The United States has provided Egypt with almost $64 billion  in assistance since 1979, including about $40 billion in security  assistance and $24 billion in economic assistance. While U.S. strategic objectives and  overall levels of assistance generally did not change during this period,  the U.S. government did increase its focus on particular objectives and  adjusted some aspects of its assistance in response to Egypt’s political  transitions. After the removal of  President Morsi, the U.S. government adjusted its assistance again by  suspending some assistance, including holding the delivery of several  large military systems, and focusing its economic assistance more on  programs that directly benefit the Egyptian people and its security  assistance more on shared interests. U.S. Government’s Strategic Objectives for Egypt Have Generally Remained Constant since Fiscal Year 2009

U.S. strategic objectives for Egypt have generally remained constant  since fiscal year 2009, according to senior U.S. officials and State  documents. Egypt upholds the peace treaty with Israel and is a partner for regional  stability. After Egypt’s 2011 Revolution, U.S. Government Increased Its Focus on Economic Growth and Democracy and Governance Initiatives

Though overall U.S. strategic objectives and amounts of economic  assistance to Egypt have largely remained unchanged since fiscal year  2009, the prioritization of particular economic assistance efforts, and the  amount of funding allocated for them, changed after Egypt’s January  2011 revolution. The U.S. government also has resumed some of its security assistance. State and USAID Disbursed or Committed Almost $7.5 Billion of the Assistance Allocated for Egypt in Fiscal Years 2009 through 2014

Of the $9.3 billion in funds allocated for Egypt in fiscal years 2009 through  2014, State and USAID had disbursed or committed almost $7.5 billion,  or 80 percent, as of the end of fiscal year 2014 (see table 2). As of the end of fiscal year 2014, USAID had approximately $460 million  in unobligated ESF balances—equal to about 230 percent of its fiscal  year 2015 ESF budget request of $200 million. The $260 million in unobligated funds was originally allocated  for a cash transfer to the Egyptian government, but the administration  decided not to use the funds for that purpose after President Morsi’s   According to State officials, the fiscal  removal from power in July 2013.year 2011 funding allocated for a cash transfer has been transferred into  a no-year ESF account and is available for obligation until expended, and  the fiscal year 2012 funding allocated for a cash transfer has been  transferred into an extended-life ESF account and is available for  obligation until September 30, 2017.that although the administration had decided not to move forward with the  cash transfer, these funds had not been reprogrammed for other  purposes. Since fiscal year 2009, USAID has completed  15 evaluations covering more than $600 million in economic assistance  and has completed all of the evaluations required under its policy. These evaluations highlighted various achievements and challenges with  USAID-funded projects, and USAID officials noted that they have used  the results of these evaluations to inform decisions about their assistance. Although State officials said that they remain committed to  evaluating security assistance to Egypt and are considering alternate  approaches, State has not established a time frame for completing the  required security assistance evaluation. According to officials in State’s  Bureau of Political-Military Affairs, which manages security assistance  through FMF, the bureau identified security assistance to Egypt as a large program in February 2013, making it subject to evaluation requirements.Accordingly, State commissioned an external evaluation of security  assistance to Egypt, including assistance provided through both FMF and   The Statement of Work for the proposed evaluation noted that  IMET.examining the impact of security assistance to Egypt was critical given  the recent transitions in the Egyptian government and the role the  Egyptian Armed Forces played in those transitions. Standard practices in program management include, among other  things, developing a plan to execute projects within a specific time  frame. Given the resource  constraints the U.S. government faces, it is important that U.S. agencies  have plans for using existing resources in an effective and timely manner. In particular, U.S. officials noted  that it is difficult to determine the extent to which security assistance has  contributed to strategic objectives, such as promoting regional stability,  upholding the Egypt-Israel Peace Treaty, countering terrorism and  extremism, and maintaining key strategic benefits. State has stated its commitment to completing such an  evaluation but has not established specific time frames for doing so. Appendix I: Objectives, Scope, and Methodology

