Colombia is the source of 90 percent of the cocaine and 40 percent of the heroin entering the United States. To assist the Colombian government in its efforts to implement Plan Colombia and reduce the cultivation and trafficking of illegal drugs, the United States has pursued a strategy emphasizing interdiction, aerial eradication and alternative development. The strategy has resulted in a 33 percent reduction in the amount of coca cultivated in Colombia over the last 2 years—from 169,800 hectares in 2001 to 113,850 hectares in 2003—and a 10 percent reduction in the amount of opium poppy cultivated over the last year. However, according to Drug Enforcement Administration officials and documents, cocaine prices nationwide have remained relatively stable—indicating that cocaine is still readily available—and Colombia dominates the market for heroin in the northeastern United States. Despite improvements in Colombia’s security situation in 2003—for example, the murder rate declined 20 percent that year—insurgent and paramilitary groups still control large parts of the countryside. According to State Department officials, the insurgents exercise some degree of control in up to 40 percent of Colombia’s territory east and south of the Andes—which, as illustrated in figure 1, includes the primary coca-growing regions of Colombia. These groups, which include the Revolutionary Armed Forces of Colombia, the National Liberation Army, and paramilitary forces such as the United Self Defense Forces of Colombia, are involved in every facet of narcotics trafficking and are on the State Department’s list of terrorist organizations. Recognizing that the insurgents and illicit drug activities are inextricably linked, the Congress provided “expanded authority” in 2002 for the use of U.S. assistance to Colombia. This authority enables the government of Colombia to use U.S.-provided equipment to fight groups designated as terrorist organizations as well as to fight drug trafficking. Beginning in fiscal year 2000, the United States substantially increased counternarcotics assistance to Colombia. For fiscal years 2000 through 2004, the United States provided a total of approximately $3.3 billion, making Colombia the fifth largest recipient of U.S. assistance since fiscal year 2002. (See table 1.) Most of this funding was provided through the Andean Counterdrug Initiative, an appropriation provided annually that supports counternarcotics programs throughout the Andean region. Much of this assistance was provided to the Colombian Army to conduct interdiction missions and to the Colombian National Police to conduct the aerial eradication of coca and poppy. For fiscal year 2005, the administration has proposed an additional $571 million for assistance to Colombia. U.S.-provided nonmilitary assistance to Colombia indirectly assists in reducing narcotics cultivation and trafficking by providing alternatives to cultivating illicit crops, assisting vulnerable groups, and supporting democracy and rule of law reforms. As shown in table 2, for fiscal years 2000 through 2004, the United States has programmed about $566 million for nonmilitary assistance to Colombia, which represents about 17 percent of the total U.S. assistance to Colombia during the period. State, Justice, and USAID have obligated about $575 million and expended about $310 million of these funds. Most of the funding—about $210 million—has been programmed for democracy, rule of law, and enhancement of state presence programs. The administration has requested an additional $150 million for nonmilitary programs in fiscal year 2005. Our past reports have addressed each of these nonmilitary programs. In February 2002, we reported that USAID faced serious obstacles to developing alternatives to cultivating illicit crops in Colombia, among them the Colombian government’s lack of control over many coca-growing areas. In August 2001, we reported that international organizations generally met the emergency food and shelter needs of internally displaced persons in Colombia, but were less effective in meeting their longer-term needs, and that the U.S. government lacked an overall policy to coordinate its efforts for dealing with the displaced. In March 2003, we reported that U.S. democracy programs in six countries, including Colombia, had a limited effect as a result of various factors, and questions remained regarding the sustainability of the gains made with U.S. assistance. A key component of U.S. counternarcotics strategy in Colombia has involved providing nonmilitary assistance for programs to promote legitimate economic alternatives to the cultivation of coca and opium poppy; assist Colombia’s vulnerable groups, particularly internally displaced persons; and strengthen the country’s democratic, legal, and security institutional capabilities. Each of the three U.S. nonmilitary assistance programs has begun to produce results envisioned in 2000 when U.S. funding for Plan Colombia was approved. However, each program has limitations. Alternative development projects often benefit only a few people or families; have difficulty marketing products; and, without additional sources of funding, likely cannot be sustained. The assistance for vulnerable groups program cannot address all the needs identified because of limited resources, and the number of individuals displaced and needing assistance is increasing. U.S. assistance for democracy and rule of law is a long-standing program, but progress has been limited because the government does not control large parts of the country, and many projects are small scale and have insufficient numbers of trained personnel and equipment. USAID oversees and implements the alternative development program. According to the agency’s strategy, the objective of the alternative development program is to provide economic and social alternatives to illicit crop production through short- and long-term projects involving crop substitution, infrastructure development, and income generation projects in rural parts of the country, as well as in secondary cities affected by illicit crop cultivation. The alternative development program has had some success promoting economic and social alternatives to illicit crop production, but individual projects are relatively localized and small in scale. USAID’s original alternative development strategy from 2000 focused primarily on encouraging farmers to manually eradicate illicit crops, and those who did received assistance in licit, short-term, income-producing opportunities. This assistance was intended to complement the eradication and interdiction components of Colombia’s effort to eliminate coca cultivation in southern Colombia. USAID primarily supported initiatives in the departments of Caquetá and Putumayo, where, at the time, much of Colombia’s coca was cultivated. USAID (and its implementing partners) found it difficult to implement projects in the largely undeveloped south, where the Colombian government exercised minimal control. In addition, poor soil made growing licit crops a challenge, and farmers found it more lucrative to continue growing coca. Furthermore, the USAID/Colombia mission estimated that implementing such a comprehensive alternative development program could involve assisting as many as 136,600 families and cost up to $4 billion over 3 years. As a result, USAID revised its approach in February 2002 to support long- term income-generating activities, focus more attention