Democracy Assistance: U.S. Agencies Take Steps to Coordinate International Programs but Lack Information on Some U.S.-funded Activities
Released: 2009-09-28T00:00:00

Letter

Background

Foreign Assistance Reform

In January 2006, to better align foreign assistance programs with U.S. foreign policy goals, the Secretary of State appointed a Director of Foreign Assistance with authority over all State and USAID foreign assistance funding and programs. In working to reform foreign assistance, the Director’s office, State/F, has taken a number of steps to integrate State and USAID foreign assistance processes. These steps have included, among others, integrating State and USAID foreign assistance budget formulation, planning and reporting processes. As part of the reform, State/F, with input from State and USAID subject matter experts, developed the Foreign Assistance Framework, with its five strategic objectives, as a tool for targeting U.S. foreign assistance resources; instituted common program definitions to collect, track, and report on data related to foreign assistance program funding and results; and created a set of standard output-oriented indicators for assessing foreign assistance programs. State/F also instituted annual operational planning and reporting processes for all State and USAID operating units. Moreover, State/F initiated a pilot program for developing 5-year country assistance strategies intended to ensure that foreign assistance provided by all U.S. agencies is aligned with top foreign policy objectives in a given country. These integrated processes are supported by two data information systems, known as the Foreign Assistance Coordination and Tracking System (FACTS) and FACTS Info.

In July 2009, the Secretary of State announced plans to conduct a Quadrennial Diplomacy and Development Review, intended in part to maximize collaboration between State and USAID. According to State, this review will identify overarching foreign policy and development objectives, specific policy priorities, and expected results. In addition, the review will make recommendations on strategy, organizational and management reforms, tools and resources, and performance measures to assess outcomes and—where feasible—impacts of U.S. foreign assistance. The review will be managed by a senior leadership team under the direction of the Secretary of State and led by the Deputy Secretary for Management and Resources, with the Administrator of USAID and the Director of the Policy Planning serving as co-chairs and with senior representation from State and USAID. Although State has not announced a formal time frame for producing a final report of the review’s results, a senior State official indicated that the process would likely produce initial results in early 2010.

Democracy Assistance and the Foreign Assistance Framework

Under the Foreign Assistance Framework developed by State/F in 2006, the strategic objective GJD has four program areas—”Rule of Law and Human Rights,” “Good Governance,” “Political Competition and Consensus-Building,” and “Civil Society”—each with a number of program elements and subelements. State/F’s information systems, FACTS and FACTS Info, track funding allocated for assistance in support of GJD and these four program areas. Table 1 shows the four program areas and associated program elements.

Funding Allocations for Democracy Assistance

In fiscal years 2006 through 2008, funds allocated for the GJD strategic objective were provided for democracy assistance programs in 90 countries around the world. Almost half of all democracy funding over this period was spent in Iraq and Afghanistan; the next highest funded countries, Sudan, Egypt, Mexico, Colombia, and Russia, accounted for more than 25 percent of the remaining GJD funding allocated to individual countries other than Iraq and Afghanistan. Of the 20 countries with the largest GJD allocations, 8 have been rated by Freedom House, an independent nongovernmental organization, as not free; 8 have been rated as partly free; and 4 have been rated as free. Figure 1 illustrates the worldwide distribution of GJD funding, and table 2 shows funding levels and Freedom House ratings for the 20 countries with the largest with the largest allocations. allocations.

Key Entities Involved in Providing U.S.-funded Democracy Assistance

USAID, State DRL, and NED fund democracy assistance programs in countries throughout the world. USAID’s and State DRL’s foreign assistance programs are funded under the Foreign Operations appropriation and tracked by State as part of GJD funding, while NED’s core budget is funded under the State Operations appropriation and is not tracked as part of GJD foreign assistance funding.

U.S. Agency for International Development. In fiscal years 2006 through 2008, USAID democracy programs operated in 88 countries worldwide. USAID’s Office of Democracy and Governance, based in Washington, D.C., supports USAID’s democracy programs worldwide, but these programs are primarily designed and managed by USAID missions in the field. USAID democracy programs cover a large variety of issues including media, labor, judicial reforms, local governance, legislative strengthening, and elections. USAID programs are managed by technical officers, typically based in missions in the field, who develop strategies and assessments, design programs, and monitor the performance of projects by collecting and reviewing performance reports from implementing partners and conducting site visits, typically at least monthly.

Bureau of Democracy, Human Rights and Labor. State DRL implements the Human Rights Democracy Fund, established in fiscal year 1998, providing grants primarily to U.S. nonprofit organizations to strengthen democratic institutions, promote human rights, and build civil society mainly in fragile democracies and authoritarian states. In 2006 through 2008, State DRL’s programs operated in 66 countries worldwide. According to State, State DRL strives to fund innovative programs focused on providing immediate short term assistance in response to emerging events. In addition, State DRL can also fill gaps in USAID democracy funding (see app. II). Unlike USAID, State DRL manages its democracy grant program centrally. State DRL’s Washington-based staff monitor these grants by collecting and reviewing quarterly reports from grantees and conducting site visits, typically through annual visits to participating countries.

National Endowment for Democracy. In 1983, Congress authorized initial funding for NED, a private, nonprofit, nongovernmental organization. NED’s core budget is funded primarily through an annual congressional appropriation and NED receives additional funding from State to support congressionally directed or discretionary programs. The legislation recognizing the creation of NED and authorizing its funding, known as the NED Act, requires NED to report annually to Congress on its operations, activities, and accomplishments as well as on the results of an independent financial audit. The act does not require NED to report to State on the use of its core appropriation; however, State requires NED to provide quarterly financial reporting and annual programmatic reporting on the use of the congressionally directed and discretionary grants it receives from State. NED funds indigenous partners with grants that typically last for about a year. NED monitors program activities through quarterly program and financial reports from grantees and site visits, performed on average about once per year, to verify program and budgetary information. About half of NED’s total annual core grant funding is awarded to four affiliated organizations, known as core institutes. The remaining funds are used to provide hundreds of grants to NGOs in more than 90 countries to promote human rights, independent media, rule of law, civic education, and the development of civil society in general.

