Report Contents
Summary of Review
Pursuant to a congressional request, the Office of Inspector General (OIG) conducted research into the U.S. Department of State’s (Department) oversight of funds awarded to the National Endowment for Democracy (NED). NED is a private, nonprofit corporation—not an agency or establishment of the U.S. government—that supports democratic institutions, individual rights, electoral processes, and civil society around the world. From FY 2017 to FY 2025, Congress appropriated more than $2 billion in funding to NED.
Congress created and authorized appropriations for NED in 1983 through the National Endowment for Democracy Act (NED Act). The NED Act requires that NED comply with various requirements in order to receive its annual grant, including engaging an independent third party to perform an annual audit of NED’s accounts and submitting to a Department audit of NED’s financial transactions for each fiscal year.
During OIG’s research, OIG found that the Department was not conducting audits of NED financial transactions as required by law and as recommended in a 2015 OIG report. Therefore, OIG is again highlighting the need for the Department to conduct statutorily required oversight of NED funding.
OIG made one recommendation to the Bureau of Global Acquisitions (GA) to address the noncompliance identified in this report. GA agreed with the recommendation, and the Bureau’s formal response to a draft of this report is reprinted in its entirety in the appendix. OIG considers the recommendation resolved, pending further action