Summary: The Agency for International Development (AID) provided nearly $10 billion in cash grant assistance during fiscal years 1989-92. This report (1) analyzes the use of cash grant assistance to buy U.S. goods and services, (2) assesses AID's systems for ensuring accountability and monitoring of the use of cash grant assistance, and (3) evaluates AID's basis for deciding when to use cash grants rather than other forms of assistance to achieve U.S. objectives. AID prefers, but does not require, that cash grant recipients use the money to buy U.S. goods. AID reports that for fiscal year 1992, recipient countries used an estimated 83 percent of all cash grants to repay debts; about 17 percent was used to purchase goods, of which about half was used to directly purchase U.S. goods, but these data are of doubtful accuracy. At the six missions GAO visited--Bolivia, Egypt, Ghana, Nicaragua, the Philippines, and Tanzania--AID generally maintained adequate accountability and monitoring controls as required by law and AID guidance. GAO recommends, however, that AID provide clear guidance to overseas missions on choosing among various forms of assistance, including cash grants, and that the missions fully document the reasons for their choices.