Data Show Largest Allocations for USAID Democracy Assistance

State/F information systems show allocations of approximately $2.25 billion in GJD funding to operating units in fiscal year 2008, with about 85 percent of this amount allocated for State and USAID field-based operating units, primarily country missions. The estimated average annualized funding for democracy assistance projects active in our 10 sample countries as of January 2009 was $18 million for USAID, $3 million for State DRL, and $2 million for NED. In fiscal year 2008, more than half of State DRL funding for democracy assistance went to Iraq, followed by China, Cuba, Iran, and North Korea, and most NED funding for democracy programs went to China, Iraq, Russia, Burma, and Pakistan.

Most Democracy Funding Allocated to Field-Based Operating Units

Data from State/ F information systems, which report GJD allocations by operating unit, indicate that most GJD funding allocated in fiscal year 2008 went to country programs. The State/F systems show that, of more than $2.25 billion allocated for GJD in fiscal year 2008, approximately $306 million, or almost 15 percent, went to operating units in Washington, D.C., including USAID and State regional and functional bureaus and offices such as State DRL. More than $1.95 billion, or about 85 percent of the total allocation, was allocated to field-based operating units, primarily country missions. (See fig. 2 for the allocation of GJD funding by type of operating unit, for fiscal year 2008. See app. IV for a list of Washington, D.C.-based and field-based operating units that received GJD funds in fiscal years 2006-2008.)

Figure 3 shows the distribution of democracy assistance funding for the four GJD program areas.

Although State/F information systems enable reporting of democracy assistance allocations to operating units and by program area, these systems do not include funding information by implementing entity for the years we reviewed—fiscal years 2006 through 2008. Consequently, State/F data on GJD funding allocations to implementing entities— including the portion of allocations to field-based operating units that is programmed by each implementing entity—are not centrally located. However, in response to our request for information on USAID democracy assistance funding, State/F and USAID compiled data provided by USAID missions on GJD funding allocated to USAID for most country-based operating units for fiscal years 2006 through 2008. According to these data, USAID implements the majority of the democracy funding provided in most countries. In addition, State/F data show that the largest portion of GJD funding in fiscal year 2008 was allocated for the Good Governance program area (see fig. 3). (App. II shows amounts of USAID, State DRL, and NED funding distributed to all countries in fiscal years 2006-2008 as well as each country’s Freedom House rating.)

USAID Funded Most Democracy Assistance in 10 Sample Countries

Estimated average annualized funding for all active democracy assistance projects in the 10 sample countries was about $18 million per year for USAID (78 percent of the total estimated average annual funding for all three entities), $3 million for State DRL, and $2 million for NED. Annualized funding per project averaged more than $2 million for USAID; more than $350,000 for State DRL; and more than $100,000 for NED. Project length averaged 3 years for USAID, 2 years for State DRL, and 1 year for NED (see fig. 4).

According to award data for USAID, State DRL, and NED, USAID provided the majority of funding for democracy assistance projects that were active as of January 2009 in 9 of the 10 sample countries (see fig. 5). USAID funding ranged from 10 to 94 percent, with a median of 89 percent, of the three entities’ total democracy assistance funding in each country.

USAID’s country-based missions are typically responsible for developing democracy assistance activities based on country-specific multiyear democracy assistance strategies, which they develop in the field with input from embassy officials as well as USAID and State offices in Washington, D.C. Once the strategic plan is approved, individual programs are designed to fit into the overall priorities and objectives laid out in the strategic plan. This program design includes the procedures to select the implementer and to monitor and evaluate program performance. USAID missions typically collaborate with the USAID Office of Democracy and Governance to develop and carry out in-depth democracy and governance assessments to help define these strategies. These assessments are intended to identify core democracy and governance problems and the primary actors and institutions in a country. For example, the USAID mission in Indonesia conducted a democracy and governance assessment in June 2008, which formed the basis for a new 5-year democracy and governance strategy for 2009 to 2014. The assessment, which was commissioned by the USAID Office of Democracy and Governance and conducted by an outside contractor, involved consultation with more than 100 Indonesian government officials, civil society representatives, local academics, and other international donors involved in democracy and governance in Indonesia.

USAID democracy activities vary in each country, according to the operating environment, needs and opportunities. For example, as of January 2009, USAID’s democracy assistance portfolio in Lebanon amounted to $24.3 million on an annual basis. The majority of this funding—65 percent—was awarded for Good Governance activities such as assistance to the Lebanese Parliament, and programs to improve service delivery through municipal capacity building. In Indonesia, about 70 percent of USAID funding for projects active in January 2009 was for Good Governance–related assistance to help the Indonesian government with a major effort to decentralize its government. Conversely, in Russia, where USAID does not work closely with the Russian government, over 50 percent of USAID funding supported Civil Society programs and only about 13 percent of funding supported active projects in the area of Good Governance.

USAID implements approximately half of the value of its democracy programs using grants and implements the remaining half using contracts. Worldwide, USAID democracy contract funding tends to be much higher than USAID grant funding; in fiscal year 2008, democracy contract funding averaged about $2 million per project and democracy grant funding averaged almost $850,000 per project. However, USAID implements more than twice as many projects with grants than with contracts; thus, although USAID contracts are higher in funding, USAID democracy funding is fairly evenly split between contracts and grants. In fiscal year 2008, about 53 percent of USAID democracy funding was implemented through contracts and 47 percent was implemented through grants. Table 3 shows USAID’s average global funding for democracy contracts and grants in fiscal year 2008.

