Inter-American Organizations: U.S. Agencies Support Oversight Mechanisms but Could Enhance Their Monitoring of U.S. Assistance Agreements
Released: 2018-01-29T00:00:00

Letter

Background

Inter-American Organizations

The U.S. government engages with the governments of other countries in the Western Hemisphere through various inter-American organizations including the OAS, PAHO, IICA, and PAIGH. According to State, the OAS is the primary inter-American political forum through which the United States engages with other countries in the Western Hemisphere to promote democracy, human rights, security, and development. PAHO serves as the Regional Office for the Americas of the World Health Organization, the United Nations agency on health. IICA supports agricultural development and rural well-being through technical cooperation and the execution of agricultural projects throughout the hemisphere. PAIGH specializes in regional cartography, geography, history, and geophysics and has facilitated the settlement of regional border disputes. According to U.S. agency officials, the organizations’ regional knowledge and technical expertise make them effective implementing partners for projects serving U.S. national interests and priorities throughout the hemisphere.

U.S. Contributions to Inter- American Organizations

Member states collectively finance these organizations by providing assessed and voluntary contributions (see table 1).

For each organization, its member states’ assessed contributions are intended to finance the organization’s regular budgets, which generally cover the organization’s day-to-day operating expenses, such as facilities and salaries. Member states also finance certain OAS, PAHO, and IICA activities and projects through voluntary contributions. According to U.S. officials, the United States provides voluntary contributions to the OAS, PAHO, and IICA primarily through assistance agreements for specific projects from State, USAID, HHS, and USDA.

Organizations’ Oversight of Their Funds

The Institute of Internal Auditors (IIA) provides the framework for international organizations to oversee funds such as the assessed contributions provided by member states to OAS, PAHO, IICA, and PAIGH. The institute’s authoritative guidance, International Standards for the Professional Practice of Internal Auditing, includes mandatory performance standards that describe the nature of internal audit activities and provide criteria for evaluating these activities. Organizations are required to subscribe to these IIA standards, according to PAIGH officials and OAS, PAHO, and IICA documents.

U.S. Agencies Oversee the Execution of Their Assistance Agreements

Assistance agreements are a critical tool the U.S. government uses to achieve important national objectives. As we have previously reported, effective oversight and internal control are important to provide reasonable assurance to federal managers and taxpayers that assistance agreements are awarded properly, recipients are eligible, and federal funds are used as intended and in accordance with applicable laws and regulations. State, USAID, HHS, and USDA oversee funds provided to OAS, PAHO, and IICA through assistance agreements using monitoring activities such as financial and performance reports. Within each of these agencies, various bureaus and offices are responsible for awarding and managing assistance agreements to these inter-American organizations, including State’s Office of Weapons Removal and Abatement in the Bureau of Political-Military Affairs, USAID’s Office of U.S. Foreign Disaster Assistance, HHS’s Centers for Disease Control and Prevention and its Food and Drug Administration, and USDA’s Animal and Plant Health Inspection Service. The documentation of these monitoring activities as called for by federal standards for internal control enables the agencies to determine the effectiveness of the agreement activity.

The Strategic Goals of the Four Inter- American Organizations Are Predominantly Aligned with U.S. Agencies’ Strategic Goals

We found that the strategic goals of the four inter-American organizations are predominantly aligned with the high-level strategic goals for the Western Hemisphere documented by State, USAID, HHS, and USDA. According to officials, the agencies all consider U.S. strategic goals when deciding which projects to fund at OAS, PAHO, and IICA. State, USAID, HHS, and USDA have goals for foreign assistance to the Western Hemisphere, as shown in table 2. For example, four of the five goals in State and USAID’s Joint Strategy correspond with goals at the OAS, IICA, and PAIGH. U.S. agencies, on an ongoing basis, evaluate each inter- American organization to ensure U.S. and organization goals are aligned.

Officials from all four agencies provided examples of how they help to ensure alignment of U.S. strategic goals when funding projects at OAS, PAHO, and IICA.

