Freshwater Programs: Federal Agencies' Funding in the United	 
States and Abroad (11-MAR-05, GAO-05-253).			 
                                                                 
As the world's population tripled during the past century, demand
for the finite amount of freshwater resources increased six-fold,
straining these resources for many countries, including the	 
United States. The United Nations estimates that, worldwide, more
than 1 billion people live without access to clean drinking water
and over 2.4 billion people lack the basic sanitation needed for 
human health. Freshwater supply shortages--already evident in the
drought-ridden western United States--pose serious challenges and
can have economic, social, and environmental consequences.	 
Multiple federal agencies share responsibility for managing	 
freshwater resources, but consolidated information on the federal
government's financial support of these activities is not readily
accessible. You asked GAO to determine for fiscal years 2000	 
through 2004 how much financial support federal agencies provided
for freshwater programs in the United States and abroad. For the 
purposes of this report, freshwater programs include		 
desalination, drinking water supply, flood control, irrigation,  
navigation, wastewater treatment, water conservation, water	 
dispute management, and watershed management.			 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-05-253 					        
    ACCNO:   A19156						        
  TITLE:     Freshwater Programs: Federal Agencies' Funding in the    
United States and Abroad					 
     DATE:   03/11/2005 
  SUBJECT:   Agricultural programs				 
	     Environmental monitoring				 
	     Federal agencies					 
	     Flood control management				 
	     International cooperation				 
	     Potable water					 
	     Wastewater management				 
	     Wastewater treatment				 
	     Water conservation 				 
	     Water pollution control				 
	     Water quality					 
	     Water resources conservation			 
	     Water supply management				 
	     Water treatment					 
	     Federal aid programs				 
	     Federal funds					 
	     Federal grants					 
	     Financial analysis 				 
	     Program evaluation 				 
	     International organizations			 
	     Standards (water quality)				 

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GAO-05-253

Report to Congressional Requesters

March 2005

FRESHWATER PROGRAMS

Federal Agencies' Funding in the United States and Abroad

Contents

Tables

Figure

March 11, 2005Letter

The Honorable George Radanovich Chairman, Subcommittee on Water and Power
Committee on Resources House of Representatives

The Honorable Ken Calvert House of Representatives

As the world's population tripled during the past century, demand for
accessible freshwater-which makes up less than 1 percent of the earth's
water-increased six-fold, straining freshwater resources for many
countries, including the United States. In the United States, with
increasing demand for the finite amount of freshwater available, large
portions of the country could face water shortages in the next few
decades. Freshwater supply shortages-already evident in the drought-ridden
West-pose serious challenges and can have significant economic, social,
and environmental consequences. Water shortages reduce farmland and forest
productivity and damage plant and animal species, wildlife habitat, and
air and water quality. In addition, water shortages can create potential
disputes between various water users, managers, and government entities.
Ensuring future water supplies to meet these various and sometimes
competing needs may require significant investments. For example, the
Environmental Protection Agency (EPA) estimated that utilities would need
to invest over $150 billion just to repair, replace, and upgrade the
nation's drinking water infrastructure over the next two decades.

Freshwater supply issues are not unique to the United States-by 2025,
one-third of the world's population is likely to live in countries facing
freshwater shortages. The United Nations highlighted these concerns when
it declared 2003 as the International Year of Freshwater. In addition, it
estimates that, worldwide, more than 1 billion people live without access
to clean drinking water, and that over 2.4 billion people lack the basic
sanitation needed for human health. Furthermore, the Secretary-General
notes that water-related diseases are responsible for 80 percent of all
illnesses and deaths in developing countries. Finally, the World Bank
estimates that countries will need to double the $70 billion to $80
billion they currently invest annually to provide clean drinking water and
basic sanitation for the world's population. To help address these global
challenges, the United States contributes financial support to foreign
countries and international organizations for various freshwater projects.

Multiple federal agencies share responsibility for managing freshwater
resources.1 Agencies provide services through direct federal spending or
financial assistance through grant, loan, and loan guarantee programs to
other parties.  Direct federal spending includes payments that agencies
make for services provided by federal employees and federal contracts for
freshwater programs in the United States and abroad. Freshwater programs
include, among other things, desalination, drinking water supply, flood
control, irrigation, navigation, wastewater treatment, water conservation,
water dispute management, and watershed management activities.
Additionally, the United States makes financial contributions to several
binational commissions that support freshwater projects along U.S. borders
and to international organizations, such as the World Bank and the United
Nations, that support freshwater projects around the world. However,
consolidated information on the federal government's financial support of
freshwater programs in the United States and abroad does not currently
exist. This information is not readily accessible because definitions of
freshwater programs and the availability of financial data vary across
agencies.

In this context, you asked us to determine for fiscal years 2000 through
2004 how much financial support federal agencies provided for freshwater
programs in the United States and abroad.

To address these objectives, we identified federal agencies that support
freshwater programs in the United States and abroad by reviewing
Congressional Research Service, GAO, and United Nations reports and the
Catalog of Federal Domestic Assistance. We conducted initial interviews
with officials from the agencies we identified to confirm that the
agencies provided financial support for these programs during fiscal years
2000 through 2004 and focused our efforts on those agencies responsible
for the majority of the federal financial support. We used a questionnaire
to gather detailed information from agencies that track freshwater
expenditures. In this report, we have only included data on the financial
support that agencies provided specifically for the following freshwater
programs: desalination, drinking water supply, flood control, irrigation,
navigation, wastewater treatment, water conservation, water dispute
management, and watershed management. We did not include financial support
for programs that may indirectly provide financial support for freshwater
projects because information on these programs' freshwater activities is
not tracked separately. As a result, the financial information in this
report is an estimate of the minimum amount of funds agencies provided for
freshwater programs. In addition, although we requested program-level
financial information, we opted to present this information at the
agency-level because agencies' definitions of freshwater programs vary. We
conducted follow-up interviews with respondents to confirm the information
and to clarify the information they provided, if necessary. A more
detailed description of our scope and methodology is presented in appendix
I. We performed our work between March 2004 and January 2005, in
accordance with generally accepted government auditing standards.

Results in Brief

Of the estimated $52 billion in total financial support provided in the
United States and abroad for freshwater programs during fiscal years 2000
through 2004, about $49 billion came from 27 federal agencies specifically
for domestic programs. Three agencies-EPA, the Army Corps of Engineers
(Corps), and the Department of Agriculture's (Agriculture) Rural Utilities
Service-accounted for over 70 percent of the total federal support for
domestic programs. Domestic drinking water supply programs received
support from 18 agencies. Agencies provided most of the domestic financial
support through grant programs and direct federal spending, over $22
billion and about $22 billion, respectively. We also identified domestic
programs that may provide financial support for freshwater activities, but
are not included in the $49 billion because supporting freshwater
activities is not the programs' primary purpose and the amounts spent on
freshwater activities could not be readily identified. Also included in
the domestic program is about $175 million that the United States provided
to three binational commissions to support freshwater activities along
both sides of the U.S. borders during fiscal years 2000 through 2004.

Federal agencies provided an estimated $3 billion in federal financial
support for freshwater programs abroad during fiscal years 2000 through 
2004. Of the about $3 billion in total international funding, the U.S.
Agency for International Development (USAID) and the Department of Defense
(Defense) provided about $1 billion for freshwater projects in Afghanistan
and Iraq during fiscal years 2002 through 2004. USAID accounted for the
majority of the international support. International wastewater treatment
and watershed management programs received the most U.S. support. Agencies
provided most of the support through grants. Some federal agencies, such
as the Department of the Interior's (Interior) Bureau of Reclamation
(Reclamation) and the Corps, conducted work on freshwater projects in
foreign countries, but funding for these projects also originated from
USAID and the Department of State (State). In addition to providing
financial support directly for freshwater programs abroad, the United
States indirectly supports such programs through its contributions to
numerous international organizations, such as the World Bank.

Background

The federal government supports multiple freshwater programs in the United
States and abroad. Although agencies vary in how they describe their
freshwater programs (activities, projects, or initiatives), the following
terms generally describe the freshwater efforts covered in this review:

o Desalination-Activities and/or infrastructure related to the process of
removing salts from saline water to provide freshwater.

o Drinking water supply-Activities and/or infrastructure designed to
improve access to and quality and availability of clean drinking water.

o Flood control-Activities related to dredging, hydrologic forecasting,
and the construction, operation, and maintenance of infrastructure
designed to reduce flood damage.

o Irrigation-Activities and/or infrastructure related to the diversion,
distribution, delivery, and drainage of water for agricultural purposes.

o Navigation-Activities and/or infrastructure related to dredging and the
construction, operation, and maintenance of infrastructure (e.g., locks,
channels, and dams), primarily for river-based transportation.

o Wastewater treatment-Activities and/or infrastructure designed to manage
and treat storm water and domestic and/or industrial wastewater.

o Water dispute management-Adjudication, litigation, and negotiation
activities to prevent or resolve water-related disputes, including water
settlement payments.

o Water conservation-Activities and/or infrastructure designed to reclaim,
recycle, and/or reuse potable or nonpotable water.

o Watershed protection, restoration, and management (watershed
management)-Activities and/or infrastructure related to nonpoint source
pollution prevention, wetlands restoration, and land-based activities
related to source water protection and coastal zone management.

Federal agencies provide financial support for freshwater programs through
direct federal spending and grant, loan, and loan guarantee programs. For
the purposes of this report, direct federal spending is a general term
used to describe, among other things, work performed by federal employees
or through contracts with private and nongovernmental entities on the
federal government's behalf. For example, direct federal spending includes
the financial support spent by federal agencies for, among other things,
the construction of reservoirs for flood control and irrigation. Grants,
loans, and loan guarantees are different types of financial assistance
programs provided by federal agencies to help communities with projects,
such as construction of water and wastewater treatment facilities. In
addition to providing financial support on the direct costs of freshwater
programs, such as capital construction and operations and maintenance
costs, agencies also provide funds for technical assistance and research
and development efforts.

Agencies rely on several sources of funding-including annual
appropriations from the general fund and from dedicated funding sources,
such as trust funds-to provide financial support for these programs.
Agencies obligate these funds for multiple purposes as they implement
their programs. Obligations represent amounts for orders placed, contracts
awarded, services received, and similar transactions during a given period
that will require payments during the same or a future period. Obligations
differ from expenditures in that an expenditure is the issuance of a
check, disbursement of cash, or electronic transfer of funds made to
liquidate an obligation. In addition, in some circumstances expenditures
fulfilling an obligation may occur during subsequent years. Consequently,
obligations provide the best estimate of what an agency plans to spend
during a fiscal year.

The extent to which agencies track their freshwater efforts vary. Agencies
tend to track the financial support they provide to large freshwater
programs, such as EPA's Drinking Water State Revolving Fund. Some
programs, such as Agriculture's Conservation Reserve Program, serve
multiple purposes and specific program components, such as irrigation
activities, are not specifically tracked. Similarly, freshwater projects
(e.g., a dam) can serve multiple purposes, providing benefits such as
water storage, flood control, and generation of hydroelectric power. The
financial support provided for the overall project cost is generally
available, but the costs for specific components of the project are not
readily available. In addition, definitions of freshwater programs can
vary depending on the agency's role. An agency that is responsible for
maintaining portions of the nation's waterways may include lock
infrastructure and waterway operations and maintenance activities in its
navigation program; however, other agencies, which are responsible for
research and development of freshwater resources, may include stream flow
and sedimentation research within their navigation programs. Because of
these differences, agencies may not be tracking their freshwater
expenditures consistently across agencies. As such, financial information
reported by the agencies on the federal government's financial support of
freshwater programs in the United States and abroad is an estimate of the
minimum amount of funds provided for these efforts.

Federal Agencies Provided an Estimated $49 Billion for Domestic Freshwater
Programs during Fiscal Years 2000 through 2004

Of the 27 agencies that provided about $49 billion in federal financial
support specifically for freshwater programs in the United States during
fiscal years 2000 through 2004, 3 agencies accounted for over 70 percent
of the total.2 EPA provided about 31 percent of the total support, the
Corps accounted for about 26 percent of the total, and Agriculture's Rural
Utilities Service accounted for about 16 percent of the total. See table 1
for more information on the federal financial support provided for
domestic freshwater programs.

Table 1: Federal Agencies' Estimated Financial Support for Domestic
Freshwater Programs, Fiscal Years 2000 through 2004

                                        

