The U.S. Agency for International Development (USAID) and Department of State (State) provide democracy assistance for Cuba aimed at developing civil society and promoting freedom of information. Typical program beneficiaries include Cuban community leaders, independent journalists, women, youths, and marginalized groups. USAID receives the majority of funding allocated for this assistance, although State has received 32 percent of funding since 2004. In recent years, both USAID and State have provided more funding for program implementation to for-profit and nongovernmental organizations (NGO) with a worldwide or regional focus than to universities and to NGOs that focus only on Cuba. All types of implementing partners, but worldwide or regional organizations in particular, used subpartners to implement program activities under 21 of the 29 awards and contracts that GAO reviewed. USAID and State legal officials view the Cuba democracy program’s authorizing legislation as allowing the agencies discretion in determining the types of activities that can be funded with program assistance. Agency officials added that the agencies ensure that program activities directly relate to democracy promotion as broadly illustrated in related program legislation. The officials stated that organizations are expected to work with agency program officers to determine what activities are permitted or appropriate. In addition, they said that program partners and subpartners are expected to spend U.S. government funds consistent with U.S. laws, and that requirements in primary award agreements generally flow down to any subpartners. USAID has improved its performance and financial monitoring of implementing partners’ use of program funds by implementing new policies and hiring contractors to improve monitoring and evaluation and to conduct financial internal controls reviews, but GAO found gaps in State’s financial monitoring. While GAO found some gaps in implementing partners’ performance planning and reporting, both agencies are taking steps to improve performance monitoring. For financial monitoring, USAID performs financial internal controls reviews of its implementing partners with the assistance of an external auditor. Since 2008, USAID has used a risk-based approach to determine the coverage and frequency of the 30 reviews the auditor has conducted, which have identified weaknesses in implementing partners’ financial management, procurement, and internal controls. However, because of resource constraints, State did not perform financial internal controls reviews for more than two-thirds of its implementing partners during fiscal years 2010 through 2012. State procured an external financial auditor in September 2012 that plans to review more than half of State’s implementing partners, and has taken steps toward implementing a risk-based approach for scheduling these reviews. Federal regulations generally require agencies to approve the use of subpartners. GAO found that USAID issued specific guidance in 2011 to its implementing partners on requirements for subpartner approval. While State told GAO it has similar requirements, State’s requirements are not clearly specified in its written guidance. As a result, State was not provided with the information it would have needed to approve at least 91 subawards and subcontracts that were obligated under eight awards. Why GAO Did This Study: Since 1996, Congress has appropriated $205 million to USAID and State to support democracy assistance for Cuba. Because of Cuban government restrictions, conditions in Cuba pose security risks to the implementing partners—primarily NGOs—and subpartners that provide U.S. assistance. For this report, GAO (1) identified current assistance, implementing partners, subpartners, and beneficiaries; (2) reviewed USAID’s and State’s efforts to implement the program in accordance with U.S. laws and regulations and to address program risks; and (3) examined USAID’s and State’s monitoring of the use of program funds. This report is a publicly releasable version of a Sensitive But Unclassified Report that GAO issued in December 2012. What GAO Recommends: GAO is recommending that State take steps to improve its financial monitoring of implementing partners and provide clear guidance for approving subpartners. State concurred with GAO’s recommendations and cited steps they are taking to address them.

Over the past 25 years, the United States has made support for the spread of democracy to other nations an increasingly important element of its national security policy. These efforts have created a growing demand to find the most effective means to assist in building and strengthening democratic governance under varied conditions. Since 1990, the U.S. Agency for International Development (USAID) has supported democracy and governance (DG) programs in approximately 120 countries and territories, spending an estimated total of $8.47 billion (in constant 2000 U.S. dollars) between 1990 and 2005. Despite these substantial expenditures, our understanding of the actual impacts of USAID DG assistance on progress toward democracy remains limited-and is the subject of much current debate in the policy and scholarly communities. This book, by the National Research Council, provides a roadmap to enable USAID and its partners to assess what works and what does not, both retrospectively and in the future through improved monitoring and evaluation methods and rebuilding USAID's internal capacity to build, absorb, and act on improved knowledge.

In fiscal years 2006- 2008, the U.S. Agency for International Development (USAID), which has primary responsibility for promoting democracy abroad, implemented democracy assistance projects in about 90 countries. The Department of State's Bureau of Democracy, Human Rights and Labor (State DRL) and the private, nonprofit National Endowment for Democracy (NED) also fund democracy programs in many of these countries. Partly to lessen the risk of duplicative programs, State recently initiated efforts to reform and consolidate State and USAID foreign assistance processes. GAO reviewed (1) democracy assistance funding provided by USAID, State DRL, and NED in fiscal year 2008; (2) USAID, State DRL, and NED efforts to coordinate their democracy assistance; and (3) USAID efforts to assess results and evaluate the impact of its democracy assistance. GAO analyzed U.S. funding and evaluation documents, interviewed USAID, State, and NED officials in the United States and abroad, and reviewed specific democracy projects in 10 countries.

In FY 2006- 2008, the U.S. Agency for International Development (USAID) implemented democracy assistance projects in about 90 countries. The Dept. of State's Bureau of Democracy, Human Rights and Labor (DRL) and the private, nonprofit National Endowment for Democracy (NED) also fund democracy programs in many of these countries. Partly to lessen the risk of duplicative programs, State recently initiated efforts to reform and consolidate State and USAID foreign assistance processes. This report reviewed: (1) democracy assistance funding provided by USAID, DRL, and NED in FY 2008; (2) USAID, DRL, and NED efforts to coordinate their democracy assistance; and (3) USAID efforts to evaluate the impact of its democracy assistance. Illus.

The U.S. Agency for International Development's (USAID) Cuba Program provides assistance to support human rights and promote nonviolent democratic change in Cuba. From 1996 through 2008, the program awarded $83 million in grants to nongovernmental organizations and universities. In 2006, GAO found weaknesses in program oversight that increased the risk of grantees' improperly using grant funds and failing to comply with U.S. laws. In 2008, misuse of grant funds at organizations with the program's two largest grants was detected. GAO was asked to examine (1) actions that USAID has taken since 2006, or plans to take, to improve its award and oversight of the Cuba Program's grants and (2) actions that USAID has taken in response to the recently detected misuses of grant funds. GAO analyzed USAID and grantee records, conducted limited reviews at five grantees, and interviewed agency and grantee officials. GAO recommends that USAID (1) ensure that the Cuba Program is staffed at the level needed to fully implement planned monitoring activities and (2) periodically assess the program's overall efforts to reduce grantee risks.

U.S. DEMOCRACY ASSISTANCE IN BURMA: USAID and State Could Strengthen Oversight of Partners' Due Diligence Procedures