State: According to State officials, State created an Annual Performance and Budget Review process in 2014 specifically to review entities, such as the OAS, that receive voluntary contributions funded through the International Organization and Programs account. This process examines performance of State-funded activities relative to those activities from the previous year and the extent to which the activities advance U.S. priorities and objectives. State officials further noted that the Annual Performance and Budget Review helps inform State’s decision-making on what to include in the following year’s budget request. For example, during the 2016 review for the OAS Development Assistance Program, State reported the program’s significant activities, funds expended, and achievements such as training government officials on successful small business policies in the United States.

USAID: According to USAID officials, USAID’s project design and approval policies and procedures ensure that all USAID-funded activities are linked to applicable U.S. and USAID strategies. USAID’s agency guidance requires, at a minimum, that each project or activity must be formally approved in writing by the relevant Mission Director or Principal Officer for a given program. Officials stated that this approval memo and supporting documentation address a number of planning considerations, including how the proposed activity aligns with broader strategies. Furthermore, officials stated that USAID’s lawyers review project approval documentation prior to final approval and verify that the activity complies with all applicable statutes, regulations, and policies.

HHS: According to HHS officials, HHS engages with PAHO on its Biennial Work Plans, which are operational planning instruments that PAHO uses to identify activities that it can implement within each of its member states. HHS officials noted that they use PAHO’s Biennial Work Plan to strengthen U.S. approaches on issues of common concern and to advance U.S. priorities within the region. According to HHS officials, proposals for technical cooperation projects are required to correspond to one of the technical priorities in PAHO’s strategic plan for 2014–2019 and to be aligned with the HHS global strategy and U.S. priorities.

USDA: USDA officials said that they compare the U.S. strategic goals with IICA’s goals and objectives when they formulate project proposals with IICA to ensure that the projects are aligned with U.S. priorities for the region. Additionally, USDA officials told us that USDA helped shape and influence IICA’s recent 10-year strategic plan, ensuring that IICA’s strategic objectives were closely aligned with U.S. strategic goals.

OAS, PAHO, IICA, and PAIGH Have Established Oversight Mechanisms

OAS, PAHO, IICA, and PAIGH have established mechanisms for overseeing their use of assessed and voluntary contributions, such as external auditors and internal audit boards as required by IIA standards. State and USDA have directly supported these oversight mechanisms.

The Four Organizations Have Oversight Mechanisms as Required by the IIA

OAS, PAHO, IICA, and PAIGH have oversight mechanisms, as shown in table 3. The four organizations follow the internal control standards of the IIA, codified in the International Standards for the Professional Practice of Internal Auditing, according to PAIGH officials and OAS, PAHO, and IICA documents. All four organizations have internal and external auditors, as required by these standards. Furthermore, OAS, PAHO, and IICA have additional oversight mechanisms, such as anti-fraud policies and program evaluation processes. The officials we interviewed from State, USAID, HHS, and USDA expressed confidence in the four organizations’ management of their assessed and voluntary contributions.

All four organizations document the status of their financial and internal control activities in audit reports posted on their public websites. For example, the OAS Office of the Inspector General’s April 2017 Annual Report included an update on its five ongoing audits and investigations. The report also outlined progress made against prior recommendations.

U.S. Agencies Support Oversight Mechanisms at OAS, PAHO, and IICA

U.S. agency officials support budget and administrative subcommittees in three of the four organizations and promote the participation of U.S. experts on independent audit committees, as shown in table 4. For example, according to officials, State plays a significant role in promoting policies on oversight and accountability at the four organizations through formal engagement in deliberations and decision-making of each organization’s governing body and through informal engagement with other member states and the secretariat by recommending best practices in governance, management, and oversight. State and USDA are also directly involved in implementing some of the additional oversight mechanisms at the organizations. For example, a USDA official serves as a member of IICA’s Audit Review Committee. Additionally, an IICA official told us the United States was involved in defining IICA’s Convention and Rules of Procedure for its governing bodies, which established the requirement for internal and external auditing.