The objectives of this review were to examine, for fiscal years 2009  through 2014, the extent to which (1) U.S. strategic objectives and  assistance for Egypt evolved, (2) the U.S. government disbursed funds  allocated for assistance to Egypt, and (3) the U.S. government evaluated  the results of its assistance. We conducted audit work in Cairo, Egypt, and interviewed U.S.  officials from State, USAID, DOD, the Department of Homeland Security,  and the Department of Justice who manage assistance programs for  Egypt.
Why GAO Did This Study

Since the signing of the Egypt-Israel Peace Treaty in 1979, Egypt has been a key strategic partner of the United States and the recipient of almost $64 billion in U.S. security and economic assistance, including an annual average of about $1.3 billion in security assistance and $245 million in economic assistance since fiscal year 2009. State outlines strategic objectives for Egypt, State and USAID are primarily responsible for funding and managing assistance provided to Egypt, and the Department of Defense implements most security assistance. Since the January 2011 revolution that ended the almost 30-year presidency of Hosni Mubarak, Egypt has experienced a series of tumultuous political transitions that have raised concerns about how U.S. assistance is supporting strategic objectives.
This report examines, for fiscal years 2009 through 2014, the extent to which (1) U.S. strategic objectives and assistance evolved, (2) the U.S. government disbursed funds allocated for assistance to Egypt, and (3) the U.S. government evaluated the results of its assistance. To address these objectives, GAO analyzed U.S. government documents; interviewed U.S. officials in Washington, D.C.; and conducted fieldwork in Cairo, Egypt.

What GAO Found

U.S. strategic objectives and levels of assistance to Egypt have generally remained constant since fiscal year 2009, though the U.S. government adjusted some aspects of its assistance in response to events in Egypt. According to documents and senior U.S. officials, U.S. strategic objectives are to assist Egypt to be stable, democratic, and prosperous; uphold the peace treaty with Israel and advance regional stability; counter terrorism and extremism; and continue to provide strategic benefits to the U.S. government. After Egypt's 2011 revolution, the U.S. government increased its emphasis on democracy and economic growth initiatives. After President Morsi's removal in July 2013, the U.S. government suspended some assistance and adjusted its economic assistance to focus more on directly benefitting the Egyptian people and its security assistance to focus more on shared interests. The administration has now resumed some assistance, enabled in part by new legal authorities provided by Congress.
As of September 30, 2014, the U.S. government had disbursed or committed almost $7.5 billion (about 80 percent) of over $9.3 billion in assistance allocated for Egypt in fiscal years 2009 through 2014. The U.S. government allocated 98 percent of this funding from the Foreign Military Financing and Economic Support Fund (ESF) accounts. The Department of State (State) and the U.S. Agency for International Development (USAID) reported $460 million in unobligated ESF balances for Egypt—equal to about 230 percent of their fiscal year 2015 budget request of $200 million. This included $260 million in prior year funding allocated for a cash transfer to Egypt that the administration announced in October 2013 that it would not carry out. According to U.S. officials, these funds have not been reprogrammed for other purposes. Given U.S. government resource constraints, it is important that U.S. agencies have plans for using existing resources.
While USAID has evaluated some economic assistance, State has not evaluated the results of billions of dollars in security assistance to Egypt. Since fiscal year 2009, USAID has evaluated 15 projects in Egypt totaling over $600 million and has completed all of the evaluations required under its policy. USAID officials noted that they have used evaluations to inform decisions about assistance. In May 2014, State attempted to commission a first-ever evaluation of results of security assistance to Egypt but received no proposals in response to its solicitation. State officials said that the agency remains committed to completing such an evaluation and is considering alternate approaches, although State has not established specific time frames for doing so. Standard practices in program management include a plan to execute projects within a specific time frame.

What GAO Recommends

GAO recommends that (1) State and USAID develop a plan for other uses for $260 million previously allocated for a cash transfer and (2) State establish specific time frames for completing a required evaluation of security assistance. State and USAID generally agreed with these recommendations.