State DRL and NED Funded Democracy Assistance Activities in Select Countries

State DRL funded democracy programs in more than 30 countries in a variety of program areas in fiscal year 2008, spending 57 percent of its funds in Iraq and 28 percent in China, Cuba, Iran, and North Korea. Funds managed by State DRL totaled $157 million in fiscal year 2008, $75 million of which was allocated through a supplemental appropriation for democracy programs in Iraq. Only a small portion of State DRL-managed funding in that year—$13 million of $157 million—was discretionary; most of the funding was congressionally directed for specific countries or issues. In planning resource allocations as well as solicitations for statements of interest and requests for proposals from NGOs, State DRL staff members consult with USAID and State regional bureaus, and review country mission strategic plans and operational plans, according to a State DRL official. Proposals are reviewed by a 7-person panel, which includes representatives from State DRL, USAID, and State regional bureaus. According to a State DRL official, the bureau does not prepare country strategies for its democracy grant program because funding levels are relatively small for most countries and fluctuate from year to year.

NED funded democracy programs in more than 90 countries in fiscal year 2008, spending 28 percent of its funds on programs in China, Iraq, Russia, Burma, and Pakistan. Unlike USAID and State DRL, NED allocates democracy funds relatively evenly across many countries, with average per-country funding of almost $1 million in fiscal year 2008. In fiscal year 2008, NED’s funding allocation for democracy programs totaled $118 million. NED makes programming decisions on specific projects in the context of its current 5-year strategic plan, published in 2007, and an internal annual planning document. For each region of the world, the annual planning document identifies regional priorities and critical sectors—such as human rights and freedom of information—in which to target assistance. According to a NED official, NED solicits proposals from NGOs every quarter. After grant proposals are received, NED conducts an internal review and the proposals that are selected are presented to the NED board of directors for approval.

Figure 6 shows the countries where State DRL and NED, respectively, allocated the largest amounts for democracy programs in fiscal year 2008. (Dollars in millions)

USAID and State DRL Coordinate to Help Ensure Complementary Programs but Often Are Not Aware of NED Projects

To help ensure complementary programming and avoid duplication in their respective democracy assistance programs, State DRL invites USAID missions to review State DRL proposals for democracy assistance projects. In addition, State DRL officials sometimes participate in USAID missions’ planning for democracy assistance projects. However, USAID and State DRL officials are often not aware of NED democracy assistance projects, and although NED is not required to report on all of its democracy assistance projects, State DRL officials and USAID mission officials said that information on all NED’s active projects would be useful in ensuring coordinated assistance. USAID officials participate in embassy working groups or committees that review democracy assistance projects, among others, to ensure that projects are complementary.

USAID Missions and State DRL Take Steps to Coordinate Democracy Assistance Programming

State DRL—which manages its democracy grant program centrally, without embassy-based staff—solicits feedback from USAID missions in both the development of State DRL’s solicitations for democracy programs and the resulting project proposals from NGOs. As part of State DRL’s formal process for evaluating democracy assistance project proposals, USAID and State regional bureau representatives participate in State DRL’s project review panels and vote on proposals, conveying feedback from USAID country missions and embassies as to whether project proposals complement or duplicate ongoing democracy assistance efforts of USAID and other State entities. USAID officials at the 10 missions we contacted generally agreed that this process helps to ensure complementary programming between State DRL and USAID. In just one instance, a USAID mission official remarked that a review panel had approved a State DRL proposal for civil society training that could duplicate an existing USAID project. According to a State DRL official, the review panels take into account the missions’ and embassies’ feedback but may vote to approve a project on the basis of other factors.

In addition, State DRL officials are involved in some aspects of USAID missions’ democracy assistance planning. State DRL officials who manage the bureau’s democracy grants participate with USAID’s Office of Democracy and Governance in providing input on democracy funding levels as a part of the budget formulation process and have the opportunity to review and comment on all country operational plans, according to State officials. State officials also noted that State DRL as a bureau is involved in many strategic discussions about democracy assistance that is provided through bilateral programs; however, State DRL officers generally are not involved in USAID missions’ planning for democracy assistance projects. According to State DRL officials responsible for grants in our 10 sample countries, increased integration into USAID’s planning process would better inform State DRL programming decisions and ensure better coordination between State and USAID. State DRL officials noted that this would also increase the opportunity for State DRL to share its expertise as the bureau responsible for U.S. human rights and democracy policy. However, State DRL and USAID officials commented that increasing the level of coordination between State DRL’s staff and USAID missions in USAID’s planning process could be challenging, because State DRL staff typically have resources to travel to countries only once per year as part of their grant oversight duties. According to USAID officials, USAID selects its projects based on multiyear democracy assistance strategies developed at country- based missions; the development of individual USAID democracy assistance projects and selection of implementing partners also generally takes place at the missions. USAID mission officials also noted that their review process for selecting implementing partners, which takes place in the field, generally lasts 10 to 15 days. In addition, a State/F official observed that for most countries, State DRL’s level of funding for its grant program would likely be too small to justify the additional staff time necessary for increasing their involvement in USAID’s mission-based planning processes.

Despite the challenges related to State DRL involvement in USAID planning, we found that USAID missions included State DRL staff in joint planning activities for 2 of our 10 sample countries. For example, the USAID mission in Russia invited a State DRL official to participate in an interagency visit to the country in 2008 to review current U.S. democracy assistance efforts and consider areas for future programming. The State DRL official involved in the visit noted that this effort helped her identify potential areas where State DRL could target its assistance to complement USAID’s larger, longer-term democracy program. In China—the only country in our sample where State DRL funds a larger portfolio of democracy projects than does USAID—a State DRL official participated in vetting proposals for a USAID Rule of Law project in China that began in 2006. State DRL official did not participate in planning the solicitation for the proposals, and USAID did not invite State DRL to participate in its planning or proposal vetting for subsequent Rule of Law projects in China. More recently, State DRL and USAID staff met with embassy staff in Beijing to collaborate on their respective democracy assistance programs. However, according to a State DRL official, it is not clear what role State DRL will have in USAID’s future strategic planning process for assistance in China or in reviewing USAID’s future democracy project proposals there.