According to State officials, the United States led efforts to strengthen oversight at several of the organizations under review in recent years, such as advocating for the creation of an ethics officer position at PAHO, proposing language to strengthen the authority and independence of the OAS’s Office of the Inspector General, and encouraging the creation of audit committees at both organizations. In addition, State has played a lead role in supporting the ongoing reform of the OAS administration, which includes improved oversight and accountability, according to officials from the OAS and the U.S. Mission to the OAS.

Two of Four U.S. Agencies Did Not Include All Key Monitoring Provisions in the Agreements We Reviewed

We reviewed 12 selected assistance agreements that the four U.S. agencies awarded to OAS, PAHO, and IICA that were active during calendar years 2014 through 2016, and found that two agencies did not consistently include all key monitoring provisions in their agreements. While HHS and USAID implemented applicable guidance by including all key monitoring provisions in their agreements, USDA and State did not do so. USDA and State agency officials did not explain why USDA and State did not include these monitoring provisions in their agreements. However, State has since taken corrective action to ensure that they are included in future agreements, according to State officials.

Agency Guidance Calls for Agencies to Conduct Monitoring Activities; Internal Control Standards State That Agencies Should Document These Requirements with Provisions in the Agreements

Applicable agency guidance calls for agencies to conduct monitoring activities as part of their oversight of their agreements. Each of the four agencies has established agency-specific guidance that outlines the monitoring activities for assistance agreements. In some cases, the agency-specific guidance may mandate additional monitoring activities beyond those called for in applicable federal regulations, such as risk assessments. For example, State’s guidance calls for the creation of a monitoring plan. Federal standards for internal control require that agencies include in agreements all key provisions delineating the parties’ responsibilities. For the 12 agreements we reviewed, the number of total key monitoring provisions per agreement varied—including within one agency—depending on when the agency issued and updated its guidance relative to when the agreements were approved.

Federal standards for internal control call for agencies to document internal controls, transactions, and significant events. Specifically, internal control standards state that agency management should include internal control activities (e.g., monitoring activities) in policies or directives for transactions such as assistance agreements.

HHS and USAID Included All Key Monitoring Provisions in Their Assistance Agreements, but USDA and State Did Not

For the 12 assistance agreements we reviewed, USDA and State did not include provisions implementing 6 of the 55 total (11 percent) applicable monitoring activities required by applicable guidance to carry out required monitoring activities (see table 5). State took corrective action in 2015 by issuing a standard operating procedure.

USDA: USDA did not include 4 of the 13 key monitoring provisions implementing the applicable guidance for the three USDA agreements we reviewed (see table 6). Two of the agreements and supporting documentation each included all four key applicable monitoring provisions. However, Agreement 2 in the table did not include 4 of the 5 monitoring provisions in the agreement or work plan, which documents the monitoring provisions. The agreement partially included performance goals, because it included objectives for the agreement’s activities, but did not include time frames to complete all of the activities. The USDA grant official did not explain why the work plan did not adhere to applicable federal regulations when it was drafted and approved.

State: State did not include 2 of the 21 key monitoring provisions implementing the applicable guidance for the three State agreements we reviewed (see table 7). Two of the agreements and supporting documentation we reviewed included the 7 monitoring provisions implementing the requirements in the applicable agency guidance. However, one agreement awarded in 2012 did not include 2 of the provisions: a risk assessment and a monitoring plan. That office that awarded this agreement took corrective action in 2015 by issuing a standard operating procedure requiring that risk assessments and monitoring plans accompany its grants and cooperative agreements.

USAID: USAID included both key monitoring provisions implementing the applicable guidance for the three USAID agreements we reviewed (see table 8). USAID’s Automated Directives System 308, Standard Provisions for Cost-Type Awards to Public International Organizations contains two key monitoring provisions for agreements. USAID incorporated the monitoring provisions nearly verbatim into the agreements we reviewed, using templates from this guidance for required terms and conditions.

