    HIV/AIDS: USAID and U.N. Response to the Epidemic in the Developing World
    (Chapter Report, 07/24/98, GAO/NSIAD-98-202).

    Pursuant to a congressional request, GAO reviewed the human
    immunodeficiency virus/acquired immunodeficiency syndrome (HIV/AIDS)
    prevention activities of the Agency for International Development (AID)
    and the United Nations' (U.N.) Joint Program on HIV/AIDS (UNAIDS),
    focusing on the: (1) contributions AID has made to the global effort to
    prevent AIDS and the methods AID uses to provide financial oversight
    over its AIDS prevention activities; and (2) extent to which the United
    Nations has met its goal of leading an expanded and broad-based,
    worldwide response to the HIV/AIDS epidemic.

    GAO noted that: (1) AID has made important contributions to the fight
    against HIV/AIDS; (2) AID-supported research helped to identify
    interventions proven to curb the spread of HIV/AIDS that have become the
    basic tools for the international response to the epidemic; (3) applying
    these interventions, AID projects have increased awareness of the
    disease; changed risky behaviors; and increased access to treatment of
    sexually transmitted diseases and to condoms, which have helped slow the
    spread of the disease in the target groups; (4) under the terms of
    cooperative agreements with private implementing organizations, AID
    managers are expected to closely monitor projects, but the major
    responsibility for internal financial management and control rests with
    recipient organizations; (5) AID's financial oversight primarily
    consists of conducting preaward evaluations of prospective funding
    recipients, reviewing quarterly expenditure reports, and requiring
    audits; (6) officials from AID's Office of Inspector General said that
    there were no indications of systemic problems from audits conducted;
    (7) in its first 2 years of operation, the U.N. has made limited
    progress in achieving its goal of leading a broad-based, expanded global
    effort against HIV/AIDS; (8) while data indicate that spending by the
    cosponsors has not increased, data are not yet available to measure the
    U.N.'s progress in increasing spending by donor countries, the private
    sector, or affected countries; (9) moreover, theme groups, the forum for
    coordinating U.N. efforts in the field, have had a difficult start and,
    in some countries, cosponsor agencies are just beginning to work
    together; (10) the UNAIDS Secretariat has not been successful in
    providing technical assistance and other support to facilitate theme
    group activities and performance measures for the U.N.'s HIV/AIDS
    programs; and (11) despite the U.N.'s limited progress in meeting its
    objectives, GAO observed innovative and low-cost activities that were
    implemented by cosponsor agencies.

    --------------------------- Indexing Terms -----------------------------

     REPORTNUM:  NSIAD-98-202
         TITLE:  HIV/AIDS: USAID and U.N. Response to the Epidemic in the
                 Developing World
          DATE:  07/24/98
       SUBJECT:  International organizations
                 Acquired immunodeficiency syndrome
                 Developing countries
                 Financial management
                 Infectious diseases
                 Health care services
                 Sexually transmitted diseases
                 Health statistics
                 International cooperation
    IDENTIFIER:  AID AIDS Control and Prevention Project
                 AIDS
                 U.N. Joint Program on HIV/AIDS

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    Cover
    ================================================================ COVER

    Report to Congressional Requesters

    July 1998

    HIV/AIDS - USAID AND U.N.
    RESPONSE TO THE EPIDEMIC IN THE
    DEVELOPING WORLD

    GAO/NSIAD-98-202

    HIV/AIDS

    (711298)

    Abbreviations
    =============================================================== ABBREV

      AIDS - Acquired Immunodeficiency Syndrome
      AIDSCAP - AIDS Control and Prevention Project
      AZT - zidovudine
      GPA - Global Program on AIDS
      HIV - Human Immunodeficiency Virus
      HIV/AIDS - Human Immunodeficiency Virus/Acquired Immunodeficiency
         Syndrome
      NGO - non-governmental organization
      OIG - Office of the Inspector General
      OMB - Office of Management and Budget
      PVO - private voluntary organization
      STD - sexually transmitted disease
      UNAIDS - Joint United Nations Programme on HIV/AIDS
      UNDP - United Nations Development Program
      UNESCO - United Nations Educational, Scientific, and Cultural
         Organization
      UNFPA - United Nations Population Fund
      UNICEF - United Nations Children's Fund
      USAID - U.S.  Agency for International Development
      WHO - World Health Organization

    Letter
    =============================================================== LETTER

    B-280249

    July 27, 1998

    The Honorable Benjamin Gilman
    Chairman, Committee on International Relations
    House of Representatives

    The Honorable Jim McDermott
    House of Representatives

    This report responds to your request that we review the Human
    Immunodeficiency Virus/Acquired Immunodeficiency Syndrome (HIV/AIDS)
    prevention activities of the U.S.  Agency for International
    Development (USAID) and the Joint United Nations Programme on
    HIV/AIDS (UNAIDS).  Specifically, we examined (1) the contributions
    USAID has made to the global effort to prevent AIDS and the methods
    USAID uses to provide financial oversight over its AIDS prevention
    activities and (2) the extent to which UNAIDS has met its goal of
    leading an expanded and broad-based, worldwide response to the
    HIV/AIDS epidemic.

    As arranged with your office, unless you publicly announce its
    contents earlier, we plan no further distribution of this report
    until 30 days after the date of this report.  We will then send
    copies of this report to the Secretary of State, the Administrator of
    USAID, the Director of the Joint United Nations Programme on
    HIV/AIDS, and to other appropriate congressional committees.  We will
    make copies available to others upon request.

    Please call me at (202) 512-4128 if you or your staff have any
    questions.  Major contributors to this report are listed in appendix
    V.

    Benjamin F.  Nelson
    Director, International Relations
     and Trade Issues

    EXECUTIVE SUMMARY
    ============================================================ Chapter 0

       PURPOSE
    ---------------------------------------------------------- Chapter 0:1

    The Human Immunodeficiency Virus/Acquired Immunodeficiency Syndrome
    (HIV/AIDS) epidemic is spreading rapidly throughout the developing
    world, where over 90 percent of the 30 million people living with the
    disease reside.  In these countries, the epidemic has begun to erode
    gains in health, child survival, education, and economic development.

    Since the mid-1980s, the U.S.  Agency for International Development
    (USAID) and the United Nations have established efforts to address
    the epidemic.  USAID primarily uses private voluntary organizations
    to implement HIV/AIDS prevention activities in developing countries.
    In 1996, the United Nations reorganized its HIV/AIDS program in
    response to donor concerns that the U.N.  effort was too heavily
    focused on the medical and public health aspects of the disease and
    did not sufficiently address the social, economic, and developmental
    issues affecting the spread of HIV/AIDS.  In light of the importance
    of these efforts to address the HIV/AIDS epidemic in the developing
    world, the Chairman, House Committee on International Relations, and
    Representative Jim McDermott asked GAO to examine USAID and U.N.
    programs.  This report examines (1) the contributions USAID has made
    to the global effort to prevent HIV/AIDS and the methods USAID uses
    to provide financial oversight over its HIV/AIDS prevention
    activities; and (2) the extent to which the Joint United Nations
    Programme on HIV/AIDS (UNAIDS) has met its goal of leading an
    expanded and broad-based, worldwide response to the HIV/AIDS
    epidemic.

       BACKGROUND
    ---------------------------------------------------------- Chapter 0:2

    UNAIDS and the World Health Organization (WHO) estimate that over 30
    million people were living with the HIV infection at the end of 1997.
    Most people living with HIV/AIDS reside in the developing
    world--two-thirds live in sub-Saharan Africa--where the disease
    continues to spread rapidly.  According to the UNAIDS Secretariat,
    the number of new infections increased from 3.1 million in 1996 to
    5.8 million in 1997.  International donors contribute about $250
    million a year to support HIV/AIDS prevention activities in the
    developing world.  The United States has been the largest single
    donor, contributing $117 million a year, through USAID and in support
    of the U.N.  HIV/AIDS program.

    USAID and the United Nations have been important contributors to the
    fight against HIV/AIDS since the mid-1980s.  While both the United
    Nations and USAID have sought to reduce the spread of the epidemic,
    they have somewhat different, yet mutually supporting, roles and
    objectives.  As a bilateral agency, USAID works in partnership with
    governments, other donors, and private organizations to support
    research and implement HIV/AIDS interventions in countries.  The
    U.N.'s role is in advocating, mobilizing, and coordinating the
    international response worldwide in addition to managing HIV/AIDS
    activities in 152 countries.

    USAID began its HIV/AIDS assistance program in 1986, when very little
    was known about the epidemic or how to fight it.  USAID's initial
    efforts primarily consisted of research on the causes, extent of the
    problem, and ways to prevent the disease's spread and of short-term
    technical assistance to more than 74 countries.  In the 1990s,
    Congress began appropriating more money specifically to combat the
    HIV/AIDS problem, and it was elevated to a USAID priority for
    planning and budgeting.  USAID developed an agencywide goal to reduce
    the number of new HIV infections by identifying and applying
    interventions to prevent HIV transmission.  It designed targeted
    programs to meet this goal and, by 1997, USAID was directly
    supporting major HIV/AIDS programs in 28 countries.  USAID relied
    heavily on cooperative agreements\1 with the private sector to
    implement its program.  Under the terms of these agreements, the
    primary financial oversight responsibility is on the funding
    recipient.

