USAID Has Issued Antiterrorism Policies and Procedures for Program Assistance for the West Bank and Gaza and Developed a Key Antiterrorism Compliance Review Process

In March 2006, the USAID West Bank and Gaza mission approved and  issued various antiterrorism policies and procedures for program  assistance for the West Bank and Gaza in a document known as Mission  Order 21, which it last updated in October 2007. This process is  reflected in formal mission notices. The antiterrorism certification is  generally an attachment to the award documentation that certifies, in part,  that the “recipient did not provide…and will take all reasonable steps to  ensure that it does not and will not knowingly provide material support or  resources to any individual or entity that commits, attempts to commit,  advocates, facilitates, or participates in terrorist acts.”

			Mandatory Provisions

Mission Order 21 requires that all prime awards and subawards for  contracts, grants, and cooperative agreements contain two mandatory  provisions (which are included as clauses in award documents): a  provision prohibiting support for terrorism and a provision restricting  funding to facilities that recognize or honor an individual or entity that  commits or has committed terrorism. USAID Developed a Key Antiterrorism Compliance Review Process in 2008 That Is Reflected in Formal Mission Notices

			USAID Developed a Key Compliance Review Process in 2008

In July 2008, the USAID mission established a post-award compliance  review function under the Office of Contracts Management to assess  implementing partners’ compliance with the requirements of the  antiterrorism procedures contained in Mission Order 21 when making  subawards. 2). That review and GAO’s examination of prime awards and a  generalizable sample of subawards from fiscal years 2012–2014 found  that USAID generally complied with requirements for vetting as well as  inclusion of required antiterrorism certification and mandatory provisions  in awards. GAO’s review of 48 prime awards and a random generalizable sample  of 158 subawards associated with these prime awards, covering the  period of fiscal years 2012–2014. In the universe of 14,436  subawards assessed by the compliance review reports provided by  USAID, 1 prime awardee failed to vet a subawardee. These prime awardees were required to  address all noncompliance weaknesses and obtain the proper vetting  approvals for the subawardee and all applicable trainees, according to  USAID. In addition, 3 prime awardees  conducted similar late vetting for 219 USAID-funded trainees. The  compliance review reports identified a single instance where a prime  awardee failed to obtain an antiterrorism certificate from a  subawardee. According to USAID officials, this prime awardee was  required to amend the subaward paperwork to include the  antiterrorism certificate. GAO’s review found that prime awards and subawards were in  compliance with antiterrorism certification requirements. The reports identified  9 prime awardees that collectively made a total of 449 subawards  without the two mandatory provisions included. GAO’s review found that prime awards were in compliance with the  two mandatory provisions requirements and the subawards were  generally in compliance. We found that 155 of the  158 subawards, or 98 percent, included the mandatory antiterrorism  clause and facility naming clause. Appendix I: Objectives, Scope, and Methodology

This report examines the extent to which (1) the U.S. Agency for  International Development (USAID) has established antiterrorism policies  and procedures for program assistance for the West Bank and Gaza and  (2) USAID complied with requirements for vetting, antiterrorism  certification, and mandatory provisions for program assistance for fiscal  years 2012–2014. To determine the extent to which the USAID West Bank and Gaza  mission complied–at the prime and subaward levels–with its vetting  requirements as well as inclusion of antiterrorism certification and  mandatory provisions for program assistance to provide reasonable  assurance that its programs do not provide support to entities or  individuals associated with terrorism, we reviewed key legal and other  requirements as well as USAID’s policies and procedures for ensuring  compliance with Mission Order 21. We also  interviewed several of USAID’s implementing partners that had received  relatively large dollar contracts from USAID. However, vetting was conducted in 1 instance after  the award was signed.
Why GAO Did This Study

Since 1993, the U.S. government has committed more than $5 billion in bilateral assistance to the Palestinians in the West Bank and Gaza. Program assistance for development is a key part of the United States' commitment to a negotiated two-state solution to promote peace in the Middle East, and program funding is primarily administered by USAID.
Congress included a provision in the law for GAO to conduct an audit of all funds provided for programs in the West Bank and Gaza, including the extent to which programs comply with certain antiterrorism requirements. This report examines the extent to which (1) USAID has established antiterrorism policies and procedures for program assistance for the West Bank and Gaza and (2) USAID complied with requirements for vetting, antiterrorism certification, and mandatory provisions for program assistance for fiscal years 2012–2014.
GAO reviewed antiterrorism laws, policies, procedures, and USAID documents that pertain to assistance programs and interviewed USAID and State officials. GAO also assessed a random generalizable sample of 158 awards to USAID's implementing partners using funds provided in fiscal years 2012–2014 from the Economic Support Fund account to determine the extent to which the awards were granted in compliance with antiterrorism policies and procedures.

What GAO Found

In 2006, the U.S. Agency for International Development (USAID) issued key antiterrorism policies and procedures—known as Mission Order 21 (the order)—to help ensure that program assistance for the West Bank and Gaza would not inadvertently provide support to entities or individuals associated with terrorism. The order, updated in 2007, outlines requirements and procedures for (1) vetting, or investigating a person or entity for links to terrorism; (2) obtaining an antiterrorism certification from awardees; and (3) including in awards two mandatory provisions that prohibit support for terrorism and restrict funding to facilities named after terrorists. In 2008, USAID West Bank and Gaza established a post-award compliance review process to identify weaknesses in compliance with applicable requirements in the order, which USAID works to resolve. This process is a key function that allows USAID to provide reasonable assurance that all prime awards and subawards are in compliance with the order. The compliance review process is described in notices issued by the mission from 2008 to 2012. For the purposes of this report, a prime awardee is an organization that directly receives USAID funding to implement projects, while a subawardee is an organization that receives funding from prime awardees.
USAID's compliance reviews and GAO's examination of prime awards and subawards for fiscal years 2012-2014 found that USAID generally complied with requirements for vetting and inclusion of antiterrorism certification and mandatory provisions in awards. Regarding vetting, the compliance review reports—which covered more than 14,000 subawards—found, for example, one subawardee and 18 trainees for which no vetting was conducted. According to USAID, the subawardee and trainees were subsequently vetted and found eligible for program assistance. GAO's review of a random generalizable sample of 158 subawards found that 157 had applicable vetting conducted before the award. Regarding antiterrorism certification requirements, the compliance reviews identified one instance where a prime awardee failed to obtain an antiterrorism certification from a subawardee. GAO's review found that both prime awards and subawards were in compliance with antiterrorism certification requirements. Regarding mandatory provisions, the compliance reviews identified nine prime awardees that made a total of 449 subawards without including the two provisions. GAO's review found that 155 subawards (98 percent) had included the provisions in the award documentation. USAID required noncompliant awardees to provide antiterrorism certification and mandatory provisions for active awards, according to USAID.

What GAO Recommends

GAO is not making any recommendations in this report.