PUBLIC LAW 108-484

Microenterprise Results and Accountability

Act of 2004

In November 2003, GAO completed a comprehensive report on microenterprise programs administered by USAID which had been requested by the House International Relations Committee.

The report concluded that oversight and accountability of microenterprise programs administered by AID is weak and that is difficult to assess who is receiving grants and their amounts.

HR 3818, "Microenterprise Results and Accountability Act of 2004" was introduced to address the concerns in the report as well as a concern that too many program resources were being spent on expensive consultants and contractors rather than reaching entrepreneurs in the developing world.

The final version of HR 3818, signed into law by the President:

• Calls for a microenterprise office within USAID to approve strategic plans of field missions and coordinate preparation of the yearly report to Congress.
• Lifts restrictions on assistance provisions so that NGOs and consultants can compete for certain grants.
• Requires USAID to place a priority on awarding grants to NGO's that run microenterprise programs rather than expensive consultants and contractors, as has been the case. Contractors' overhead can run as high as 40 60%, while NGOs typically carry 20 30% overhead costs.
• Requires an annual report that demonstrates greater cost effectiveness and efficiency in the program as a result of the new law.

Text of the Microenterprise Results and Accountability Act (P.L. 108-484) [.pdf]