    The U.N.  efforts to address HIV/AIDS began in 1987 under the
    auspices of WHO.  WHO provided technical and financial support to
    fight the epidemic worldwide, primarily focusing on the medical and
    public health aspects of the disease.  By the early 1990s, the United
    Nations and donors agreed that a more comprehensive approach was
    needed.  On January 1, 1996, UNAIDS replaced WHO's Global Program on
    AIDS in an attempt to draw upon the experience and skills of all U.N.
    agencies.

    UNAIDS is composed of six U.N.  agency cosponsors\2 and a
    Secretariat, which is the coordinating unit.  When forming UNAIDS,
    the cosponsor agencies agreed to increase resources devoted to
    HIV/AIDS activities; to mobilize resources for HIV/AIDS in affected
    countries, including increased private sector involvement; and to
    coordinate with other cosponsor agencies at the country level.  The
    UNAIDS Secretariat was expected to (1) advocate increased political
    and financial support for HIV/AIDS activities; (2) develop a
    framework for measuring the performance and objectives of HIV/AIDS
    activities; (3) organize entities at the country level--called "theme
    groups"--as the forum for coordinating U.N.  efforts; and (4) provide
    technical support and information to theme groups on what activities
    work best to facilitate development and implementation of national
    HIV/AIDS strategies.  The biennial budget for the UNAIDS Secretariat
    in 1996-97 was $120 million, of which the United States contributed
    $34 million, or about 28 percent.

    --------------------
    \1 A cooperative agreement is a funding mechanism used by a federal
    agency to transfer funds to an organization to support an agency
    program.

    \2 UNAIDS consists of the following six agencies:  the United Nations
    Children's Fund (UNICEF); the United Nations Development Program
    (UNDP); the United Nations Population Fund (UNFPA); the United
    Nations Educational, Scientific and Cultural Organization (UNESCO);
    WHO; and the World Bank.

       RESULTS IN BRIEF
    ---------------------------------------------------------- Chapter 0:3

    Despite the continued spread of HIV/AIDS in many countries, USAID has
    made important contributions to the fight against HIV/AIDS.
    USAID-supported research helped to identify interventions proven to
    curb the spread of HIV/AIDS that have become the basic tools for the
    international response to the epidemic.  Applying these
    interventions, USAID projects have increased awareness of the
    disease; changed risky behaviors; and increased access to treatment
    of sexually transmitted diseases and to condoms, which have helped
    slow the spread of the disease in target groups.

    Under the terms of cooperative agreements with private implementing
    organizations, USAID managers are expected to closely monitor
    projects, but the major responsibility for internal financial
    management and control rests with recipient organizations.  USAID's
    financial oversight primarily consists of conducting pre-award
    evaluations of prospective funding recipients, reviewing quarterly
    expenditure reports, and requiring audits.  Officials from USAID's
    Office of the Inspector General said that there were no indications
    of systemic problems from audits conducted.

    In its first 2 years of operation, UNAIDS has made limited progress
    in achieving its goal of leading a broad-based, expanded global
    effort against HIV/AIDS.  While available information indicates that
    spending by the cosponsors has not increased, data are not yet
    available to measure UNAIDS' progress in increasing spending by donor
    countries, the private sector, or affected countries.\3 Moreover,
    theme groups, the forum for coordinating U.N.  efforts in the field,
    have had a difficult start and, in some countries, cosponsor agencies
    are just beginning to work together.  Finally, the UNAIDS Secretariat
    has not been successful in providing technical assistance and other
    support to facilitate theme group activities and has only recently
    begun to establish a framework for developing performance measures
    for the U.N.'s HIV/AIDS programs.  Despite UNAIDS' limited progress
    in meeting its broader coordination and resource mobilization
    objectives, GAO observed innovative activities that were implemented
    by cosponsor agencies.\4

    --------------------
    \3 Throughout this report, reference to U.N.  funding for HIV/AIDS
    activities is limited to the six cosponsoring agencies and the
    Secretariat.

    \4 GAO conducted fieldwork in the Dominican Republic, Honduras,
    India, the Philippines, and Zambia.

       PRINCIPAL FINDINGS
    ---------------------------------------------------------- Chapter 0:4

       USAID FUNDED DEVELOPMENT AND
       IMPLEMENTATION OF EFFECTIVE
       INTERVENTIONS
    ---------------------------------------------------------- Chapter 0:5

    The interventions developed, in part, by USAID-supported efforts,
    have become the basic tools for HIV/AIDS prevention.  They are

      -- information, education, and counseling to raise awareness of the
         threat of HIV/AIDS in an effort to promote behavior changes,
         such as abstinence, that will reduce risk;

      -- treatment of sexually transmitted diseases which, if untreated,
         can facilitate transmission of the HIV virus; and

      -- promotion of increased condom use through condom "social
         marketing," or advertising the availability and appeal of using
         condoms.

    In elevating HIV/AIDS prevention to an agency priority, USAID devised
    a strategy that relies on development and application of
    interventions in target groups based on specific country needs.
    Programs in countries GAO visited focused on the high-risk groups
    that spread the disease and used proven interventions to change
    behavior and reduce the chance of infection.

    These interventions have been proven to have an impact on HIV/AIDS
    because they result in behavior changes that reduce the risk of
    disease transmission.  However, it is difficult to determine the link
    between a particular activity or program and reductions in the
    incidence of HIV/AIDS because of the long incubation period for the
    disease; a person can be infected as a result of activity from 7 to
    10 years previously.  Thus, in addition to blood testing to measure
    the impacts of its HIV/AIDS activities in target groups, USAID also
    relies upon proxy indicators, such as behavioral change.  Public
    health experts agree that the proxy indicators used by USAID are
    reasonable indicators of changes in HIV incidence.

    GAO's review of internal and external evaluations, conducted by
    technical experts from the public and private sectors and academia,
    and other data collection efforts, as well as discussions with
    representatives of high-risk groups, found that USAID projects have
    increased knowledge of HIV, changed risky behaviors, and increased
    access to treatment for sexually transmitted diseases and to condoms,
    thus helping slow the spread of the disease in targeted groups such
    as commercial sex workers.  Evaluations conducted for USAID's largest
    project, the AIDS Control and Prevention Project (AIDSCAP),
    determined that its activities were successful in the countries where
    it had projects.  For example, in the Dominican Republic, USAID found
    that commercial sex workers and tourist resort staff were the primary
    conduits for HIV/AIDS.  USAID focused its efforts on these groups,
    providing information about the disease to the workers, distributing
    condoms, and counseling them on alternative employment options.  The
    percentage of HIV-positive commercial sex workers at one clinic
    funded by USAID slowed from 5.8 percent in 1995 to 3.3 percent in
    1996.

          NATURE OF USAID'S FINANCIAL
          OVERSIGHT
    -------------------------------------------------------- Chapter 0:5.1

    Following direction from Congress, USAID primarily relies on
    U.S.-based private voluntary organizations and indigenous
    nongovernmental organizations to implement its HIV/AIDS programs.
    USAID has mainly used cooperative agreements to fund these
    organizations' efforts.  Under these agreements, project managers are
    expected to be substantially involved in planning and monitoring
    project progress; however, recipient organizations have the primary
    responsibility for their internal financial management and control.
    According to USAID officials, these agreements provide maximum
    flexibility to USAID and its private partners to design, implement,
    and change work plans without a formal process for review and
    approval.

    USAID's financial oversight generally consists of (1) conducting
    pre-award evaluations to determine if a recipient has appropriate
    financial and management systems in place to handle the USAID
    financing; (2) reviewing quarterly expenditure reports submitted by
    the funding recipient to monitor the level of funds expended; and (3)
    obtaining annual external audits which, in accordance with the Single
    Audit Act,\5 provide information to oversight officials and program
    managers on whether funding recipients' financial statements are
    fairly presented.  The audits are also intended to provide reasonable
    assurance that federal assistance programs are carried out in
    accordance with applicable laws and regulations.  The annual single
    audit reports of USAID's $200 million, 6-year AIDSCAP project did not
    indicate any financial management or reporting problems.  The Office
    of the Inspector General determined that there were no indications
    from audits conducted that systemic problems existed.

    --------------------
    \5 The Single Audit Act of 1984 (31 U.S.C.  7501-7507), requires
    organizations that meet a minimum threshold of federal funding to
    undergo a single, nonfederal audit each year.