and resources outside southern Colombia, and encourage private sector participation. The agency’s revised strategy is to promote and leverage significant private sector investment in longer-term, economically viable agro-business and forestry initiatives, as well as linkages to small- and medium-sized enterprises. Unlike the initial alternative development efforts, the program is no longer based on an explicit mandate to assist illicit crop growers whose crops had been eradicated or who agreed to manually eradicate their illegal crops. Some current program participants were not directly involved in cultivating coca or poppy. USAID has alternative development projects in 25 of Colombia’s 32 departments. To assess its progress, USAID uses four measures: the number of hectares of illicit crops eradicated, the number of hectares of licit crops cultivated, the number of families benefited, and the number of small infrastructure projects established. Table 3 illustrates USAID’s reported accomplishments. Based on these four measures, the alternative development program has started to produce results. However, USAID officials acknowledge that these indicators do not measure the agency’s progress in reaching its primary objective of promoting economic and social alternatives to illicit crop production. Individual alternative development projects may employ only a small number of people for a short period of time or benefit a relatively small number of families. Without broader participation and financial support, such projects may not be sustainable if U.S. support is reduced. Furthermore, as we reported in 2002, the lack of security in the project areas continues to seriously hamper the Colombian government’s ability to develop infrastructure where illicit crop cultivation takes place, establish viable and reliable markets for licit products, and attract the private investment needed for long-term, income-generating development. For example: In 2002, a contractor received about $1.4 million from USAID to build a water treatment plant in Villa Garzón in the department of Putumayo. The plant is designed to provide clean water for the town and to create employment opportunities for local residents. Construction began in December 2002, and when we visited the site in January 2004, it was nearing completion. Although the project provided jobs for some local residents, these jobs will end shortly. Another contractor received funding for a hearts of palm canning plant in Puerto Asís, Putumayo, which is intended to provide long-term employment opportunities for the workers and income to farmers who grow palm fronds. The United Nations Drug Control Program built the plant with the government of Colombia in the late 1990s, but it was dormant for several years. USAID took over the plant in 2002. When we visited the site in January 2004, it was operating at 30 percent capacity. Although the plant had secured a buyer for its product, USAID support will end in September 2004, and the plant manager told us he did not know if the plant could maintain or increase its operating capacity when U.S. funding stops. The same contractor overseeing the hearts of palm plant also receives USAID funding to operate a woodworking center in Puerto Asís, where program participants make furniture parts. According to the project’s annual work plan, the woodworking center will directly employ 25 people. The contractor plans to sell the furniture parts for assembly elsewhere, targeting the North American market. However, when we toured the center, we learned that the contractor has not been able to market the wood products outside Putumayo because when the products are shipped to less humid regions, the wood cracks. An alternative development project outside Putumayo is designed to encourage families to cultivate specialty coffee rather than coca or opium poppy. To participate, farmers must commit to eradicate or not enter into illicit crop cultivation. However, the contractor has been able to market only a very limited amount of the product because before a specialty coffee can be marketed, measures must be taken to ensure that the coffee meets industry standards—a process that can take 1 to 5 years due, in part, to the need to renovate coffee farms and implement more stringent quality control procedures. Moreover, according to the contractor, before February 2004, security concerns prevented U.S. buyers from traveling to Colombia’s coffee-growing regions to evaluate the product. As we reported in February 2002, alternative development progress in Bolivia and Peru took 20 years of sustained U.S. assistance, and the host government agencies involved in the efforts continued to be heavily dependent on U.S. support. The situation in Colombia is similar. As noted earlier, the USAID/Colombia mission once estimated that a comprehensive alternative development program could involve assisting as many as 136,600 families and cost up to $4 billion over 3 years. The agency has requested about $56 million for the program in fiscal year 2005, and for fiscal years 2006 through 2008, USAID planning documents call for a total of $234 million. In addition, according to USAID officials, recent funding and personnel cuts have hurt the Colombian alternative development agency’s ability to support the USAID program. State and USAID implement programs to assist Colombia’s vulnerable groups—particularly its displaced population. Internally displaced persons—those forced to flee their homes because of armed conflict and persecution but who remain within their own country—are among the most at-risk, vulnerable populations in the world. They are unlikely to have adequate shelter, health care, and the ability to earn a livelihood. By many estimates, Colombia has one of the world’s largest internally displaced populations. The U.S. vulnerable groups program has provided assistance to many internally displaced persons and others, but program beneficiaries may not receive all of the services they need, and State and USAID do not track individuals after they receive assistance. In fiscal year 2003, State provided about $19 million to seven organizations for assisting Colombia’s internally displaced persons— generally for a 3-month period immediately following initial displacement. This emergency assistance included protection, shelter, medical assistance, and food and assistance targeted specifically to help displaced children. State also provided some emergency humanitarian assistance to Colombian refugees living in neighboring countries, primarily Ecuador. However, State does not have any written strategy outlining the objectives and performance goals of its vulnerable groups program. Furthermore, State does not routinely track the number of people its program supports. After several requests by us, State officials said the program assisted 763,000 internally displaced persons in 2003. State officials did not provide comparable figures for fiscal years 2000 through 2002. State does not have a mechanism to “hand off” its program beneficiaries to USAID’s longer-term assistance program after they have received the emergency aid. Although USAID’s annual report for fiscal year 2003 states that USAID helped internally displaced persons gain access to basic services after short-term emergency relief provided by State had expired, this has not happened in any systematic way. USAID’s Longer-Term Assistance During fiscal year 2003, USAID provided about $38.2 