referral hospitals in  the medical referral systems. In response, in a January 2016  internal memorandum, the West Bank and Gaza mission officials  concluded, among other things, that the findings did not pose a  significant risk to USAID funds. They also stated that the Ministry of  Health’s medical referral system had adequate policies and  procedures for referrals to local hospitals. However, after the  assessment report was issued, a USAID contractor worked with the  Ministry of Health to update, revise, and approve guidelines for  medical referrals.

Ministry of Finance and Planning petroleum procurements. The  assessment report stated that the ministry lacked specific policies and  procedures to prevent or detect fraud in the petroleum procurement  systems. In the West Bank and Gaza mission’s January 2016  memorandum, USAID mission officials disagreed with the  assessment’s findings regarding the petroleum procurement system,  stating that the assessment did not take into account sufficient and  adequate internal controls at the ministry as a first line of defense  against fraud. The memorandum also stated that the finding did not  affect USAID debt relief payments to the PA creditors.

USAID officials told us that, while they did not believe the external  assessments’ findings affected the integrity of USAID’s debt relief  payment process, they took four additional steps to mitigate findings  noted in the assessment of the Ministry of Finance and Planning’s fuel  procurement processes. According to USAID officials, they (1) confirmed  that the fuel companies had controls and systems to ensure an objective  and transparent system in receiving and recording PA orders, (2)  dispatched orders with official and properly signed shipping delivery and  receipt documents, (3) obtained written confirmation from the fuel  companies of the costs of the fuel provided to the PA, and (4) confirmed  the PA’s petroleum debt with the fuel companies before initiating the  payments and after making the payments.

In addition, in 2016, USAID commissioned two routine financial audits of  the debt relief grant agreed to by USAID and the PA for the use of fiscal  year 2015 ESF assistance to make direct payments to PA creditors.  According to USAID officials, the auditors were to examine the PA  Ministry of Finance and Planning’s recording of USAID payments to PA  creditors in its financial records as well as the ministry’s and USAID’s  compliance with the terms of the grant agreement and related  implementation letters. The audits did not identify any questioned or  ineligible costs, reportable material weaknesses in internal control, or  material instances of noncompliance with the terms of the debt relief  grant. Also, in 2017, USAID contracted for a financial audit of the fiscal  year 2016 debt relief grant agreed to by USAID and the PA. According to  a USAID document, in May 2018, USAID held an entrance conference  with the PA Ministry of Finance and Planning for the audit of the fiscal  year 2016 grant. In July 2018, USAID sent the final audit report to the  Regional Inspector General for review. According to the USAID  document, the report did not identify any questioned or ineligible costs,  reportable material weaknesses in internal controls, or material instances  of noncompliance with the terms of the grant.

section_title: Agency Comments
paragraphs: We provided a draft of this report to USAID and State for review and  comment. USAID provided comments, which we have reproduced in  appendix II, as well as technical comments, which we incorporated as  appropriate. State did not provide comments.

We are sending copies of this report to the appropriate congressional  committees, the Administrator of USAID, and the Secretary of State. In  addition, the report is available at no charge on the GAO website at  http://www.gao.gov  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 contributed to this report are  listed in appendix III.

section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: Appropriations acts for fiscal years 2015 and 2016 included provisions for  GAO to review the treatment, handling, and uses of funds provided  through the ESF for assistance to the West Bank and Gaza. This report  examines (1) the status of ESF assistance and projects provided to the  West Bank and Gaza for fiscal years 2015 and 2016, including payments  to PA creditors, and (2) the extent to which USAID conducted required  vetting of PA creditors to ensure that assistance would not support  entities or individuals associated with terrorism and assessed PA  ministries’ capacity to use ESF assistance as intended.

To address our first objective, we reviewed appropriations legislation,  related budget justification documents, and financial data for fiscal years  2015 and 2016, including expenditures as of March 31, 2018, provided by  USAID’s West Bank and Gaza mission in Tel Aviv, Israel. We reviewed  data that USAID provided on obligations and expenditures of all ESF  assistance for the West Bank and Gaza as of March 31, 2018, from  annual allocations for fiscal years 2015 and 2016. We also reviewed  relevant USAID documents, including notifications to Congress regarding  the use of appropriated funds. In addition, we interviewed USAID and  State officials in Washington, D.C., and Tel Aviv.

To determine whether the data were sufficiently reliable for the purposes  of this report, we requested and reviewed information from USAID  officials about their procedures for entering contract and financial  information into USAID’s data system. We determined that the USAID  data were sufficiently reliable. For the project information included in this  report, we relied on data that USAID provided, showing its obligations and  expenditures of fiscal year 2015 and 2016 ESF assistance for West Bank  and Gaza. For illustrative purposes, we requested and obtained from  USAID descriptions of projects that, according to USAID officials,  represented the largest financial obligations for each development  objective in fiscal years 2015 and 2016.