       UNAIDS HAS MADE LIMITED
       PROGRESS TOWARD MEETING ITS
       GOAL
    ---------------------------------------------------------- Chapter 0:6

    UNAIDS has made limited progress toward achieving its goal of leading
    a broad-based, expanded global response to HIV/AIDS.  Expenditure
    data for cosponsor agencies indicate that U.N.  spending has not
    increased since the establishment of UNAIDS, but data are not
    available to measure spending from other sources.  At the country
    level, the success of theme groups has been uneven.  The UNAIDS
    Secretariat has not provided support to facilitate country programs.

          HIV/AIDS SPENDING BY
          COSPONSOR AGENCIES HAS NOT
          INCREASED
    -------------------------------------------------------- Chapter 0:6.1

    Although one of UNAIDS' objectives was to increase resources devoted
    to HIV/AIDS by cosponsor agencies, spending on HIV/AIDS has not risen
    since the creation of UNAIDS.  Instead, spending declined from $337
    million in 1994-95 to $332 million in 1996-97.  While UNFPA and UNDP
    increased spending for HIV/AIDS after UNAIDS was established and
    UNESCO began programming for HIV/AIDS activities, these increases
    were outweighed by decreased expenditures by the World Bank and
    UNICEF.  The decline in U.N.  spending for HIV/AIDS occurred despite
    an increase in overall spending by cosponsor agencies of 6.5 percent.

          DATA ARE NOT AVAILABLE TO
          MEASURE PROGRESS IN
          MOBILIZING RESOURCES FROM
          OTHER SOURCES
    -------------------------------------------------------- Chapter 0:6.2

    One of UNAIDS' objectives was to increase spending by donors and
    affected countries and to increase private sector involvement in
    fighting the epidemic.  However, the UNAIDS Secretariat is still
    analyzing survey data that should assist in developing a baseline to
    measure UNAIDS' progress in mobilizing donor and affected country
    resources.\6

    Preliminary data from the survey indicate that contributions from
    major donors\7 remained relatively stable between 1993 and 1996 at
    about $250 million a year.  Data for 1997 were not available.
    Despite Secretariat efforts at the international level to encourage
    private sector involvement in the fight against HIV/AIDS, the UNAIDS
    Secretariat reports that private sector HIV/AIDS activities have
    remained limited to date.  GAO's work in the field and the
    Secretariat's reports indicate that at the country level U.N.
    agencies have only made limited efforts to encourage private sector
    support of HIV/AIDS activities.  U.N.  officials offered several
    reasons for the lack of private involvement, including inadequate
    information about the impact of the disease on its workforce and the
    lack of government encouragement.

    --------------------
    \6 Study on the National and International Financing of the National
    Response to HIV/AIDS, UNAIDS/PCB(6)/98.3 (Geneva, Switzerland:  May
    24, 1998).

    \7 Major donors were identified by the United Nations as Australia,
    Canada, Denmark, France, Germany, Japan, Luxembourg, the Netherlands,
    Norway, Sweden, the United Kingdom, and the United States.

          DIFFICULT BEGINNING FOR
          THEME GROUPS
    -------------------------------------------------------- Chapter 0:6.3

    The UNAIDS Secretariat was expected to organize theme groups as the
    forum for coordinating cosponsor agency activity in the field.
    Cosponsor agencies were expected to work together in the theme groups
    to support national governments' HIV/AIDS programs.  UNAIDS' surveys
    of theme groups and GAO's work in the field indicate that cosponsor
    agencies met regularly and even conducted joint projects in some
    countries, such as the Dominican Republic.  In others, such as
    Honduras and India, representatives rarely met.  Despite the presence
    of World Bank projects in three of the five countries GAO visited,
    the World Bank representative did not attend any of the theme group
    meetings.  A 1997 survey of theme groups, compiled by the Secretariat
    after GAO conducted its fieldwork, showed that theme groups were
    making some progress in working together.  However, in areas where
    the groups reported progress, such as national resource mobilization,
    less than half of the theme groups that responded to the survey were
    operating effectively.  U.N.  officials reported several reasons for
    theme group difficulties:  (1) lack of guidance to agency field
    representatives regarding how theme groups should operate and what
    the scope of their mission should be, (2) lack of individual
    accountability for theme group success, and (3) lack of commitment to
    working together in theme groups because of concerns held by some
    cosponsor representatives about the role of UNAIDS as the
    organizational vehicle for the U.N.  response.  Officials from the
    UNAIDS Secretariat said that they met with cosponsor agencies in
    March 1998 to address these problems and develop strategies to
    improve theme group coordination.

          UNAIDS SECRETARIAT HAS NOT
          PROVIDED SUPPORT REQUIRED TO
          FACILITATE COUNTRY PROGRAMS
    -------------------------------------------------------- Chapter 0:6.4

    Despite being directed by its governing board to develop a framework
    for measuring the performance of the U.N.'s HIV/AIDS programs within
    a year of UNAIDS' establishment, the UNAIDS Secretariat has been slow
    to create an evaluation framework.  Only recently has the
    Secretariat:  (1) staffed the evaluation unit that is charged with
    developing performance measures and (2) funded a survey to gather
    data on spending by donors and affected countries on HIV/AIDS.  The
    survey data are necessary to measure UNAIDS' progress toward meeting
    its objectives.  In addition, in countries GAO visited, cosponsor
    agency officials did not think that best practices information and
    technical support available from the UNAIDS Secretariat were useful.
    For example, U.N.  officials told GAO that the best practices
    information was too theoretical and lacked project implementation
    guidance.  Cosponsor agency officials also said they rarely used
    technical support from the Secretariat because it was not tailored to
    their specific needs and, in some cases, they were not aware of its
    availability.  Secretariat officials acknowledged deficiencies in its
    country support activities and have begun to develop more
    country-specific materials that include implementation guidance.

       RECOMMENDATIONS
    ---------------------------------------------------------- Chapter 0:7

    GAO is making no recommendations in this report.

       AGENCY COMMENTS AND GAO'S
       EVALUATION
    ---------------------------------------------------------- Chapter 0:8

    USAID, the Department of State, the Department of Health and Human
    Services, and the UNAIDS Secretariat provided written comments on a
    draft of this report.  These agencies emphasized the unique and
    important role UNAIDS plays in the global fight against HIV/AIDS.
    USAID, the UNAIDS Secretariat, and State had concerns about
    information GAO presented on UNAIDS.  The agencies' comments and
    GAO's detailed evaluation of them are included in the report where
    appropriate.

    USAID shared GAO's concerns about the areas in which UNAIDS has not
    made sufficient progress and noted that it is working with UNAIDS to
    strengthen UNAIDS' role.  USAID, State, and the UNAIDS Secretariat
    noted that UNAIDS has only been in existence for 2-1/2 years and were
    concerned that it may have been too early to assess the program.
    State also said it was disappointed at the very negative tone in the
    report concerning UNAIDS' activities and believed that the report did
    not give any credit to UNAIDS for what it had achieved.  Furthermore,
    State said that GAO implied that U.N.  agencies and the U.S.
    government should stop supporting UNAIDS.  The UNAIDS Secretariat
    stated that it was pleased with the overall presentation and
    objectivity of the report but was concerned that GAO's presentation
    of USAID's and UNAIDS' programs obscured the important distinctions
    between them.  The Secretariat also noted that it had expected a more
    positive perspective on the program.

    GAO agrees that UNAIDS plays an important and unique role in the
    global response to HIV/AIDS and clarified the report to better
    reflect the distinction between the UNAIDS and USAID's program.
    While GAO recognizes that UNAIDS has been in existence for only 2-1/2
    years, GAO did not evaluate the program's impact on the HIV/AIDS
    epidemic.  In its report, GAO presents the facts as it found them to
    be, including areas needing improvement and areas that have worked
    well.  In fact, the report specifically identifies UNAIDS'
    accomplishments, including information on innovative grassroots
    interventions.  Also, GAO did not evaluate whether support for UNAIDS
    should be continued.  GAO's objective, as stated in the report, was
    to examine the program's progress, since its inception, in meeting
    established objectives such as increasing resources devoted to
    HIV/AIDS and working together in theme groups at the country level.

    INTRODUCTION
    ============================================================ Chapter 1

       THE EXTENT AND IMPACT OF THE
       HUMAN IMMUNODEFICIENCY
       VIRUS/ACQUIRED IMMUNODEFICIENCY
       SYNDROME EPIDEMIC
    ---------------------------------------------------------- Chapter 1:1

    The Human Immunodeficiency Virus/Acquired Immunodeficiency Syndrome
    (HIV/AIDS)\1 epidemic continues to spread rapidly in the developing
    world, where more than 90 percent of the 30 million people living
    with the HIV infection live (see fig.  1.1).  Moreover, the UNAIDS
    Secretariat recently reported that more than 90 percent of the 5.8
    million new infections in 1997 (up from 3.1 million in 1996) were in
    developing countries (see fig.  1.2).  Sub-Saharan Africa has the
    worst infection rate, accounting for 3.4 million new infections in
    1997.  In that region,
    7.4 percent of people aged 15 to 49 are infected.  Estimates for
    South and South-East Asia indicate the disease is also rapidly
    spreading in that region, with 6.4 million currently living with
    HIV/AIDS and 1.3 million new infections in 1997.

