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GAO-08-577R 1 (2008-04-11)

handle is hein.gao/gaocrptawnz0001 and id is 1 raw text is: Sai Accountability * Integrity * Reliability United States Government Accountability Office Washington, DC 20548 April 11, 2008 The Honorable John J. Danilovich Chief Executive Officer Millennium Challenge Corporation 875 Fifteenth Street NW Washington, D.C. 20005-2221 Subject: Millennium Challenge Corporation: Analysis of Compact Development and Future Obligations and Current Disbursements of Compact Assistance Dear Mr. Ambassador: The Millennium Challenge Corporation (MCC), now in its fourth year of operations, provides aid to developing countries that have demonstrated a commitment to ruling justly, encouraging economic freedom, and investing in people. MCC provides monetary assistance to eligible countries through multiyear compact agreements to fund specific programs targeted at reducing poverty and stimulating economic growth.' MCC has received appropriations for fiscal years 2004 to 20082 totaling more than $7.5 billion, and has set aside about $6.4 billion of this amount for compact assistance. The President has requested an additional $2.225 billion for MCC for 2009, of which MCC plans to use $1.88 billion for compact assistance with countries currently eligible for compacts. MCC compact development is a four-phase process: (1) an eligible country submits a compact proposal; (2) MCC conducts a due diligence review of the proposed projects; (3) MCC and the country negotiate and sign the compact; (4) MCC and the country complete preparations, including developing disbursement plans, for the compact to enter into force. After the compact enters into force, compact implementation begins, and funds are obligated and disbursed. As of March 2008, MCC had selected 28 countries as eligible for compact assistance and had signed compacts with 16 of these countries. 'The Millennium Challenge Act of 2003 (Public Law 108-199, Division D, Section 605) authorizes MCC to provide assistance to countries that enter into public compacts with the United States. MCC has negotiated compacts with countries that contain agreed upon assistance objectives, responsibilities, implementation schedules, expected results, and evaluation strategies. The act stipulates that a compact may not last longer than 5 years and that MCC may have only one compact with a country at a time. 2Unless otherwise noted in this report, all years refer to fiscal years. 3About $1 billion has been set aside for MCC's threshold country program, administrative expenses, due diligence, monitoring and evaluation, and other costs. MCC's threshold program is designed to assist countries that have not yet qualified for compact assistance, but have demonstrated a significant commitment to improve their performance on MCC's eligibility criteria. GAO-08-577R MCC Compact Assistance Page 1

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