    Dollars in                                                             
     millions                                                              
                            Fiscal  
                             year   
Department or      2000     2001      2002      2003     2004     Total 
      agency                                                               
  Agriculture                                                              
  Agricultural                                                             
  Research           $87.9    $98.9    $103.9    $114.0   $119.1    $523.8 
  Service                                                                  
  Cooperative                                                              
  State Research,                                                          
  Education, and      27.7     31.1      33.3      39.7     41.1     172.9 
  Extension                                                                
  Service                                                                  
  Economic                                                                 
  Research             1.0      1.0       1.0       0.9      0.8       4.7 
  Service                                                                  
  Farm Service         0.0      0.1      13.2       5.9      5.4      24.6 
  Agencya                                                                  
  Forest Serviceb     59.0     52.1      59.3      62.1     59.0     291.5 
  Natural                                                                  
  Resources          270.3    259.1     403.1     473.7    445.9   1,852.0 
  Conservation                                                             
  Service                                                                  
  Rural Utilities  1,311.1  1,340.5   2,065.4   1,388.8  1,471.7   7,577.4 
  Service                                                                  
  Subtotal        $1,756.9 $1,782.7  $2,679.1  $2,085.1 $2,142.9 $10,446.7 
  Commerce                                                                 
  Economic                                                                 
  Development        $56.9    $87.1     $59.3     $56.4    $77.8    $337.5 
  Administration                                                           
  National                                                                       
  Oceanic and                  35.2      36.3      41.7     42.5      46.6 202.3
  Atmospheric                                                              
  Administrationc                                                          
  Subtotal           $92.1   $123.4    $101.0     $98.9   $124.3    $539.8 
  Defense                                                                  
  Army Corps of   $2,485.8 $2,614.0  $2,656.9  $2,702.6 $2,450.9 $12,910.2 
  Engineersd                                                               
  Army Material        0.2      1.3       3.4       6.0      9.5      20.4 
  Command                                                                  
  Office of Naval      0.8      1.2       0.7       7.2      7.0      16.8 
  Research                                                                 
  Subtotal        $2,486.8 $2,616.5  $2,661.0  $2,715.8 $2,467.4 $12,947.4 
  Energye             $4.2     $1.5      $3.7      $0.3     $7.7     $17.3 
  Health and                                                               
  Human Services                                                           
  Administration                                                           
  for Children        $5.1     $5.3      $6.6      $6.6     $7.2     $30.7 
  and Families                                                             
  Indian Health       91.2     91.5      90.8      88.0     92.7     454.2 
  Service                                                                  
  Subtotal           $96.3    $96.8     $97.4     $94.5    $99.9    $484.9 
  Housing and                                                    
  Urban                                                          
  Development                                                    
  Office of                                                                
  Community         $275.8   $478.9    $552.9    $528.9   $424.4  $2,260.9 
  Planning and                                                             
  Developmentf                                                             
  Interior                                                                 
  Bureau of          $71.5    $74.5     $88.3     $89.2    $67.1    $390.7 
  Indian Affairs                                                           
  Bureau of Land      47.2     52.7      61.6      71.1     80.7     313.3 
  Management                                                               
  Bureau of          692.7    637.2     802.2     739.7    788.8   3,660.6 
  Reclamationg                                                             
  Fish and                                                                 
  Wildlife            40.6    136.4     154.1     147.2    174.7     653.0 
  Serviceh                                                                 
  National Park       65.2     30.5      69.9      34.6     27.3     227.4 
  Servicei                                                                 
  U.S. Geological    196.6    212.3     216.6     218.0    225.8   1,069.3 
  Survey                                                                   
  Subtotal        $1,113.9 $1,143.5  $1,392.8  $1,299.7 $1,364.4  $6,314.4 
  Transportation                                                           
  Federal Highway    $24.4    $27.9     $17.5     $26.2    $20.2    $116.2 
  Administrationj                                                          
  Saint Lawrence                                                           
  Seaway              12.0     13.0      13.3      14.0     14.3      66.5 
  Development                                                              
  Corporationk                                                             
  Subtotal           $36.4    $40.9     $30.8     $40.2    $34.5    $182.7 
  Independent                                                              
  agency                                                                   
  Appalachian                                                              
  Regional           $23.6    $30.7     $22.7     $24.4    $23.9    $125.2 
  Commissionl                                                              
  EPA              2,987.4  3,012.4   3,135.2   3,085.3  3,132.8  15,353.1 
  National                                                                 
  Science             14.3     18.5      18.3      27.7     33.2     112.0 
  Foundation                                                               
  Subtotal        $3,025.3 $3,061.6  $3,176.2  $3,137.4 $3,190.0 $15,590.4 
  Total           $8,887.6 $9,345.9 $10,694.7 $10,000.9 $9,855.4 $48,784.5 

Source: GAO survey of federal agencies' freshwater programs.

Note: Other agencies, such as the Federal Emergency Management Agency and
Small Business Administration, may also provide financial support for
these programs. In addition, the Department of the Treasury's Judgment
Fund paid out over $41 million in fiscal year 2003 and over $3 million in
fiscal year 2004 as part of the settlement of a dispute related to the
Central Valley Project, a large water project in California. Sumner Peck
Ranch Inc. v. Bureau of Reclamation, No. CV-F-91-048 OWW (E.D. Cal). An
additional payment of over $64 million was paid out in fiscal year 2005.
The figures in the table are reported as obligations, appropriations, or
expenditures in current dollars. Unless otherwise noted, figures refer to
obligations. All totals were calculated prior to rounding to the nearest
million. Totals may not equal the sums of the yearly amounts due to
rounding.

aThese figures are for the Farmable Wetlands Program that began as a pilot
program in fiscal year 2001. The figures are an estimate of the amount of
federal dollars (rental and other payments) paid to landholders to convert
farmlands into wetlands. According to a senior agency official, these
figures can be used as a proxy for obligations.

bThese figures are appropriations. According to a senior agency official,
the agency obligates the entire relevant appropriation each fiscal year.

cThese figures only include selective programs from the National Weather
Service and Oceanic and Atmospheric Research offices.

dThese figures only include the Civil Works program and are primarily in
obligations. Figures for one program were reported in expenditures.
According to a senior agency official, the agency obligates the entire
relevant appropriation for this program each fiscal year.

eThe Department of Energy is counted by itself because no separate
agencies were identified within the department that provided financial
support for freshwater programs.

fThese figures are actual disbursements.

gThese figures only include the agency's Water and Related Resources
budget and some nonfederal dollars, such as funds provided by local
governmental entities, which were used to supplement the agency's annual
budget. The agency could not readily break out funds provided by the
nonfederal dollars.

hThese figures only include selective programs from the Division of Bird
Habitat Conservation and the Division of Federal Assistance. The agency
modified its data management system in 2001, which improved its ability to
track freshwater programs. Financial support provided in fiscal year 2000
is incomplete because the information was not readily available.

iThese figures include the agency's Water Resources Division's budget
along with water-related activities at the Everglades and Olympic National
Parks. Financial support provided to other parks for freshwater programs
were not readily available.

jThese figures only include costs related to mitigation of water pollution
due to highway runoff.

kThese figures are appropriations. According to a senior agency official,
the agency obligates the entire relevant appropriation each fiscal year.

lThese figures are actual grant approval amounts.

Each of the agency's financial support of freshwater programs generally
reflects the nature of its mission. EPA-as the agency responsible for
protecting the nation's waters through enforcing clean water and safe
drinking water laws, providing support for municipal wastewater treatment
plants, and protecting watersheds and sources of drinking water-provides
substantial financial support for freshwater programs. On the other hand,
the Department of Health and Human Services' (Health) Administration of
Children and Families-an agency responsible for federal programs that seek
to promote economic and social well-being-administers a grant program
dedicated to helping rural, low-income communities with their water and
wastewater systems and provides a relatively small amount of financial
support. In addition, agencies, such as Agriculture's Rural Utilities
Service, the Department of Commerce's (Commerce) Economic Development
Administration, Health's Indian Health Service, the Department of Housing
and Urban Development's (Housing) Office of Community Planning and
Development, and EPA, that assist communities with the development of
drinking water supply and wastewater treatment facilities provide far more
financial support than agencies, such as Agriculture's Cooperative State
Research, Education, and Extension Service and Defense's Army Material
Command and Office of Naval Research, that primarily support research and
development efforts.

Agencies generally receive annual appropriations from the general fund to
support their domestic freshwater programs. In addition to annual
appropriations, 4 agencies-Agriculture's Rural Utilities Service, the
Corps, Defense's Office of Naval Research, and the Appalachian Regional
Commission-received funds from supplemental appropriations. The Department
of Transportation's (Transportation) Federal Highway Administration and
Saint Lawrence Seaway Development Corporation received the majority of
their annual budgets from dedicated funding sources available subject to
appropriations (the Highway Trust Fund and the Harbor Maintenance Trust
Fund, respectively). In addition, 4 other agencies-Agriculture's Farm
Service Agency and Natural Resources Conservation Service, the Corps, and
Interior's Reclamation-supplemented their annual budgets with dedicated
funding sources available subject to appropriation. The Agriculture
agencies received funds from the Commodity Credit Corporation, while the
Corps and Interior's Reclamation received funding from trust funds.
Finally, certain agencies, including Interior's Reclamation and Fish and
Wildlife Service and Agriculture's Rural Utilities Service, received funds
from dedicated funding sources available without further appropriation.
For example, Interior's Reclamation received funds from the Lower Colorado
River Basin Development Fund to finance the operation and maintenance of
freshwater infrastructure in the Colorado River Basin for, among other
things, drinking water supply, flood control, and irrigation efforts.

Domestic drinking water supply and wastewater treatment programs were
supported by 18 and 16 agencies, respectively. Agriculture's Rural
Utilities Service, Commerce's Economic Development Administration,
Health's Indian Health Service, Housing's Office of Community Planning and
Development, and EPA primarily supported activities related to the
development of drinking water supply and wastewater treatment
infrastructure, and some of the other agencies mostly provided technical
assistance and/or research and development assistance, such as water
quality and water availability research. Sixteen agencies supported a
variety of watershed management programs. While 7 agencies provided
financial support for navigation programs, the Corps and Transportation's
Saint Lawrence Seaway Development Corporation provided the majority of the
support for, among other things, operations and maintenance of the
nation's waterways. See table 2 for more information on the domestic
freshwater programs these agencies supported.

Table 2: Federal Agencies' Domestic Freshwater Programs, Fiscal Years 2000
through 2004

                                        

                Freshwater  
                 program    
Department or               Drinking   Flood                          Waste-      Water        Water  Watershed 
    agency     Desalination    water control Irrigation Navigation     water    dispute conservation management 
                              supply                               treatment management              
Agriculture                                                                                          
Agricultural                                                                                                    
Research                                   X          X                                            X          X
Service                                                                                              
Cooperative                                                                                                     
State                                                                                                
Research,                                                                                            
Education,                X        X                  X          X         X          X            X          X
                                                                                                     
and Extension                                                                                        
Service                                                                                              
Economic                                                                                                        
Research                                              X                                            X          X
Service                                                                                              
Farm Service                                                                                                  X 
Agency                                                                                               
Forest Service                                                                        X                       X 
Natural                                                                                                         
Resources                                  X          X                                            X          X
Conservation                                                                                         
Service                                                                                              
Rural                                                                                                
Utilities                          X                                       X                         
Service                                                                                              
Commerce                                                                                             
Economic                                                                                             
Development                        X       X          X                    X                         
Administration                                                                                       
National                                                                                                        
Oceanic and                                                                                          
                                   X       X                     X                                 X          X
Atmospheric                                                                                          
Administration                                                                                       
Defense                                                                                              
Army Corps of             X        X       X          X          X         X                       X          X 
Engineers                                                                                            
Army Material             X        X                                       X                       X 
Command                                                                                              
Office of                 X        X                                       X                         
Naval Research                                                                                       
Energya                   X        X       X                               X                         
Health and                                                                                           
Human Services                                                                                       
Administration                                                                                       
for Children                       X                                       X                         
and Families                                                                                         
Indian Health                      X                                       X                         
Service                                                                                              
Housing and                                                                                          
Urban                                                                                                
Development                                                                                          
Office of                                                                                            
Community                                                                                            
                                   X       X                               X                         
Planning and                                                                                         
Development                                                                                          
Interior                                                                                             
Bureau of                          X       X          X                    X          X              
Indian Affairs                                                                                       
Bureau of Land                                                                        X                       X 
Management                                                                                           
Bureau of                 X        X       X          X                    X          X            X          X 
Reclamation                                                                                          
Fish and                                                                                                        
Wildlife                                                                                                      X
Service                                                                                              
National Park                      X                                                  X                       X 
Service                                                                                              
U.S.                                                                                                            
Geological                X        X       X          X          X         X          X            X          X
Survey                                                                                               
Transportation                                                                                       
Federal                                                                                                         
Highway                                                                                                       X
Administration                                                                                       
Saint Lawrence                                                                                       
Seaway                                                           X                                   
Development                                                                                          
Corporation                                                                                          
Independent                                                                                          
agency                                                                                               
Appalachian                                                                                          
Regional                           X       X                     X         X                         
Commission                                                                                           
EPA                                X                                       X                                  X 
National                                                                                                        
Science                   X        X       X          X          X         X                       X          X
Foundation                                                                                           
Total                     8       18      12         10          7        16          7           10         16 

Source: GAO survey of federal agencies' freshwater programs.

Note: The programs noted above only include programs that contributed to
the agencies' financial support in table 1. Agencies may support
additional freshwater programs.

aThe Department of Energy is counted by itself because no separate
agencies were identified within the department that provided financial
support for freshwater programs.

Agencies used several different funding mechanisms to provide financial
support for domestic freshwater programs. Twenty of the 27 agencies
reported that they used direct federal spending to provide financial
support for freshwater programs. For the purposes of our review, we define
direct federal spending to include (1) work carried out by federal
employees, contractors, and private and nongovernmental organization
sectors for the federal government; (2) the federal government's portion
of federal cost-share programs; and (3) funds provided from one agency to
another agency to conduct work. Thirteen agencies used grant programs, and
2 agencies each used loan and loan guarantee programs. Many agencies used
a combination of funding mechanisms to provide financial support for
freshwater programs. See table 3 for more information on funding
mechanisms used by agencies to provide financial support for freshwater
programs in the United States.

Table 3: Funding Mechanisms Used by Agencies to Provide Financial Support
for Domestic Freshwater Programs, Fiscal Years 2000 through 2004

                                        

     Funding mechanism           Department           Agency that provided    
                                                        financial support     
                                                    o Agricultural Research   
                                                    Service                   
                                                                              
                                                    o Economic Research       
                                                    Service                   
                          Agriculture                                         
                                                    o Farm Service Agency     
                                                                              
                                                    o Forest Service          
                                                                              
                                                    o Natural Resources       
                                                    Conservation Service      
                                                    o National Oceanic and    
                          Commerce                  Atmospheric               
Direct federal                                   Administration            
spending                                         o Army Corps of Engineers 
                          Defense                                             
                                                    o Army Material Command   
                          Health and Human Services o Indian Health Service   
                                                    o Bureau of Indian        
                                                    Affairs                   
                                                                              
                          Interior                  o Bureau of Land          
                                                    Management                
                                                                              
                                                    o National Park Service   
                                                    o Federal Highway         
                                                    Administration            
                          Transportation                                      
                                                    o Saint Lawrence Seaway   
                                                    Development Corporation   
                          Commerce                  o Economic Development    
                                                    Administration            
                          Health and Human Services o Administration for      
                                                    Children and Families     
                          Housing and Urban         o Office of Community     
                          Development               Planning and Development  
Grant programs                                   o Appalachian Regional    
                                                    Commission                
                                                                              
                          Independent Agencies      o EPAa                    
                                                                              
                                                    o National Science        
                                                    Foundation                
                                                    o Cooperative State       
                          Agriculture               Research, Education, and  
                                                    Extension Service         
Direct federal         Defense                   o Office of Naval         
spending and grant                               Research                  
programs               Energyb                   
                                                    o Fish and Wildlife       
                          Interior                  Service                   
                                                                              
                                                    o U.S. Geological Survey  
Direct federal                                                             
spending, and grant,   Interior                  o Bureau of Reclamationc
loan, and loan                                   
guarantee programs                               
Grant, loan, and loan  Agriculture               o Rural Utilities Service 
guarantee programs                               

Source: GAO survey of federal agencies' freshwater programs.

Note: The funding mechanisms noted above only include mechanisms used to
disburse agencies' financial support reported in table 1. Agencies may use
additional funding mechanisms.

aEPA grants are primarily used to fund the Drinking Water and Clean Water
State Revolving Funds. These revolving funds make loans to municipalities.

bThe Department of Energy is counted by itself because no separate
agencies were identified within the department that provided financial
support for freshwater programs.

cIn fiscal year 2002, the agency dissolved its loan guarantee program.

