MCC Has Established a Records and Information Management Program but Has Not Reviewed Its Inventory of Compact Management Records

Beginning in 2006, MCC established a records and information  management program and subsequently established guidelines for  handling compact management records and other compact-related  information. The policy also includes a list specifying  the types of documents that MCC classifies as compact management  records. Documents that may be needed to support future  audits or analysis of MCC assistance. The policy also states that MCC is  responsible for ensuring that the partners understand (1) what is covered  by both compact management records and other compact-related  information and (2) that MCC or a U.S. government audit, legal, or  oversight entity may need to have access to such information for at least  5 years after the compact end date. Partner Countries’ Implementation of MCC Document Retention Requirements and Their Ability to Provide Requested Documents Vary

For the five closed compacts that we reviewed—MCC’s compacts with  Armenia, Benin, El Salvador, Ghana, and Mali—the MCAs provided  varying levels of detail about their plans for retaining compact-related  information to address MCC requirements. MCC’s compact closure guidelines do not provide a sample document  retention schedule specifying standard types of compact-related  information that most compacts would need to retain or provide. All five program closure plans that we reviewed contained some  discussion of filing and storing documents, but each MCA addressed the  guidelines’ three requirements differently. Such variation in approaches to  scheduling and storing compact documentation will make it more difficult  for MCC to verify that standard compact information is being retained in  all partner countries after the compacts have closed. According to the plans:
Armenia will store the documents at three different government  agencies: the state archives, the Ministry of Transport and  Communications, and the Foreign Financing Projects Management  Center (a foreign donor coordination unit);
Benin will store the documents at its national archives;
El Salvador has made a contractor responsible for the safekeeping of  compact-related files and documents;
Ghana’s MCA will continue as a foreign donor coordination unit after  compact closure and will retain all MCC documents; and
Mali will store compact-related information at the Office of the  Secretary General of the President (the “Office of the Segal”), which  was the office of the principal government representative under the  compact. Four of the governments provided all or most of the  documents we requested. MCC has previously  noted that political turmoil in Madagascar, whose government was  overthrown in 2009, impeded MCC’s ability to access documents. However, because its policies do not call for, and it  does not conduct, systematic reviews of the records it receives, MCC  cannot be sure that it is meeting the Federal Records Act’s requirement  that it preserve all records documenting its functions, activities, decisions,  and other important transactions. Recommendations

We recommend that MCC’s Chief Executive Officer take the following  three actions to strengthen MCC’s records and information management  program:  1. Develop a policy requiring—and conduct—periodic reviews of each  set of compact management records that MCC receives from partner  governments, to ensure that the records are complete. Revise program closure guidelines to include a sample document  retention schedule, specifying standard types of compact-related  information that most compacts would need to retain. 3.  Review MCC’s policy of delegating the storage of compact-related  information to partner governments, weighing the costs and benefits  of storing more of this information at MCC headquarters. Appendix I: Objectives, Scope, and Methodology

Our objectives were to (1) examine the Millennium Challenge  Corporation’s (MCC) records and information management program and  practices and (2) assess partner-country governments’ implementation of  MCC guidelines for retention and storage of compact-related information. In addition, we  interviewed officials at MCC and NARA. To assess partner governments’ implementation of MCC’s guidelines for  retention and storage of compact-related information, we selected five  closed compacts—Armenia’s, Benin’s, El Salvador’s, Ghana’s, and  Mali’s—to use as case studies. We chose these compacts because they  closed after May 2011 and therefore were subject to MCC’s Program  Closure Guidelines, which were finalized that month. We also conducted a test of MCC’s ability to retrieve compact-related  information from partner governments after compact closure.
Why GAO Did This Study

MCC has approved 26 bilateral compact agreements, providing a total of about $9.3 billion to help eligible developing countries reduce poverty and stimulate economic growth. MCC is subject to the Federal Records Act, which requires that agencies preserve all records documenting its functions and other important transactions.
GAO was asked to review MCC's management of records and information. This report (1) examines MCC's records and information management program and practices and (2) assesses partner governments' implementation of MCC's information retention guidelines. GAO analyzed MCC documents, interviewed MCC officials, and tested MCC's ability to retrieve compact-related information from five closed compacts. GAO selected these compacts because they closed after May 2011, when MCC's Program Closure Guidelines went into effect.

What GAO Found

In 2006, the Millennium Challenge Corporation (MCC) established a records and information management program to maintain and preserve its federal records. The program includes policies related to compact management records--a subset of MCC's federal records. These policies also address the handling of other compact-related information generated by MCC partner governments' accountable entities, which typically manage compact implementation until the 5-year compacts close. MCC's policies require that the entities transfer their compact management records to MCC for storage before compact closure. MCC also requires that partner governments retain compact-related information not classified as records, such as survey data and data quality reviews, for at least 5 years after their compacts close, to facilitate audits and analysis of MCC assistance. However, MCC does not require, and has not conducted, periodic reviews to determine whether it has received all compact-management records from the accountable entities consistent with federal internal control standards. As a result, MCC cannot be sure that it is meeting the federal requirement that it preserve all records documenting its functions, activities, and other transactions.
In reviews of five closed compacts--Armenia's, Benin's, El Salvador's, Ghana's, and Mali's--GAO found variation in the accountable entities' implementation of MCC document retention requirements and the partner governments' ability to retrieve requested compact-related information after the compacts closed. As required by MCC's compact closure guidelines, all five program closure plans that we reviewed contained some discussion of retaining and storing documents, but each accountable entity addressed the guidelines' requirements differently. MCC's guidelines do not provide a list specifying standard types of compact-related information that most compacts should retain. Such variation in approaches to retaining and storing compact-related information will make it more difficult for MCC to verify that standard compact information is retained in all partner countries after the compacts close. In addition, in a test of MCC's ability to retrieve documents from the partner governments after compact closure, GAO found that four of the five governments provided all or most requested documents within 30 days, but Mali's, which is involved in political turmoil, provided no documents. Political turmoil in Madagascar, another compact-recipient country, has also impeded MCC's ability to obtain compact information that may be needed to conduct future audits, evaluate project impact, or inform future compact designs.

What GAO Recommends

To strengthen MCC's records and information management program, MCC's Chief Executive Officer should (1) develop a policy requiring--and conduct--periodic reviews of MCC's compact-management records to ensure they are complete, (2) revise guidelines to include a sample document retention schedule specifying standard types of compact-related information compacts should retain, and (3) review MCC's policy of delegating storage of most compact-related information to partner governments. MCC agreed with all three recommendations and stated that they have already taken steps to implement them.