million to seven nongovernmental and international organizations for mid- to long-term development assistance to Colombia’s vulnerable groups. The agency reported that as of December 2003, its program had helped more than 1.4 million individuals. Following are examples of USAID’s projects that assist vulnerable persons. One grantee received $5.1 million from USAID to alleviate child hunger and improve the health and well-being of displaced families. The project’s two primary activities are a school feeding program and a health education project for mothers. While these services address a significant need, a relatively small number of beneficiaries will receive them. Children and adolescents account for half (at least 1 million persons) of Colombia’s displaced population. According to agency documents, 113,000 displaced school children will benefit from this program. Another USAID project in Soacha (just outside Bogotá) is designed to address the health and education needs of displaced Afro-Colombian children and their families. An assistance center provides day care to children in the community, trains youth in life- and job-related skills, and provides information to mothers about childcare and nutrition. Colombia has at least 279,000 Afro-Colombian internally displaced persons; this project will provide services to 120 Afro-Colombian children and their families, 100 adolescents and their families, 210 fathers, and 50 lactating mothers and their families. Another USAID grantee received $16.7 million to, among other things, provide microenterprise loans (averaging $1,000) and home improvement loans (averaging $2,000) to internally displaced persons. However, grantee officials stated that they have had minimal success with both types of loans. Internally displaced persons often move to new locations with little notice or lack the financial knowledge to manage a loan. For these reasons, the grantee has decided to limit the number of loans it awards. USAID’s program to rehabilitate and reintegrate excombatant children into Colombian society provides specialized, individualized care, including medical attention and psychosocial counseling. Some receive formal education; others receive vocational or agricultural training. When they reach age 18 or are reunited with their families, the children are supported through regional reference centers that provide continued assistance through a network of social service providers. Types of assistance provided include employment assistance, legal aid, and general services available through Colombia’s social service system. USAID reports that it has assisted 1,375 former child combatants, or roughly 13 to 23 percent of Colombia’s total child soldier population. About 450 to 500 children currently receive assistance through USAID’s rehabilitation and reintegration program. The rehabilitation center we visited had 30 former child soldiers enrolled. Program participants were taking traditional classes and learning useful skills through more unconventional projects. Some students were learning how to make household cleaning products and were communicating with a local company about marketing the products to the local community. However, the program may face difficulty reintegrating its beneficiaries into society. Several students we met with expressed concern about what will happen when they leave the center. One student stated that he wanted to stay and become a teacher, rather than leave. Although USAID reports that it has provided at least some assistance to more than half of Colombia’s estimated 2.5 million internally displaced persons, this does not mean that the individuals received all or even most of the services they needed. This is because most USAID grantees specialize in one or two areas of assistance and operate in different locations. Of the 27 departments in Colombia with vulnerable groups projects, more than half had just one or two grantees providing assistance. In addition, although USAID’s most recent annual report (January 2004) identifies “durable solutions” for program beneficiaries as one of its performance goals, USAID officials acknowledged that they have no way to track program beneficiaries once they have received assistance through one of the agency’s projects to determine whether they have been assimilated back into society or still need additional assistance. State and USAID programs to assist Colombia’s vulnerable groups are achieving some of the intended results, but U.S. assistance cannot address all the identified needs. One organization estimates that providing a basic package of services to all of Colombia’s internally displaced persons would cost approximately $1 billion. However, U.S. government expenditures for assistance to vulnerable groups have declined each year since fiscal year 2001—from $36 million in fiscal year 2001 to $21 million in fiscal year 2004. Nevertheless, the Office of the United Nations High Commissioner for Refugees estimates that in Colombia, 900 to 1,000 individuals are newly displaced everyday. In addition, USAID anticipates the demobilization of 30,000 insurgents and paramilitaries over a 5-year period. USAID estimates that the complete demobilization of all illegal armed groups in Colombia could cost between $254 million and $298 million. USAID, State, and Justice provide support and oversight for the democracy and rule of law programs. In the 1980s, the United States began to help Colombia and other Latin American countries improve their judicial systems as a way to counter political instability and support democratic principles and institutions. According to planning documents from the three agencies, the objectives are to promote a more responsive, participatory, and accountable democracy; enhance state presence; and strengthen Colombia’s justice sector. Democracy and rule of law programs are intended to increase the Colombian government’s control over its territory and thereby help prevent the cultivation of illicit crops in those areas. In addition, a strengthened justice sector would help enforcement of Colombian laws that make cultivation of coca and opium poppy illegal and afford greater protections to vulnerable populations. The United States has achieved some results in reaching its three main objectives in the area of democracy and rule of law reform in Colombia, but individual projects often produce limited results. USAID reports progress in promoting a more responsive, participatory, and accountable democracy in Colombia, but many of the projects are implemented on the scale of demonstration projects. State indicates that it has made progress toward enhancing state presence and public security through specially trained police units, but these units have limited equipment and show mixed results. Finally, Justice reports that it has made some progress in strengthening Colombia’s justice sector, but budget cuts have impeded the Colombian government’s ability to take over full program responsibility, and Justice has lowered its initial targets in some cases. USAID’s primary objective is to promote a more responsive, participatory, and accountable democracy in Colombia. Its Casa de Justicia (Justice House) program is designed to increase Colombians’ access to legal services, as well as to enhance the presence of the state throughout the country. Justice houses are multi-agency centers of information, orientation, reference, and conflict resolution. People in poor, marginalized areas