Grant programs and direct federal spending provided over $22 billion and
about $22 billion, respectively, for domestic freshwater programs. Loan
programs provided over $4 billion, and loan guarantee programs provided
over $90 million in initial obligations. Initial obligations are the
amount agencies obligated for the subsidy cost when a loan guarantee was
made. They do not include subsequent reestimates. See figure 1 for the
financial support provided by each funding mechanism.

Figure 1: Financial Support Provided by Each Funding Mechanism for
Domestic Freshwater Programs, Fiscal Years 2000 through 2004

Note: In addition to these funding mechanisms, about 0.2 percent ($90.3
million) of the total financial support for domestic freshwater programs
was provided through loan guarantee programs.

The $49 billion for domestic freshwater programs includes funding provided
from one agency to another to conduct freshwater activities in the United
States. For example, the Corps received financial support from EPA to
conduct watershed management activities. We included funding for this
effort in the financial information reported by EPA. See table 4 for
examples of agencies that performed work on freshwater activities in the
United States using financial support provided to them by other agencies.

Table 4: Examples of Agencies' Domestic Freshwater-Related Activities That
Were Supported by Other Agencies, Fiscal Years 2000 through 2004

                                        

    Agency conducting the   Agency that provided          Examples of         
            work              financial support        freshwater-related     
                                                           activities         
Agriculture                                     
                           o Agriculture agencies                             
                                                                              
Agricultural Research   o Defense agencies      Irrigation, flood control, 
Service                                         water conservation, and
                           o Interior agencies     watershed management
                                                   
                           o EPA                   
                           o Commerce's Economic                              
                           Development                                        
Rural Utilities Service Administration          Drinking water supply and
                                                   wastewater treatment
                           o Appalachian Regional  
                           Commission              
Commerce                                        
                           o Defense's Office of   Drinking water supply,     
Economic Development    Economic Adjustment     wastewater treatment,      
Administration                                  irrigation, and flood      
                           o Appalachian Regional  control                    
                           Commission              
                           o Army Corps of         Drinking water supply,     
National Oceanic and    Engineers               water conservation,        
Atmospheric                                     watershed management, and  
Administration          o Interior's U.S.       flood control              
                           Geological Survey       
Defense                                         
                           o Agriculture agencies                             
                                                                              
                           o Defense agencies      Flood control, navigation,
Army Corps of Engineers                         and watershed management
                           o Interior agencies     
                                                   
                           o EPA                   
Health and Human                                
Services                                        
Indian Health Service   o EPA                   Drinking water supply and  
                                                   wastewater treatment       
Housing and Urban                               
Development                                     
Office of Community     o Appalachian Regional  Drinking water supply,     
Planning and            Commission              wastewater treatment, and  
Development                                     flood control              
Interior                                        
                           o Agriculture's Natural                            
                           Resources Conservation                             
                           Service                                            
                                                                              
                           o Commerce's National   
                           Oceanic and Atmospheric Drinking water supply,
                           Administration          flood control, irrigation,
Bureau of Reclamation                           wastewater treatment, and
                           o Defense agencies      watershed management
                                                   
                           o Energy                
                                                   
                           o Interior agencies     
                                                   
                           o EPA                   
                           o Defense agencies                                 
                                                                              
                           o Interior agencies     Drinking water supply and
U.S. Geological Survey                          watershed management
                           o Energy                
                                                   
                           o EPA                   
Independent agency                              
                           o Agriculture agencies                             
EPA                                             Drinking water supply and  
                           o Army Corps of         watershed management
                           Engineers               

Source: GAO survey of federal agencies' freshwater programs.

We also identified domestic programs that may provide financial support
for freshwater activities, but are not included in the $49 billion because
supporting freshwater activities is not the programs' primary purpose and
activity-level data is not readily available. For example, Housing's
Office of Community Planning and Development administers a loan guarantee
program that may provide financial support for water infrastructure
projects, but aggregate information on the use of loan guarantee authority
for particular categories of activities is not readily available.
Consequently, financial support provided by these types of programs is not
included in table 1. Other agencies also have these types of programs that
may support freshwater-related activities: Agriculture's Farm Service
Agency, Forest Service, and Rural Utilities Service; Commerce's Economic
Development Administration; Interior's Fish and Wildlife Service; the
Appalachian Regional Commission; and EPA. Furthermore, while these 27
agencies provided the majority of the federal financial support for
freshwater programs in the United States, other agencies may also provide
financial support for these types of programs. Appendix II provides
information on some other agencies and programs that can provide financial
support for freshwater-related activities. These agencies provide
financial assistance primarily for specific regions of the United States
and/or support a variety of programs, including freshwater-related
activities.

In the domestic support for freshwater programs, we also identified the
United States' financial contributions to three binational
commissions-Border Environment Cooperation Commission, International
Boundary and Water Commission, and International Joint Commission. These
commissions support a variety of projects on both sides of the U.S.
borders with Canada and Mexico.3 Typically, these commissions coordinate
their efforts with EPA and/or State and are able to track how U.S.
contributions are used to support their freshwater activities. Together,
the three commissions used about $175 million in U.S. contributions to
support a number of freshwater projects during fiscal years 2000 through
2004. For the purposes of our review, we include information on U.S.
contributions to these commissions in the same section as the information
for domestic freshwater programs because these projects are joint efforts
among the United States, Canada, and Mexico along the shared borders;
however, information on funding spent solely in the United States by the
commissions is not readily available. Table 5 presents information on
total U.S. contributions to these commissions for freshwater projects. See
appendix II for more information on these commissions.

Table 5: U.S. Financial Contributions Used to Support Freshwater Projects
along Both Sides of the U.S. Borders, Fiscal Years 2000 through 2004

                                        

                                   Fiscal year       
             Commission                   2000  2001  2002  2003  2004  Total 
Border Environment Cooperation         $3.1  $2.9  $5.4  $2.4  $1.6  $15.4 
Commission                                                          
International Boundary and             25.9  30.3  31.1  31.7  32.1  151.1 
Water Commission                                                    
International Joint Commissiona         0.0   1.5   2.9   2.3   1.5    8.1 
Total                                 $29.0 $34.6 $39.3 $36.4 $35.2 $174.6 

Sources: Department of State and commission officials.

Note: These figures are estimates of obligations in current dollars. All
totals were calculated prior to rounding to the nearest million. Totals
may not equal the sums of the yearly amounts due to rounding.

aThe commission did not support any freshwater projects in fiscal year
2000.

Federal Agencies Provided an Estimated $3 Billion for Freshwater Programs
Abroad during Fiscal Years 2000 through 2004

Of the about $3 billion of U.S. financial support provided internationally
for freshwater programs during fiscal years 2000 through 2004, an
estimated $2 billion was spent throughout most of the world, and more
recently another $1 billion supported freshwater projects in Afghanistan
and Iraq. In addition to the financial assistance provided directly by
federal agencies for freshwater programs abroad, the United States also
indirectly supports these programs through its contributions to numerous
international organizations, such as the World Bank and the United
Nations.

Eight Federal Agencies Provided Financial Support for Programs throughout
the World

Eight federal agencies obligated an estimated $2 billion during fiscal
years 2000 through 2004 for freshwater activities abroad, excluding
Afghanistan and Iraq. USAID accounted for over 90 percent of the $2
billion. Interior's Fish and Wildlife Service provided about 6 percent;
Agriculture's Foreign Agricultural Service and the U.S. Trade and
Development Agency (an independent federal agency) each accounted for
around 1 percent. The remaining 4 agencies (State, the Corps, the African
Development Foundation, and the National Science Foundation) together
provided about 1 percent of the support. See table 6 for information on
the federal financial support provided for freshwater programs abroad,
excluding aid provided to Afghanistan and Iraq.

Table 6: Federal Agencies' Estimated Financial Support for Freshwater
Programs Abroad, Excluding Afghanistan and Iraq, Fiscal Years 2000 through
2004

                                        

                                         Fiscal                    
                                          year                     
     Department or        2000     2001     2002     2003     2004      Total 
         agency                                                    
Agriculture                                                     
Foreign                                                                    
Agricultural            $57   $4,213   $2,875     $396  $19,303    $26,844
Service                                                         
Defense                                                         
Army Corps of            28      100      100      200      100        528 
Engineersa                                                      
Interior                                                        
Fish and Wildlife    18,363   29,799   30,067   26,446   24,033    128,708 
Service                                                         
State                 1,693    1,950    2,000    2,865      200      8,708 
Independent agency                                              
African                                                                    
Development              55      102      393       30      279        859
Foundation                                                      
National Science        100      112      126      222      146        706 
Foundation                                                      
U.S. Agency for                                                            
International       432,004  339,310  372,592  344,746  331,486 1,820,137b
Development                                                     
U.S. Trade and        4,115    7,616    9,214    4,769    2,932     28,645 
Development Agency                                              
Total              $456,414 $383,201 $417,367 $379,673 $378,479 $2,015,134 

Source: GAO survey of federal agencies' freshwater programs.

Note: Some of the agencies primarily provide financial support on a
project-by-project basis. Consequently, total financial support may vary
from year-to-year. Other agencies, such as the Inter-American Foundation,
may also provide financial support for these programs. The figures in the
table are reported as obligations in current dollars. All totals were
calculated prior to rounding to the nearest thousand. Totals may not equal
the sums of the yearly amounts due to rounding.

aThese figures only include the Civil Works program.

bThis total includes contributions provided to the Consultative Group on
International Agricultural Research during fiscal years 2000 through 2004
for irrigation and watershed management projects.

For international support on freshwater programs abroad, agencies
generally receive annual appropriations from the general fund to support
their freshwater programs. Some freshwater programs, such as those at
Interior's Fish and Wildlife Service, are also supported by permanent or
dedicated funding sources, which remain available without further
appropriation. Agriculture's Foreign Agricultural Service receives funds
for its freshwater programs from the Commodity Credit Corporation (a
dedicated funding source at Agriculture subject to congressional
appropriation).

Seven of the 8 agencies reported that they provided financial support for
wastewater treatment and watershed management programs abroad. In
addition, 6 agencies each provided financial support for drinking water
supply and irrigation programs. See table 7 for information on the
freshwater programs supported by federal agencies abroad.

Table 7: Federal Agencies' Freshwater Programs Abroad, Excluding
Afghanistan and Iraq, Fiscal Years 2000 through 2004

                                        

 Freshwater   
program    
                           Drinking                                  Waste-      Water                         
Department or Desalination    water   Flood Irrigation Navigation              dispute        Water  Watershed 
agency                    supply control                           water management conservation management
                                                                  treatment                         
Agriculture                                                                                         
Foreign                                                                                                        
Agricultural                      X                  X                    X          X            X          X
Service                                                                                             
Defense                                                                                             
Army Corps of                             X          X          X         X          X                       X 
Engineers                                                                                           
Interior                                                                                            
Fish and                                                                                                       
Wildlife                                                                                                     X
Service                                                                                             
State                    X        X       X          X                    X          X            X          X 
Independent                                                                                         
agency                                                                                              
African                                                                                             
Development                       X                  X                    X                         
Foundation                                                                                          
National                                                                                                       
Science                           X                                       X                                  X
Foundation                                                                                          
U.S. Agency                                                                                                    
for                      X        X       X          X                    X          X            X          X
International                                                                                       
Development                                                                                         
U.S. Trade                                                                                                     
and                      X        X       X          X          X         X                       X          X
Development                                                                                         
Agency                                                                                              
Total                    3        6       4          6          2         7          4            4          7 

Source: GAO survey of federal agencies' freshwater programs.

About 99 percent of the estimated $2 billion in federal financial support
for freshwater programs abroad was delivered through grant programs
administered by 7 agencies. The Corps was the only agency that did not
have a grant program to support freshwater programs abroad. Agriculture's
Foreign Agricultural Service, the Corps, State, and USAID provided a
relatively small amount of financial support (about $15 million total)
through direct federal spending. Additionally, USAID obligated $4 million
in loan guarantees for water supply and wastewater treatment projects
through its Development Credit Authority program to cover up to 50 percent
of the risk in lending.4

Some of the $2 billion for freshwater programs abroad includes funding
provided from one agency to another to conduct freshwater projects in
foreign countries. For example, Interior's Reclamation received funds from
State to conduct desalination activities. We included funding for this
effort in the financial information reported by State. See table 8 for
examples of agencies that performed work on freshwater activities abroad
using financial support provided to them by other agencies.

Table 8: Examples of Agencies' Freshwater-Related Activities Abroad That
Were Supported by Other Agencies, Fiscal Years 2000 through 2004

                                        

    Agency conducting the  Agency that provided          Examples of          
            work            financial support   freshwater-related activities 
Agriculture                                  
                           o Agriculture's                                    
Agricultural Research   Foreign Agricultural 
Service                 Service              Irrigation
                                                
                           o State              
Foreign Agricultural    o State              Wastewater treatment          
Service                                      
Forest Service          o State              Watershed management          
Commerce                                     
National Oceanic and    o State              Flood control and watershed   
Atmospheric                                  management                    
Administration          o USAID              
Defense                                      
                           o State              Watershed management and      
Army Corps of Engineers                      wastewater treatment          
                           o USAID              
Interior                                     
                           o State              Desalination, flood control,  
Bureau of Reclamation                        and water dispute management  
                           o USAID              
                           o State              Flood control, drinking water 
U.S. Geological Survey                       supply, wastewater treatment, 
                           o USAID              and water conservation        
Independent agency                           
EPA                     o State              Drinking water supply         

Source: GAO survey of federal agencies' freshwater programs.

Appendix III provides information on these and other agencies and programs
that can also provide financial support for freshwater activities abroad.

Financial Support for Afghanistan and Iraq

For Afghanistan and Iraq, USAID and Defense provided about $1 billion
during fiscal years 2002 through 2004 to support the reconstruction and
rehabilitation of freshwater infrastructure in these countries. For the
purposes of our review, we report financial support for freshwater
projects in Afghanistan and Iraq separately from the $2 billion total in
foreign aid because these funds were primarily made available during
fiscal year 2004. USAID provided financial support through grants and
contracts and by transferring funds to the Corps to carry out work on
water supply, wastewater treatment, irrigation, and watershed projects in
Afghanistan and Iraq. USAID received funds from the Emergency Supplemental
Appropriation for Defense and for the Reconstruction of Iraq and
Afghanistan for Fiscal Year 2004 to support, among other activities,
freshwater projects in those two countries. Within the Office of the
Secretary of Defense, (1) the Defense Security Cooperation Agency's
Humanitarian Assistance Program supports, among other things, water
infrastructure projects  overseas and (2) the Army's Commander's Emergency
Response Program is designed to respond to urgent humanitarian relief and
reconstruction requirements at the local level in Afghanistan and Iraq.
Also within Defense, the Project and Contracting Office awarded and
continues to manage various contracts to support, among other things, the
construction of rural water systems and the rehabilitation of drinking
water supply facilities in major cities in Iraq. Table 9 presents
information on financial support provided by USAID and Defense for
freshwater projects in Afghanistan and Iraq.