The development of joint State-USAID country assistance strategies (CAS), which State/F is piloting as part of its foreign aid reform efforts, is expected to improve coordination of State and USAID foreign assistance, according to State/F officials. However, as we reported in April 2009, the CAS, unlike USAID’s country strategies, contains only high-level information, which could limit its impact on interagency collaboration. State piloted this new strategic planning process in 10 countries in fiscal year 2008 and was reviewing the results of the pilot as of August 2009. Consequently, according to State and USAID officials, it is not yet clear what form the new process will take; it also is not clear whether or how the process may affect interagency coordination of democracy assistance efforts.

USAID and State DRL Are Often Not Aware of NED Projects

USAID and State DRL officials responsible for managing democracy assistance in our 10 sample countries have often lacked basic information about NED’s democracy projects, which they believe would be useful in ensuring coordinated assistance. No mechanism currently exists for the routine sharing of information on NED’s core-funded projects outside the Europe and Eurasia region. In 4 of our 10 sample countries, USAID mission officials told us that they were not aware of NED-supported activities in the country, despite the presence of several active NED projects. Several USAID mission officials stated that more knowledge of NED’s projects would be useful for ensuring that U.S.-supported assistance is well coordinated. State DRL officials responsible for planning and managing democracy grants in 7 of the 10 sample countries also told us that they were not aware of NED’s current projects, and State DRL officials responsible for managing projects in 5 of these 7 countries said that receiving timely information on NED’s projects would improve coordination and help reduce the possibility of duplicative programming. In particular, State DRL officials stated that knowledge of NED’s activities in a given country would help inform their own planning decisions regarding which projects to support.

State has access to NED’s annual report to Congress on its core grant activities. However, State DRL officials noted that they cannot rely on this report for complete information about NED’s activities, because the report may exclude many projects that go into effect after the report is published. Although NED is under no obligation to report to State on the projects it funds with its core U.S. appropriation, NED also regularly provides information on its core-funded and non-core-funded projects to State in some instances. For example, in addition to annually reporting, NED provides quarterly updates on both proposed and active projects in former Soviet Union and Eastern Europe countries to State’s Office of the Coordinator of U.S. Assistance to Europe and Eurasia (EUR/ACE). EUR/ACE officials stated that they circulate information on NED’s proposed and active projects to the relevant USAID missions and U.S. embassies, as well as to Washington counterparts in DRL and regional State and USAID bureaus, to keep them informed and that they also solicit any feedback that might be useful to NED on an advisory basis only. EUR/ACE officials noted that because EUR/ACE exists expressly to coordinate all foreign assistance in its geographic regions, staff resources are available to collect and disseminate this information; according to these officials, other geographic State bureaus may not have access to such resources.

NED officials told us that, although there is no mechanism for routine information sharing on NED projects, NED provides information to State and USAID when asked. NED officials also said that the organization does not oppose sharing with State or USAID information on projects that the NED board has approved. The officials stated that NED would be willing to provide project information routinely if State or USAID deemed it useful. However, NED and State officials also indicated that any attempt to increase NED’s sharing of information with State DRL should be designed to minimize additional administrative burden and avoid straining State DRL’s available staff resources.

USAID and Embassy Officials Collaborate Regularly

USAID mission and embassy officials involved in democracy assistance in our 10 sample countries collaborate regularly, typically through working groups or committees at posts. For example, in Indonesia, an anticorruption working group that includes USAID, Department of Justice, and State officials from the embassy’s political and economic sections meets monthly at the embassy. According to USAID officials, this group has discussed various anticorruption-related programs to ensure that their efforts are complementary. The embassy in Indonesia also convenes a parliamentary working group, a counterterrorism and law enforcement working group, and an ad hoc working group on elections involving many of the same representatives. In addition, during our review of 10 sample countries, USAID officials in Russia told us of a working group that meets at the embassy to coordinate all U.S. foreign assistance, including democracy assistance. Also, according to State officials, the embassies in Lebanon and Kosovo have each established a staff position devoted to coordinating U.S. assistance. The State officials noted that these staff have facilitated interagency coordination among the various U.S. programs involved in democracy assistance in these countries.

In addition to participating in embassy-based interagency working groups and committees, mission officials also reported regularly collaborating, both informally and formally, with State officials at posts such as political and public affairs officers. In particular, in our survey of 31 USAID mission officials responsible for managing democracy assistance projects, 25 officials identified collaboration with the embassy political section, 21 officials identified collaboration with the embassy public affairs section, and 10 officials identified collaboration with the embassy law enforcement section as being at least somewhat important to their current projects. Our survey respondents also showed that State officials often reviewed USAID democracy project proposals. Specifically, 13 respondents identified the embassy political section as being somewhat, moderately, or very involved in reviewing USAID’s democracy project proposals. Six respondents identified the embassy public affairs section, and two respondents identified the embassy law enforcement section, as being at least somewhat involved in reviewing the proposals.

USAID Uses Standard and Custom Indicators to Assess and Report Democracy Assistance Results and Provides Some Independent Evaluations of Impacts

USAID uses standard indicators to report quantitative information on immediate results of its democracy assistance programs and develops additional custom indicators to assess specific projects. In addition, USAID sometimes commissions longer-term independent evaluations of program impact. USAID reported taking several actions to improve its evaluation capacity in response to the 2008 National Research Council study that the agency commissioned.