visit these centers to receive both formal and informal legal services. To date, 37 justice houses have been built, and USAID plans to expand this number to 40 by 2005. Since the start of the program, more than 2 million cases have been handled in the justice houses. However, the USAID contractor told us some justice houses cannot provide services to residents on a daily basis because government of Colombia personnel do not always show up for work. Another project supported by USAID is a public defense pilot center. Until recently, public defenders in Colombia worked on a part-time basis, were paid a low fixed salary, and handled less than 10 percent of cases involving poor defendants. In September 2003, USAID opened a public defense pilot center in Bogotá specifically designated to handle cases requiring a public defender. The center houses offices and a law library and makes it possible to have a permanent public defense service. USAID pays half the salaries of public defense lawyers, while Colombia has responsibility for the other half. As a pilot project, the center’s benefits have been limited—the 15 full- time public defenders that the center employs are the only ones in the country. USAID’s Peace Initiatives Program consists primarily of support for the peace negotiations and implementation of coexistence and resolution activities. These activities include establishing self-determination projects and coexistence centers. Both are designed to provide basic government services at the municipal level. The self-determination projects promote cooperation, coordination, and confidence building between citizens and the state in municipalities. These projects have two principal components: (1) training in peaceful coexistence, local governability, and civic education; and (2) financial and technical support for infrastructure. In Cauca, for example, the citizens of one municipality formed a committee to determine the community’s needs. They decided that they needed a road connecting the various small towns in the area. Using USAID funds, the citizens are planning to build the road themselves. USAID has implemented self- determination projects in three municipalities; its goal is to have 40 projects by 2005. Coexistence centers, like justice houses, provide government services to marginalized populations. They are located in municipalities considered too small for justice houses. Coexistence centers provide on-site administrative and legal assistance, educational opportunities for children, youth, and adults, and a neutral space for community meetings, dialogue, and events. Some of the services offered include libraries, ludotecas (which are similar to preschools), and municipal family services. Although USAID’s goal was to establish 6 coexistence centers by September 30, 2003, 4 coexistence centers had been established through the end of 2003. USAID intends to establish 14 centers by the end of 2005. State’s primary objective is to enhance state presence and public security. Reestablishing a government of Colombia presence in all municipalities is also one of President Uribe’s primary strategic objectives. When President Uribe assumed office in August 2002, 158 municipalities in Colombia lacked a police presence. As of February 2004, State reported that all municipalities in Colombia had a police presence for the first time in history. According to State’s 2003 Human Rights Report, as a result of the Colombian government’s emphasis on improving security, murders were reduced by 20 percent over the year, kidnappings by 39 percent, and forced displacements of persons by 49 percent. State has assisted the Colombian National Police in organizing, training, and equipping more than 16,500 police officers. Once trained, special police units were sent to targeted municipalities to establish a secure base and begin the process of restoring public security. According to State, afterwards, permanent police units of a minimum of 46 police were sent in; the more conflictive municipalities received units of up to 180 police. Anecdotal evidence indicates that these units may have improved conditions in some areas. State officials say that judges and prosecutors will now be able to visit some municipalities that were previously deemed too dangerous and provide local justice services to citizens whose only prior recourse was appealing to the local insurgency leader. However, some of the police units cannot safely leave their posts, and they face difficulty patrolling their areas of responsibility. For example, Colombian National Police mobile police squadrons, which are tasked with reinforcing security in rural conflict zones, have a limited ability to do so. The United States is providing basic equipment to the squadrons, while the government of Colombia is responsible for maintaining them. To date, none of the mobile squadrons has been fully equipped. Justice’s primary objective is to strengthen Colombia’s justice sector. Its Justice Sector Reform Program is intended to help Colombia develop and sustain a modern, effective, and efficient criminal justice system. The program consists of 12 interrelated project areas, including developing human rights investigative units; combating organized financial crime; supporting joint case investigations and prosecutions; and providing witness and judicial officer protection. For example, Justice has supported satellite human rights units to investigate and prosecute human rights cases in Colombia. Investigations increased significantly in fiscal years 2002 and 2003; arrest warrants increased by 35 percent, accusations by 73 percent, and guilty pleas by more than 200 percent. However, Justice has reduced its original target to establish 32 satellite units to as few as 15 units; as of January 2004, 11 had been created. Justice officials expect funding for this program to decrease. Although Justice has budgeted $4 million for fiscal year 2004 and requested $3 million for fiscal year 2005, the department plans to reduce the funding level to less than $2 million in later years. Justice has also assisted the Colombian government in developing a new criminal procedure code. As we noted in a prior report, Colombia enacted constitutional reform in 1991 that called for criminal justice reform, but little progress had been made. According to Justice, the new code provides the framework for an accusatory criminal justice system and oral trials. In order to prepare for and support the code’s implementation, Justice trained 122 prosecutors in criminal trial techniques in fiscal year 2003 and plans to train 10,000 judicial police investigators by 2005 for their new roles as witnesses in oral trials. The department also plans to train an additional 3,000 prosecutors in the new procedural code and their changed roles in an accusatory system. Justice uses a “train-the-trainer” approach to encourage and facilitate the transition of program responsibility to Colombian personnel. Although the U.S. nonmilitary assistance programs are beginning to achieve some of the results originally envisioned, Colombia and the United States must address management and financial challenges. USAID has not yet maximized the mutual benefits of its programs, and State and USAID have not coordinated their assistance programs to internally displaced persons. State, Justice, and USAID have not established timelines, nor have State or USAID developed an overall strategy for turning programs over to the