Foreign Assistance

The African Development Foundation was created by Congress in 1980 as an independent public corporation to support local self-help initiatives of the poor in Africa. In response to congressional concerns about whether the Foundation has used its resources efficiently, GAO reviewed the Foundation's administrative and financial management practices. This report discusses whether the Foundation (1) used program funds for administrative expenses, (2) presented reliable data in its budget submissions to Congress, and (3) complied with financial reporting requirements.

GAO found that in fiscal year 1994, ADF: (1) spent more of its budget for administrative expenses than similar agencies, because of higher salaries and its greater use of contractors to carry out ADF functions; (2) exceeded the amounts included in its budget, partly because its board of directors provided insufficient oversight of its activities; (3) was not bound to the amount it spent for administrative overhead, because its funds were appropriated as a lump sum and not earmarked for program or administrative use; (4) budgetary and cost data for program management and support were unreliable and based on unaudited financial statements and an accounting system that was not viable for audit; (5) and the Office of Management and Budget acknowledged the data problems and took steps to improve the quality of budget reporting; and (6) did not comply with financial reporting, internal controls assessment, and budget report reconciliation requirements, but it took steps to do so.

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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