Foreign Assistance

The Agency for International Development (AID) is highly decentralized, with a headquarters in Washington, D.C., and missions in more than 70 countries. AID reorganized its Washington headquarters in 1991 to streamline and improve agency management. This move did not, however, directly affect the agency's overseas operations, which have remained essentially unchanged since AID was founded 30 years ago. In fiscal year 1990, AID activities consumed about 38 percent ($7.5 billion) of the U.S. international affairs budget. AID does not have total control over these funds, however. In fiscal year 1990, for example, it directly transferred $1.2 billion to Israel. The agency had about 1,600 active projects in fiscal year 1990, most of which were run by AID's overseas missions; AID obligated $6.1 billion for project and program expenses that year. At the start of fiscal year 1990, AID had $8.3 billion in funds obligated in earlier years but unspent. AID employees are a mix of U.S. and foreign national direct hires and personal services contractors. About 10,000 individuals not directly employed by AID also perform a wide range of services for the agency. More than two-thirds of AID's overseas work-years (about 7,000) in fiscal year 1990 were expended by U.S. and foreign national personal services contractors, who are not separately identified and reported to Congress.

GAO found that: (1) AID has a highly decentralized organizational structure, with a headquarters staff in the District of Columbia and missions in more than 70 foreign countries; (2) in 1991, the Administrator initiated a major reorganization of AID/W to improve agency management, but the reorganization did not affect AID offices overseas; (3) in fiscal year (FY) 1990, activities comprised 38 percent of the international affairs budget, but AID does not have total control over administered funds, as illustrated by its direct transfer of $1.2 billion to Israel; (4) AID had 1,680 active projects in FY 1990, with three-fourths of the projects administered by AID overseas missions and offices, and the remaining administered by AID/W; (5) AID activities involve economic support, bilateral development assistance, food assistance, multilateral development banks, the Peace Corps, military financing and training, and foreign information and exchange activities; (6) in FY 1990, AID obligated $6.1 billion for project and program expenses, but also had obligated but not expended $8.3 billion in prior years; and (7) the AID work force is comprised of U.S. and foreign national direct hires and personal services contractors.