Colombian government or to the private sector. In addition, funding constraints and Colombia’s long-standing conflict will complicate sustainability efforts. As we reported in 1998, U.S. counternarcotics activities were hampered by a lack of planning and management coordination. While U.S. agencies recognize the need for greater coordination to maximize program benefits, we found this was not always happening. USAID was not maximizing the interrelationships among its programs for alternative development, vulnerable groups, or democracy, and its implementing partners expressed concern that they were often not aware of one another’s projects even when they were nearby. Moreover, State and USAID were not coordinating their programs for internally displaced persons. The three nonmilitary assistance programs are interrelated. Alternative development can provide legitimate income generation for coca and opium poppy farmers. An increased state presence and strengthened judicial system can provide greater protection and a safer environment for those who want to grow licit crops and participate in other licit income- generating alternatives. A more secure situation can lead to fewer people leaving their homes and depending on assistance for internally displaced persons. The USAID/Colombia mission recognizes this interrelationship among its programs. Its recently amended strategy for fiscal years 2006 through 2008 recognizes the need to explore opportunities for program synergies and efficiencies. However, coordination among USAID’s implementing partners is not always occurring. A February 2004 evaluation of USAID’s alternative development projects in Putumayo concluded that the successful continuation of these projects depended, in part, on greater coordination among USAID’s contractors and grantees. Many of the grantees and contractors implementing USAID’s three nonmilitary assistance programs told us they had never met as a group to discuss and coordinate their efforts. In our meetings with grantees working with vulnerable groups, the representatives also suggested that specific barriers limit coordination. For instance, if grantees from two different programs implement a joint project, only one of them can claim an achievement for having served the project beneficiaries. According to one grantee, this is a disincentive to cooperate with other grantees. Another barrier cited was general confusion among grantees about how to account for money taken from different programs— according to some grantees, USAID’s rules and regulations about using funding from different strategic objectives are prohibitively complex. USAID officials and representatives of many of its implementing partners told us that while USAID holds monthly meetings to ensure that alternative development grantees and contractors coordinate with one another, no mechanisms exist for ensuring that similar coordination occurs among grantees and contractors working in USAID’s other assistance programs, even in areas of the country where several projects are taking place near one another. For example, in January 2004 we met with local USAID democracy grantees in Antioquia. All told us they had never met each other and did not know about one another’s projects, even when they dealt with similar issues. They reported that as a result of their meeting with us, they would make a better effort to coordinate with one another. In addition to coordination problems among the nonmilitary assistance programs, coordination is weak within the vulnerable groups program. Although State and USAID have agreed to split responsibilities for providing emergency aid and longer-term development assistance to internally displaced persons, respectively, they do not have any procedures for coordinating or transitioning from one to the other. USAID’s and State’s Strategic Plan for fiscal years 2004 through 2009 does not include any specifics for joint program implementation. We found that during a site visit to a USAID-funded project outside of Bogotá, an agency official was surprised to learn that State also funded a project in the same location; and half of the grantees involved in USAID’s program were unaware of State’s program to assist the displaced and did not know whether their project beneficiaries had first received emergency humanitarian assistance from State. While State and USAID are not explicitly required to assist the same beneficiaries, agency officials and program documents indicate that their goal is to ensure that internally displaced persons who receive emergency aid are then provided longer-term assistance, if needed. In 2001, we reported that the U.S. government had difficulty coordinating and managing its programs to aid the internally displaced. These challenges continue in Colombia. Under the original concept of Plan Colombia, the government of Colombia pledged $4 billion and called on the international community to provide $3.5 billion. We reported in June 2003 that this international assistance— apart from that provided by the United States—did not materialize as expected. International donations not directly related to Plan Colombia have also been limited. For example: The United Nation’s Consolidated Inter-Agency Appeal for $62 million in humanitarian assistance to Colombia is underfunded. Donations as of November 2003 amounted to approximately $14 million, of which the United States contributed about 42 percent. As we reported in August 2001, scarce or declining budgetary resources provided by the international donor community inhibit agencies from expanding their internally displaced person protection and assistance activities. The Colombian government has dedicated some of its own resources for nonmilitary assistance programs, although they are not sufficient to sustain ongoing programs. For example, according to a United Nations agency, Colombia is providing resources to support internally displaced persons, and Colombian law exempts internally displaced persons from paying fees for education, health, and other basic services. However, the report (dated May 2003) goes on to note that only 43 percent of the total number of internally displaced persons registered with the Colombian government received relief items. Furthermore, the government’s response to displacement does not reach remote areas and is inadequate in urban areas. Similarly for democracy programs, the Colombia Human Rights Ombudsman’s office agreed to produce a sustainability plan outlining its financial and technical responsibilities on a long-term basis by January 2004. As of May 2004, the plan had not been completed. Specifically within the rule of law program, Colombian nondefense budget reductions have prevented the government from taking control of the human rights investigative units as originally planned and funds for maintaining the justice houses may be in jeopardy. A number of domestic and foreign factors have limited the Colombian government’s ability to contribute more resources. In August 2003, President Uribe promoted a referendum designed to produce fiscal reform. However, voter turnout was short of the threshold required, and the referendum failed. To mitigate the effects of these failed cost-cutting measures, State said that the Uribe administration introduced new economic austerity legislation in the Colombian Congress. According to State officials, these measures included taxes on wealth, personal income, and financial transactions; creation