Foreign Assistance

Treasury's Technical Assistance Program Gao ID: NSIAD-99-65 March 12, 1999

After the collapse of communism in Central Europe and the breakup of the Soviet Union, the United States created programs of technical assistance to help countries transition to market economies and democracy. Using advisors based in the United States and overseas, the Treasury Department's Office of Technical Assistance provides strategic and technical advice to these countries to promote economic reform and private-sector development. This report reviews the operation of the Treasury assistance program. GAO (1) identifies the types of technical assistance the advisors have provided to Russia and Romania; (2) discusses oversight by the Office of Technical Assistance of advisors' activities; and (3) provides information on advisor qualifications, program costs, fund transfers between the Agency for International Development and the Treasury, and the location of the Treasury's senior advisors to its program.

GAO noted that: (1) the Treasury's technical assistance advisors in Russia and Romania have assisted in efforts to reform tax and budget systems, improve banking and debt management policies, and enhance law enforcement; (2) in support of these initiatives, Treasury advisors have helped countries devise new systems and approaches to management of their finances, drafted legislation and procedures, and developed economic models; (3) host-government officials for the most part indicated that the advice received from the Treasury's advisors was beneficial to their reform efforts; (4) the advisor program has been carried out with little formal structure; (5) the only clear mandatory requirement is the filing of monthly reports, and reports of varying content were generally filed on a regular basis; (6) however, other documents OTA officials say they use in their oversight, such as host-country agreements, work plans, and the results of supervisory trips, were not available; (7) OTA has also been lax in enforcing advisors' financial disclosure requirements; and (8) in response to GAO's observations, OTA told GAO that they use informal means such as electronic mail and telephone calls to carry out their oversight of advisor activities.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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