Table 9: Federal Agencies' Estimated Financial Support for Freshwater
Projects in Afghanistan and Iraq, Fiscal Years 2002 through 2004

                                        

             Dollars in millions                              
                                                  Fiscal year        
              Country or agency              2002        2003   2004    Total 
Afghanistan                                                       
Defense's Defense Security Cooperation    $1.2        $1.1   $0.5     $2.8 
Agencya                                                           
Defense's Secretary of the Armyb             -           -    5.8      5.8 
U.S. Agency for International             15.1         9.6   82.8    107.5 
Development                                                       
Subtotal                                 $16.3       $10.6  $89.1   $116.1 
Iraq                                                              
Defense's Defense Security Cooperation    $0.0        $1.1   $2.3     $3.4 
Agencya                                                           
Defense's Project and Contracting Office     -           -  369.8    369.8 
Defense's Secretary of the Armyb             -           -   24.6     24.6 
U.S. Agency for International                -       214.9  348.6    563.5 
Development                                                       
Subtotal                                  $0.0      $216.0 $745.3   $961.3 
Total                                    $16.3      $226.7 $834.4 $1,077.4 

Sources: U.S. Agency for International Development and Department of
Defense.

Note: The figures in the table are reported as obligations in current
dollars. All totals were calculated prior to rounding to the nearest
million. Totals may not equal the sums of the yearly amounts due to
rounding.

aThe agency's Humanitarian Assistance Program funded these projects.

bArmy's Commander's Emergency Response Program funded these projects.

The United States Also Provided Financial Contributions to Various
International Organizations That Support Freshwater Programs

In addition to providing financial support directly through federal
agencies for freshwater programs abroad, the United States also indirectly
supports these programs through its contributions to numerous
international organizations (e.g., the United Nations and the World Bank).
In most cases, the United States makes contributions to the general
budgets of these organizations and not to a specific project or program.
In addition, these organizations usually combine U.S. contributions with
other sources of funds, including contributions from other countries, to
fund their freshwater programs. As a result, it is difficult to determine
what portion of U.S. contributions to international organizations is used
to support freshwater programs.

The United States contributed to the general budgets of a number of
multilateral development banks and financial institutions that support
freshwater projects around the world, and some portion of these
contributions was used to support freshwater efforts worldwide. Using
funds contributed by the United States and other countries or borrowed
from world capital markets, multilateral development banks finance
economic and social development programs around the world. Together, these
autonomous institutions are the largest single source of developmental
assistance for developing countries. The United States is a member of, and
has made financial contributions to, five multilateral development banks
that support freshwater projects around the world. These multilateral
development banks include the African Development Bank Group, the Asian
Development Bank, the European Bank for Reconstruction and Development,
the Inter-American Development Bank, and the World Bank Group. The United
States also contributed to other international financial
institutions-including the Global Environment Facility, the International
Fund for Agricultural Development, and the North American Development
Bank-that also support freshwater projects abroad. See table 10 for
figures on total contributions the United States made to selected
multilateral development banks and financial institutions. Some portion of
these contributions supported freshwater projects abroad.

Table 10: Total U.S. Contributions to Selected Multilateral Development
Banks and Financial Institutions, Fiscal Years 2000 through 2004 (Some
Portion of These Contributions Supported Freshwater Projects Abroad)

                                        

                       Fiscal year 
Multilateral                                                               
development bank or        2000     2001     2002   2003     2004    Total
financial                                                         
institution                                                       
African Development       $57.8   $105.9   $105.1   $5.1   $224.5   $498.4 
Bank                                                              
Asian Development         132.2     71.8    115.0    0.0    240.8    559.8 
Bank                                                              
European Bank for                                                          
Reconstruction and         36.2     36.7     35.6   35.7     35.3    179.5
Development                                                       
Global Environment         58.1    107.8    100.5  146.9    138.4    551.7 
Facility                                                          
Inter-American             69.0     34.9     18.0   42.6     24.9    189.4 
Development Bank                                                  
International Fund                                                         
for Agricultural            0.0      5.0     15.0   14.9     14.9     49.8
Development                                                       
North American             41.0     84.0      0.0  102.6     61.4    289.0 
Development Bank                                                  
World Bank Group          992.8    783.3    796.4    1.6  1,753.4  4,327.5 
Total                  $1,387.1 $1,229.4 $1,185.6 $349.4 $2,493.6 $6,645.1 

Sources: Department of the Treasury and the Environmental Protection
Agency (for contributions to the North American Development Bank).

Note: The figures in the table are reported in current dollars.

The United States also contributed to the general budgets of a number of
international organizations that support freshwater projects around the
world, and some portion of these contributions was used to support
freshwater efforts. Of these organizations, the United States contributed
the most financial support to the United Nations. In addition to assisting
with peacekeeping efforts, the United Nations provides funds for
humanitarian, environmental, and development programs that support, among
other things, water resources management efforts around the world. Table
11 presents figures on contributions the United States made to selected
international organizations. Some portion of these contributions supported
freshwater projects abroad.

Table 11: Total U.S. Contributions to Selected International
Organizations, Fiscal Years 2000 through 2004 (Some Portion of These
Contributions Supported Freshwater Projects Abroad)

                                        

                             Fiscal year 
         Organization               2000   2001   2002   2003  2004a    Total 
Inter-American Institute                                                   
for Cooperation on              $12.3  $16.4  $16.4  $20.2  $16.6    $81.7
Agriculture                                                       
Organization of American         45.8   53.3   50.1   69.0   55.3    273.5 
States                                                            
Organisation for Economic                                                  
Cooperation and                  50.0   44.8   51.7   63.8   82.2    292.5
Development                                                       
Pan American Health              51.7   52.3   55.0   66.3   57.2    282.4 
Organization                                                      
Ramsar Convention on              0.8    0.8    1.1    0.7    0.8      4.2 
Wetlands                                                          
United Nationsb                 569.2  592.9  673.8  775.3 506.9c  3,117.5 
The World Conservation            1.5    1.4    1.9    1.6   0.3e      6.7 
Uniond                                                            
Total                          $731.3 $761.7 $849.9 $996.8 $719.3 $4,085.5 

Source: Department of State.

Note: The figures in the table are reported as obligations in current
dollars. All totals were calculated prior to rounding to the nearest
million. Totals may not equal the sums of the yearly amounts due to
rounding.

aThese figures are estimates of financial contributions the United States
made to the organizations in fiscal year 2004.

bThese figures include: (1) assessed contributions to the United Nations
(U.N.), and selected specialized agencies of the U.N.-Food and Agriculture
Organization and World Health Organization, and (2) voluntary
contributions to selected specialized agencies of the U.N.-the Food and
Agriculture Organization, the U.N. Development Programme, the U.N.
Environment Programme, the U.N. Framework Convention on Climate Change,
and the World Health Organization.

cThese figures do not include voluntary contributions to the U.N. or its
selected specialized agencies.

dThese figures include voluntary contributions and dues paid to the World
Conservation Union.

eThis figure does not include voluntary contributions to the World
Conservation Union.

Appendix III presents general information on these multilateral
development banks, financial institutions, and international organizations
and their freshwater programs.

Agency Comments 

We provided the Departments of Agriculture, Commerce, Defense, Energy,
Health and Human Services, Housing and Urban Development, the Interior,
Transportation, and State and independent agencies, including the African
Development Foundation, the Appalachian Regional Commission, EPA, the
National Science Foundation, the Small Business Administration, USAID, and
the U.S. Trade and Development Agency, with a draft of this report for
review and comment. Three of these agencies-Interior, Health and Human
Services, and USAID-provided us with written comments that are included in
appendixes IV through VI. The 3 agencies agreed with the report and
provided us with technical comments, which we have included as
appropriate. The other 13 agencies provided us with technical comments
orally or did not provide us with any comments. We have made changes in
response to the technical comments throughout the report, as appropriate.

We will send copies of this report to interested congressional committees;
the Secretaries of Agriculture, Commerce, Defense, Energy, Health and
Human Services, Housing and Urban Development, the Interior,
Transportation, and State; the Administrators of EPA, Small Business
Administration, and USAID; the Directors of the National Science
Foundation, Office of Management and Budget, and U.S. Trade and
Development Agency; the President of the African Development Foundation;
the Federal Co-Chair of the Appalachian Regional Commission; and other
interested parties. We will also make copies available to others upon
request. In addition, the report will be available at no charge on the GAO
Web site at http://www.gao.gov.

If you or your staff have any questions, please call me or Edward Zadjura
at (202) 512-3841. Key contributors to this report are listed in appendix
VII.

Anu K. Mittal Director, Natural Resources and Environment

Scope and MethodologyAppendix I

The objectives of our review were to determine for fiscal years 2000
through 2004 how much financial support federal agencies provided for
freshwater programs in the United States and abroad.

To identify the agencies that support freshwater programs in the United
States and abroad, we reviewed the Catalog of Federal Domestic Assistance
and reports published by GAO, the Congressional Research Service, the
United Nations, and the National Research Council of the National
Academies. We also interviewed water and natural resources experts at the
Congressional Research Service. For the purpose of our review, we examined
freshwater programs that support desalination; drinking water supply;
flood control; irrigation; navigation (primarily for river-based
transportation); wastewater treatment; water conservation; water dispute
management; and watershed protection, restoration, and management
activities. We identified numerous agencies that support at least one of
these freshwater programs. After conducting additional background research
and interviews with officials at these agencies, we narrowed our focus to
32 agencies.1 These agencies received congressional appropriations during
each of the fiscal years from 2000 through 2004 and, to some extent,
tracked the amount of financial support they provided for freshwater
programs. Together, these agencies accounted for the majority of the
federal financial support for freshwater programs in the United States and
abroad during fiscal years 2000 through 2004. These agencies include the
following:

o Department of Agriculture (Agriculture): Agricultural Research Service;
Cooperative State Research, Education, and Extension Service; Economic
Research Service; Farm Service Agency; Foreign Agricultural Service;
Forest Service; Natural Resources Conservation Service; Rural Utilities
Service;

o Department of Commerce (Commerce): Economic Development Administration,
National Oceanic and Atmospheric Administration;

o Department of Defense (Defense): Army Corps of Engineers (Corps), Army
Material Command, Office of Naval Research;

o Department of Energy (Energy);

o Department of Health and Human Services (Health): Administration for
Children and Families, Indian Health Service;

o Department of Housing and Urban Development (Housing): Office of
Community Planning and Development;

o Department of the Interior (Interior): Bureau of Indian Affairs, Bureau
of Land Management, Bureau of Reclamation (Reclamation), Fish and Wildlife
Service, National Park Service, U.S. Geological Survey;

o Department of State (State);

o Department of Transportation (Transportation): Federal Highway
Administration, Saint Lawrence Seaway Development Corporation; and

o Independent agencies: African Development Foundation, Appalachian
Regional Commission, Environmental Protection Agency (EPA), National
Science Foundation, U.S. Agency for International Development (USAID),
U.S. Trade and Development Agency.

To determine the amount of financial support these agencies provided for
freshwater programs, we used a questionnaire to gather information on
agencies' freshwater programs, including funds provided on an annual basis
to support these programs.2 Before distributing the questionnaire, we had
staff from the Resources, Science, and Industry and American Law Divisions
of the Congressional Research Service review the draft questionnaire, and
we included their comments, accordingly. In addition, we pretested the
questionnaire with an official from the Corps and incorporated her
comments, as appropriate. We sent the questionnaires, along with a cover
letter, to respondents and requested that agencies return the completed
questionnaire within 4 weeks. All agencies returned their questionnaires.
We conducted follow-up interviews with respondents to confirm the
information and to clarify the information, if necessary.

In our questionnaire, we requested financial information on the direct
costs of agencies' freshwater programs, such as capital construction and
operations and maintenance costs of freshwater infrastructure. We also
requested information on the amount of financial support provided for
technical assistance and research and development efforts related to
freshwater programs.3 We requested information on freshwater programs that
agencies typically fund during a year and excluding atypical funding, such
as financial support for freshwater projects in response to natural
disasters. We obtained and reported on financial support for freshwater
projects in Afghanistan and Iraq separately from the total foreign
assistance because these funds were provided in recent years.

We requested this information in the form of obligations because
obligations provide a good estimate of what an agency plans to spend
during a fiscal year. Additionally, financial information in the form of
obligations are the best measure for comparing the amount of financial
support provided from year to year over a period of time. Because we
reviewed a fairly recent period of time during which inflation was
minimal, we reported the figures in current dollars. For loan guarantee
programs, we requested that the agency provide the amount they initially
obligated the year the loan was guaranteed to cover potential defaults,
rather than annual reestimates of these amounts.

In cases where agencies do not track financial information in the form of
obligations, we requested that senior agency officials provide the best
available proxy for obligations. Some officials said that obligations are
comparable to their appropriation or expenditure figures. Other officials
stated that their agency collects information on actual disbursements or
actual grant approval amounts. Agencies for which we do not report
obligations include Agriculture's Farm Service Agency and Forest Service,
Housing's Office of Community Planning and Development, Transportation's
Saint Lawrence Seaway Development Corporation, and the Appalachian
Regional Commission-see notes to table 1 for more

information on these agencies' financial information.4 We did not
independently assess the reliability of the financial information provided
by agency officials because obligations are agency expectations for
expenditures and there are no associated transactions to track.

Although we requested program-level financial information, we opted to
present this information at the agency-level because agencies' definitions
of freshwater programs vary. However, we collected the program-level
financial information to ensure that agency officials reported financial
support for freshwater programs consistently across agencies. As part of
this effort, we confirmed with each agency that for each of the programs
listed in the questionnaire, the agency only provided financial
information on the freshwater portion of the program. In addition to
programs that specifically supported freshwater activities, we also
requested information on other programs that may provide funding for these
activities. We did not include financial support from these programs in
the agency totals because supporting freshwater activities is not their
primary purpose and activity level data is not readily available.
Consequently, the financial information we reported is an estimate of the
minimum amount of financial support provided by the agencies.