of anti-evasion policies; and an expansion of the tax base. However, these measures will not entirely eliminate the fiscal shortfall. According to State, the tax bill that passed the Colombian Congress in December 2003 provided $817 million in added revenues, leaving a $286 million gap to be bridged by spending cuts. Fiscal constraints due to revenue shortfalls and an International Monetary Fund requirement to reduce the combined sector deficit to 2.5 percent of gross domestic product will preclude the government from increasing both defense and nondefense spending in 2004. Because the success of President Uribe’s democratic security policy depends in part on increasing the size of Colombia’s security forces, President Uribe has announced that nondefense spending will be cut to enable the Colombian government to meet its fiscal targets. This strategy should enable the government to meet its short-term fiscal targets. However, without significant cuts in expenditures for pensions and other earmarks, U.S. embassy officials stated that the Colombian government may also need to reduce defense spending to meet its long-term goal of significantly reducing public debt. At a time when nonmilitary assistance programs are beginning to produce intended results, such budget cuts could impede project implementation and sustainability. The government of Colombia has stated that ending the country’s civil conflict is central to solving Colombia’s problems, from improving economic conditions to stemming illicit drug activities. The continuing violence limits both the U.S. and Colombian government’s ability to institute economic, social, and political improvements. A peaceful resolution to the decades-old insurgency would help stabilize the nation, speed economic recovery, help ensure the protection of human rights, and restore the authority and control of the Colombian government in the coca- growing regions. Although the Colombian National Police, with U.S. assistance, have reestablished a presence in every municipality, rebel groups continue to exercise control in large geographic areas. State estimates that Colombia still does not control up to 40 percent of the country. Lack of government control intensifies the difficulty of implementing assistance programs. According to USAID officials, the agency is still prohibited from operating in certain parts of the country because of security concerns. Within the alternative development program, for example, it makes the process of verifying that communities are adhering to voluntary eradication agreements highly risky. Moreover, while many human rights indicators improved last year due to the Colombian government’s efforts to improve security, both armed forces and insurgents continue to commit serious human rights abuses, according to human rights organizations, as well as State’s 2003 Human Rights Report. The ongoing violence often prevents USAID and contractor officials from visiting project sites to implement and monitor efforts. Furthermore, it discourages private business groups from traveling to and investing in remote parts of Colombia. The long-standing insurgency also limits the government’s ability to address the socio-economic conditions—including poverty, inadequate social services, and high unemployment—that encourage illicit activities. Several USAID officials emphasized the importance of job creation in the fight against violence and illicit activities, yet unemployment was over 14 percent in September 2003. In 2002, the World Bank estimated that 60 percent of Colombia’s population lives below the poverty line, and rural poverty in Colombia is estimated at 79 percent. The World Bank also calculated that even if a positive growth path is reestablished and sustained, Colombia will require more than a decade to reduce poverty to the levels recorded in 1995—an economic performance that Colombia has not been able to achieve in recent years. Colombia is a long-time ally and significant trading partner of the United States and, therefore, its economic and political stability is important to the United States as well as to the Andean region. Colombia’s long-standing insurgency and the insurgents’ links to the illicit drug trade complicate the country’s efforts to tap its natural resources and make systemic economic reforms. Solving these problems is important to Colombia’s future stability. Colombia and the United States continue to face financial and management challenges in implementing and sustaining counternarcotics and counterinsurgency programs in Colombia. Namely, the government of Colombia does not have the capacity to sustain alternative development projects, provide the level of assistance needed for vulnerable groups, or implement democracy and judicial reform. Colombia’s financial resources are limited and its economy is weak, and thus it will need U.S. assistance for the foreseeable future. In 2000 and 2001, USAID determined that an alternative development program for the estimated 136,600 families involved in illicit drugs could cost up to $4 billion. At least one organization has predicted that providing basic services to Colombia’s displaced population could cost $1 billion. If demobilization occurs on a large scale, it could cost well over $250 million. In addition, we note that these estimates do not include future funding needed for other U.S. programs in Colombia, including support for the Colombian Army and Colombian National Police. In recent years, world events—from the global war on terrorism to the massive reconstruction efforts in Afghanistan and Iraq—have diverted scarce U.S. resources and made it paramount that the United States fully consider the resources committed to its overseas assistance programs. Because of competing demands, the United States very likely cannot continue current levels of assistance to Colombia; in some instances, State, Justice, and USAID have already begun to limit or curtail their programs. Yet, State and USAID have not systematically coordinated their programs to maximize the interrelated benefits or developed a plan for turning program responsibilities over to the Colombian government and the private sector. Because of Colombia’s prolonged conflict and the limited financial resources available for nonmilitary assistance programs, we recommend that the Secretary of State, in consultation with the Attorney General and the Administrator, USAID, develop a detailed plan for improving systematic coordination among the three nonmilitary assistance programs in Colombia. The plan should include clearly defined objectives and future funding requirements for the programs; a timeline for achieving the stated objectives; and a strategy for sustaining the results achieved, including transitioning program responsibility to the government of Colombia and the private sector. Particular attention should be placed on establishing a coordination mechanism between State and USAID to facilitate internally displaced persons’ transition from emergency aid to longer-term assistance. The Secretary of State should provide this information to the Congress for consideration in the fiscal year 2006 appropriations cycle. State, Justice, and USAID provided written comments on a draft of this report. See appendixes I, II, and III, respectively. Overall, the agencies found the report helpful, but none specifically commented on our recommendation. Justice did not address coordination. State and USAID noted instances of where