The United States’ share was about $174 million, or about 25 percent of the total. The United States’ share of the new assessment is about $39 million for each of these 3 years. We estimate that based on current U.S. Treasury borrowing rates and the Fund’s general practice for cashing the notes over time, the U.S. government could save between $2 million and $3 million on each of its annual contributions to the Multilateral Fund by using the promissory notes. Multilateral Fund Recipients

Since the establishment of the Multilateral Fund in 1991 through May 1997, the Fund’s Executive Committee has approved a total of 1,810 projects in more than 100 countries and allocated about $570 million to fund these projects. China has been the Fund’s largest recipient with almost $150 million, or 26 percent, of all approved funding. Purposes for Which the Multilateral Fund Has Been Used

There are seven broad purposes or categories for which the projects have been funded: (1) country program preparation, (2) institutional strengthening, (3) technical assistance, (4) training, (5) demonstration projects, (6) project preparation, and (7) investment projects. Accomplishments in Phasing Out Ozone-Depleting Substances

When fully implemented, projects approved to date are expected to phase out the annual use of almost 84,000 metric tons of ozone-depleting potential. This is about 40 percent of the estimated ODP-weighted consumption of ozone-depleting substances in Article 5 countries. Mechanisms to Ensure the Proper Use of Funds

The Multilateral Fund has a number of mechanisms in place that are designed to ensure that funds are properly accounted for and that the amount of funds allocated to specific projects is reviewed and verified. Administrative Support Costs Paid to the Implementing Agencies

In addition to funds allocated for projects of various types, the Multilateral Fund pays the implementing agencies for administrative support costs associated with project implementation. In November 1996, the Parties to the Montreal Protocol directed the Executive Committee to work toward the goal, over the next 3 years, of reducing agency support costs to an average of below 10 percent to make more funds available for other activities.
Why GAO Did This Study

GAO discussed its work on the Montreal Protocol Multilateral Fund, focusing on: (1) principal contributors to the Fund; (2) principal recipients of disbursements made from the Fund; (3) the purposes for which disbursements were made; (4) what has been accomplished with these disbursements; and (5) the controls and accountability mechanisms in place to ensure proper use of money disbursed from the Fund.

What GAO Found

GAO noted that: (1) the United States is the largest contributor to the Multilateral Fund, accounting for about 25 percent of the contributions; (2) for 1997 through 1999, the United States is expected to contribute about $39 million per year; (3) GAO estimates that the United States could avoid interest expenses of between $2 million and $3 million associated with its annual contributions by using an alternative payment method; (4) from its establishment in 1991 through May 1997, the Multilateral Fund has allocated about $570 million for projects in more than 100 Article 5 countries; (5) China has been the largest recipient, accounting for almost $150 million or 26 percent of the total; (6) there are seven broad purposes for which projects have been funded, but over 80 percent of the funds have been for investment projects, which help businesses to convert their operations from the use of ozone-depleting substances and to cease the production of goods containing them; (7) projects approved to date are projected to phase out the annual use of about 84,000 ozone-depleting potential-weighted metric tons of ozone-depleting substances, or about 40 percent of the estimated consumption of ozone-depleting substances, in Article 5 countries; (8) the Multilateral Fund has a number of mechanisms in place that are designed to ensure that funds are properly accounted for and that the amounts of funds allocated to specific projects are reviewed and verified; (9) the Multilateral Fund currently pays a 13-percent administrative fee to the implementing agencies for their costs associated with project implementation; and (10) however, efforts are under way to evaluate the appropriateness of the fees, with the goal of reducing the support costs to about 10 percent over the next 3 years.