In addition to the agencies that specifically supported freshwater
programs, we identified and obtained information on several binational
commissions, international organizations, and multilateral development
banks to which the United States made financial contributions and which
support freshwater programs along U.S. borders or abroad. To identify how
U.S. contributions to binational commissions were used to support
freshwater programs along U.S. borders, we obtained financial information
from officials at State and EPA and representatives from the commissions.
To identify the annual amount of the United States' financial
contributions to multilateral development banks and other international
organizations, we obtained financial information from officials at State
and the Department of the Treasury. When necessary, we corroborated this
information with support from other sources, including annual reports to
Congress on U.S. contributions to international organizations.

We conducted our review from March 2004 through January 2005 in accordance
with generally accepted government auditing standards.

Federal Financial Support for Freshwater Programs in the United States and
along U.S. BordersAppendix II

This appendix discusses federal financial support of freshwater programs
in the United States and along U.S. borders in three parts. First, we
provide a general overview on the agencies responsible for the majority of
the federal financial support for freshwater programs in the United
States, along with the total amount of financial support provided for
freshwater programs during fiscal years 2000 through 2004. Second, we
briefly summarize the information on some other agencies that can also
provide financial support to domestic freshwater programs. Third, we
provide information on (1) binational commissions that used U.S. financial
contributions for freshwater projects along the U.S. borders with Canada
and Mexico and (2) total U.S. financial contributions to these commissions
for their freshwater programs during fiscal years 2000 through 2004.

Federal Agencies

The following agencies provide the majority of the federal government's
financial support specifically for freshwater programs in the United
States. These programs, as described by agency officials, documents, and
reports, are discussed below.

Department of Agriculture: $10.4 Billion

The mission of the Department of Agriculture is to provide leadership on
food, agriculture, and natural resources issues on the basis of sound
public policy, the best available science, and efficient management. The
department conducts work under a variety of mission areas, including farm
services, natural resources and the environment, research and education,
and rural development. The agency provides financial support for
freshwater programs primarily for the construction of drinking water and
wastewater facilities, watershed and wetland management, and
freshwater-related research.

Agricultural Research Service: $523.8 Million

The Agricultural Research Service is the department's primary in-house
scientific research agency. The agency conducts research to develop and
transfer solutions to address agricultural problems to enhance natural
resources, such as protecting and sustaining freshwater resources. The
agency's authority to conduct these efforts primarily falls under the
Department of Agriculture Organic Act of 1862 and the Agricultural
Research Act of 1935. Freshwater programs include technological
improvements in irrigation, rural and urban water recycling and reuse,
nonpoint source pollution prevention, stream restoration, and flood
control structures. The agency also receives financial support from other
federal agencies-such as Commerce's National Oceanic and Atmospheric
Administration and the Corps-to support domestic freshwater programs,
including watershed management, irrigation, and water conservation.
Additionally, the agency receives funds from State to conduct freshwater
activities abroad, such as irrigation systems in Pakistan and Mexico.

Cooperative State Research, Education, and Extension Service: $172.9
Million

The Cooperative State Research, Education, and Extension Service was
created in 1994 through the USDA Reorganization Act. The agency provides
financial support-primarily through grants to universities, nonprofit
associations, private industry, and other groups-for state and local
research, education, and outreach activities. The agency conducts these
activities primarily through the Hatch Act of 1887, as amended, the
National Agricultural Research, Extension, and Teaching Policy Act of
1977, and section 406 of the Agricultural Research, Extension, and
Education Reform Act of 1998. For example, through the Hatch Act, the
agency provides block grants for agricultural research on an annual basis
primarily to state land grant institutions. These funds are distributed
according to a statutory formula. Although the scope of the agricultural
research conducted under the Hatch Act is broad, portions of the financial
support are directed toward research projects on freshwater resources.

Economic Research Service: $4.7 Million

The Economic Research Service is Agriculture's main source of economic
information and research. Regarding freshwater resources, the agency
primarily provides financial support for research and development
programs. For example, the agency is currently conducting research on the
impact of agriculture on water quality by examining (1) the influence of
economic, environmental, and institutional factors affecting adoption of
water conservation management practices and irrigation technologies; (2)
the economics of alternative public policy mechanisms to encourage
agricultural water conservation and improved water quality; and (3) the
availability of water infrastructure and policy mechanisms to facilitate
water reallocations and the implications for irrigated agriculture and
resource costs. According to a senior agency official, these research
activities are generally performed under the Agricultural Marketing Act of
1946. In addition to conducting its own freshwater programs, the agency
receives funds from Agriculture's Foreign Agricultural Service to support
freshwater research and development efforts to foreign countries, such as
a project to support hydrological modeling of river systems in North
China.

Farm Service Agency: $24.6 Million

The Farm Service Agency was formed after a departmental reorganization in
1994 and incorporated programs from several agencies. One of the agency's
primary missions is to help farmers conserve both land and water
resources. The agency supports several multipurpose programs-such as the
Debt for Nature Program and the Conservation Reserve Program-that may also
benefit freshwater resources, but financial information specifically for
freshwater efforts is not readily available. For example, through the
Conservation Reserve Program, landowners receive annual rental payments
and other payments for implementing long-term conservation practices on
their land, for among other things, management of wetlands. The Farmable
Wetlands Program, which began as a pilot in six states in fiscal year 2001
and is part of the Conservation Reserve Program, provides payments to
farmers who voluntarily restore farmable wetlands. The program expanded
nationwide in fiscal year 2002 when it was authorized by the Farm Security
and Rural Investment Act of 2002. Funding for this program comes from the
Commodity Credit Corporation-a government-owned and -operated corporation
established in 1933 to stabilize, support, and protect farm income and
prices.

Forest Service: $291.5 Million

Among its goals, the Forest Service promotes ecosystem health and
conservation in part by improving and protecting watershed conditions to
provide the water quality and quantity necessary to support ecological
functions. In the United States, forests cover approximately one-third of
the land area from which about 66 percent of freshwater originates. Under
the Organic Act of 1897, one of the primary reasons for establishing
national forests was to maintain and restore watersheds to protect
freshwater resources. The agency fulfills these efforts by supporting
programs for watershed management activities, such as conducting water
quality monitoring and watershed restoration. The agency also secures
water rights to protect and use freshwater on Forest Service lands.

Natural Resources Conservation Service: $1.9 Billion

The mission of the Natural Resources Conservation Service is to provide
leadership in a partnership effort to help landowners conserve, maintain,
and improve natural resources, including freshwater. As a part of these
efforts, the agency supports watershed management, flood control, and
water conservation programs. The agency provides financial support for
freshwater activities through a variety of programs, including Watershed
Protection and Flood Prevention Operations and the Watershed
Rehabilitation Program. Most financial support for freshwater activities
reported by the agency was through the Wetlands Reserve Program, which was
mandated by the Food Security Act of 1985 and reauthorized by the Farm
Security and Rural Investment Act of 2002. The program is voluntary and
offers landowners financial and technical assistance for the restoration,
protection, and enhancement of wetlands. To be eligible for the program, a
landowner must have owned the land for at least 12 months and the wetland
must be restorable and suitable for wildlife benefits. As with the
Farmable Wetlands Program administered by the Farm Service Agency, the
source of funds for the program is through the Commodity Credit
Corporation.

Rural Utilities Service: $7.6 Billion

Part of the mission of the Rural Utilities Service is to improve the
quality of life in rural communities by administering drinking water
supply and wastewater treatment programs. The agency provides the most
financial support for freshwater programs of any Agriculture agency. The
agency primarily uses grant and loan programs to provide financial support
for developing water systems in rural areas and reducing water costs for
rural users. The main authority to administer these programs is through
the Consolidated Farm and Rural Development Act of 1961. Municipalities,
counties, special-purpose districts, Indian tribes, and nonprofit
organizations are eligible for the programs. In addition, the agency
provides technical assistance and training grants to nonprofit
organizations to assist rural communities with drinking water and
wastewater issues. Furthermore, the agency also administers a loan
guarantee program for drinking water supply and wastewater treatment loans
it provides. In addition to executing its own grants during fiscal years
2000 through 2004, the agency, under a memorandum of understanding,
administered grants funded by Commerce's Economic Development
Administration and the Appalachian Regional Commission for drinking water
supply and wastewater treatment projects.

Department of Commerce: $539.8 Million

The Department of Commerce's strategic goals include, among other things,
encouraging economic growth that benefits Americans and observing,
protecting, and managing the Earth's resources to promote environmental
stewardship. The department's freshwater programs include water
infrastructure and water availability activities.

Economic Development Administration: $337.5 Million

The Economic Development Administration, established by the Public Works
and Economic Development Act of 1965, as amended, leads the federal
government's economic development efforts by facilitating growth in
America. Through its Public Works and Economic Adjustment Assistance
Programs, the agency provides grants to communities and entities in
regions experiencing economic decline and distress. These grants are used
for, among other things, revitalizing, expanding, and upgrading the
physical infrastructure, including water and sewer systems. Under the
Partnership Planning Program, the agency also provides grants for planning
and technical assistance. The agency can track the majority of its
freshwater activities using standard industrial codes, such as water
system and water treatment. The agency also supports other programs that
can provide funds for freshwater-related activities. In addition to
executing its own grants during fiscal years 2000 through 2004, the
agency, under a memorandum of agreement, administered grants funded by the
Appalachian Regional Commission and Defense's Office of Economic
Adjustment to carry out freshwater infrastructure activities.

National Oceanic and Atmospheric Administration: $202.3 Million

Among its missions, the National Oceanic and Atmospheric Administration
researches and gathers data related to changes in the weather and
availability of water. Several offices within the agency provide financial
support for freshwater activities. The National Weather Service-authorized
under the Organic Act of October 1, 1890, as amended, and the Flood
Control Act of 1938, as amended-provided the largest portion of the
agency's budget for freshwater programs. Within its hydrology program, the
National Weather Service supports watershed management and flood control
activities, such as forecasting water availability activities on rivers,
lakes, and streams and inland water research. In addition, the Office of
Oceanic and Atmospheric Research provides financial support for drinking
water supply, water conservation, watershed management, and navigation in
the Great Lakes region. These activities are carried out under various
legal authorities, such as the National Climate Program Act (15 U.S.C.
S:S: 2901-2908) and the Great Lakes Water Quality Agreement of 1978, as
amended. Other offices within the National Oceanic and Atmospheric
Administration also provide financial support for, among other things,
fisheries and aquatic species management and freshwater-related activities
in coastal, estuarine, and marine environments. During fiscal years 2000
through 2004, the agency performed work in other countries, but funding
for these efforts typically originated with State and USAID.

Department of Defense: $12.9 Billion

The Department of Defense provides services for military and civilian
purposes. The Corps provides financial support for the vast majority of
the department's freshwater programs for civilians through its Civil Works
program. In addition, the Army and Navy provide financial support for
science and technology research on drinking water supply, water
conservation, wastewater treatment, and desalination. Some of these
technologies have the potential to be transitioned from a military
function to benefit civilians.

Army Corps of Engineers: $12.9 Billion

The Army Corps of Engineers provides engineering services for military and
civilian purposes. In addition to designing and managing construction of
military facilities, the Corps plans, designs, builds, and operates water
resources and other civil works projects through its Civil Works program.
The Corps carries out water infrastructure and environmental management
and restoration projects under various legal authorities, including
numerous river and harbors acts, flood control acts, and Water Resources
Development Acts. Activities supported include navigation, flood
protection, dam and reservoir projects, and drinking water and wastewater
projects.1 The Corps' annual appropriations are primarily directed to
specific projects. These appropriations are received through Energy and
Water Development appropriation acts rather than the Department of Defense
appropriations acts. In addition to annual appropriations from the general
fund, the Corps receives appropriations from dedicated funding sources,
such as the Harbor Maintenance Trust Fund and the Inland Waterway Trust
Fund, which receive revenue through receipts of, respectively, a tax on
port use and a tax on fuel used by vessels in commercial waterway
transportation. The Corps also performs domestic work funded by agencies,
such as EPA, Agriculture, and Interior.

Army Material Command: $20.4 Million

The Army Material Command conducts research related to, among other
things, the logistics of providing water for combat operations on land.
The agency performs in-house research, manages contract efforts, and
supports other military and government agencies with drinking water
treatment, monitoring, storage, and distribution; wastewater treatment;
desalination; and water conservation programs. Within the agency, the Army
Tank-Automotive Research, Development and Engineering Center researches,
develops, engineers, and integrates advanced technology into ground
operations. For example, the Water Purification and Recovery Technology
program seeks to reduce the logistical burden of providing water for
ground troops. According to Army officials, the Army carries out these
activities under its general mission to provide and equip combat
operations on land.

Office of Naval Research: $16.8 Million

The Office of Naval Research coordinates, executes, and promotes the
science and technology programs of the U.S. Navy and Marine Corps. The
agency provides financial support through direct federal spending and
grant programs for drinking water supply, wastewater treatment, and
desalination projects. In addition to private contractors, the agency
collaborates with schools, universities, government laboratories, and
nonprofit organizations to execute its science and technology programs.
More recently in fiscal year 2003, in response to appropriations committee
direction, the Office of Naval Research began funding the Expeditionary
Unit Water Purification project, which will develop prototype
demonstrators to produce drinking water from brackish or saline water.2
The agency leads this effort, which involves other federal agencies, such
as the Army, Interior's Reclamation, and the Department of Energy. The
Office of Naval Research conducts its research efforts under 10 U.S.C.
S:S: 5022-5023.

Other Defense Programs

The Office of the Secretary of Defense administers programs that can
provide financial support for freshwater activities, although that is not
the focus of the programs. For example, the Strategic Environmental
Research and Development Program and the Environmental Security Technology
Certification Program fund research for technologies related to, among
other things, water quality and wastewater treatment. In addition, the
Legacy Program supports watershed rehabilitation and freshwater
conservation efforts, although these efforts are not specifically tracked.

The Office of Economic Adjustment provides technical expertise and
financial support to state and local governments in planning community
adjustments. The agency may acquire the services of Commerce's Economic
Development Administration to execute grants that implement plans to
convert former military bases to civilian uses. According to a senior
agency official, the agency does not track its implementation projects by
category, some of which could be water infrastructure projects.