USAID Uses Standard and Custom Indicators to Assess Immediate Results of Democracy Assistance

USAID uses standard indicators to assess and report the outputs—that is, numbers of activities and immediate results—of its democracy assistance programs. State/F developed the standard indicators with input from subject matter experts in DRL and USAID’s Office of Democracy and Governance. The indicators, which are linked to State/F’s program objectives, areas, and elements, are intended to facilitate the aggregating and reporting of quantitative information common to foreign assistance programs across countries. For the GJD program areas, there are 96 element-level standard indicators (see table 4 for examples). USAID uses the standard indicators in performance reports that summarize project activities, achievements, and difficulties encountered.

According to USAID officials, in addition to using these standard indicators to measure program outputs, USAID uses custom indicators for virtually every project to measure program outputs, outcomes, and impacts that are not captured by the standard indicators. Some USAID officials we spoke with informed us that they use project-specific custom indicators that are more outcome focused than the standard indicators. For example, USAID’s Jordan mission uses customized project indicators associated with each GJD program area; for the program area Good Governance, one such indicator is “improved capacity of the legislative branch and elected local bodies to undertake their stated functions.” Of the USAID technical officers we surveyed, more than two-thirds (22 of 31) said that custom indicators were very useful for monitoring and evaluating projects and assessing impact. USAID management officials also noted the importance of custom indicators in assessing the impact of democracy assistance projects.

USAID Conducts Some Independent Evaluations of Longer-Term Democracy Assistance Impact

To complement the data collected with the standard and custom indicators, USAID also commissions some independent evaluations of the longer-term impact of its democracy assistance, although such evaluations are relatively infrequent. State/F’s and USAID’s March 2009 joint guidelines for evaluating foreign assistance state that mission staff may decide whether and when to commission evaluations, based on management needs among other considerations.

Evaluations of USAID assistance efforts have decreased in frequency since the mid-1990s. In 1995, USAID eliminated a requirement that every major foreign assistance project undergo midterm and final evaluations; according to USAID officials, the requirement was eliminated because the evaluation requirement of every project was seen as too resource intensive relative to the value added. As a result of this change in policy, the number of evaluations across all areas of development assistance dropped from approximately 340 in 1995 to about 130 in 1999, according to a 2001 review.

Our analysis of documentation from the 10 sample countries shows 7 independent evaluations commissioned in fiscal years 2006 through 2008. Some USAID mission officials we met with noted that they conducted few independent evaluations of democracy assistance because of the resources involved in the undertaking and the difficulty of measuring impact in the area of democracy assistance. For example, one technical officer responded on our survey that “behavior change is difficult to measure and change in democracy is not seen overnight. It is a long process difficult to measure.” In addition, senior USAID officials we spoke to in the three countries we visited stated that it is difficult to demonstrate causality between projects and improvements in a country’s democratic status. On the other hand, USAID mission officials in all of our 10 sample countries stated that evaluations are useful to monitoring, evaluating, and identifying lessons learned. In addition, in our survey six of eight technical officers who responded on the usefulness of independent evaluations responded that they are either very or moderately useful to monitoring and evaluation.

USAID officials at headquarters as well as at several missions we contacted told us that because of the infrequency of independent evaluations, USAID missions use, as a proxy for such evaluations, internal program assessments of a country’s need for democracy programming (called sector and subsector assessments). More than half of the USAID technical officers we surveyed said that they found these assessments moderately or very useful in monitoring and evaluating their current projects. The three overall sectorwide assessments that we reviewed— for Kosovo, Indonesia, and the Democratic Republic of the Congo—follow the assessment structure recommended in USAID guidance, which emphasizes strategic recommendations rather than program performance results. In line with that guidance, these assessments provide general, high-level comments on program results, rather than evaluative information, and do not include either evidence supporting the results statements or references to evaluation documents. We also examined 10 subsector assessments (not subject to the sector assessment guidance). Three of the 10 included significant information about the results of specific programs, while others included no reference or only a brief reference to the results or outcomes of specific USAID democracy projects.

USAID Reported Preliminary Steps to Improve Evaluation Capacity

Recognizing the need for evaluations of its democracy assistance programs’ impacts, in 2008 USAID commissioned a review of its program evaluation practices and problems by the National Research Council. According to the report’s findings: USAID has lost much capacity to assess the impact and effectiveness of its programs.

The number of evaluations undertaken by USAID has declined.

The evaluations undertaken generally focus on implementation and management concerns and have not collected the data needed for sound “impact” evaluations.

Most current evaluations do not provide compelling evidence of the impacts of the programs. Most evaluations usually do not collect data that are critical to making the most accurate and credible determination of project impacts.

Most evaluations tend to be informative and serve varied purposes for project managers.

The National Research Council report outlines techniques for improving the monitoring and evaluation of projects, developing methodologies for retrospective case studies, and other means of collecting and analyzing data that will allow USAID to more reliably gauge impact and improve strategic planning and programming decisions. Following the release of the report, the USAID Office of Democracy and Governance formed an internal initiative to formulate how to implement the report’s recommendations. According to USAID data provided to GAO, as of June 2009, the office reports taking several actions in response to these recommendations. Table 5 shows the National Research Council’s recommendations and USAID’s reported actions.

Conclusion

Democracy promotion is one of five strategic objectives for U.S. foreign assistance. Given the need to maximize available resources to pursue this important objective, coordination among the entities providing democracy assistance is essential to ensure that these efforts are complementary and not duplicative. USAID and State DRL have processes in place to facilitate coordination of their programs—for example, State and USAID officials in the field review State DRL project proposals to minimize duplication, and USAID officials regularly participate in interagency meetings with embassy officials to help ensure that their agencies’ democracy-related projects are complementary. However, lacking access to current information about NED’s activities, State and USAID officials are constrained in their efforts to fully coordinate their activities with NED’s in the many countries where they and NED each provide democracy assistance. Although NED is not required to report to State on all of its activities, NED regularly shares useful information with State regarding democracy projects in the former Soviet Union and Eastern Europe, and NED indicated its willingness to also routinely provide information on its projects in other countries.

