Aid to Kenya

Pursuant to a congressional request, GAO reviewed the effectiveness of the Agency for International Development's (AID) and the Department of Defense's (DOD) accountability and control procedures over economic and military assistance programs to Kenya, focusing on: (1) how the Kenyan government controlled and used U.S. aid; and (2) the adequacy of program controls.
GAO found that: (1) between 1986 and 1991, the United States transferred approximately $125 million in cash and commodities to Kenya to generate local currency; (2) local currency funds remained vulnerable to misuse or diversion due to weaknesses in AID monitoring and documentation controls over program expenditures, withdrawals, and use; (3) AID strengthened its policy guidance for local currency accountability, however, guidelines for existing local currency programs remained vague; (4) AID lacked adequate oversight over whether local currency fund expenditures were meeting program objectives; (5) since 1969, the United States has made guaranteed low-income housing improvement loans totalling $50 million; (6) delinquent housing loan repayments and the growing insolvency of the housing programs have delayed funding for other ongoing U.S. programs; (7) a local Kenyan government board was responsible for delays in food aid distribution; (8) since 1987, the United States has provided $47.3 million in military aid to Kenya; (9) Kenyan inventory controls over U.S. supplied military equipment were often weak and inadequate; and (10) there was a lack of integration between the Kenyan Army helicopter unit and the rest of the Kenyan Army and uncertainty existed about the potential use of U.S.-supplied helicopters.