To address our second objective, we identified and reviewed relevant  legal requirements as well as USAID policies and procedures to comply with those requirements. USAID Mission Order 21 is the primary  document that details USAID procedures to ensure that the mission’s  assistance program does not provide support to entities or individuals  associated with terrorism, consistent with the prohibition on such support  found in relevant laws and executive orders. In addition, we reviewed 27  USAID determinations of compliance for payments to PA creditors and  discussed with USAID mission officials their efforts to comply with the  policies and procedures in Mission Order 21 before executing payments  to hospitals, companies, and banks that facilitated the payments. We also  reviewed the timing of USAID’s vetting of each PA creditor that received  payments, to ensure that, as required by Mission Order 21, the vetting  occurred within 12 months before USAID signed the relevant debt relief  grant agreement with the PA. Further, we reviewed external assessments  of the PA Ministries of Health and Finance and Planning and financial  audits of the PA Ministry of Finance and Planning, and we discussed the  assessments’ and audits with USAID officials responsible for payments to  PA creditors.

We conducted this performance audit from September 2017 to August  2018, 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 findings and  conclusions based on our audit objectives.

section_title: Appendix II: Comments from the U.S. Agency for International Development

section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact

section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Judith McCloskey (Assistant  Director), Tom Zingale (Analyst-in-Charge), Eddie Uyekawa, Jeff Isaacs,  and Nicole Willems made significant contributions to this report. David  Dornisch, Neil Doherty, Reid Lowe, and Roger Stoltz also contributed to  the report.

Fast facts: The United States provides economic and humanitarian assistance to Palestinians in the West Bank and Gaza to promote Middle East peace and stability.

In 2015 and 2016, the U.S. Agency for International Development provided about $545 million for projects such as water treatment systems and to pay Palestinian Authority creditors directly for fuel and health services. USAID is required to ensure no support goes to people or entities linked to terrorism.

We found that USAID carried out the required vetting of Palestinian Authority creditors.

Question-summary annotations: questions: question: Why were PA creditors vetted?
answer: USAID vetted PA creditors to ensure that the program assistance would not provide support to entities or individuals associated with terrorism and also conducted external assessments and financial audits of PA ministries of Health and Finance and Planning. In addition, USAID commissioned financial audits of the debt relief grant agreements between USAID and the PA for direct payments to PA creditors in fiscal year 2015 and 2016.
child_questions: question: How USAID confirm compliance with requirements?
answer: USAID documentation showed that, as required, officials checked the vetting status of each PA creditor within 12 months before USAID signed its debt relief grant agreements with the PA.

question: What did the audits reveal?
answer: The audits did not identify any ineligible costs, reportable material weaknesses in internal control, or material instances of noncompliance with the terms of the agreements.

question: What characterized the USAID assessment of French medical and infrastructural systems?
answer: In addition, although USAID determined that it was not legally required to assess the PA Ministry of Health's medical referral services and the Ministry of Finance and Planning's petroleum procurement system, the agency commissioned external assessments of both ministries.
child_questions: question: What did these assessments discover?
answer: These assessments found some weaknesses in both ministries' systems; however, USAID mission officials stated that these weaknesses did not affect USAID debt relief payments to the PA creditors. Nevertheless, USAID took additional steps to mitigate the identified weaknesses. For example, a USAID contractor worked with the Ministry of Health to update, revise, and approve guidelines for medical referrals.

questions: question: What assistance has the US provided to Palestinians in the West Bank and Gaza?
answer: Since 1993, the U.S. government has committed more than $5 billion in bilateral assistance to the Palestinians in the West Bank and Gaza.
child_questions: question: What interests does this assistance serve?
answer: According to the Department of State, this assistance to the Palestinians promotes U.S. economic and political foreign policy interests by supporting Middle East peace negotiations and financing economic stabilization programs.

question: How is USAID involved in the region?
answer: USAID is primarily responsible for administering ESF assistance to the West Bank and Gaza.

questions: question: Why did GAO review ESF?
answer: Appropriations acts for fiscal years 2015 and 2016 included provisions for GAO to review the treatment, handling, and uses of funds provided through the ESF for assistance to the West Bank and Gaza.

question: What does this report cover?
answer: This report examines (1) the status of ESF assistance and projects provided to the West Bank and Gaza for fiscal years 2015 and 2016, including project assistance and payments to PA creditors, and (2) the extent to which USAID conducted required vetting of PA creditors to ensure that this assistance would not support entities or individuals associated with terrorism and assessed PA ministries' capacity to use ESF assistance as intended.

question: What data did the GAO collect?
answer: GAO reviewed relevant laws and regulations and USAID financial data, policies, procedures, and documents. GAO also interviewed USAID and State Department officials.