U.S. Intercontinental Growth Finance Company: Actions Essential to Boost Administration of Protection Output Act Financial loan Plan

What GAO Observed

The major mission of the U.S. Global Improvement Finance Company (DFC) is to lover with the personal sector to make investments in enhancement jobs around the planet. Considering the fact that the Defense Output Act (DPA) Loan Program began in June 2020 to respond to the COVID-19 outbreak and strengthen domestic provide chains, DFC and the Department of Defense (DOD) have obtained 178 programs. As of mid-Oct 2021, the companies have completed no loans (see determine). DFC officers claimed factors that slowed the process integrated far more applications and additional intricate interagency involvement than DFC predicted. To improve efficiency, DFC and DOD have prioritized health care programs and revised treatments, but they lack plans to examine the program’s all round efficiency. These types of options could tell conclusions about the long run use of DPA lending authority and raise congressional and community self confidence that application expenditures and hazards are affordable relative to results.

DFC Protection Creation Act (DPA) Loan Plan Timeline

DFC did not absolutely assess and react to the dangers of carrying out the DPA Personal loan Application together with its key mission in fiscal calendar year 2020 mainly because it was continue to producing an agency-large threat management solution when the application started off. DFC took some methods to mitigate threats when developing the DPA application, this sort of as minimizing the use of international advancement mission methods by using the services of focused team to control DPA financial loans. DFC took more ways in fiscal yr 2021 to evaluate challenges the company faces, which include building an company-large Danger and Prospect Profile. DFC is on monitor to entire this profile by October 2021. It has also determined the DFC workplaces that will be accountable for handling just about every threat, which include challenges related to the DPA Loan Program.

DFC has created methodologies to account for most, but not all of the prices to administer the DPA Loan Plan suitable for reimbursement by DOD. As of early Oct 2021, DFC experienced submitted six partial invoices, totaling about $1.4 million, for reimbursement. The invoices were partial due to the fact DFC lacks methodologies to work out all categories of reimbursable charges called for by federal value accounting criteria. For example, DFC has a methodology for allocating labor several hours, but not for the DPA program’s part of office place and devices shared with the rest of DFC. In addition to ensuing in incomplete invoices, DFC’s incomplete price tag accounting methodologies necessarily mean DFC and DOD simply cannot be particular of the full charges of establishing and operating the program.

Why GAO Did This Analyze

DFC, the U.S. government’s international advancement finance establishment, started operations in December 2019. In June 2020, DFC and DOD began applying particular DPA authorities to perform a 2-year domestic loan program to answer to the COVID-19 pandemic and reinforce suitable U.S. source chains, underneath the President’s Government Purchase 13922. Associates of Congress have expressed worry about DFC’s ability to control DPA routines alongside with its intercontinental enhancement mission.

Household of Associates Report 116-444 provided a provision for GAO to evaluate DFC’s actions beneath the DPA. This report examines the extent to which DFC has (1) made loans that contributed to the pandemic reaction and planned to assess software effectiveness (2) assessed and responded to the organizational risks of carrying out DPA actions along with its intercontinental development tasks and (3) carried out inner controls to guarantee comprehensive accounting of its DPA costs for DOD reimbursement. GAO reviewed DPA Bank loan Method techniques and paperwork, analyzed DFC info on mortgage programs, and interviewed DFC and DOD officers.