       Figure 1.1:  Map of HIV/AIDS
       Prevalence, 1997

       (See figure in printed
       edition.)

       Sources:  The Joint United
       Nations Programme on HIV/AIDS
       (UNAIDS) and the World Health
       Organization (WHO).

       (See figure in printed
       edition.)

       Figure 1.2:  Annual Number of
       New HIV Infections in Selected
       Regions, 1980-97

       (See figure in printed
       edition.)

    \a Established market economies include North America, Western
    Europe, Australia, and New Zealand.

    Source:  UNAIDS.

    In many developing countries, HIV/AIDS has begun to erode decades of
    gains in health, child survival, life expectancy, education, and
    economic development.  For example, U.S.  Bureau of the Census
    projections for Zambia indicate that by 2010, AIDS may increase
    infant mortality rates nearly 60 percent higher than would have been
    expected without the disease.  Similarly, projections for Zimbabwe
    indicate that by 2010, life expectancy will decline from 70 years to
    less than 35 years as a result of AIDS and in Uganda from 54.5 years
    to 35.5 years.  Since the start of the epidemic, more than 8 million
    children have lost either their mother or their father because of
    AIDS.  AIDS' impact on families and public health systems is
    weakening economies as people in their prime working years are
    afflicted by the disease and governments and families divert scarce
    resources to care for them for extended periods of time.

    The donor community is spending approximately $250 million a year to
    address the HIV/AIDS epidemic in the developing world.  The United
    States is the largest single donor, contributing $117 million in 1997
    through the U.S.  Agency for International Development (USAID) that
    includes specific support for UNAIDS.  However, HIV/AIDS poses
    serious challenges to the world community because of the extent of
    the epidemic and the cost and difficulty of changing deeply rooted
    traditions and behaviors that contribute to the spread of the
    disease:  according to a study commissioned by WHO, between $1.5
    billion and $2.9 billion would be needed from donors and affected
    countries annually to implement behavioral and blood safety
    strategies to prevent HIV/AIDS in developing countries.  Moreover,
    other epidemics had their roots essentially in medical problems and
    could be addressed through biomedical remedies from public health
    systems.  However, absent a vaccination or cure, slowing the reach of
    the virus must be accomplished by addressing such fundamental
    cultural and social traditions as the role of women, sexual
    practices, and inheritance laws.  For example, according to USAID,
    tradition and laws in Kenya do not allow women to inherit property.
    Without skills or experience in earning money, if their husbands die,
    women often have no other recourse than to engage in prostitution.

    --------------------
    \1 HIV is the viral infection that causes AIDS.

       USAID AND U.N.  RESPONSE TO THE
       EPIDEMIC
    ---------------------------------------------------------- Chapter 1:2

    USAID and the United Nations first began to address the epidemic in
    the mid-1980s.  While both USAID and the United Nations seek to
    reduce the spread of the epidemic, they have somewhat different yet
    mutually supporting roles, objectives, and coverage.  As a bilateral
    agency, USAID works in partnership with governments, other donors,
    and private organizations to support research and implement HIV/AIDS
    interventions in the 28 countries where it has major programs.  The
    U.N.'s role is in advocating, mobilizing, and coordinating the
    international response worldwide in addition to managing HIV/AIDS
    activities in 152 countries.

          USAID RESPONSE TO THE
          EPIDEMIC
    -------------------------------------------------------- Chapter 1:2.1

    Since it began its HIV/AIDS assistance program in 1986, USAID's goal
    has been to reduce the incidence of new HIV/AIDS infections.  In the
    1980s, very little was known about the epidemic or how to fight it.
    As a result, USAID focused its initial efforts on understanding the
    causes and extent of the epidemic and on identifying ways to prevent
    its spread.  At the direction of Congress in 1986, USAID supported
    WHO's Global Program on AIDS (GPA), and it also paid for public and
    private research efforts and activities in the field.  These field
    activities included operations research on interventions that prevent
    the spread of HIV/AIDS; surveillance and analysis of the incidence,
    spread, and impact of the disease; and assistance in countries'
    design and implementation activities.  During this learning phase,
    USAID reported that it was the first donor to introduce HIV/AIDS
    prevention activities in most countries.  Further, by providing
    short-term technical assistance to USAID missions in more than 74
    countries and funding small-scale projects to prevent new infections,
    it educated USAID staff and host country officials about the
    epidemic.

    By the early 1990s, USAID became more knowledgeable about the
    disease, and Congress increased funding for HIV/AIDS (see fig.1.3).
    USAID designed a strategy to focus on country-level projects that
    could have a measurable impact on the epidemic.  From 1991 to 1997,
    USAID supported the AIDS Control and Prevention (AIDSCAP) project.
    By far the most ambitious international HIV/AIDS prevention effort
    ever undertaken, AIDSCAP was a worldwide program intended to help
    USAID overseas missions design and implement HIV/AIDS prevention
    projects.  AIDSCAP directly managed comprehensive projects in some
    countries and supplied technical assistance to USAID missions as
    requested.  USAID relied primarily on private voluntary organizations
    (PVO) and nongovernmental organizations (NGO) to implement its
    HIV/AIDS programs, both at its Washington, D.C., headquarters and in
    the field.

       Figure 1.3:  USAID Funding for
       HIV/AIDS Prevention, 1986-97

       (See figure in printed
       edition.)

    Note:  Only U.N.  grant funding was provided in fiscal years 1986
    ($1.1 million) and 1987 ($5 million).

    Source:  USAID.

    By 1997, USAID had incorporated the goal of reducing HIV/AIDS
    transmission as one of five objectives in its global health
    improvement portfolio and had delineated performance goals and
    indicators to measure its progress.  Agency funding for HIV/AIDS
    activities had increased (to about $125 million in 1993, leveling off
    at about $117 million a year), and USAID shifted more resources to
    missions to develop their own comprehensive programs.  Headquarters'
    efforts became focused on providing technical assistance as needed
    and supporting research.  In fiscal year 1997, the majority of
    USAID's funds supported project activities at the country level--with
    major programs in 28 countries ($81 million), followed by centrally
    managed technical assistance and research support ($20 million), and
    grants to UNAIDS ($16 million).

    In 1997, USAID initiated three cooperative agreements\2 with several
    PVOs and has a fourth in process.  These agreements provide up to
    $290 million over 5 years for HIV/AIDS activities--about $40 million
    to conduct operations research and field testing to refine and
    develop best practices for prevention and care; up to $150 million
    for technical assistance, as requested by missions; up to $75 million
    to implement programs that advertise and promote the appeal,
    availability, and use of condoms, as requested by missions; and about
    $25 million to provide program design/monitoring and evaluation,
    lessons learned, and information dissemination services.

    --------------------
    \2 A cooperative agreement is a funding mechanism used by a federal
    agency to transfer funds to an organization to support an agency
    program.

          THE U.N.  RESPONSE TO
          HIV/AIDS
    -------------------------------------------------------- Chapter 1:2.2

    WHO first began collecting and publishing information on HIV/AIDS in
    1981.  The U.N.  General Assembly directed WHO to develop and
    coordinate the agency's first program to respond to HIV/AIDS by
    creating the Special Program on AIDS in 1987, subsequently renamed
    GPA in 1988.  GPA's mission was to strengthen the capacity of
    governments to respond to the epidemic and to help establish national
    AIDS programs.  WHO provided technical and financial support, ranging
    from $100,000 to $400,000 to initiate national programs.  WHO is
    credited with making major contributions to nations' efforts against
    the epidemic, including protecting blood supply systems,
    strengthening national behavior research, and improving disease
    surveillance.

    In the early 1990s, U.N.  officials and donors increasingly
    recognized the need for a multisectoral response to the complex
    challenges of the HIV/AIDS epidemic--including the social, economic,
    and development issues affecting the spread of the virus.  They
    realized that WHO's medically based response was insufficient.  They
    were concerned that countries were dependent on GPA for operational
    support and, as a result, were not devoting enough of their own
    resources to the effort.  Also, they expressed the need for better
    coordination and delineation of roles and responsibilities among
    various U.N.  agencies.  To address these concerns, on January 1,
    1996, the United Nations replaced GPA with the Joint United Nations
    Programme on HIV/AIDS (UNAIDS).  The 1996-97 biennial budget for the
    UNAIDS Secretariat was $120 million, of which the United States
    contributed $34 million, or about 28 percent.

    The U.N.'s goal in creating UNAIDS was to lead a broad-based,
    expanded, worldwide effort to prevent the transmission of HIV/AIDS.
    UNAIDS is composed of a Secretariat and six U.N.  agency cosponsors:
    the United Nations Children's Fund (UNICEF); the United Nations
    Development Program (UNDP); the United Nations Population Fund
    (UNFPA); the United Nations Educational, Scientific, and Cultural
    Organization (UNESCO); WHO; and the World Bank.  Each cosponsor was
    expected to expand its financial support for HIV/AIDS efforts, to try
    to mobilize resources for HIV/AIDS in affected countries, and to
    coordinate with other cosponsor agencies at the country level.