HHS: HHS included the 15 monitoring provisions implementing the applicable guidance for the three HHS agreements we reviewed (see table 9).

None of the U.S. Agencies Had Full Documentation of Monitoring Activities Called for by All of Their Assistance Agreements That We Reviewed

None of the agencies provided us with full documentation to demonstrate their adherence to the required monitoring activities called for in all of their agreements that we reviewed, including the previously mentioned key monitoring provisions that we reviewed. State and HHS have taken corrective actions to address the gaps we found in documentation for the agreements we reviewed. Agency officials told us that they use these monitoring documents, such as financial and progress reports, to inform future budgetary and programmatic decisions. Therefore, they may lack information needed to make such decisions if they do not have access to complete monitoring documentation.

Assistance Agreements Include Requirements for Monitoring Activities; Internal Control Standards Say Agencies Should Document These Activities

According to federal standards for internal control, each agency is to include key monitoring provisions as part of its agreements. In the individual assistance agreements, the agencies specify the requirements to fulfill these activities, such as requiring financial reports on a quarterly basis or including specific information in performance reports. Grants officers at times, if they deem it necessary or appropriate, include additional monitoring provisions requiring activities beyond those required by the applicable guidance, such as site visits.

Federal standards for internal control call for agency management to design monitoring activities, such as financial and performance reporting, so that all transactions are completely and accurately recorded.

Recording these activities maintains their relevance and value to management in controlling operations and making decisions. Without access to complete monitoring documentation, the agencies risk weakening the effectiveness of these controls.

U.S. Agencies Did Not Have Full Documentation of Monitoring Activities for Most of the Agreements We Reviewed

None of the four U.S. agencies had full documentation of all of the monitoring activities required by their agreements we reviewed (see table 10). The agencies did not have full documentation of monitoring activities for 9 of the 12 agreements we reviewed. For the 42 monitoring activities identified across all of the individual agreements, the four agencies did not have full documentation of 18 of the activities (43 percent). However, State took corrective action in May 2017 to address its gaps in documentation, and according to HHS officials, the Food and Drug Administration addressed its gap in documentation by implementing its agreement monitoring program in fiscal year 2018.

USDA did not have full documentation of any of the 10 monitoring activities we identified (see table 11). USDA demonstrated that it had partially documented 2 of the 10 monitoring activities (20 percent) by providing us with some, but not all, quarterly performance reports. For one of the agreements, USDA had no documentation of the monitoring activities for that agreement. For its other two agreements, USDA did not have full documentation of the required monitoring activities. USDA officials did not explain why they did not have full documentation. Without full documentation of the required monitoring activities, USDA may not have the information it needs to make appropriate budgetary and programmatic decisions.

USAID did not have full documentation of 2 of the 11 total monitoring activities (18 percent) we identified across the three agreements we reviewed (see table 12). USAID had partial documentation of those 2 monitoring activities. For example, USAID provided us with some, but not all, records such as financial reports required by the terms of the monitoring activities in the agreements.

According to USAID officials, the agencies’ lack of complete monitoring documentation was in part due to agency officials not following some of their agency’s requirements for managing agreement documents, such as placing all documents in a shared document management system. For example, for one of the agreements we reviewed, USAID officials stated that they stored some agreement documentation electronically—such as modifications, correspondence with the agreement recipient, and quarterly financial reports—but primarily maintained paper files.

USAID officials told us they use the monitoring documents of these agreements, such as financial and progress reports, to inform future budgetary and programmatic decisions. For example, according to USAID officials, USAID uses monitoring documents to identify and address potential project delays or other “red flags.” For one of the agreements we reviewed, USAID officials stated these monitoring reports also assist them in determining whether to award additional funds and establish new indicators in subsequent agreements. Without full documentation of the required monitoring activities, USAID may not have the information it needs to make appropriate budgetary and programmatic decisions.