Department of Energy: $17.3 Million

Created by the Department of Energy Organization Act of 1977, Energy's
mission is to advance the national, economic, and energy security of the
United States; promote scientific and technological innovation in support
of that mission; and ensure the environmental cleanup of the nation's
nuclear weapons complex. Although freshwater-related issues are not a
primary focus, the department, through grants and direct federal spending,
provides financial support for groundwater cleanup projects and for the
research and development of desalination technologies. As provided for in
the Uranium Mill Tailings Radiation Control Act of 1978, the department
engages in groundwater cleanup and remediation activities at several
former uranium mill sites. The department also provides funding for
alternative clean water supplies, a distillation water treatment plant,
and flood control activities at these sites. In addition, Energy and
Interior's Reclamation collaborated to produce a national road map in 2003
for the research and development of desalination and water purification
technologies. The Conference Committee report accompanying the 2004 Energy
and Water Development Appropriations Act directed Energy's Office of
Environmental Management's Technology Development and Deployment Program
to provide $3 million to support the research and development of
desalination research technologies. Sandia National Laboratories
coordinated these activities for the department.

Department of Health and Human Services: $484.9 Million

The Department of Health and Human Services is the government's principal
agency for protecting the health of Americans and providing essential
human services. The department's freshwater programs primarily provide
financial support for water supply and wastewater treatment systems.

Administration for Children and Families: $30.7 Million

The Administration for Children and Families promotes the economic and
social well-being of families, children, individuals, and communities. As
part of these efforts, the Office of Community Services provides training
and technical assistance grants on a regionwide basis to help small,
rural, low-income communities construct, repair, and rehabilitate water
and wastewater systems. The agency's Rural Community Facilities
Development Program provides these services, authorized under section 680
of the Community Services Block Grant Act included in the Coats Human
Services Reauthorization Act of 1998. Project activities under this
program include (1) providing training and technical assistance to
low-income rural communities to develop expertise needed to establish and
manage water facilities; (2) improving the coordination of federal, state,
and local agencies with rural water and wastewater management; and (3)
educating local, rural community leaders about available federal
resources. According to agency officials, the program enables rural
communities to comply with the requirements of the Clean Water Act and the
Safe Drinking Water Act. Entities eligible for the program include
multistate, regional, private, and nonprofit 501(c)(3) tax-exempt
organizations.

Indian Health Service: $454.2 Million

The Indian Health Service originated in 1955 when Interior transferred
administration of the American Indian and Alaska Native health programs to
the Department of Health and Human Services. However, the Indian Health
Service continues to receive annual appropriations from a budgetline
within Interior's annual appropriations. The Office of Environmental
Health and Engineering provides technical and financial support to Indian
tribes and Alaska Native communities to promote a healthy environment
through the cooperative development and continuing operation of safe
water, wastewater, and solid waste systems. The Sanitation Facilities
Construction Program is the Indian Health Service's primary water
infrastructure program. Program services are authorized under Public Law
No. 86-121, Indian Health Care Improvement Act (Pub. L. No. 94-437), as
amended, and the Indian Self-Determination and Education Assistance Act
(Pub. L. No. 93-638), as amended. The Indian Health Service may provide
sanitation facilities directly or in partnership with other federal
agencies or with nonfederal entities. The agency's nonfederal project
partners could include tribes, tribal-designated housing entities, tribal
enterprises, states, counties, and municipalities. The agency's federal
partners include Housing's Office of Native American Programs, Interior's
Bureau of Indian Affairs and Reclamation, Agriculture's Rural Utilities
Service Program, and EPA. The agency may also administer projects funded
by those federal agencies to provide sanitation facilities services to
tribes.

Department of Housing and Urban Development: $2.3 Billion

The Department of Housing and Urban Development supports community
development through partnerships with states and local governments. The
department's primary tool for providing financing for public improvements
is the Community Development Block Grant program, authorized under title 1
of the Housing and Community Development Act of 1974, as amended. The
program is managed by (1) the Office of Community Planning and Development
and (2) the Office of Public and Indian Housing.

Office of Community Planning and Development: $2.3 Billion

The Office of Community Planning and Development runs the Community
Development Block Grant program for states, entitled cities and counties,
and insular areas (U.S. territories). Grant recipients design and
administer their projects, and the Office of Community Planning and
Development provides project oversight. In order to qualify for a grant, a
project must meet one of the following national objectives: (1)
principally benefit low- and moderate-income families, (2) aid in the
prevention or elimination of slums or blight, or (3) meet other urgent
community development needs. The agency can track some of its freshwater
projects on the basis of general categories, such as water and sewer and
flood and drainage activities. In addition to the Community Development
Block Grant program, local governments may apply for a loan guarantee
program, authorized under section 108 of the Housing and Community
Development Act of 1974, as amended.3 The local government pledges its
future year Community Development Block Grant funds as security for a
federally guaranteed loan, which provides funds to pursue neighborhood
revitalization projects. Freshwater projects are not specifically tracked
in this program. In addition to executing its own grants during fiscal
years 2000 through 2004, the agency, through a memorandum of agreement,
administered grants funded by the Appalachian Regional Commission.

Office of Public and Indian Housing

The Office of Public and Indian Housing provides programs for Indian
tribes and Alaska Native communities, which are similar to those provided
by the Office of Community Planning and Development. These programs are
the Indian Community Development Block Grant program governed by title I
of the Housing and Community Development Act of 1974, as amended,4 and the
Indian Housing Block Grant program governed by the Native American Housing
Assistance and Self Determination Act of 1996. The programs can provide
financial support for water infrastructure projects; however, the
freshwater component is not specifically tracked. Indian Housing Block
Grant recipients are eligible to secure financing for affordable housing
activities using a 95 percent federal loan guarantee under title VI of the
Native American Housing Assistance and Self-Determination Act.
    Infrastructure projects that support freshwater and sanitary waste
disposal for low- and moderate-income households are eligible activities
under the title VI program.

Department of the Interior: $6.3 Billion

Part of the mission of the Department of the Interior is to protect
natural areas through scientific research and to foster sound use of land
and water resources. Consequently, the department supports multiple types
of freshwater programs.

Bureau of Indian Affairs: $390.7 Million

Specifically related to freshwater resources, the Bureau of Indian Affairs
is responsible for protecting water and land rights and developing and
maintaining infrastructure, such as dams and drinking water facilities, on
55.7 million acres of land held in trust by the United States for Indian
tribes and Alaska Native communities. As part of these efforts, the agency
provides financial support for drinking water supply, wastewater
treatment, irrigation, dam safety, water rights litigation and
negotiation, and Indian land and water claim settlements programs. The
agency's authority to support these programs comes primarily from the
Snyder Act of 1921 and the Indian Dams Safety Act of 1993.

Bureau of Land Management: $313.3 Million

The mission of the Bureau of Land Management is to sustain the health,
diversity, and productivity of federally owned lands that are located
primarily in 12 western states. As such, the agency supports watershed
management and water dispute management activities and carries out these
efforts primarily under the Federal Land and Policy Management Act of
1976. Among its programs, the agency supports water resource inventories,
watershed assessments, wetland and stream projects, and the monitoring of
lake and stream ecosystems.

Bureau of Reclamation: $3.7 Billion

The mission of the Bureau of Reclamation is to manage, develop, and
protect water and related resources in an environmentally and economically
sound manner. As a part of these efforts, the agency is the nation's
largest supplier of water-managing 457 dams and 348  reservoirs in 17
western states-and delivers water to irrigate 10 million acres of land and
to supply more than 31 million municipal, rural, and industrial water
users. Financial support for freshwater programs is provided under a
number of different legal authorities, but primarily under the Reclamation
Act of 1902. The agency provides financial support for freshwater
activities primarily through the Water and Related Resources program,
through direct federal spending and through grant, loan, and loan
guarantee programs.5 The terms of funding vary and are dictated by project
authorization, legislation, or other authorizations. In addition to annual
appropriations, Reclamation receives funding from a variety of sources,

such as the Reclamation Fund,6 Central Valley Project Restoration Fund,7
and funds collected from surcharges placed on the use of water and power.
Reclamation also receives funds from other federal agencies to conduct
various freshwater programs, such as collecting data for the U.S.
Geological Survey's watershed management and flood control activities.
Moreover, Reclamation-under section 607 of the Foreign Assistance Act of
1961-periodically received funds from USAID and State to conduct
freshwater projects in other countries during fiscal years 2000 through
2004.

Fish and Wildlife Service: $653 Million

The mission of the Fish and Wildlife Service is, working with others, to
conserve, protect, and enhance fish, wildlife, and plants and their
habitats for the continuing benefit of the American people. As such, the
agency's freshwater programs primarily support watershed protection,
restoration, and management through direct federal spending and grant
programs.8 For example, under the Landowner Incentive Program, the agency
provides grants to state agencies with primary responsibility for fish and
wildlife to establish or supplement landowner incentive programs that
protect and restore habitats on private lands. Freshwater programs carried
out by the agency are conducted under a number of different legal
authorities-generally under the North American Wetlands Conservation Act
of 1989, the Pittman-Robertson Wildlife Restoration Act of 1937, and the
Dingell-Johnson Sport Fish Restoration Act of 1950. According to agency
officials, the majority of the funds come from dedicated funding
sources-the Pittman-Robertson Wildlife Restoration Act and the
Dingell-Johnson Sport Fish Restoration Act, which includes excise taxes
collected on sporting arms, ammunition, bows and arrows, and fishing
equipment. The remaining funds come from annual appropriations from the
general fund.

National Park Service: $227.4 Million

The mission of the National Park Service is to preserve unimpaired natural
and cultural resources and values of the national park system. Through the
National Park Service Organic Act of 1916, the agency mainly supports
watershed protection, restoration, and management programs as well as
drinking water supply and water rights management programs. Each of the
388 national parks is responsible for management activities in the park.
Information on the amount of financial support provided for freshwater
programs at individual parks is not tracked centrally. However, the agency
did provide information on major freshwater projects as well as the
financial support provided by the Water Resources Division. The agency
conducts freshwater work directly through wetlands restoration efforts at
the Everglades National Park and stream restoration activities affiliated
with the removal of the Elwha and Glines Canyon Dams in Olympic National
Park. In addition, the Water Resources Division within the agency provides
direct financial and technical support for freshwater resources management
and policy and operation support to units of the national park system.

U.S. Geological Survey: $1.1 Billion

The mission of the U.S. Geological Survey is to provide reliable
scientific information to, among other things, describe and understand the
Earth and manage freshwater resources. The agency conducts programs that
support the planning and operation of freshwater resources, primarily
through technical assistance and research activities. Specifically, the
agency collects basic data on stream flow, groundwater levels, and water
quality and conducts interpretive studies designed to answer specific
questions about water resources. These activities are primarily carried
out through the Cooperative Water Program, National Water Quality
Assessment, and Hydrologic Networks and Analysis Program. The agency
conducts its freshwater programs under many different legal
authorities-most generally under the U.S. Geological Survey Organic Act.
The agency also receives funds from other federal agencies-such as EPA,
the Corps, State, and Interior's National Park Service-to gather data on
water resources and water contaminant studies.

Department of Transportation: $182.7 Million

The Department of Transportation develops and coordinates policies to
provide for an efficient and economical national transportation system.
The department's freshwater programs include watershed management and
navigation.

Federal Highway Administration: $116.2 Million

The Federal Highway Administration is charged with carrying out highway
safety projects and administering the Federal-Aid Highway Program. Funded
by the Highway Trust Fund as authorized by the Transportation Equity Act
for the 21st Century and other acts, the program provides financial
resources and technical assistance to state and local governments for
constructing, preserving, and improving highways. The program provides
financial support for selecting, planning, designing, and building
highways. Funds may also be used for reducing water pollution due to
highway runoff and are included in the project's overall costs. States are
responsible for project oversight and may voluntarily report data spent on
individual project costs to the Federal Highway Administration. Another
component of the Federal-Aid Highway Program is the wetland mitigation
program, which replaces an average of 1.5 acres of wetlands for every acre
affected by highway construction activities. Financial information on this
program is not included in the agency's total because it is incomplete and
primarily available on an acreage basis, which compares acres of wetlands
replaced and the acres affected by highway construction activities.

Saint Lawrence Seaway Development Corporation: $66.5 Million

A wholly owned government corporation within the Department of
Transportation, the Saint Lawrence Seaway Development Corporation was
created by the Wiley-Dondero Act of May 13, 1954. In cooperation with the
Canadian St. Lawrence Seaway Management Corporation, the agency serves the
marine transportation industries by providing a safe, secure, reliable,
efficient, and competitive international waterway. The agency constructs,
operates, and maintains the part of the St. Lawrence Seaway between
Montreal and Lake Erie that is within the territorial limits of the United
States. The majority of the agency's activities are related to lock
infrastructure and waterway operations, maintenance, and security. The
agency receives the vast majority of its annual budget from an
appropriation from the Harbor Maintenance Trust Fund. The rest of its
budget is derived from other sources, such as interest income, rent
payments, and the collection of noncommercial tolls.

Independent Agencies: $15.6 Billion

Appalachian Regional Commission: $125.2 Million

The Appalachian Regional Commission, established by the Appalachian
Regional Development Act of 1965, as amended, seeks to foster economic and
community development across the 13-state Appalachian Region. The region
includes all of West Virginia and portions of Alabama, Georgia, Kentucky,
Maryland, Mississippi, New York, North Carolina, Ohio, Pennsylvania, South
Carolina, Tennessee, and Virginia. The agency provides grants, which are
primarily funded by annual appropriations, for basic infrastructure
services to public and nonprofit entities through its Area Development
Program. According to a senior agency official, approximately 33 percent
of the agency's budget goes toward grants for drinking water, wastewater,
and related activities. The agency has other programs that may also
provide financial support for freshwater activities, although that is not
their primary purpose. The Appalachian Regional Commission grants are
administered either by the agency or by another federal agency, such as
Agriculture's Rural Utilities Service; Commerce's Economic Development
Administration; Housing's Office of Community Planning and Development;
and, occasionally, EPA.

Environmental Protection Agency: $15.4 Billion

Within the Environmental Protection Agency, the Office of Water supports
most of the agency's freshwater efforts, primarily through the Drinking
Water and Clean Water State Revolving Funds. Under these programs, EPA
provides grants to states for below-market loans to municipalities for
drinking water or surface water protection and restoration projects. The
Clean Water State Revolving Fund supports the construction of municipal
wastewater facilities and nonpoint source pollution control and estuary
protection projects. The Drinking Water State Revolving Fund provides
financial support to community water systems for installing, upgrading, or
replacing infrastructure. EPA also administers other grant programs, such
as the Public Water System Supervision Grants Program, Water Quality
Cooperative Agreements, Non-Point Source Grants, and Wetland Program
Grants. These programs are conducted primarily under the Clean Water Act
and the Safe Drinking Water Act. EPA also receives funds from other
federal agencies to carry out freshwater programs. For example, EPA
received funds from the Corps for wetland restoration activities in
coastal Louisiana.