Recommendation for Executive Action

To enhance coordination of U.S.-funded democracy assistance efforts, and in support of the Department of State’s first Quadrennial Diplomacy and Development Review, we recommend that the Secretary of State and the USAID Administrator, while recognizing NED’s status as a private nonprofit organization, work jointly with NED to establish a mechanism to routinely collect information about NED’s current projects in countries where NED and State or USAID provide democracy assistance.

Agency Comments and Our Evaluation

USAID, State, and NED provided written comments regarding a draft of this report, which are reprinted in appendixes V, VI, and VII, respectively. State also provided technical comments separately, which we incorporated as appropriate.

In its written comments, USAID agreed with our recommendation, noting that its country missions and Bureau for Democracy, Conflict, and Humanitarian Assistance would benefit from information on current NED projects. USAID also noted that the current coordination mechanism in State’s Europe and Eurasia Bureau appears to be effective and may serve as a model for worldwide efforts. In our report, we highlight the important role of that bureau’s Office of the Coordinator of U.S. Assistance to Europe and Eurasia, which exists expressly to coordinate all foreign assistance in its geographic regions, but note that other geographic State bureaus may not have access to the resources available to this office. USAID’s written comments suggested several additions to our report’s description of the agency’s planning and evaluation processes; we incorporated these suggestions as appropriate.

State also concurred with our recommendation. State responded that improved coordination with NED could enhance the effectiveness of U.S. democracy assistance and agreed to work with USAID and NED to assess how to develop a cost-effective and sustainable process for doing so. State also noted that coordination and information sharing have improved in recent years as a result of foreign assistance reform efforts and that State DRL includes relevant U.S. agencies in its planning and program solicitation process.

NED concurred with our recommendation as well, noting that sharing information about its programs with other providers of democracy assistance helps avoid duplication of effort and also helps providers develop their program-related strategies. NED stated that a mechanism for collecting information on its current projects should be designed to minimize additional administrative burden and avoid straining staff resources on all sides. In addition, NED highlighted the monitoring and evaluation efforts it undertakes and referred to its March 2006 report to Congress, Evaluating Democracy Promotion Programs, which we also cite in our report’s discussion of challenges associated with assessing the impact of democracy assistance.

We are sending copies of this report to interested congressional committees, the Secretary of State, the Acting Administrator of USAID, and other interested parties. In addition, this report is available on GAO’s Web site at http://www.gao.gov. If you or your staffs 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. Individuals who made key contributions to this report are listed in appendix VIII.

Appendix I: Objective, Scope, and Methodology

Our objectives were to (1) describe democracy assistance funding provided by the U.S. Agency for International Development (USAID), and the Department of State’s Bureau of Democracy, Labor and Human Rights (State DRL), and the National Endowment for Democracy (NED) in fiscal year 2008; (2) examine USAID, State DRL, and NED efforts to coordinate their democracy assistance activities to ensure complementary programming; and (3) describe USAID efforts to assess results and evaluate the impact of its democracy assistance activities. To accomplish our objectives, we analyzed funding, planning, and programmatic documents describing U.S. democracy assistance activities provided by USAID, State DRL, and NED in fiscal years 2006 through 2008. We conducted audit work in Washington, D.C., and in three countries: Indonesia, Jordan, and Russia. We also collected information on democracy programs in the following seven additional countries: China, Democratic Republic of the Congo, Haiti, Kosovo, Lebanon, Nicaragua, and Pakistan. In total, we collected detailed information on U.S. democracy programs in 10 countries.

We selected these 10 countries to reflect geographic diversity and provide examples of countries with significant levels of U.S. funding for the strategic objective Governing Justly and Democratically (GJD) and that have multiple U.S. or U.S.-funded entities providing democracy assistance, such as USAID, State DRL, and NED. However, this sample of 10 countries is not intended to be representative of all countries receiving U.S. democracy assistance. Moreover, we did not include Iraq and Afghanistan in our sample, despite the very large levels of U.S. democracy assistance funding provided there, because of the unique circumstances in these two countries.

In the three countries we visited, we met with USAID officials responsible for democracy assistance programs, selected non-governmental organizations receiving USAID, State, and NED grants or contracts to provide democracy assistance, and country government officials in Indonesia and Jordan. For all 10 countries in our sample, we interviewed the USAID Democracy and Governance directors at the USAID missions (either in person or by telephone) and administered a survey to 31 USAID technical officers with responsibility for managing active democracy and governance grants in these countries. We also interviewed State DRL policy and program officers responsible for managing the bureau’s democracy grants in the 10 countries.

To obtain the views of USAID mission officials in our 10 sample countries regarding interagency coordination and project monitoring and evaluation, we conducted an e-mail survey of all 35 USAID technical officers with responsibility for managing active democracy and governance grants in these countries, receiving 31 responses, from April to June 2009 (a response rate of 89 percent). Our survey included questions on collaboration with other U.S. government agencies, overlap of USAID programs with those of other agencies, cooperation with implementing partners, site visit activities, and monitoring and evaluation practices. We pretested our survey with seven technical officers in Indonesia, Jordan, and Russia. In collecting and analyzing the survey data, we took steps to minimize errors that might occur during these stages.

