Foreign Assistance

This report reviews the effect of reforms on the U.S. Agency for International Development's (USAID) overseas mission operations and delivery of assistance. GAO focuses on how (1) USAID missions have reengineered their operations, (2) reengineering has affected the content of USAID's assistance program, (3) USAID monitors and evaluates the results of its projects, (4) USAID allocated funds for its projects, and (5) USAID's New Management System supports mission operations. In doing this review, GAO visited missions in El Salvador, Honduras, Bangladesh, and the Philippines.

GAO noted that: (1) in reengineering the way assistance is delivered, USAID missions have only recently made the investment and operational changes necessary to bring about long-term change; (2) to date, USAID's reengineering efforts to improve its delivery of assistance have shown some benefits in the areas of planning, implementing, and monitoring projects; (3) notwithstanding this progress, USAID still has major obstacles to overcome in deploying its New Management System and establishing valid and reliable performance measures; (4) overseas missions have changed the way they manage assistance in support of USAID's strategic goals; (5) however, because missions had no baseline data on operations management prior to reengineering their processes, neither they nor GAO can identify measurable increases in efficiency or effectiveness of the delivery of assistance; (6) USAID missions have, to varying degrees, begun to establish more results-oriented indicators and report the results of their projects annually; (7) however, the missions still have difficulty linking their activities to the broad indicators of development--such as a country's rate of economic growth; (8) one way to provide a more complete picture of program performance could be to supplement performance measurement data with impact evaluation studies; (9) although the relative performance of mission programs is clearly a factor in USAID's resource allocation decisions, these decisions are still largely driven by other considerations, such as contributions to foreign policy and agency priorities, country need and commitment, and funding priorities of the executive branch and Congress; (10) USAID's New Management System, one of the agency's key tools in reforming its operations, is not working as intended; (11) this computer system, which is expected to cost at least $100 million by the end of fiscal year 1998, was designed to enable the agency to manage its resources and monitor results more effectively by consolidating accounting, budgeting, personnel, procurement, and program operations into a single, integrated network that can be accessed worldwide; (12) despite warnings that the system had not been tested and did not meet basic federal requirements, USAID activated the system in July 1996 in Washington and deployed it in October 1996 in its missions; (13) USAID suspended much of the system's operation in April 1997, after it failed to work properly; and (14) correcting system deficiencies will be critical to continued progress of the agency's reform effort.