State

State did not have full documentation for 5 of the 16 monitoring activities (31 percent) we identified across the three agreements we reviewed (see table 13). However, State had partial documentation of 4 of those 5 monitoring activities. For example, State had some, but not all, records such as standard reporting metrics, required by the terms of the monitoring activities in one of the agreements. State did not have documentation of one of the monitoring activities (site visits).

According to State officials, the agency’s lack of complete monitoring documentation was in part due to agency officials not following some of the agency’s requirements for managing agreement documents, such as placing all documents in a shared document management system. For example, according to State officials, for one of the agreements we reviewed, the grants officer mistakenly had saved site visit reports and similar documents to personal folders because the officer did not know how to use State’s grant document storage system. As a result, neither the current grants officer nor other State officials could retrieve these documents.

In May 2017, after awarding the agreements we reviewed, State took corrective action by issuing the Federal Assistance Directive to establish internal guidance, policies, and procedures for all domestic and overseas grant-making bureaus, offices, and posts within the department when administering federal financial assistance. The directive notes that State implemented a grant management system for domestic and overseas grants to resolve its “significant deficiency in the management of Federal financial assistance.” In addition, the directive indicates that officials from State’s Bureau of Administration, Office of the Procurement Executive, Federal Assistance Division will evaluate compliance with risk assessment requirements and review documentation for selected agreements each fiscal year. One of the stated purposes of these reviews is to mitigate risk by strengthening management and oversight of awards, including grants. According to a State Office of Inspector General report, State should complete the full deployment of this system for overseas grants in fiscal year 2019.

HHS did not have full documentation of 1 of the 5 applicable monitoring activities (20 percent) we identified across the three agreements we reviewed (see table 14). HHS had partial documentation of the semiannual progress report activity for one of its agreements, required by the terms of its agreement. HHS officials did not explain why they did not have full documentation for this monitoring activity. HHS had full documentation of all applicable monitoring activities for the other two agreements we reviewed.

According to agency officials, the Food and Drug Administration, which administered one of the HHS agreements we reviewed, has taken corrective action to evaluate its agreement documentation and address deficiencies. According to HHS officials, the Food and Drug Administration developed a pilot program intended to provide an additional layer of oversight to ensure adherence to the terms of each agreement. Under the pilot, officials said, a grant monitoring specialist reviews the agreement documentation and monitoring reports to identify agreements that need additional assistance. According to HHS officials, the Food and Drug Administration implemented this program in fiscal year 2018 and will eventually include all Food and Drug Administration agreements.

Conclusions

U.S. assistance agreements for projects with inter-American organizations further U.S. strategic goals in the Western Hemisphere, but State, HHS, USAID, and USDA did not consistently include all key monitoring provisions as part of their assistance agreements or demonstrate that they had full documentation of monitoring activities for the agreements we reviewed. Of these four agencies, USAID and USDA have not taken corrective actions. Monitoring the implementation of U.S. assistance agreements and fully documenting the results of such monitoring are key management controls to help ensure that U.S. agreement recipients use federal funds appropriately and effectively. The agencies risk weakening the effectiveness of these controls by not including all key monitoring provisions called for by applicable agency guidance. Further, if the agencies do not have full documentation of the agreements’ required monitoring activities, they may not be able to effectively manage federally funded projects that support U.S. strategic goals. In addition, agencies may not have all the information they need to make budgetary and programmatic decisions.

Recommendations for Executive Action

We are making a total of three recommendations: one to USAID and two to USDA.