To describe the funding levels for U.S. democracy assistance for each entity involved in these activities, we collected funding allocation data. From State/F we collected and analyzed data on GJD funding allocations to each operating unit from fiscal years 2006 through 2008, which was generated using the FACTS Info database. Because State/F data systems do not include GJD funding by implementing agency, State/F and USAID compiled data at our request on GJD funding allocated to USAID for each country operating unit for fiscal years 2006 through 2008. We also obtained funding allocation data by country for fiscal years 2006 through 2008 directly from State DRL and NED. We also collected funding data on all democracy-related Millennium Challenge Corporation (MCC) threshold grants directly from MCC and available funding information on democracy-related assistance provided by State’s Middle East Partnership Initiative (MEPI) and the Bureau of International Narcotics and Law Enforcement Affairs (State INL).

To obtain information on active democracy programs in our 10 sample countries, we contacted the USAID mission in each country to obtain a list of all projects active during January 2009 and the corresponding funding obligations for each project. In addition, we contacted State DRL and NED to obtain lists and respective funding levels for all active projects in those 10 countries. To compare these projects with varying duration and funding levels, we annualized the funding of each project and portfolio.

Specifically, we based the annualized funding of active projects on the average monthly cost of each project (total project funding divided by the length of the project in months), multiplied by 12; and we summed the annualized funding for each project to obtain the annual value of the USAID, State DRL, and NED portfolios.

To assess the reliability of the global funding information on U.S. government democracy assistance from the F database, we checked that the congressionally appropriated amount for GJD in fiscal years 2006 through 2008 matched the amounts provided to us by State/F. To assess the reliability of the country-level data provided by State/F on GJD allocations to USAID at country missions in fiscal years 2006-2008, we compared these data to the information USAID missions provided to us directly for our 10 sample countries. We also discussed with State/F how they conducted this data call and data reliability issues. Regarding the State DRL data we use in this report, State DRL officials noted that the data provided on funding levels for each country are based on individual grant awards. Correspondingly, to verify both the country-level and project-level data, we compared State DRL’s data to information in copies of grant agreements of all active State DRL projects in the three countries we visited (Jordan, Russia, and Indonesia). To verify the reliability of the USAID data on individual active democracy programs we received from USAID missions for our 10 sample countries, we compared the dollar totals of projects contained in the lists they provided us against data on a set of 47 projects detailed by the 31 technical officers we surveyed. To assess the reliability of the NED project-level data for the 10 sample countries, we compared them to project-level data contained on the NED Web site. We found that all data used in this report are sufficiently reliable to present the general levels of democracy funding globally and in individual countries and to present the relative size of project portfolios between USAID, State DRL, and NED.

To assess coordination between USAID, State DRL, and NED, we interviewed responsible officials from these three entities and selected grantees and contractors during our field work in Indonesia, Jordan, and Russia to obtain their views on the coordination mechanisms to ensure complementary programming and avoid duplication. For the broader sample of 10 countries, including the 3 countries we visited, we reviewed project descriptions for all active democracy grants and contracts funded by USAID, State DRL, and NED. We also included questions on interagency coordination and examples of duplication in our survey of USAID technical officers as well as interviews of USAID mission and State DRL officials.

In assessing U.S. reporting and evaluation efforts, we focused our analysis on USAID efforts and projects since they typically represented the majority of U.S.-funded assistance. We interviewed agency and organization officials, as well as selected implementing partners during our field work in Indonesia, Jordan, and Russia to obtain their views on reporting and evaluation efforts. In our survey of technical officers, we included questions on reporting and evaluation practices. We reviewed selected quarterly and final performance reports of USAID-funded democracy projects in the 10 countries, which are required of USAID’s implementing partners. We also reviewed democracy and governance assessments for the 10 countries, which are conducted as part of USAID missions’ strategy development and project planning efforts. We also discussed the use of performance indicators with USAID, including standard indicators required by State and custom project-specific indicators developed by USAID missions and their implementing partners. In addition, we reviewed USAID assessments to determine the extent to which these assessments provide program results. Moreover, we reviewed independent evaluations from our 10 sample countries completed in fiscal years 2006 through 2008. We did not review State DRL and NED practices for assessing results and evaluating impact, because their programs are small and short term relative to USAID’s and because they generally do not conduct independent evaluations of their activities’ impact. According to State DRL officials, State DRL recommends that its grantees conduct independent external evaluations as part of individual grant awards but has not undertaken standard independent evaluations of democracy assistance at the country or thematic level. NED commissions periodic independent evaluations of clusters of programs but does not evaluate every grant. In addition, we reviewed recent studies that discuss the challenges associated with measuring impact of democracy assistance. In particular, we complemented our findings from interviews and document reviews with findings from the National Research Council study of USAID evaluation capacity. We did not assess the quality or comprehensiveness of this study; we also did not assess USAID’s actions since June 2009 in implementing recommendations from this study, because these actions are preliminary.

We conducted this performance audit from September 2008 to September 2009 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.

Appendix II: Country Funding Levels and Freedom House Ratings

Table 6 shows the USAID, State DRL, and NED democracy funding allocated to each country from fiscal years 2006 through 2008. This table demonstrates that USAID democracy funding is substantially larger than State DRL and NED funding in most countries. Not including Iraq, Afghanistan, and Pakistan, USAID has the majority of funding in 93 percent of countries where USAID has an active portfolio. However, State DRL or NED provides democracy assistance in over 20 countries where USAID funding is not provided. In addition, State DRL democracy funding tends to be larger in countries with lower USAID funding, such as in China and Iran, or where USAID funding for democracy assistance is not provided, such as North Korea or Syria, consistent with State DRL’s focus on filling in the gaps in USAID democracy funding.