coordination was occurring and said that they are looking for ways to improve. For instance: State reported that it is exploring ways in Washington, D.C., and the field to improve coordination between State and USAID on the hand-off of beneficiaries from State’s emergency assistance to USAID’s longer-term assistance. USAID acknowledged that more can be done to improve coordination and detailed new initiatives designed to do so, including the creation of a Joint Policy Council between State and USAID. USAID also noted that, with the start-up phase of its programs completed, it was developing approaches and programs that are more sustainable and relying on private sector support to leverage additional resources where possible. Our recommendation was intended to help ensure that State, Justice, and USAID worked together to build on the progress that each of the nonmilitary programs is making by taking advantage of the synergies among the programs. Without a more formal plan for improving systematic coordination, we do not believe that the U.S. nonmilitary assistance to Colombia will be leveraged to the extent possible. Each agency also provided additional information and elaborated on the status of their programs. In addition, the agencies provided us technical comments and updates that we have incorporated throughout the report, as appropriate. As agreed with your office, unless you publicly announce its contents earlier, we plan no further distribution of this report until 30 days from the date of this letter. At that time, we will send copies of this report to interested congressional committees, the Secretary of State, the Attorney General, and the Administrator of the U.S. Agency for International Development. We will also make copies available to others on request. In addition, this report will be available at no charge on the GAO Web site at http://www.gao.gov. If you or your staff have any questions about this report, please contact me at (202) 512-4128 or FordJ@gao.gov, or Al Huntington, Assistant Director, at (202) 512-4140 or HuntingtonA@gao.gov. Other key contributors to this report were José M. Peña, Elizabeth Singer, and Judith Williams. To identify the objectives of each program; determine the programs’ reported accomplishments; as well as the factors, if any, limiting their implementation, we analyzed project design documents, including funding documents and contracts and grant agreements, describing the projects from State, Justice, and USAID; reviewed project documentation, including progress reports and other documents prepared by the grantees and contractors implementing the projects; interviewed cognizant contractor and grantee officials both in Washington, D.C., and Colombia; and interviewed State, Justice, and USAID officials responsible for program oversight and implementation both in Washington, D.C., and at the U.S. Embassy in Bogotá. We traveled to Colombia in January 2004. In Colombia, we held two roundtable discussions with representatives of most of the grantees and contractors responsible for alternative development and vulnerable groups projects. We observed U.S.-funded projects in Bogotá and Soacha (near Bogotá), Medellín, and Puerto Asís and Villa Garzón in Putumayo. During these site visits, we met with project beneficiaries and interviewed representatives of the nongovernmental organizations implementing the projects. To determine the challenges faced by Colombia and the United States in sustaining these programs, we obtained program information and economic data prepared by a variety of sources and interviewed U.S. and Colombian government officials. In Washington, D.C., we interviewed agency officials from State, Justice, and USAID. We also examined political and economic reports prepared by the Congressional Research Service, the World Bank, and the International Monetary Fund. We reviewed several studies evaluating issues of concern and U.S. assistance to Colombia, particularly alternative development, vulnerable groups, and democracy and rule of law programs. In Colombia, we reviewed program documents, including USAID’s draft 5-year strategic plan, a February 2004 evaluation of USAID’s programs in the Putumayo, the U.S. Embassy’s Mission Performance Plan, and contractor and grantee organization reports. In addition, we interviewed U.S. embassy officials knowledgeable about Colombia’s economic and political situation and met with Colombian government officials knowledgeable about the state of the Colombian economy and the Colombian government’s budgetary constraints, including the director of the Office of National Planning, which is similar to the U.S. Office of Management and Budget. To determine the reliability of the funding data used in this report, we examined State, Justice, and USAID quarterly progress reports and other financial management activity reports. Agency officials also verified the data. Moreover, we obtained copies of State, Justice, and USAID Inspector General audits of their respective agencies’ consolidated financial statements, which reported, among other things, on their internal control structures. All three agencies received unqualified opinions. However, State’s Bureau of International Narcotics and Law Enforcement Affairs did not provide complete funding data for the programs it supports. As a result, the funding figures may not reflect what was actually programmed, obligated, and expended for assisting vulnerable groups, promoting democracy and rule of law programs, and enhancing state presence and public security. Moreover, we did not audit the funding data and are not expressing an opinion on them. However, based on our examination of the documents received and our discussions with cognizant agency officials, we concluded that the funding data we obtained were sufficiently reliable for the purposes of this engagement. To determine the reliability of the performance measurement data we obtained, we asked State, Justice, and USAID program officials how the data were collected and verified. We found that because of the difficult security situation in Colombia, U.S. agencies (USAID in particular) must often rely on third parties, including the United Nations, to document performance data, such as the number of hectares voluntarily eradicated. We also found that while U.S. embassy officials conduct oversight to assess the accuracy of program data submitted by grantees and contractors, not all do. For example, according to State, it does not independently verify estimates of the number of beneficiaries assisted by the international organizations it funds. In addition, any data collected by the agencies is subject to some limitations. For example, the November 2003 Inspector General report stated that the alternative development program might be overstating the number of families benefited due to the way program data are collected. In addition, the vulnerable groups program may double count project beneficiaries, and the statistics collected through the justice houses are generally not reliable because they are not equipped to collect data regularly on their own. However, USAID has taken measures to address these limitations. For example, in response to its Inspector General’s concerns, USAID agreed to separate the alternative development program data between crop substitution and infrastructure projects to avoid double counting. Similarly, to avoid the double counting in the vulnerable groups program, the agency asks grantees to jointly report on individuals assisted in areas where more than one grantee was present. Finally, to correct data collection difficulties associated with the justice houses, the USAID contractor plans to have a national automated information system by 2005. Nevertheless, based on our discussions with State, Justice, and USAID officials, we concluded that the performance data we obtained were sufficiently reliable for the purposes of this engagement. The following are GAO’s comments on the Department of State letter, dated June 28, 2004. 