The USAID Administrator should ensure that USAID officials have full documentation of required monitoring activities in agreements with inter- American organizations. (Recommendation 1)

The Secretary of Agriculture should ensure that USDA includes all key monitoring provisions specified by applicable guidance as part of agreements with inter-American organizations. (Recommendation 2)

The Secretary of Agriculture should ensure that USDA officials have full documentation of required monitoring activities in agreements with inter- American organizations. (Recommendation 3)

Agency Comments

We provided a draft of this report for comment to State, USAID, HHS, and USDA. USDA concurred with our recommendations in an e-mail. In its written comments, reproduced in appendix IV, USAID stated that it has policies, procedures, and training in place for the officials who manage these agreements. In response to our recommendations, USAID stated that it will issue an agency notice to remind all such officials of these responsibilities, including the requirement to maintain complete files for each agreement.

State and HHS did not provide formal comments. They did provide technical comments, which we incorporated as appropriate.

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If you or your staff have questions about this report, please contact me at (202) 512-9601, or melitot@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this report are listed in appendix V.

Appendix I: Objectives, Scope, and Methodology

Congressional requesters asked us to review several issues related to the Organization of American States (OAS), the Pan American Health Organization (PAHO), the Inter-American Institute for Cooperation on Agriculture (IICA), and the Pan-American Institute of Geography and History (PAIGH). In this report, we (1) assess the extent to which the organizations’ strategic goals align with those of U.S. agencies; (2) examine how the organizations oversee the use of their funds and the extent to which U.S. agencies have supported those efforts; (3) assess the extent to which U.S. agencies included key monitoring provisions as part of their assistance agreements; and (4) assess the extent to which U.S. agencies had documentation of monitoring activities, including those called for by these provisions.

To address the first objective, we gathered documentation and interviewed officials from the four U.S. agencies and the four organizations to determine the U.S. strategic goals for foreign assistance to the Western Hemisphere and the goals of the four organizations. According to Department of State (State) and U.S. Agency for International Development (USAID) officials, the strategic document that underpins their foreign assistance priorities for the region is The Department of State’s Bureau of Western Hemisphere Affairs’ and USAID’s Bureau for Latin American and Caribbean Affairs’ Joint Regional Strategy. Department of Health and Human Services (HHS) officials said that HHS’s relevant strategic document is The Global Strategy of the U.S. Department of Health and Human Services. U.S. Department of Agriculture’s (USDA) strategic goals for foreign assistance, according to officials, are outlined in the United States Department of Agriculture Strategic Plan FY2015–2018. The OAS outlined its strategic goals in the Comprehensive Strategic Plan of the Organization, adopted on October 31, 2016. PAHO’s goals are laid out in Strategic Plan of the Pan American Health Organization 2014–2019. IICA’s strategic document is the IICA 2010–2020 Strategic Plan, which took effect in October 2010. PAIGH’s strategic document is the Declaration and Guide for the Pan American Agenda 2010-2020. We compared the strategic goals articulated by the four organizations against U.S. strategic goals to assess the extent to which the organizations’ goals contribute to U.S. interests in the region. We then interviewed officials from the four agencies and reviewed relevant documentation on efforts they undertake to ensure that U.S.-funded activities align with U.S. strategic goals.

To address the second objective, we reviewed documentation of the organizations’ internal control mechanisms and confirmed our findings with the organizations. We identified mechanisms to include policies, directives, rules, practices, and organizational structures that can have an oversight role in the use of the organizations’ funds. We also interviewed officials from State, USAID, HHS, and USDA to discuss their support of these mechanisms.

To address the third objective, we identified 60 active assistance agreements that these agencies oversaw with OAS, PAHO, and IICA during calendar years 2014 through 2016 and selected a nongeneralizable sample of 12 agreements, three each from State, USAID, HHS, and USDA. To determine which agreements we would review for each agency, we selected the three agreements with the lowest, median, and highest dollar value. If any of an agency’s agreements supported the same country or activity or were for one-time projects such as seminars, we selected the next appropriate agreement based on dollar value.