National Science Foundation: $112.0 Million

Established by the National Science Foundation Act of 1950, the National
Science Foundation is an independent federal agency whose mission is to
promote the progress of science; advance the nation's health, prosperity,
and welfare; and secure the nation's defense. Using annual appropriations
from the general fund, the agency provides grants for research activities
across scientific and engineering disciplines to address issues related
to, among other things, the preservation, management, and enhancement of
the environment. With regard to freshwater issues, the agency provides
financial support for research on, among other things, drinking water
treatment, desalination, flood control, wastewater treatment, and
watershed management. For example, during fiscal years 2000 through 2004,
the agency-through the Science and Technology Centers Program-provided
financial support to the Center for Sustainability of semi-Arid Hydrology
and Riparian Areas. The center will carry out multidisciplinary research
into the hydrology and management of freshwater resources in semi-arid
regions.

Small Business Administration: $0.3 Million

The Small Business Administration, created by the Small Business Act of
1953, seeks to assist the interests of small businesses. The agency does
not lend money; rather, it provides loan guarantees to small businesses.
The agency's Basic 7(a) and Basic 504 loan programs can be used for water
infrastructure projects, such as water supply and irrigation systems,
sewage treatment facilities, and dredging and surface cleanup activities.
Under both programs, the agency guarantees a portion of the loans and
shares the risk with a commercial lender if a borrower defaults on its
loan. A senior agency official notes that unlike the Basic 7(a) program,
the Basic 504 program receives no appropriations. Eligibility for the
programs varies slightly, but under both programs recipients must be a
for-profit corporation. The Small Business Administration initially
obligated about $327,000 during fiscal years 2000 to 2004 to cover
potential default on water-related loans in its loan guarantee program.
This small amount of obligations is not included in our governmentwide
totals.

Other Agencies

Our review focuses on the federal agencies that provide the majority of
the federal financial support for selected freshwater programs. Additional
agencies that support freshwater activities, as described by agency
officials, reports, and documents, are discussed below.

Bonneville Power Administration

The Bonneville Power Administration is a self-financing agency that
markets wholesale electrical power and operates and markets transmission
services in the Pacific Northwest. The agency pays for its costs through
power and transmission sales and funds the region's efforts to protect and
rebuild fish and wildlife populations in the Columbia River Basin.

Federal Emergency Management Agency 

Within the Department of Homeland Security, the Federal Emergency
Management Agency leads the nation's efforts to prepare for hazards and
manages the federal response and recovery efforts following any national
event. In terms of freshwater activities, the agency manages the National
Flood Insurance Program-a program that assists with flood insurance,
floodplain management, and flood hazard mapping activities.

Regional Economic Development Entities

Regional commissions provide assistance to some of the nation's most
chronically poor and distressed communities. Since its creation in 1965,
the Appalachian Regional Commission has been providing assistance to
counties affected by severe and chronic economic distress. More recently,
Congress created additional regional economic development entities. The
Delta Regional Authority, created in 2000, serves parts of Alabama,
Arkansas, Illinois, Kentucky, Louisiana, Mississippi, Missouri, and
Tennessee. The Northern Great Plains Regional Authority, created in 2002,
includes the states of Iowa, Minnesota, Nebraska, North Dakota, and South
Dakota. Additionally, Congress created a wholly intrastate commission in
1998, the Denali Commission, to provide infrastructure and economic
development throughout Alaska.

River Basin Commissions

The Water Resources Planning Act of 1965 authorized the President to
establish river basin commissions to serve as the principal agencies for
coordinating the development of water and related land resources in river
basins. In 1981, an executive order terminated six of these commissions.
Many river basin commissions established by interstate compacts, such as
the Delaware River Basin Commission, still exist. Information on federal
financial assistance provided to river basin commissions is not readily
available because individual commissions primarily maintain these data.

Tennessee Valley Authority

The Tennessee Valley Authority is a self-financing corporation of the
federal government that supplies affordable and reliable power and
operates fossil fuel, nuclear, and hydropower plants in the Tennessee
Valley. The agency receives its revenues through power sales and the sale
of bonds in the financial market and uses its own funds for a variety of
stewardship and watershed activities. These activities include reservoir
operations, navigation, watershed improvement activities, aquatic plant
management, and land planning and use.

Binational Commissions

During fiscal years 2000 through  2004, the United States provided
financial contributions to three binational commissions for freshwater
projects along U.S. borders. The United States typically made
contributions to the budgets of these commissions, and a portion of these
contributions supported freshwater projects along U.S. borders. Since the
commissions coordinate activities along U.S. borders with State and EPA,
financial information on the U.S. contributions for freshwater projects
during fiscal years 2000 through  2004 was available. These commissions,
as described by federal agencies and commission officials and documents,
are discussed below.

Border Environment Cooperation Commission: $15.4 Million

Created as a side agreement to the North American Free Trade Agreement,
the Border Environment Cooperation Commission is a binational
international organization that works to conserve, protect, and enhance
the environment along the U.S.-Mexico border. The commission's annual
budget for drinking water and wastewater treatment activities comes mainly
from EPA. The commission's annual budget for irrigation, air quality,
solid waste, and other projects comes from State and Mexico's Secretariat
of Environment and Natural Resources. Managed by a binational Board of
Directors, composed of five members from each country, the commission
identifies, supports, evaluates, and certifies various environmental
infrastructure projects. Once the commission certifies that sustainability
and public participation requirements are met, project sponsors may
qualify for funding from the North American Development Bank or from other
sources requiring such certification. Additionally, through its Project
Development Assistance Program, which is EPA-funded, the commission
provides technical grants to qualifying border communities for the
development of water and wastewater projects.

International Boundary and Water Commission: $151.1 Million

The International Boundary and Water Commission is a binational,
treaty-based organization comprised of a U.S. section, headquartered in El
Paso, Texas, and a Mexican section, headquartered in Ciudad Juarez,
Mexico. Through binational cooperation, the commission seeks to preserve
the international land and river boundary between Mexico and the United
States in a manner that balances economic, environmental, and sovereignty
needs; carry out the conservation, flood control, national ownership, and
utilization of international waters; and improve the quality and
utilization of international waters in a manner that supports ecological
needs and regional development. The U.S. section of the commission
operates under State's foreign policy guidance and receives an annual
appropriation through the Departments of Commerce, State, Justice, and
other related agencies' appropriation bills. The U.S. section of the
commission operates and maintains two international wastewater treatment
plants, multiple diversion dams, and numerous smaller in-river structures
for flood control and water distribution. In addition, the U.S. section
and the Mexican section of the commission jointly operate two
international dams. Additionally, the U.S. section of the commission is
responsible for the operation and maintenance of five flood control
projects with over 500 miles of levees and related structures, which
protect approximately 3 million residents and 1.5 million acres of
adjoining farmland in the United States and Mexico.

International Joint Commission: $8.1 Million

Established by the Boundary Waters Treaty of 1909, the International Joint
Commission is an independent binational organization that assists the
governments of the United States and Canada in addressing water quality
and quantity issues and air pollution problems along the U.S.-Canadian
border. The U.S. section of the commission receives an annual
appropriation through State for these purposes. The commission is made up
of six commissioners, three that are appointed by the President of the
United States and three appointed by the Governor in Council of Canada, on
the advice of the Prime Minister. Although the commission does not build
or maintain any water-related infrastructure, it undertakes research
efforts and analyses of binational water issues and of the operations of
selected water works affecting both countries. For example, a current
research and development effort is a 5-year, $20-million study to
determine changes to the operation of infrastructure that affect water
levels and flows on Lake Ontario and the St. Lawrence River. The U.S.
section and the Canadian government are sharing equally the cost of this
study.

Federal Financial Support for Freshwater Programs Abroad Appendix III

This appendix on U.S. financial support of freshwater programs abroad has
three sections. First, we provide a general overview of the agencies
responsible for the majority of the U.S. government's direct financial
support for freshwater programs abroad, along with the total amount each
agency provided for freshwater programs during fiscal years 2000 through 
2004, excluding aid provided to Afghanistan and Iraq. Second, we briefly
discuss other agencies that can also support freshwater programs abroad.
Third, we provide information on international organizations to which the
United States contributes annually and that support freshwater projects
around the world.

Federal Agencies

The following agencies provide the majority of the U.S. government's
financial support specifically for freshwater programs abroad. These
programs, as described by agency officials, documents, and reports, are
discussed below.

Department of Agriculture: $26.8 Million

With the Department of Agriculture, the Foreign Agricultural Service works
to improve foreign market access for U.S. products and provides food aid
and technical assistance to foreign countries. As the primary agency
responsible for Agriculture's international work, the agency administers
international research and technical assistance activities in coordination
with developing and transitional countries. These activities include
international cooperative research efforts on freshwater quality and
availability, irrigation, and watershed management issues. The majority of
the agency's financial support for freshwater activities abroad is
provided by the Export Credit Guarantee Program using various food aid
agreements, as authorized by several statutes, including the Food for
Progress Act of 1985; section 416(b) of the Agriculture Act of 1949, as
amended; and the McGovern-Dole International Food for Education and Child
Nutrition Program of 2003. Through these food aid agreements, the Export
Credit Guarantee Program provides U.S. agricultural commodities to a
recipient country for resale. The proceeds from the sale may be used to
support various agricultural, economic, and infrastructure development
projects in the recipient country. Recently, this program funded the
development of, among other things, water supply, irrigation, and water
treatment projects in countries such as Guatemala, Pakistan, Vietnam, and
Uzbekistan. Additionally, as authorized by section 1543 of the Food,
Agriculture, Conservation, and Trade Act of 1990, as amended, the agency
manages the Cochran Fellowship Program, which provides opportunities for
professionals from foreign countries to attend training programs on a
number of agricultural issues, including drought mitigation and irrigation
management.

Department of Defense: $0.5 Million

Although freshwater is not a focus area for the Department of Defense, the
department provides financial support for several efforts related to
freshwater projects abroad.1 In addition to providing engineering services
for military and civilian purposes in the United States, the Corps,
through its Civil Works program, provides technical assistance to foreign
countries on a number of freshwater issues, such as wastewater treatment,
flood control, and irrigation. The Corps is authorized by section 234
(Interagency and International Support Authority) of the Water Resources
Development Act of 1996 to provide up to $250,000 of its own funding for
technical assistance on freshwater projects to international organizations
and federal agencies in foreign countries. However, other federal
agencies, such as USAID, and the governments of foreign countries often
provide the funding that supports the Corps' freshwater work in foreign
countries. Recently, the Corps received funds from USAID to provide
technical assistance for the reconstruction of drinking water
infrastructure and wastewater treatment systems in Iraq. The Corps also
received funds from USAID for similar work in Afghanistan.

In addition to the Corps, the Defense Security Cooperation Agency, within
the Office of the Secretary of Defense, coordinates and oversees
humanitarian assistance programs abroad. Under 10 U.S.C. S: 2561, U.S.
military units are authorized to perform humanitarian activities
(primarily carried out through contracts) in communities and areas where
military units are deployed abroad. These activities include, among other
activities, digging wells and improving sanitation facilities. For
example, military commanders in Afghanistan and Iraq from the United
States Central Command have used these funds to repair and augment
drinking water and wastewater systems.

Department of the Interior: $128.7 Million

As part of its mission to conserve fish, wildlife, and plants and their
habitats for the American people, the Fish and Wildlife Service-within the
Department of the Interior-protects wetlands used by waterfowl and
migratory birds, in Canada and Mexico, as well as in countries in Central
and South America and the Caribbean. The agency provides financial support
to protect, restore, and enhance these wetlands through several programs,
including the North American Wetlands Conservation Act of 1989 and the
Neotropical Migratory Bird Conservation Act of 2000. Through its North
American Wetlands Conservation program, the agency coordinates with
representatives from Canada and Mexico to provide grants for long-term
acquisition, restoration, and/or enhancement of critical wetlands used by
waterfowl and migratory birds in the three countries. Grant recipients are
required to provide matching funds at a 1:1 ratio. Under the Neotropical
Migratory Bird Conservation Act of 2000, the Fish and Wildlife Service
established a matching grants program that, among other things, supports
the maintenance, protection, and restoration of the habitats of birds in
the United States, Latin America, and the Caribbean. Government agencies,
individuals, corporations, and other private entities may apply for a
grant from this program, if they provide $3 for every $1 they receive from
the agency.

Department of State: $8.7 Million

As recognized in the Foreign Assistance Act of 1961, as amended, the
Department of State is the lead agency responsible for the continuous
supervision and general direction of foreign assistance. The department's
mission is to create a more secure, democratic, and prosperous world for
the benefit of the American people and the international community.

Several bureaus within State provide financial support for freshwater
programs abroad; however, the level of their involvement varies. The
Bureau of Oceans and International Environmental and Scientific Affairs
coordinates the department's overall policy for international
environmental issues, including freshwater issues. The bureau provides
grants to support international initiatives on watershed management,
access to safe drinking water, flood control, and water dispute
management. The Bureau of Near Eastern Affairs coordinates U.S. foreign
policy and diplomatic relations with countries in the Middle East and
North Africa. In support of the United State's role in the Middle East
Peace Process, this bureau promotes technical cooperation between Arabs
and Israelis on numerous freshwater issues. Typically, the bureau provides
funds to other federal agencies, such as those within Agriculture and
Interior, for projects designed to promote water cooperation and the
building of strong working relationships between water officials and
experts in the region.

The Bureau of Population, Refugees, and Migration coordinates the
department's efforts related to global population, refugees, and migration
issues. This bureau provides financial support for various water and
sanitation projects in foreign countries through grants and cooperative
agreements issued to international and nongovernmental organizations.
These projects provide water for drinking, irrigation, and sanitation to
temporary refugee camps. Although State does not specifically track
freshwater expenditures for refugee camps, a bureau official estimates
that less than $5 million a year is obligated to support these activities.

The Bureau of International Organization Affairs develops and implements
the U.S. government's policies and efforts with the United Nations, its
affiliated agencies, and other international organizations. This bureau
manages the U.S. government's assessed and voluntary contributions to
various organizations. Most of these contributions are made directly to
the core budgets of these organizations and are not designated for
specific activities.

Independent Agencies

African Development Foundation: $0.9 Million

The African Development Foundation is a public corporation and federal
agency established by the African Development Foundation Act of 1980, as
amended. The agency supports community-based, self-help initiatives to
alleviate poverty and to promote sustainable development in Africa.
Currently working in 15 sub-Saharan African countries, the agency provides
grants of usually $250,000 or less directly to community-based,
nongovernmental organizations and enterprises administered by Africans.
The agency's grants enable community-based groups to expand their
production capacity and increase incomes, thereby improving the
community's economic security. Although freshwater is not a program focus,
the agency supported various irrigation, drinking water, and wastewater
projects in countries such as Botswana, Guinea, Mali, and Niger.

