U.S. The Reform  Act directed the Secretary of State to, among other things, submit “a  multiyear strategy that…identifies a path toward the adoption of  necessary reforms that would lead to an assessed fee structure in which  no member state would pay more than 50 percent of the OAS’s assessed  yearly fees.” According to the Reform Act, it is the sense of Congress  that, among other things, it is in the interest of the United States, OAS  member states, and a modernized OAS that the OAS move toward an  assessed quota structure that (1) assures the financial sustainability of  the organization and (2) establishes, by October 2018, that no member  state pays more than 50 percent of the organization’s assessed fees. The United States Contributed Over Half of Total Assessed Contributions to the Four Organizations, but OAS Member States Have Voted to Consider a Reduction of the U.S. Share

In June 2017, we reported that the United States’ assessed contributions  constituted over 57 percent of total assessed contributions by member  states to four inter-American organizations from 2014 through 2016 (see  table 1). The  other three organizations use OAS’s system for determining member  states’ quotas to calculate their member states’ assessed contributions. Thus, any change in the OAS’s assessed quota structure should be  reflected at PAHO, IICA, and PAIGH, according to their respective  processes regarding the determination of assessed contributions. The U.S. share of assessed contributions may be reduced in the future. In response to that requirement, State told us that they  submitted to Congress a strategy that included working with OAS  member states toward ensuring that the OAS would not assess any  single member state a quota of more than 50 percent of all OAS  assessed contributions. Subsequent to our June 2017 report, at  the OAS General Assembly in June 2017, OAS member states voted to  draft a proposal to modify the quota structure to potentially reduce the  maximum assessed quota to below 50 percent. Agencies Provided Voluntary Contributions to OAS, PAHO, and IICA through Assistance Agreements but Could Enhance Their Monitoring of These Agreements

State, HHS, USAID, and USDA fund activities at OAS, PAHO, and IICA in  the form of assistance agreements. In our December 2017 report, we  reviewed 12 such agreements across the four agencies and found that  State and USDA did not include all key monitoring provisions in their  agreements as called for by applicable guidance. State has taken  corrective action since the grants were awarded. We also found that all  four agencies did not have full documentation of 18 of the 42 monitoring  activities required by the 12 assistance agreements we reviewed. State  and HHS both initiated corrective action prior to our review of the grants. U.S. Agencies Provided Voluntary Contributions through Assistance Agreements to OAS, PAHO, and IICA

The United States provided voluntary contributions to OAS, PAHO, and  IICA through project-specific assistance agreements, such as grants and  cooperative agreements. U.S. For example, USDA did not have full documentation,  such as financial reports, of any of its 10 required monitoring activities,  and USAID did not have full documentation of 2 of its 11 required  monitoring activities (financial and performance reports). The Strategic Goals of the Four Inter- American Organizations Are Predominantly Aligned with U.S. Agencies’ Strategic Goals

In our December 2017 report, we found that the strategic goals of the four  inter-American organizations are predominantly aligned with the high- level strategic goals for the Western Hemisphere documented by State,  USAID, HHS, and USDA, as shown in table 5. U.S. agencies, on an ongoing basis, evaluate  each inter-American organization to ensure U.S. and organization goals  are aligned. In addition, agencies may not have all the information they need to  make budgetary and programmatic decisions. In our December 2017 report, we recommended that (1) USDA ensure  inclusion of all monitoring provisions as part of agreements and (2)  USAID and USDA ensure full documentation of monitoring activities.
Why GAO Did This Study

The United States belongs to several inter-American organizations, including the OAS, PAHO, IICA, and PAIGH, which promote democracy, security, health care, agricultural development, and scientific exchange in the Western Hemisphere. The United States helps finance these organizations' operating expenses through assessed contributions. The United States also provides voluntary contributions through the federal funding of assistance agreements to OAS, PAHO, and IICA.
This testimony is based on GAO's June and December 2017 reports that, among other things, (1) determined the amounts and percentages of U.S. assessed contributions to the four organizations, (2) assessed the extent to which U.S. agencies included and documented key monitoring provisions as part of their assistance agreements, and (3) assessed the extent to which the organizations' strategic goals align with those of U.S. agencies.
GAO analyzed documents and interviewed officials from State, HHS, USAID, USDA, and the four organizations. GAO analyzed the four organizations' audited financial reports and a nongeneralizable sample of 12 assistance agreements awarded by State, USAID, HHS, and USDA active in calendar years 2014 through 2016.

What GAO Found

While the United States' assessed contributions constituted over 57 percent of total assessed contributions by member states to four inter-American organizations from 2014 to 2016, the U.S. share may be reduced in the near future (see table). In response to a statutory requirement, the U.S. Department of State (State) said it submitted to Congress a strategy that included working with the Organization of American States (OAS) member states toward ensuring that the OAS would not assess any single member state a contribution amounting to more than 50 percent of all OAS assessed contributions. At the OAS General Assembly in June 2017, OAS member states voted to draft a proposal to modify its system for determining member states' assessed contributions to potentially reduce the maximum assessed contribution to below 50 percent. The other three organizations use OAS's system for setting assessed contributions. Hence, any change in contributions at OAS should also be reflected at Pan American Health Organization (PAHO), Inter-American Institute for Cooperation on Agriculture (IICA), and the Pan-American Institute of Geography and History (PAIGH).
State, the Department of Health and Human Services (HHS), the U.S. Agency for International Development (USAID), and the U.S. Department of Agriculture (USDA) provide voluntary contributions to OAS, PAHO, and IICA in the form of assistance agreements (e.g., grants and cooperative agreements). In December 2017, GAO reported that its review of 12 such agreements across the four agencies found that State and USDA did not include all key monitoring provisions in their agreements as called for by applicable guidance. State has since taken corrective action. GAO also found that all four U.S. agencies did not have full documentation of 18 of the 42 monitoring activities required by the 12 assistance agreements GAO reviewed. For example, USDA did not have full documentation, such as financial reports, of any of its 10 required monitoring activities, and USAID did not have full documentation of 2 of its 11 required activities. State and HHS said they initiated corrective action before our review. If an agency does not have full documentation of monitoring activities, it may lack information needed to make appropriate budgetary and programmatic decisions.
GAO found that the strategic goals of the OAS, PAHO, IICA, and PAIGH are predominantly aligned with the strategic goals of State, USAID, HHS, and USDA. According to agency officials, the agencies employ mechanisms to ensure that assistance agreements with these organizations align with U.S. goals.

What GAO Recommends

In its December 2017 report, GAO recommended that (1) USDA ensure inclusion of all monitoring provisions as part of agreements and (2) USAID and USDA ensure full documentation of monitoring activities. USDA and USAID concurred with GAO's recommendations.