    Unlike WHO's role in GPA, the UNAIDS Secretariat was not expected to
    provide significant financial support and technical advisers to
    countries.  Instead, it was established primarily as a coordinating
    body and was expected to advocate increased political and financial
    support for HIV/AIDS activities, to devise a framework for
    performance measures to be used in managing HIV/AIDS activities, to
    provide technical support and best practice information to help
    develop and carry out national HIV/AIDS strategies, and to organize
    entities at the country level--called "theme groups"--as the forum
    for coordinating U.N.  efforts.  Theme groups were to be composed of
    field representatives of U.N.  cosponsor agencies.  The groups were
    expected to work together to assist national governments develop and
    implement HIV/AIDS programs.  As of May 1998, 127 HIV/AIDS theme
    groups were operating in 152 countries.

       OBJECTIVES, SCOPE, AND
       METHODOLOGY
    ---------------------------------------------------------- Chapter 1:3

    At the request of the Chairman of the House International Relations
    Committee and Representative Jim McDermott, we reviewed the
    contributions made by USAID and the United Nations in designing and
    implementing programs to slow the spread of HIV/AIDS.  Specifically,
    we examined (1) the contributions USAID has made to the global effort
    to prevent HIV/AIDS, and the methods USAID uses to provide financial
    oversight for its HIV/AIDS prevention activities; and (2) the extent
    to which UNAIDS has met its goal of leading an expanded and
    broad-based, worldwide response to the HIV/AIDS pandemic.  We did not
    evaluate the program's impact on the HIV/AIDS epidemic or whether
    U.S.  support for the program should continue.

    To examine USAID's contributions to the global effort to prevent
    HIV/AIDS, we reviewed expert studies on the disease and
    interventions, and reviewed internal and external USAID project
    evaluations from 1995 to 1998.  We compared the reported data with
    evidence we gathered in the field.  To view USAID efforts in the
    field, we chose countries in different parts of the world with both
    emerging and advanced epidemics.  In countries with emerging
    epidemics, HIV/AIDS is primarily concentrated in high-risk groups,
    and in countries with advanced epidemics it has spread to the general
    population.  In Latin America and the Caribbean, we visited the
    Dominican Republic and Honduras, both of which have emerging
    epidemics.  USAID considers Honduras the epicenter of the epidemic in
    Central America because it has the highest concentration of
    HIV-positive people in its high-risk groups.  In Asia we visited
    India, which has more HIV-positive people than any other country in
    the world, although still largely concentrated in high-risk groups,
    and the Philippines, which has an emerging epidemic.  In Africa, we
    visited Zambia, which has an advanced epidemic, with about 20 percent
    of the general population infected with HIV.  In the countries we
    visited, we reviewed internal USAID mission project papers and 1997
    mission progress reports and observed USAID projects.  To gather
    evidence of the effectiveness of USAID's country-level projects, we
    reviewed behavior surveys and available surveillance data; and met
    with mission directors, population, health, and nutrition officers,
    HIV/AIDS project officers, staff from PVOs and NGOs implementing
    projects, host government officials, project participants, and
    recipients of services, including commercial sex workers, men who
    have sex with men, and youth, volunteers, a condom social marketing
    organization, and private sector representatives involved in HIV/AIDS
    activities, and people living with HIV/AIDS.  We visited project
    sites to see how interventions were implemented and to discuss the
    views of the recipients of USAID activities.

    To examine the level of financial oversight USAID exercised over
    program activities, we reviewed Office of Management and Budget (OMB)
    and USAID guidance relating to the use of cooperative agreements and
    contracts.  We reviewed several relevant contracts, cooperative
    agreements, and associated procurement records relating to active
    HIV/AIDS projects to determine whether they provided for appropriate
    oversight as required by federal procurement regulations and guidance
    from OMB and USAID.  We discussed financial oversight
    responsibilities with USAID project managers, procurement staff, and
    financial management officers in headquarters and in the five
    countries we visited.  We also reviewed the financial record-keeping
    and reporting requirements that USAID placed on recipients of USAID
    funds.  In addition, we reviewed quarterly expenditure reports from
    PVOs from 1994 through 1997 and discussed financial reporting and
    selected management and accounting policies with PVO staff to
    determine their compliance with OMB and agency provisions.  We
    reviewed USAID's administrative approval and payment procedures and
    studied recent USAID assessments of its financial and operational
    oversight responsibilities with PVOs.  We reviewed pre-award
    evaluations for four headquarters-led projects and two mission-led
    projects and reviewed audit reports related to the centrally managed
    projects in the five countries we visited.  We also met with Office
    of the USAID Inspector General (OIG) staff to discuss their reviews
    of these reports and independent audit assessments.

    As an agency of the U.S.  government, we have no direct authority to
    review the operations of multilateral organizations such as the
    United Nations.  However, throughout this review we obtained broad
    access to agency staff members and official information at the
    headquarters, regional, and country level.  To determine whether
    UNAIDS has achieved its goal to lead an expanded and broad-based,
    worldwide response to the HIV/AIDS epidemic, we measured progress
    against criteria set forth in the U.N.'s Economic and Social Council
    resolution endorsing the creation of a Joint United Nations Program
    on HIV/AIDS, the memorandum of understanding signed by the six
    cosponsoring agencies, and the strategic plans of the UNAIDS
    Secretariat and the cosponsoring agencies.  We conducted audit work
    at the UNAIDS Secretariat in Geneva, Switzerland, and at the
    headquarters of each of the six cosponsor agencies, including the
    Washington headquarters of the Pan-American Health Organization.

    At the UNAIDS Secretariat, we interviewed officials from the Office
    of the Executive Director and the Departments of External Relations;
    Policy, Strategy and Research; and Country Support.  We obtained and
    analyzed staffing and budget documents of the Secretariat and
    analyzed the scope of work for each department.  We also reviewed
    several of the "best practices" documents produced by the Department
    of Policy, Strategy and Research and discussed the best practices
    outputs with knowledgeable officials from USAID.  We interviewed
    officials from the cosponsor agencies charged with directing their
    agencies' HIV/AIDS activities and with officials from other offices
    and departments of cosponsor agencies that are relevant to addressing
    HIV/AIDS--such as WHO's Global Tuberculosis Program.

    To determine U.N.  spending on HIV/AIDS, we obtained expenditure data
    for 1992 to 1997 directly from the UNAIDS Secretariat and from the
    headquarters offices of the six cosponsor agencies.  We also obtained
    agency expenditure data reported by the UNAIDS Program Coordinating
    Board.  We did not verify the data reported by or provided directly
    to us from the agencies and the UNAIDS Secretariat.  In attempting to
    determine the level of spending by the major donors and developing
    nations, we reviewed preliminary data from a study on global HIV/AIDS
    expenditures conducted by the UNAIDS Secretariat and Harvard
    University's School of Public Health.\3 We also met with government
    officials to discuss the level and type of financial support for
    HIV/AIDS activities and to discuss barriers to increasing resources
    to fight the disease.  To determine the level of activity by the
    private sector in support of HIV/AIDS, we interviewed host
    government, U.N., USAID, and NGO officials in our case study
    countries and analyzed reports prepared by the UNAIDS Secretariat.

    To gain an understanding of UNAIDS' progress in addressing the
    HIV/AIDS pandemic over time and issues surrounding the transition
    from WHO's Global Program on AIDS to the current Joint Program on
    HIV/AIDS, we interviewed a U.N.  diplomat instrumental in the
    negotiations establishing UNAIDS and knowledgeable officials from
    U.N.  agencies, USAID, the Department of State, and the U.S.  Centers
    for Disease Control.

    To determine how well cosponsor agencies work together and the types
    of interventions provided, we reviewed surveys of theme group
    participants provided by the UNAIDS Secretariat and conducted case
    studies of U.N.  programs in the five countries we visited.  While in
    these countries, we interviewed officials and obtained strategic
    planning documents from most of the U.N.  cosponsor agencies active
    in the country; host government officials, including officials from
    the national AIDS program and the Ministries of Health; USAID; other
    bilateral donor programs; international and local PVOs and NGOs; and
    local activists and people living with HIV/AIDS.  We also observed
    firsthand the intervention activities of the U.N.  agencies.

    We conducted our work from July 1997 through June 1998 in accordance
    with generally accepted government auditing standards.

    --------------------
    \3 Study on the National and International Financing of the National
    Response to HIV/AIDS, UNAIDS/PCB(6)/98.3 (Geneva, Switzerland:  May
    24, 1998).

    USAID HAS MADE IMPORTANT
    CONTRIBUTIONS TO HIV/AIDS
    PREVENTION
    ============================================================ Chapter 2

    USAID has elevated HIV/AIDS to an agency priority and developed a
    targeted strategy to achieve its objective of reducing the incidence
    of HIV/AIDS.  USAID's main contributions have been (1) support for
    research that helped to identify interventions ultimately proven in
    clinical trials to prevent HIV transmission; and (2) implementation
    of projects at the country level that increased awareness of the
    disease, reduced risky behaviors, and increased access to treatment
    of sexually transmitted diseases (STD) and to condoms, which have
    helped slow the spread of the disease in target groups.