1. Throughout this report, we acknowledge the many obstacles that the U.S. government faces in reaching its nonmilitary assistance objectives, including Colombia’s long-standing conflict and limited financial resources. As such, we recognize that establishing a formal mechanism for transitioning beneficiaries of the vulnerable groups program from emergency to longer-term assistance is not an easy task. Nevertheless, State and USAID will benefit from a more formal mechanism to address this transition gap, as we recommended. Any informal coordination that already occurs is an important step toward implementing this recommendation. 2. While some of State’s implementing partners may track some individuals after they receive assistance, not all do. Further, it should be noted that while the Colombian Government’s Social Solidarity Network works to avoid duplication of assistance and to attend to registered internally displaced persons, both State’s and USAID’s implementing partners provide services to persons who are not registered with the Colombian government. 3. State is incorrect. GAO did not praise the Policy and Program Review Committee (PPRC) regional policy paper process in past reports. After we inquired about this point, a PRM official acknowledged that State’s Inspector General and the Office of Management and Budget have complimented the process, but GAO has not. In addition, State declined to provide GAO a copy of PPRC #2004-38, and the same official said that State had not provided a copy to USAID, either. 4. We recognize that tracking beneficiaries assisted by international organizations may be difficult. However, we found that USAID tracks the number of individuals assisted each quarter by its grantees, including international organizations. 5. The report does not state that there is no coordination. Rather, we concluded that State and USAID can do a better job of “handing off” State’s short-term beneficiaries to USAID’s longer-term assistance program. 6. We modified the text to better describe State’s funding. 7. The $1 billion figure was not intended to be a definitive estimate. The point is that U.S. assistance cannot address all identified needs. 8. We do not agree that better coordination between State and USAID would compromise the security of the staff. 9. We modified the text to acknowledge the government of Colombia’s efforts to enhance public security and the improvement in human rights indicators over the past year. However, as State quotes from its own 2003 Human Rights report, “The Government’s human rights record remained poor.” The following are GAO’s comments on the Department of Justice letter, dated June 23, 2004. 1. As we indicate in note “c” on p. 8, State transfers funding to Justice for its rule of law programs. We have added Justice’s total originally appropriated figure of $88 million, which is approximately 16 percent of total U.S. nonmilitary assistance funding. 2. Rather than budget increments, President Uribe has announced cuts in nondefense spending. 3. GAO recognizes that the new asset forfeiture law referred to by Justice has strengthened the government of Colombia’s ability to employ seized assets, but it remains to be seen to what extent that will benefit the justice sector’s capacity. 4. We recognize that Justice has a variety of projects within its Justice Sector Reform Program and that these projects are instrumental in strengthening Colombia’s justice sector. We did not focus on all of the projects in detail, however, because of their small size (in terms of funding) relative to State’s and USAID’s projects. We do highlight the human rights units, code reform assistance, prosecutor training, and judicial police training projects. 5. We modified the text to give Justice more credit for its efforts to turn programs over to the Colombian government. The General Accounting Office, the audit, evaluation and investigative arm of Congress, exists to support Congress in meeting its constitutional responsibilities and to help improve the performance and accountability of the federal government for the American people. 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Summary: Since 2000, the U.S. government has provided a total of $3.3 billion to Colombia, making it the fifth largest recipient of U.S. assistance. Part of this funding has gone toward nonmilitary assistance to Colombia, including programs to (1) promote legitimate economic alternatives to coca and opium poppy; (2) assist Colombia's vulnerable groups, particularly internally displaced persons; and (3) strengthen the country's democratic, legal, and security institutional capabilities. GAO examined these programs' objectives, reported accomplishments, and identified the factors, if any, that limit project implementation and sustainability. We also examined the challenges faced by Colombia and the United States in continuing to support these programs. Although U.S. nonmilitary assistance programs have begun to produce some results, individual projects reach a relatively small number of beneficiaries, face implementation challenges, and may not be sustainable. For example, projects designed to promote legitimate economic alternatives to illicit crop cultivation have helped about 33,400 families. However, the U.S. Agency for International Development (USAID) estimated in 2000 and 2001 that as many as 136,600 families needed assistance, and these projects face implementation obstacles, such as difficulty marketing licit products and operating in conflictive areas. U.S. assistance to Colombia's vulnerable groups has provided support to many internally displaced persons, but these program beneficiaries do not receive all of the assistance they need, and there is no systematic way for beneficiaries to transition from emergency aid to longer-term development assistance. The U.S. government has made some progress toward facilitating democratic reform in Colombia, but projects face certain obstacles, such as limited funding and security constraints. Despite the progress made by the three nonmilitary assistance programs, Colombia and the United States continue to face long-standing management and financial challenges. The Colombian government's ability to contribute funds for nonmilitary assistance programs is limited by a number of domestic and foreign factors, and Colombia's longstanding conflict poses additional challenges to implementing and sustaining nonmilitary assistance efforts. The U.S. government has not maximized the mutual benefits of its nonmilitary assistance programs and has not established a mechanism for vulnerable groups to transition from emergency aid to longer-term assistance. Furthermore, the Departments of State and Justice and USAID have not established timelines for achieving their stated objectives, nor have State and USAID developed a strategy to turn programs over to the Colombian government or to the private sector.