Report Contents
What OIG Evaluated
The Office of Inspector General (OIG) performed this evaluation to (1) determine the nature and extent to which the Department funds and participates in international organizations, and (2) evaluate the Department’s use of oversight provisions for the funds it contributes to them.
What OIG Found
OIG found that of the $9.3 billion provided to international organizations in FY 2024, $3.6 billion was assessed contributions levied by international organizations as requirements of membership. The remaining $5.7 billion was voluntary contributions, or discretionary financial assistance, designated for specific organizations and programs. According to Department officials, treaty obligations limited the Department’s ability to oversee or apply conditions to its $3.6 billion of assessed contributions. OIG found United Nations (UN) policies and legal requirements, including UN diplomatic privileges and immunities, the UN’s single audit principle, and the UN’s practice of commingling funding presented barriers to the Department’s ability to obtain detailed information about its contributions. Despite these limitations, the Department participated in international organizations’ executive boards, reviewed international organizations’ audit reports, and coordinated with other donors to strengthen oversight and reform. The Department had greater flexibility to include oversight provisions for its $5.7 billion in voluntary contributions. However, it did not consistently include such provisions in its contribution agreements.
Specifically, OIG found that the Department inconsistently applied oversight provisions to its agreements, with provisions varying by Department bureau and type of mechanism used to provide the funds. In contrast, OIG found that other donors to international organizations, such as the European Commission and the U.S. Agency for International Development (USAID), included more stringent requirements in their own standard funding agreement provisions. The inconsistent oversight provisions created a barrier to the Department and State OIG’s ability to thoroughly oversee funds voluntarily contributed to international organizations. To enhance accountability for IO contributions, Congress included a requirement in the Further Consolidated Appropriations Act, 2024 for the Department and USAID to seek to enter into written agreements with each international organization receiving U.S. funding. These agreements were to grant timely access to financial data and to other information relevant to the Inspectors General of the Department and USAID, and to the Comptroller General of the United States. OIG found that the Department had taken limited action to implement the statutory requirement and, 16 months after the enactment of the law, had not made any request to any international organization to enter into an overarching written agreement to provide the two OIGs and Government Accountability Office (GAO) with access to financial data and other information related to U.S. contributions.
What OIG Recommends
OIG made five recommendations to improve the Department’s oversight of voluntary contributions and strengthen its implementation of Section 7048(h).
Report Terms
Report Recommendations
The Bureau of Global Acquisition should coordinate with bureaus providing federal assistance to international organizations, review the provisions in use across the Department for voluntary contributions to international organizations, and revise the Federal Assistance Directive to standardize, to the extent practicable and appropriate, the Department’s oversight provisions for those funds.
The Bureau of Global Acquisition, in coordination with the Bureau of Personnel and Training, should coordinate with bureaus providing federal assistance to international organizations; review training offered on providing, managing, and overseeing funding to international organizations; and adjust formal training curricula to address any identified gaps related to the topic.
The Bureau of Global Acquisition should review the oversight provisions that other donors include in their voluntary contribution agreements with international organizations and revise the Department’s standard provisions to incorporate similar language where appropriate.
The Bureau of International Organization Affairs should coordinate implementation of Section 7048(h) of the Further Consolidated Appropriations Act, 2024 with all Department bureaus that provide contributions to international organizations.
The Bureau of International Organization Affairs should develop and implement a plan to take additional steps to comply with Section 7048(h) of the Further Consolidated Appropriations Act, 2024.