In fiscal years 2006 through 2008, almost 30 percent of all GJD funds were allocated for democracy activities in Iraq, which is the largest portion of democracy assistance funds allocated to any country over this period. A large and increasing portion of GJD funds are allocated to democracy programs in Afghanistan as well. The percentage of GJD funds allocated to Afghanistan rose from 6 percent in fiscal year 2006, 14 percent in fiscal year 2007, to 24 percent in fiscal year 2008. In fact, in fiscal year 2008, there were more GJD funds allocated to democracy programs in Afghanistan than any other country. Together, GJD funds allocated to Iraq and Afghanistan comprised over 40 percent of all GJD funds in fiscal years 2006 through 2008.

In fiscal years 2006 through 2008, total democracy assistance funding increased by 29 percent. However, when excluding Iraq and Afghanistan, which account for nearly half of all democracy spending, democracy funding only rose 20 percent. In addition, not including funding for Iraq and Afghanistan, the 10 countries with the highest GJD funding from fiscal years 2006 to 2008 comprised almost half of the remainder of GJD funding allocated to individual countries over that time period (see table 7).

Appendix III: Democracy Assistance Provided by MEPI, State INL, and MCC

The Department of State’s Middle East Partnership Initiative (MEPI) and Bureau of International Narcotics and Law Enforcement Affairs (State INL) and the Millennium Challenge Corporation (MCC) provide democracy assistance in a much narrower set of countries than USAID, State DRL or NED programs.

MEPI, part of State’s Near Eastern Affairs Bureau, was launched in December 2002 as a presidential initiative to promote reform, foster democracy in the Middle East and North Africa, and serve as a tool to address violent extremism. MEPI programs are focused in 17 countries and are managed from MEPI’s office in Washington, D.C., as well as from regional offices in Abu Dhabi and Tunis. MEPI programs are organized generally into four areas, two of which—political participation and women’s empowerment—are characterized as GJD assistance; MEPI funding for these areas in fiscal years 2006 through 2008 totaled about $110 million. Unlike USAID and State DRL programs, which are generally focused on individual countries, MEPI programs are often cross-cutting regional programs that cover a number of different countries. Consequently, it is not possible to identify MEPI funding by country. In addition to providing larger grants in response to specific solicitations, MEPI provides a number of local grants each year directly to organizations working at the community level. For instance, MEPI’s local grants program in Jordan provides funds to less experienced NGOs to increase the NGOs’ capacity and help them become eligible for future funding from larger donors such as USAID. Grant officers in the MEPI office in Washington, D.C., monitor projects through reviews of grantee quarterly reports and rely on staff in the regional offices and embassy-based MEPI coordinators to conduct site visits and coordinate with related USAID assistance programs.

State INL

State INL’s programs within the GJD framework focus on institution building in the criminal justice sector. State’s FACTS database does not break out State INL’s funding for GJD programs in every country; however, according to a State INL official, the bureau managed $290 million in GJD funding worldwide in fiscal year 2008, directing the majority of these funds to Afghanistan, Colombia, and Iraq. State INL’s programs support reforms such as reform of criminal procedures codes and promotion of adversarial and evidentiary trial principles; training and technical assistance for judges, prosecutors, and defense attorneys; and anticorruption programs. A wide variety of U.S. law enforcement and regulatory agencies, international organizations, NGOs, and international assistance agencies implement State INL’s programs. For example, State INL funds training of prosecutors through the Department of Justice’s Office of Overseas Prosecutorial Development, Assistance and Training. Embassy Law Enforcement Sections oversee State INL programs implemented in the field and they coordinate democracy assistance with USAID through embassy-based interagency working groups.

MCC is a U.S. government corporation that provides assistance through multiyear compact agreements with countries that demonstrate commitment to reducing poverty and stimulating economic growth, in part by strengthening their democratic institutions and processes. MCC also funds “threshold programs,” intended to help countries that do not qualify for compact assistance to achieve eligibility. During 2008, MCC had programs providing democracy-related assistance, such as support for anti-corruption and local governance, in 16 countries. Although these threshold grants fit within State’s definition of GJD, State does not track these activities or funding. USAID has primary responsibility for overseeing the implementation of MCC’s threshold programs. USAID monitors MCC threshold programs similarly to its own democracy and governance programs, through quarterly and end-of-project reporting by implementing partners and site visits by technical officers based in USAID missions in the field. In addition, USAID submits quarterly reports on threshold projects to MCC. According to USAID officials we met with in Indonesia and Jordan, management of the MCC threshold projects by USAID mission-based staff—former or current USAID democracy and governance technical officers—facilitated effective coordination with USAID’s democracy and governance programs.

MCC has threshold projects related to democracy in select countries that are high in funding (see table 8). For example, in Indonesia, MCC funded a 2-year, $35 million threshold project, which represents a large amount of funding when compared to annual funding of $28 million for the USAID democracy and governance portfolio in Indonesia, $1.1 million for State DRL’s grant program, and $1.6 million for the National Endowment for Democracy.

Appendix IV: Listing of Field-Based and Washington, D.C.-Based Operating Units

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

The following are GAO’s comments on USAID’s letter dated September 17, 2009.

GAO Comments

1. We have incorporated information provided in USAID’s letter regarding its democracy strategic planning efforts into our report as appropriate. 2. As we state in our discussion of scope and methodology, we did not review State DRL’s and NED’s evaluation efforts because their programs are small and short-term relative to USAID’s and because they generally do not conduct independent evaluations of their activities’ impact. 3. We have incorporated evaluation information provided in USAID’s letter into our report as appropriate.

Appendix VI: Comments from the Department of State

Appendix VII: Comments from the National Endowment for Democracy

Appendix VIII: GAO Contact and Staff Acknowledgments

Staff Acknowledgments

In addition to the contact named above, Leslie Holen, Assistant Director; Diana Blumenfeld; Howard Cott; David Dornisch; Reid Lowe; Grace Lui; and Marisela Perez made key contributions to this report. Etana Finkler provided technical support.