For these selected agreements, we then identified the applicable agency guidance for monitoring activities in the agreements, which we define as all documents related to each agreement provided to us by the agencies, such as monitoring reports. The number of key monitoring provisions varied—even within each agency—depending on when agency guidance was issued and updated relative to when the agreements were approved. USDA did not have applicable internal agency-specific guidance for monitoring of assistance agreements at the time it awarded the agreements we reviewed; thus, with USDA’s input, we used the applicable sections of the Code of Federal Regulations, which together have five key monitoring provisions for agreements. However, USDA approved two of the agreements in 2012 and the third agreement in 2016, and this third agreement was subject to an amended version of the Code of Federal Regulations, which added an additional provision for performance goals. State’s four applicable grants policy directives have seven key monitoring provisions for agreements that were applicable at the time the agreements we reviewed were approved. USAID’s Standard Provisions for Cost-Type Awards to Public International Organizations (PIOs): A Mandatory Reference to ADS Chapter 308 has two key monitoring provisions for agreements: audits and records, and the organization’s adherence to their rules. HHS’s grants policy has five key monitoring provisions for grant documentation.

We identified key monitoring provisions for agencies to include as part of agreements to ensure oversight of the use of funds, such as financial and progress reports. For the 12 agreements in our sample, we analyzed the assistance agreements from the four agencies, and then determined the extent to which the agencies’ agreements included key monitoring provisions implementing monitoring activities called for by applicable agency guidance. We did not include subsequent amendments to these 12 agreements in our review of key monitoring provisions. We interviewed officials from State, USAID, HHS, and USDA (1) to confirm we were applying the appropriate federal or agency guidance and (2) to discuss instances in which the agreements did not include key monitoring provisions.

To address the fourth objective, we reviewed the 12 selected assistance agreements and guidance to identify specific required monitoring activities, such as financial and program reports, site visits, and other forms of oversight. The agreements specify the requirements for these activities such as requiring financial reports on a quarterly basis. For these 12 agreements, we reviewed all the documentation provided to us by the agencies, then determined the extent to which the agencies had full documentation of key monitoring activities as specified in the assistance agreements, including those called for by key monitoring provisions, as well as those called for by guidance when the monitoring provisions were absent. We did not include subsequent amendments to these 12 agreements in our review of monitoring activities. We interviewed officials from State, USAID, HHS, and USDA to discuss instances in which the agency did not have full documentation of key monitoring activities. We also discussed how State, USAID, and HHS agency officials manage their agreement documentation and use the information in the agreements’ required monitoring documentation.

We conducted this performance audit from July 2016 to December 2017 in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

Appendix II: Financial Oversight Mechanisms of Four Inter-American Organizations

The Organization of American States (OAS), Pan American Health Organization (PAHO), the Inter-American Institute for Cooperation on Agriculture (IICA), and the Pan-American Institute on Geography and History (PAIGH) have established mechanisms for overseeing their use of funds. Tables 15–18 show the mechanisms (oversight policies and oversight committees and organizations) for each of these inter-American organizations, as confirmed by the organizations’ officials.

Appendix III: Key Monitoring Provisions Implementing Federal Regulations or Agency Guidance

To oversee the execution of their agreements, the Department of State (State), the U.S. Agency for International Development (USAID), the Department of Health and Human Services (HHS), and U.S. Department of Agriculture (USDA) are to conduct monitoring activities called for by applicable federal regulations or agency guidance and document these provisions in assistance agreements as called for by federal standards for internal control. We identified key monitoring provisions implementing the applicable agency guidance for State, USAID, HHS, and the applicable regulations for USDA, as shown in table 19. For both the agency guidance and the federal regulations, those listed are the ones that were in effect when the agreements in our sample were approved. Some of the agency guidance and regulations have since been amended or superseded.

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

Appendix V: GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgments

In addition to the contact named above, Pierre Toureille (Assistant Director), Julia Jebo Grant (Analyst-in-Charge), Leslie Stubbs, and Paul Sturm, Alana Miller, and Shirley Min made key contributions to this report. In addition, David Dayton, Martin de Alteriis, Neil Doherty, Jeff Isaacs, and Alex Welsh provided technical assistance.