National Science Foundation: $0.7 Million

Established by the National Science Foundation Act of 1950, as amended,
the National Science Foundation is an independent U.S. government agency
whose mission is to promote the progress of science; advance the national
health, prosperity, and welfare; and secure the national defense. Using
annual appropriations from the general fund, the agency provides grants
for scientific research for various freshwater issues abroad, including
watershed management, drinking water treatment, and wastewater management.
The statute creating the agency authorizes it to promote the interchange
of scientific information between scientists and engineers in the United
States and foreign countries. For example, the agency's Office of
International Science and Engineering provides grants to U.S. scientists
and engineers to participate in international collaborative research
partnerships with their foreign colleagues.

U.S. Agency for International Development: $1.8 Billion

The U.S. Agency for International Development is an independent federal
agency created under the Foreign Assistance Act of 1961, as amended.
Operating under guidance from the Secretary of State, USAID provides
economic, development, and humanitarian assistance around the world in
support of U.S. foreign policy goals. As part of the agency's efforts to
promote an integrated approach to water resources management, USAID
provides technical assistance, educational and outreach opportunities,
emergency relief assistance, and international leadership on a variety of
water issues in over 76 countries. USAID reports that over the 5-year
period covered in this analysis (fiscal years 2000 through 2004),
approximately 5 percent of its annual appropriation has been used to
support freshwater-related activities. USAID provides financial support
for freshwater programs through partnerships with nongovernmental
organizations; government entities (host country and U.S. government
agencies); and public international organizations, such as United Nations
agencies.

During fiscal years 2000 through 2004, USAID missions in Egypt, Jordan,
and the West Bank/Gaza received the most financial support from USAID for
freshwater projects.2 Most funds for freshwater projects are distributed
as grants, although some funds are provided in the form of loan guarantees
through USAID's Development Credit Authority. The majority of USAID's
freshwater funds are used to support water supply projects. USAID also
supports sanitation and wastewater management projects. Additionally,
USAID provides financial support for, among other things, watershed
management, irrigation, and flood and drought forecasting and preparedness
activities in foreign countries. During fiscal years 2002 through 2004,
USAID provided about $670 million for the reconstruction of drinking water
infrastructure and wastewater treatment systems in Afghanistan and Iraq.3
USAID primarily drew on funds from the President's Supplemental
Appropriation for the Reconstruction and Development of Iraq and
Afghanistan to carry out this work.

U.S. Trade and Development Agency: $28.6 Million

Created under the Foreign Assistance Act of 1961, as amended, the U.S.
Trade and Development Agency is an agency that provides financial support
to promote U.S. private sector participation in development projects in
developing and middle-income countries. The agency offers early planning
support to overseas development projects by funding technical assistance
activities, feasibility studies, conferences, and other activities. The
agency provides grants directly to host-country project sponsors (i.e.,
local, regional, and national governments; private sector; and
nongovernmental organizations) that agree to select U.S. companies to
perform the work associated with project planning. Agency-supported
projects span a variety of sectors, including drinking water supply,
wastewater treatment, irrigation, and flood control. For example, the
agency supported the development of water treatment and supply projects in
Ghana, wastewater treatment facilities in India, and an irrigation project
in China.

Other Agencies

Our review focused on the federal agencies that provide the majority of
the federal financial support for selected freshwater programs abroad.
Additional agencies that support freshwater programs, as described by
agency officials, reports, and documents, are discussed below.

Department of Health and Human Services-Centers for Disease Control and
Prevention

In conjunction with the Pan American Health Organization, the Centers for
Disease Control and Prevention developed a Safe Water System program to
help provide safe drinking water to developing countries. To date, this
project has supplied inexpensive, adaptable, and flexible drinking water
technologies to communities in at least 19 countries.

Export-Import Bank of the United States

The Export-Import Bank is an independent agency that assists in financing
the export of U.S. goods and services to international markets by
providing U.S. businesses with working capital guarantees, export credit
insurance, loan guarantees, and direct loans. Although freshwater-related
goods and services are not a primary focus, the bank provides financial
support for the export of water purification devices, wastewater treatment
systems, and technologies designed to prevent and mitigate water
pollution.

Inter-American Foundation

The Inter-American Foundation is an independent foreign assistance agency
that provides grants to nongovernmental organizations in Latin America and
the Caribbean for economic and social development projects. The agency
primarily relies on congressional appropriations to fund development
projects. The agency also has access to additional funding from the Social
Progress Trust Fund, which consists of payments on loans made by the
United States to Latin American and Caribbean countries under the Alliance
for Progress program. According to a senior agency official, the agency
does not specifically track freshwater expenditures, which are a small
part of the agency's total portfolio; activities supported include
improving access to drinking water, developing irrigation systems, and
protecting watersheds.

Overseas Private Investment Corporation

The Overseas Private Investment Corporation is a self-sustaining U.S.
government corporation created to facilitate U.S. private investment in
developing countries and emerging market economies, primarily by offering
political risk insurance, loan guarantees, and direct loans. The agency
provides financial support for various development projects worldwide,
including some freshwater projects.

Peace Corps

Created in late 1961, the Peace Corps promotes world peace and friendship
by helping developing countries meet their need for trained workers while
promoting mutual understanding between Americans and citizens of foreign
countries. The Peace Corps supports volunteers who commit to 2-year
assignments in host communities where they work on various community
development projects, such as teaching English, strengthening farmer
cooperatives, or building sanitation systems. Although some volunteers
work on water sanitation systems and agricultural projects, the Peace
Corps does not directly fund any freshwater projects.

Selected International Organizations

During fiscal years 2000 through  2004, the United States indirectly
supported freshwater programs abroad through its financial contributions
to various international organizations that support freshwater programs
abroad. The United States typically made contributions to the general
budgets of these organizations, although some contributions were directed
for a particular project or program. Some portion of the general budgets
of these organizations was used to support freshwater projects around the
world. These organizations can be split into two groups: (1) multilateral
development banks and international financial institutions and (2) other
international organizations. Contributions to multilateral development
banks and international financial institutions are typically coordinated
by the Department of the Treasury,4 while contributions to the other
organizations are typically coordinated by State. These organizations'
freshwater projects and programs, as described by officials and documents,
are discussed below.

Multilateral Development Banks and Financial Institutions

African Development Bank Group

The African Development Bank Group-the African Development Bank and the
African Development Fund-provides loans and offers technical assistance to
African countries for development projects. The bank's priority areas
include rural water supply, irrigation, and other agricultural and
development projects. The bank's membership includes all countries in
Africa as well as some countries in the Americas, Asia, and Europe.

Asian Development Bank

The Asian Development Bank-the Ordinary Capital Resources group and the
Asian Development Fund-provides loans and loan guarantees and offers
technical assistance to low- and middle-income countries in Asia and the
Pacific for a variety of economic and social development projects.
Traditionally, the bank supports projects related to agriculture
(including irrigation) and rural development. Recently, the bank placed
additional importance on its Social Infrastructure Sector, which supports
projects to improve water supply. Since its inception, the bank has lent
the most money to Indonesia; China, Pakistan, and India were also major
borrowers.

European Bank for Reconstruction and Development

Created in 1991, the European Bank for Reconstruction and Development
seeks to foster the transition toward open market-oriented economies in
countries in Central and Eastern Europe and the Commonwealth of
Independent States. The bank provides financial support for, among other
issues, the development and improvement of water and wastewater systems.

Global Environment Facility

The Global Environment Facility is a multilateral, financial institution
that provides grants and other financial assistance, particularly in low-
and middle-income countries, for projects that protect the global
environment. One of the organization's top priority areas is protecting
freshwater resources. Working in partnership with the U.N. Environment
Programme, the U.N. Development Programme, and the World Bank, the
organization funds projects to improve protection of safe drinking water
supply, manage water disputes, and reduce water-borne pollutants.

Inter-American Development Bank

The Inter-American Development Bank provides financial and technical
support for various development projects in Latin America and the
Caribbean. The bank funds projects in several sectors, including
agriculture, fisheries, water and sanitation, and the environment. Since
1961, the bank has lent most of its money to Brazil, Argentina, Mexico,
and Colombia.

International Fund for Agricultural Development

Established in 1977, the International Fund for Agricultural Development
works to alleviate poverty and improve nutrition around the world, with a
special focus on low-income countries. As an international financial
institution associated with the United Nations, the organization provides
loans and grants for technical assistance, research, and activities in
several areas related to freshwater. These areas include agricultural
development, irrigation, and water infrastructure development in rural
areas.

North American Development Bank

Created in a side agreement to the North American Free Trade Agreement,
the North American Development Bank is jointly funded by Mexico and the
United States. Working closely with the Border Environment Cooperation
Commission, the bank finances projects related to drinking water supply,
wastewater treatment, and other environmental infrastructure projects
along the U.S.-Mexico border. The United States provides its annual
contributions-through EPA-to the bank as a grant. The bank may use a
portion of these contributions to support freshwater projects along the
U.S. borders. The bank's Board of Directors consists of members from the
United States and Mexico, with the chairmanship of the board annually
alternating between U.S. and Mexican representatives.

World Bank Group

The World Bank Group, the largest multilateral development bank, is made
up of the International Bank for Reconstruction and Development,
International Development Association, International Finance Corporation,
and Multilateral Investment Guaranty Agency. These institutions provide
loans and loan guarantees and offer technical assistance for various
economic and social development projects. The bank has several
water-related program areas that focus on, among other things, extending
water supply and sanitation services to the urban poor, increasing rural
access to water supply and sanitation, and improving water resources
management. The bank has funded the construction of dams, flood control
infrastructure, and drinking water and wastewater treatment facilities in
countries around the world. Together with the U.N. Development Programme,
the World Bank created the Water and Sanitation Program, which works with
donors, governments of foreign countries, and nongovernmental
organizations to support the development of cost-effective water delivery
technologies and implementation of strategies for providing safe water and
sanitation to the world's poor.

Other International Organizations That Support Freshwater Programs Abroad 

Inter-American Institute for Cooperation on Agriculture

Created more than six decades ago, the Inter-American Institute for
Cooperation on Agriculture is a specialized international agency that
promotes agricultural development, food security, and rural economic
development in North, Central, and South America and the Caribbean. The
institute's focal areas include rural development, agribusiness
development, and agricultural and food safety. Within these areas, the
institute provides technical assistance for the management of, among other
things, water resources, watershed management, and efforts to combat
desertification.

Organization of American States

The Organization of American States brings together 35 countries in North,
Central, and South America and the Caribbean to strengthen cooperation and
advance common interests. Through its Office for Sustainable Development
and Environment, the organization provides technical assistance to
countries and promotes cooperation on various issues, including integrated
water resources management. For example, the organization provides
financial support to help countries in South and Central America manage
transboundary water resources in several major river basins. The
organization works in partnership with the United Nations' Environment
Programme, the World Bank, and the Global Environment Facility on these
projects. The organization also serves as the technical secretariat for
the Inter-American Water Resources Network, which was created in 1993 to
foster cooperation on water management issues in the hemisphere.

Organisation for Economic Co-operation and Development

The Organisation for Economic Co-operation and Development brings together
30 industrialized nations in a forum to discuss, develop, and refine
economic and social policies. The organization is funded by contributions
from member countries, with the United States providing 25 percent of the
general budget. Among other issues, the organization carries out research
and analysis on water management policies, water use for agriculture,
water pricing, water and wastewater infrastructure financing, and
technologies to improve water quality.

Pan American Health Organization

The Pan American Health Organization is an international public health
agency that works to improve the health and living standards of residents
in North, Central, and South America and the Caribbean. Affiliated with
the United Nations and the World Health Organization, the organization
provides technical support to various countries on a number of
health-related issues. Among the organization's top priorities are
improving supplies of clean water and adequate sanitation facilities.

Ramsar Convention on Wetlands

The Ramsar Convention on Wetlands is an inter-governmental treaty adopted
in 1971 that addresses various wetlands-related issues worldwide. A small
secretariat carries out the work of the convention using financial
contributions from the 138 countries that are signatories to the
convention. The United States makes voluntary contributions to the
organization's general budget and also funds a grant program for
wetlands-related training. The organization has also used U.S.
contributions to support the protection of key wetland habitats for
migratory birds in Latin American and the Caribbean.

United Nations

Among other purposes, the United Nations seeks to achieve international
cooperation in solving economic, social, cultural, and humanitarian
problems. Funded through assessed dues paid by its 191 member nations, the
United Nations consists of a number of commissions, funds, organizations,
and other entities developed to respond to global needs. The United States
has been the largest contributor of funds since the organization's
inception in 1945, making annual contributions that amount to about 22
percent of the United Nations' general budget. In addition to its assessed
contributions, the United States provides voluntary contributions to the
United Nations and its affiliated organizations. Most of these
contributions are used for humanitarian and development programs. With
respect to freshwater projects, the United Nations provides advisory and
technical assistance to governments on various freshwater issues, such as
water resources management and infrastructure improvements. Within the
United Nations' system, 26 entities support water-related projects.
However, according to a U.N. official who works on freshwater issues, the
entities do not currently work together to track the financial support
provided for freshwater projects.

World Conservation Union

Created in 1948, the World Conservation Union is an international
environmental organization with members from the government of foreign
countries, governmental agencies, and nongovernmental entities. The
organization has over 1,000 members from 140 countries, including 6 U.S.
federal agencies-USAID, Agriculture's Forest Service, Commerce's National
Oceanic and Atmospheric Administration, Interior's Fish and Wildlife
Service and National Park Service, and EPA. The organization's mission is
to encourage the conservation of nature and ensure that the use of natural
resources is ecologically sustainable. In addition to providing technical
assistance on the management and restoration of wetlands and water
resources, the organization supports several freshwater projects, such as
the Water for Nature Initiative. This initiative works with partners in
approximately 40 countries to improve water resources management in 10
river basins.

Comments from the U.S. Department of Health and Human ServicesAppendix IV

Comments from the U.S. Department of the InteriorAppendix V

Comments from the U.S. Agency for International DevelopmentAppendix VI

GAO Contacts and Staff AcknowledgmentsAppendix VII

GAO Contacts

Ms. Anu K. Mittal, (202) 512-3841 Edward Zadjura, (202) 512-9914

Staff Acknowledgments

In addition to those named above, Diana Cheng, Richard P. Johnson, Nathan
Morris, Lynn Musser, Jonathan Nash, and Kim Raheb made significant
contributions to this report. Denise Fantone, Jessica Fast, Carol
Herrnstadt Shulman, and John Hutton also contributed to this report.

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