    USAID relies primarily on cooperative agreements with PVOs to
    implement its programs, both at headquarters and in the field.  Under
    the terms of these agreements, the primary responsibility for
    financial oversight rests with recipients.  USAID's oversight
    consists of pre-award evaluations, quarterly expenditure reports, and
    annual external audits.  OIG officials said that there were no
    indications from audits conducted that systemic problems existed.

       USAID SUPPORTED THE DEVELOPMENT
       OF ACCEPTED INTERVENTIONS
    ---------------------------------------------------------- Chapter 2:1

    USAID has funded public and private research efforts to identify
    interventions that became the principal tools used in the global
    response to HIV/AIDS.  When USAID began its program in the mid-1980s,
    medical experts recognized that the key to slowing HIV transmission
    was behavior change and that traditional medical responses were not
    sufficient.  However, research was only beginning to identify
    effective interventions.  USAID capitalized on expertise developed in
    its health and child survival programs and built upon the research
    conducted by WHO to test and implement interventions targeted at
    HIV/AIDS prevention.

    With support from USAID and other donors, experts identified
    interventions that, when implemented in a culturally appropriate
    manner and combined in a coordinated effort, have been proven through
    clinical trials and longitudinal studies to have an impact on the
    spread of AIDS.  They are

      -- information, education, and counseling to raise awareness of the
         threat of HIV/AIDS in an effort to promote positive behavior
         changes such as abstinence or reduction in the number of sexual
         partners, and safer sex practices;

      -- treatment of STDs which, if left untreated, can facilitate
         transmission of the HIV infection; and

      -- promotion of increased condom use through condom "social
         marketing" to prevent transmission of the virus.

          INFORMATION, EDUCATION, AND
          COUNSELING
    -------------------------------------------------------- Chapter 2:1.1

    The first intervention, attempting to change risky behavior through
    increased awareness, has posed a particular challenge to HIV/AIDS
    experts.  The behaviors that result in transmission of the virus are
    often deeply rooted in social and cultural traditions, and people
    often find them difficult to discuss.  For example, in some African
    countries, polygamous unions may force "junior wives" into
    prostitution to earn money.  In addition, research on ways to promote
    change in sexual behaviors is not advanced.  Even when effective
    approaches have been identified, they may not always be transferable
    from one cultural environment to another.  For example, USAID's
    largest HIV/AIDS program--AIDSCAP--noted the difficulty in
    encouraging Rwandan refugees to take individual action to change
    their risky behavior when they had no control over the rest of their
    life.

    USAID supported a number of efforts to identify approaches to achieve
    behavioral change through clinical trials of HIV prevention
    counseling and testing in Africa, Asia, Latin America, and the
    Caribbean.\1 For example, AIDSCAP worked with the United Nations and
    research institutions from Kenya, Tanzania, Trinidad, and the United
    States to assess the efficacy of efforts intended to promote
    voluntary HIV counseling and testing.  In 1997, USAID signed a
    cooperative agreement to support a 5-year, $40-million program for
    operations research and field testing of interventions to further
    refine and develop best practices for prevention and care activities.

    In the five countries we visited, USAID projects used creative
    approaches to increase HIV/AIDS awareness and promote behavior
    change.  For example, in Honduras, USAID--in conjunction with
    UNICEF--supported youth theater groups to develop plays with
    HIV/AIDS-related themes.  To reach out-of-school youth, USAID
    supported pregame mock soccer matches, where HIV Virus and Death
    teams battled Abstinence and Condom teams.  Also, in the Indian state
    of Tamil Nadu, USAID targeted education efforts at truck drivers, who
    had been identified as key transmitters of the virus.  On a field
    trip, we saw roadside meetings between counselors and truckers to
    discuss the risks of HIV transmission and demonstrate how to use
    condoms correctly.

    --------------------
    \1 Conducted by the University of California's Center for AIDS
    Prevention Studies.

          TREATMENT OF SEXUALLY
          TRANSMITTED DISEASES
    -------------------------------------------------------- Chapter 2:1.2

    USAID was among the pioneers in funding research to determine whether
    having an STD increases the risk of transmitting HIV.  This research
    concluded that STDs, especially those that cause lesions, provide a
    pathway for the HIV virus to enter the body and that STDs were highly
    prevalent in many of the populations most affected with HIV/AIDS.  As
    early as 1991, USAID reported that the risk of HIV transmission
    significantly increased when other STDs are present and worked with
    WHO to develop standardized treatments.  The link between STDs and
    HIV transmission was eventually confirmed by the results of a 3-year
    trial in Tanzania.  The trial concluded that increased STD treatment
    reduced HIV incidence by about 40 percent.

    Improving STD treatment capacity was a component of USAID's AIDS
    prevention strategy in every country we visited.  In Honduras, USAID
    supported the expansion of health clinic services to include
    treatment of STDs.  Further, USAID's AIDSCAP program supported STD
    research in the Philippines, trained health care providers in STD
    treatment in India, and developed national guidelines for improved
    STD care in 18 other countries.

          CONDOM SOCIAL MARKETING
    -------------------------------------------------------- Chapter 2:1.3

    Another intervention developed and tested with USAID's support is
    condom social marketing, which relies on increasing the availability,
    attractiveness, and demand for condoms among target populations
    through advertising and public promotions.  USAID projects encourage
    production and marketing of condoms by the private sector to ensure
    the availability of affordable and quality condoms when and where
    people need them.  The development of this marketing strategy was
    based on USAID-sponsored research and experience that showed that
    people are more likely to use a condom if they were affordable, high
    quality, and available when and where needed.  World Bank data
    demonstrated that condom sales increased dramatically in many
    developing countries after condom social marketing programs were
    introduced.  For example, condom sales in Brazil rose from 406,000 in
    1991 to nearly 27 million in 1996 after condom social marketing
    programs began.

          IMPACTS ON INCIDENCE OF AIDS
          ARE DIFFICULT TO MEASURE
    -------------------------------------------------------- Chapter 2:1.4

    USAID, as well as UNAIDS, World Bank, and private research
    institutions, have noted the difficulty in determining the direct
    impact of interventions on the incidence of AIDS.  The interventions
    used by USAID have been proven to affect HIV/AIDS incidence because
    they result in behavior changes that reduce the risk of disease
    transmission.  However, it is difficult to determine the link between
    a particular activity or program and reductions in the incidence of
    HIV/AIDS because of the long incubation period for the disease; a
    person can be infected as a result of an activity from 7 to
    10 years previously.  USAID measures the impact of its HIV/AIDS
    activities in its target groups by conducting blood tests for HIV
    incidence but also uses proxy indicators such as behavioral change
    and condom sales.  Public health experts agree that these proxy
    indicators are reasonable indicators of changes in HIV incidence.

       USAID PROJECTS MADE IMPORTANT
       CONTRIBUTIONS
    ---------------------------------------------------------- Chapter 2:2

    Despite the limitations in evaluating impact, USAID can demonstrate
    that it has contributed to the fight against HIV/AIDS through its
    interventions in the countries where it had programs.  For the global
    project--AIDSCAP--and each mission, USAID established goals and
    identified target groups based on country needs.  To assess the
    countries' progress toward achieving these goals, USAID conducted
    internal and external evaluations and behavioral surveys, and tested
    people in the target groups for HIV.  Data show that USAID projects
    increased knowledge about HIV/AIDS and how to prevent it, changed
    risky behaviors, and increased access to STD treatment and condoms,
    thus helping to slow the spread of AIDS in target groups.

          CENTRALLY MANAGED AIDSCAP
          PROJECT
    -------------------------------------------------------- Chapter 2:2.1

    From 1991 to 1997, the goal of USAID's $200-million global project,
    AIDSCAP, was to support research, help missions develop and implement
    HIV/AIDS programs and to provide technical assistance for mission-led
    programs.  AIDSCAP devised and carried out AIDS prevention programs
    in 18 countries and supplied technical assistance to 25 other USAID
    programs.

    Using a variety of evaluation instruments such as behavioral surveys
    and blood testing for the HIV virus, USAID evaluated AIDSCAP's
    projects and concluded that AIDSCAP's activities increased knowledge
    about HIV and effected a change in attitude toward those affected by
    the virus.  In target groups in many of the countries, data indicate
    that AIDSCAP activities resulted in altered perceptions of individual
    risk and less risky sexual behaviors.  For example, in the Ivory
    Coast, a USAID survey of 1,000 15- to 25-year olds in 30 targeted
    villages indicated that 47 percent had reduced their number of sexual
    partners in response to AIDSCAP activities.  USAID also reported that
    more than 275 million condoms were distributed with USAID support in
    1996, or approximately 27 percent of all socially marketed condoms in
    developing countries.

