5 minute read
International
CIDC members embrace robust oversight of US foreign policy implementation, both to achieve results and to provide sound and transparent stewardship of U.S. taxpayer funds.
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Oversight promotes results and accountability with the public and private sector across all development objectives and can be broadly categorized into three main “buckets”: (1) measuring for results (2) compliance (3) financial performance. American international development contractors have long appreciated the linkage between oversight and both Congressional and public support for foreign assistance. As a result, we have the systems and processes to excel in these areas and the experience and know-how to achieve U.S. foreign assistance goals in the most complicated and risky operating environments – in both the physical and fiscal sense. Contractors implement projects in more than 120 countries, with nearly 39 percent of funds programmed in sub-Saharan Africa. For USAID alone, contracts accounted for 29 percent of total dollars obligated in FY 2020.
Streamlined Procedures for Small Grants to Promote COVID Impact
USAID for-profit implementers have successfully used streamlined grant procedures to quickly award hundreds of small grants to businesses negatively impacted by COVID-19 to promote economic recovery or help struggling health systems to respond to the crisis. We have used similar streamlining mechanisms in emergency situations without sacrificing compliance or results.
Rule of Law Assistance
In 2020, GAO completed several studies of the Department of State and USAID rule of law programs that accounted for more than $2.7 billion from fiscal years 2014 through 2018. During this period, USAID conducted 861 performance evaluations for its foreign assistance programs and projects. Of these, 53 (about 6 percent) were for global rule of law-related projects, often carried out by for-profit implementers. GAO concluded that USAID programs followed key practices for monitoring assistance in almost all cases.
Measuring Results
For-profit implementers are held legally accountable for achieving tangible, quantifiable technical indicators – a key distinction for contracts. The Theory of Change model requires that each contract uniquely describe how and why the process of change is expected to take place and how we will work directly and or indirectly to influence the desired change and achieve the stated project purpose. To support the theory of change, all aid contracts include a Monitoring and Evaluation (MEL) plan. This MEL plan includes the project’s monitoring approach and performance indicators of activity outputs and outcomes, including a consistent process for data validation by multiple parties. Progress against indicators in the MEL plan are reported by contractors on a regular basis enabling the US government to track project performance, take early corrective action when necessary, and ensure that projects achieve their intended results. Results of performance evaluations performed by third parties are disseminated to public via Development Experience Clearinghouse. The theory of change model and managing by results allows for contractors to promote collaboration, learning, and adapting to changing conditions on the ground to maximize results.
SIGAR’s overview of USAID’s implementation of its recommendations (2014-2019)
In Afghanistan, SIGAR conducted 17 performance audits, 8 inspections and 59 financial audits of USAID’s contracts over the past five years. In his quarterly report to Congress, the head of SIGAR, John Sopko, reported that of its 201 recommendations, 167 (an impressive 83 percent) were implemented within the statutorily required one year period, 22 remained open, and only 12 were not implemented and closed. About 80 percent of the recommendations aimed at enhancing contract oversight and nine percent intended to improve program effectiveness. Contrast that with the Department of Defense’s performance during the same period during which the Department “implemented less than 40 percent of SIGAR’s audit and inspections recommendations” according to SIGAR’s April 2020 Report.
Compliance
Contractors work collaboratively with the US government to promote a culture of compliance to prevent fraud, waste, and abuse. There is a perception that compliance hinders innovation, however we maintain that the polarity between compliance and innovation doesn’t always exist. With a thorough understanding of the rules, regulations, and policies by both the contractor and the government, we can promote creativity and innovation while remaining compliant (see text box above about rapid grants). There are hundreds of laws originating from the Foreign Assistance Act that govern the work of contractors, and compliance is both time consuming and expensive. But we see it as central to our ability to promote accountability. And many laws are in place to promote U.S. businesses and protect the most vulnerable populations. For example, Buy America, Fly America, and the Bumpers Amendment promote the use of American businesses and goods, and terrorist financing and anti-trafficking laws are critical to have in place as a safety and oversight function.
Financial Performance
U.S. foreign assistance has financial principles and standards based on Federal laws and regulations. CIDC contractors assume the risks of managing resources effectively, including an auditable trail of accounting systems, procurement systems, etc. This includes e-payments to third parties which allow traceability of funding. And contractors are increasingly working in highly complex and volatile environments that in some cases necessitate working remotely. Contractors have embraced the challenge and responsibility to have robust systems in place so that we can effectively operate in all environments without sacrificing results. According to the Office of Inspector General semiannual reports to Congress, out of 120 audits of US based contractors conducted between October 1, 2019 through September 30, 2020 covering nearly $10 billion in programs, only 0.51% of expenses were questioned. Unlike with grants, contractors have to provide invoices and billing details how they spend federal funds increasing transparency over how Federal acquisition funds are spent. Contractors also devote tremendous effort to increasing the operational and technical capacity of local organizations we work with to promote sustainability and new development partners overseas.
Conclusion
CIDC members recognize the realities inherent in providing contract services to the federal government as they work to achieve US foreign policy goals around the world in often challenging and dangerous environments. Providing a high degree of transparent accountability ensures effective program implementation and maintains the necessary and appropriate oversight on these activities – ensuring American taxpayers and their Congressional representatives can have confidence that their money is being appropriately spent and bringing the best outcomes to the largest number of beneficiaries. Anna Slother, EVP, Chemonics International
