MCC's First Year of Operations - GAO Report Highlights

For two days, April 26 and 27, the United States Congress held hearings on the Millennium Challenge Corporation, for the Senate Foreign Relations Committee and the House International Relations Committee, respectively. The Congress wanted a full report on the MCC's first year of operations.In his introductory remarks during the HIRC hearing, Chairman Henry Hyde (IL), expressed some growing concern about the MCC's progress:

"The same observers who once received this initiative with such optimism now feel underwhelmed by the cautious pace and the modest scope of the MCA writ large...a program struggling to get off the ground and funding levels for compacts now emerging that lack the boldness necessary to break the cycle of poverty in countries prepared to take that step."

Hyde worried that MCC's incremental approach and the lack of urgency in the implementation of the MCA initiative belied the original vision. The slow pace and the lack of urgency could eventually make the MCA just another development program, with marginal impact, he warned.To help Congress and other key stakeholders understand MCC's performance, David Gootnick, Director for International Affairs and Trade at the U.S. Government Accountability Office, testified before both the Senate Foreign Relations Committee and the House International Relations Committee.Gootnick's team monitored MCC's operations over the last 15 months. The GAO analyzed MCC's process for country MCA eligibility and the selection criteria for the Threshold Program. In his report to Congress, Gootnick also discussed progress in compact development, coordination with key stakeholders and the establishment of management structures and accountability mechanisms.The GAO report, which is now available, recommends that MCC's Chief Executive Officer continue to develop and implement overall plans and related time frames to establish corporate-wide accountability, internal control, and human capital management.Furthermore, the GAO also recommends that MCC's Board of Directors consider, in addition to its statutory responsibilities, other responsibilities associated with sound and effective governance.CGD's Senior Fellow Steve Radelet also testified at the HIRC hearing.