    AIDSCAP implemented HIV/AIDS programs in the Dominican Republic and
    Honduras.  Our observations on these two efforts follow.

             DOMINICAN REPUBLIC
    ------------------------------------------------------ Chapter 2:2.1.1

    The goal of USAID's AIDSCAP project in the Dominican Republic was to
    improve knowledge and access to AIDS prevention practices and
    services in target groups.\2 Our review of behavioral and HIV
    surveillance data and our interviews with participants indicate that
    USAID had an impact in both areas.  USAID reported that the
    percentage of young people who knew of at least two preventive
    measures increased from 45 percent to 100 percent between 1993 and
    1996 after receiving AIDSCAP-developed information on the disease.
    In addition, the use of condoms by commercial sex workers rose from
    65 percent in 1992 to 98 percent in 1996; commercial sex workers with
    whom we met said they always tried to convince their clients to use
    condoms.  Moreover, USAID helped develop a low-cost condom with a
    multinational pharmaceutical company, which significantly increased
    the availability of condoms.  USAID also obtained free air time on
    radio stations to broadcast prevention messages.  Data on HIV
    incidence among commercial sex workers at one clinic targeted by
    AIDSCAP projects indicated that the percentage of HIV-positive
    workers who came to a USAID-supported clinic declined from 5.8
    percent in 1995 to 3.3 percent in 1996.  Moreover, surveys undertaken
    upon completion of the project showed significant declines in risky
    behavior in targeted groups.  For example, the number of youth who
    said they were sexually active declined from 73 percent in 1992 to 30
    percent in 1996.

    --------------------
    \2 These groups were commercial sex workers, men who have sex with
    men, hotel workers, and youth.

             HONDURAS
    ------------------------------------------------------ Chapter 2:2.1.2

    In Honduras, AIDSCAP designed and implemented a program to support
    the government's HIV/AIDS control program and to increase the use of
    STD/AIDS prevention practices among high-risk groups,\3 including
    increasing access to STD treatment.  The goal of the program was to
    reduce the incidence of HIV/AIDS in specific regions of the country.
    However, because of difficulties getting started, the project
    operated for only 2 years.  According to USAID officials in Honduras,
    they began negotiating with AIDSCAP in 1993 to develop a program, but
    that AIDSCAP's proposals did not adequately emphasize participation
    by the government or involvement by local NGOs.  USAID did not reach
    agreement with AIDSCAP until 1995, 2 years before it was scheduled to
    end.  USAID evaluations and discussions with NGO personnel indicated
    that the project had successes but should have done more to prepare
    their local country office to assume the financial and managerial
    responsibilities for the projects in an effort to ensure
    sustainability.  In 1997, after the AIDSCAP office was converted to a
    locally registered NGO, the mission awarded the new NGO a USAID grant
    to continue prevention efforts.  However, because of its lack of
    financial and managerial capacity, it was required to take corrective
    actions before the new project could begin.

    Data are not yet available to determine the impact of AIDSCAP on the
    incidence of HIV/AIDS in Honduras.  Early in the AIDSCAP project,
    USAID conducted a behavioral survey to gather baseline data on risky
    behaviors.  However, because the project was only operating for 2
    years, USAID will not follow up with a survey to measure behavioral
    change as a result of its activities until 1999.

    The mission used other indicators to measure the success of the
    project.  It reported that it had exceeded its goal in increasing the
    numbers of condoms distributed and that it had expanded access to STD
    treatment.  USAID upgraded a number of Ministry of Health-run health
    clinics to increase access to STD prevention and treatment.
    Government officials informed us that the number of women seeking STD
    treatment had risen since completion of a USAID-funded STD clinic in
    a poor area of the capital city, Tegucigalpa.  Recipients of
    USAID-supported activities also told us that risky behavior had
    declined.  For instance, the leader of a gay men's group said that
    the amount of information and condoms requested by the gay Honduran
    community had increased significantly since an AIDSCAP-supported NGO
    began aggressive education activities.

    Furthermore, mission officials stated that the AIDSCAP project had
    helped publicize HIV/AIDS, had encouraged the host government to
    begin to address the epidemic, and had established a network of NGOs
    that have the capacity to promote HIV/AIDS prevention activities.  We
    met with a number of NGOs that, according to USAID officials, are
    competent and provide the key to sustaining activities after USAID
    funding ends.

    --------------------
    \3 These groups were commercial sex workers, men who have sex with
    men, and factory workers.

          MISSION-LEVEL PROJECTS
    -------------------------------------------------------- Chapter 2:2.2

    We also reviewed mission-level projects in three countries:  India,
    the Philippines, and Zambia.  In these countries, USAID missions
    designed their own projects and hired PVOs and other organizations to
    manage activities.  AIDSCAP provided limited technical support to
    these missions.  We found that most programs were successful, with
    the exception of Zambia, where problems significantly affected
    USAID's ability to have an impact on the spread of the disease.

             INDIA
    ------------------------------------------------------ Chapter 2:2.2.1

    Our review of HIV surveillance and behavioral survey data, visits to
    projects, and interviews with recipients of assistance indicate that
    USAID has made progress toward meeting its goal of reducing HIV
    transmission among target groups\4 in the southern Indian state of
    Tamil Nadu (see
    fig.  2.1).  The mission measured increased awareness about the
    disease and behavioral change as indicators of change in HIV
    transmission and reported progress in its target groups.  USAID is
    accomplishing its objective by establishing and building a network of
    technically capable NGOs working to alter behaviors and increase STD
    treatment and condom distribution.  At the time of our fieldwork,
    USAID had worked in only 1 of India's 27 states, though USAID
    officials said they planned to expand to 1 other state, Maharashtra,
    because available funding did not permit USAID to develop
    comprehensive programs nationwide.  However, other donors were active
    elsewhere in India.  States, rather than the national government,
    manage health care delivery, and USAID chose Tamil Nadu and
    Maharashtra because they have a high percentage of HIV-positive
    people, and the state governments are politically and financially
    supportive of AIDS prevention efforts.

       Figure 2.1:  Director of
       USAID-Supported Health Clinic
       Discussing HIV/AIDS Prevention
       Activities, in Tamil Nadu,
       India

       (See figure in printed
       edition.)

    Data generated from USAID's last behavioral survey conducted in 1997
    in Tamil Nadu demonstrated significant behavior changes among
    high-risk groups.  Specifically, between 1996 and 1997, truck drivers
    reported declines in their patronage of commercial sex workers and in
    the number of nonregular sex partners from 38 percent to 27 percent
    and increased condom use from 55 percent to 66 percent.  Among
    factory workers, condom use increased from 28 percent to 41 percent.
    USAID has trained
    800 volunteers, peer educators, and NGO leaders to implement
    community-based interventions and trained 60 health care providers in
    the diagnosis and management of STDs since 1992.

    --------------------
    \4 These groups were commercial sex workers, their clients (for
    example, truck drivers), and people with STDs.

             PHILIPPINES
    ------------------------------------------------------ Chapter 2:2.2.2

    In the Philippines, the USAID mission's goals were to increase
    knowledge and to change attitudes and behaviors to prevent STD/AIDS
    infection among high-risk groups\5 and to collect comprehensive
    baseline data on the incidence of HIV and behavior at 10 sites.  Our
    review of an independent evaluation and discussions with target
    groups in the Philippines indicated that USAID interventions had been
    effective in increasing awareness and changing behavior.  In
    addition, USAID's surveillance activities provided data on HIV
    incidence and risky behavior among target group populations.  An
    independent evaluation conducted in 1997 concluded that USAID's
    activities helped avert an increase of HIV/AIDS,\6

    as the percentage of people who are HIV-positive remained below 1
    percent in targeted groups.  Behavioral surveys demonstrated that
    USAID activities to expand knowledge about the disease led commercial
    sex workers to increase their use of condoms.  Data also indicated
    that male clients exposed to USAID interventions used condoms much
    more frequently than those with no contact with the project (75
    percent compared to 41 percent).  Our reviews of evaluations and
    interviews with NGO staff also indicated that USAID increased the
    capacity of the NGO staff to implement AIDS prevention activities.
    USAID project activities are carried out by staff working for 20
    local organizations that have been trained as a result of USAID
    activities.  We met with a number of NGOs that were successfully
    implementing prevention strategies under the guidance of USAID.  For
    example, we accompanied a local NGO to a site frequented by gay men,
    where the NGO distributes pamphlets, discusses HIV/AIDS risks, and
    promotes condom use.

    --------------------
    \5 These groups were registered female commercial sex workers,
    freelance commercial sex workers, men who have sex with men, and
    intravenous drug users.

    \6 The evaluation used a simulation model developed by AIDSCAP that
    calculates the number of infections averted when accepted
    interventions are applied to high-risk groups.

