African Development Foundation: Retention of Funds from Strategic, B-300218, March 17, 2003

B-300218 Mar 17, 2003 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights ADF does not have statutory authority to contract with the government of Guinea to provide services on behalf of Guinea to certain development sites selected by Guinea but who are not ADF grantees. Since ADF does not have statutory authority to enter into contracts to provide services. BACKGROUND The African Development Foundation (ADF) is a U.S. government corporation that supports community-based. " which is not an ADF program. Here the government of Guinea is contracting with ADF and paying it to provide services to communities which are not participating in an ADF program. DISCUSSION The question before us is whether ADF may retain funds received from these four partnerships. The agency must have express authority to retain moneys collected. View Decision African Development Foundation: Retention of Funds from Strategic, B-300218, March 17, 2003 DIGEST DECISION The President of the African Development Foundation (ADF) has requested an advance decision under 31 U.S.C. Sec. 3529 regarding the authority of the Foundation to retain funds it receives from partnerships with four African governments: Botswana, Namibia, Guinea, and the State of Jigawa, Nigeria. We conclude that ADF's gift acceptance authority permits it to accept funds from Botswana, Namibia and Jigawa State because those governments donate funds to supplement amounts that ADF grants to recipients within their respective states. Unlike the other three partnerships, ADF's partnership with Guinea involves a contract where Guinea pays ADF for services. Since ADF does not have statutory authority to enter into contracts to provide services, it should terminate its contract with Guinea and deposit any proceeds from that contract into the general fund of the Treasury as miscellaneous receipts. As we discuss below, ADF might consider restructuring its arrangement with Guinea along the same lines as its arrangements with Botswana, Namibia and Jigawa. BACKGROUND The African Development Foundation (ADF) is a U.S. government corporation that supports community-based, self-help initiatives to alleviate poverty and promote broad-based, sustainable development in Africa. Specifically, ADF supports new export trade and investment activities, improved natural resource management, and AIDS prevention and mitigation through direct grants to small and micro-enterprises and community-based organizations that generate income and employment for low-income people. In recent years ADF has helped beneficiaries leverage grants, loans and loan guarantees from other sources through what ADF terms "strategic partnerships" with national and state governments in Africa, national and regional development banks, other international development assistance agencies, and the private sector. See, e.g. Foreign Operations, Export Financing, and Related Programs Appropriations, Hearings Before the Subcomm. On Appropriations, Part 1A Justification of Budget Estimates 107th Cong. 1219 et seq. (March 2002) (African Development Foundation, Congressional Budget Justification, Fiscal Year 2003); see generally www.adf.gov. ADF has undertaken four such strategic partnerships with Botswana, Namibia, Guinea, and the State of Jigawa, Nigeria. ADF has signed multi-year Memoranda of Understanding (MOU) with these governments, whereby they agree to share the costs of ADF development programs in their respective states. Under the terms of the MOU with Botswana, Namibia and Jigawa State, these governments make quarterly contributions to ADF for 50% of the amount of grants that ADF has awarded in their respective countries that meet certain agreed-upon criteria set out in the MOU. According to ADF, these partnerships enable ADF to "leverage resources for grassroots development, promote the use of participatory development methodology in development strategies, and facilitate coordination with others involved in development assistance." Mem. to Nathaniel Fields, Pres., ADF, from Doris Martin, Gen. Counsel, ADF, Sept. 9, 2002 at 2. The partnership with the government of Guinea operates differently. Here the National Directorate of Decentralization, an arm of the government of Guinea, has contracted with ADF, and pays ADF, to furnish technical assistance as a "field operator" to rural communities that participate in Guinea's "Village Community Support Program," which is not an ADF program. Though ADF ordinarily provides technical assistance to ADF grantees, here the government of Guinea is contracting with ADF and paying it to provide services to communities which are not participating in an ADF program. DISCUSSION The question before us is whether ADF may retain funds received from these four partnerships. The Miscellaneous Receipts Statute, 31 U.S.C. Sec.