             ZAMBIA
    ------------------------------------------------------ Chapter 2:2.2.3

    Our review of USAID activities in Zambia indicated that the mission
    has had a difficult time developing an HIV/AIDS prevention program.
    Despite its problems designing an effective program, it did have some
    successes.  Since 1992, the mission has redesigned its program three
    times with different goals and implementing organizations.
    Initially, the USAID mission in Zambia established a goal of reducing
    HIV transmission.  It subsequently determined that this goal was
    unrealistic and refocused its objective on changing behavior in
    high-risk groups.  USAID's difficulty in developing a program
    stemmed, in part, from the national government's transition to a
    decentralized approach to HIV/AIDS and health care delivery.
    However, according to USAID mission officials and an independent
    evaluation, problems occurred primarily because the U.S.  educational
    institution managing USAID's program did not have the necessary
    expertise to implement large-scale HIV/AIDS activities overseas.  An
    evaluation of the project found a number of weaknesses, including a
    lack of project monitoring and a reliance on U.S.-based institutions
    to implement activities rather than building the capability of local
    NGOs.  In addition, host government officials informed us the
    implementing agency designed and implemented activities without host
    country involvement.  The evaluation also found that the project had
    not increased the number of patients treated for STDs, an important
    component of USAID's HIV/AIDS strategy.

    Despite USAID's management problems, we saw some successes in Zambia
    (see fig.  2.2).  Our discussions with youth groups indicated an
    increased awareness of HIV/AIDS.  USAID reported that condom sales
    exceeded expectations and increased by 22 percent in 2 years and that
    the number of casual sex partners in the target groups decreased.
    Additionally, USAID mission officials said that they had been
    instrumental in convincing the Zambian government to integrate
    HIV/AIDS activities into the national health plan and that they have
    had some successes in addressing one of the social and cultural
    factors that contribute to the spread of the disease.  Specifically,
    USAID worked with traditional healers and the legal community to
    discourage a custom whereby recently widowed women engage in sexual
    relations to "cleanse" their bodies of the spirit of the deceased.

       Figure 2.2:  HIV/AIDS Education
       Program for Community Health
       Workers in Lusaka, Zambia

       (See figure in printed
       edition.)

       NATURE OF USAID'S FINANCIAL
       OVERSIGHT
    ---------------------------------------------------------- Chapter 2:3

    USAID conducts financial oversight for its HIV/AIDS activities
    primarily through pre-award evaluations, quarterly financial reports,
    and annual financial audits of its private sector partners.  Largely
    in response to congressional direction, USAID officials decided to
    rely on U.S.-based PVOs and indigenous NGOs to implement its HIV/AIDS
    program.\7 To manage their private partners, USAID officials in
    headquarters and the field told us that they have chosen almost
    without exception to use a funding arrangement called a "cooperative
    agreement." Cooperative agreements are similar to grant agreements\8
    but are used when agencies expect to be substantially involved in the
    activity to be carried out.  These agreements allow USAID and
    recipients to easily adapt the scope of work and shift budgeted
    resources to changing needs.  Therefore, they are able to adjust
    activities to meet agency goals without a formal process for review
    and approval.  Recipient organizations have the primary
    responsibility for financial management.  OIG officials said that
    there were no indications from audits conducted of systemic problems.

    --------------------
    \7 Since 1990, the House and Senate Appropriations Committees have
    urged USAID to maximize its use of PVOs and NGOs to implement
    HIV/AIDS prevention activities.

    \8 See The Federal Grant and Cooperative Agreement Act of 1977 (31
    U.S.C.  6301-8).

          OMB GUIDANCE PLACES
          FINANCIAL MANAGEMENT
          RESPONSIBILITIES ON
          RECIPIENT ORGANIZATIONS
    -------------------------------------------------------- Chapter 2:3.1

    OMB guidance outlines the responsibilities of awarding agencies and
    funding recipients under cooperative agreements.\9 The guidance
    states that agencies should require organizations to have requisite
    financial and management systems in place; agree to comply with
    various requirements, such as guidelines for allowable costs; and
    provide procedures for periodic financial and progress reporting.

    With respect to monitoring, OMB's general guidance is that while the
    agency has the responsibility to ensure that public funds are managed
    prudently, day-to-day financial management is the responsibility of
    the recipient.  USAID project managers use several methods to ensure
    financial oversight:  pre-award evaluations, quarterly expenditure
    reports, and annual audits.

    --------------------
    \9 OMB Circulars A-110, "Uniform Administrative Requirements for
    Grants and Agreements with Institutions of Higher Education,
    Hospitals and Other Non-Profit Organizations"; and A-122, "Cost
    Principles for Non-Profit Organizations." See also 22 C.F.R.  226.

             PRE-AWARD EVALUATIONS
    ------------------------------------------------------ Chapter 2:3.1.1

    Pre-award evaluations are conducted as necessary before an award is
    granted, to assess whether prospective recipients have adequate
    financial and management control systems to properly manage, report,
    and account for USAID funds.  If a recipient has recently received a
    federal award and is known to have the technical and financial
    capacity to perform the job, USAID conducts an informal review of its
    systems and controls.  Otherwise, a team will go on-site to conduct a
    formal evaluation.  We examined pre-award surveys for four
    headquarters projects and two mission bilateral projects.  USAID
    conducted pre-award evaluations for all of them, and with the
    exception of the award to a local NGO in Honduras, they were informal
    reviews because the recipients were known to USAID.  In Honduras,
    USAID conducted a formal evaluation because the NGO selected to
    manage the mission's HIV/AIDS project after AIDSCAP ended did not
    have previous experience managing a USAID project.  USAID found
    problems with the NGO's accounting system, procurement and
    contracting procedures, and personnel management system.  Before the
    award was made, the NGO was required to undertake corrective actions.

             QUARTERLY EXPENDITURE
             REPORTS
    ------------------------------------------------------ Chapter 2:3.1.2

    Recipients of cooperative agreements are also required to provide
    quarterly expenditure reports to the USAID project manager.  These
    are summaries of expenditures listed in categories such as salaries
    and travel.  For the 6 years of the AIDSCAP project, we found that
    USAID reviewers approved all expenditure reports without disapproving
    any costs.  OMB guidance stipulates that agencies must determine
    whether costs incurred are in accordance with terms of agreements and
    are reasonable and allowable.  However, the guidance does not define
    the roles and responsibilities of an awarding agency for monitoring
    the recipient's compliance with these standards.  Project managers
    told us that they reviewed expenditure reports primarily to compare
    the level of funds expended with the progress toward completion of
    project activities.

             ANNUAL AUDITS
    ------------------------------------------------------ Chapter 2:3.1.3

    According to USAID officials, USAID uses annual financial audits
    required by the Single Audit Act as its principal tool for financial
    oversight.\10 These audits are intended, among other things, to
    promote sound financial management, including effective internal
    controls, with respect to federal awards administered by nonfederal
    entities such as PVOs.  As such, they provide information to federal
    oversight officials and program managers on whether an entity's
    financial statements are fairly presented and reasonable assurance on
    whether federal assistance programs are carried out in accordance
    with applicable laws and regulations.  The single audit reports from
    1992 to 1996 of the PVO that implemented the AIDSCAP project did not
    indicate any financial management or reporting problems.  OIG reviews
    of these audits found that they were performed in accordance with the
    Single Audit Act's requirements.

    In 1994, the OIG conducted an audit primarily focused on salaries,
    fringe benefits, and travel, based on specific allegations regarding
    these matters.  As a result of this review, the OIG questioned 11
    percent of the $14.6 million of expenditures examined.  Following
    negotiations, the PVO repaid $540,000 to USAID.  OIG officials said
    that there were no indications, from either this review or the single
    audits, that systemic problems existed.

    --------------------
    \10 The Single Audit Act of 1984 (31 U.S.C.  7501-7507) requires
    organizations that meet a minimum threshold of federal funding to
    undergo a single, nonfederal audit each year.

       CONCLUSIONS
    ---------------------------------------------------------- Chapter 2:4

    USAID has made important contributions in the fight against HIV/AIDS
    by helping to support the development and implementation of
    interventions that have been proven effective in the global fight
    against the disease.  These interventions include information,
    education, and counseling; treatment of sexually transmitted
    diseases; and promotion of increased condom use through condom social
    marketing.

    At the country level, USAID implemented projects that increased
    awareness of the disease, reduced risky behaviors, and increased
    access to STD treatment and condoms.  These actions have helped slow
    the spread of the disease in target groups.  Evaluations of USAID's
    largest HIV/AIDS project, AIDSCAP, determined that its activities had
    successes in the countries where it had projects.  Our fieldwork and
    evaluations conducted for a number of other mission-led projects also
    showed important impacts.

    USAID implements its programs at headquarters and in the field
    primarily through PVOs and NGOs.  To manage their private partners,
    USAID has chosen almost without exception to use a funding
    arrangement called a cooperative agreement.  Because they are similar
    to grant agreements, cooperative agreements allow flexibility to
    USAID in adjusting their scope, and recipient organizations have the
    primary responsibility for financial management.  USAID managers
    primarily rely on pre-award evaluations, review of quarterly
    expenditure reports, and annual audits for their financial oversight
    of its funding recipients.  OIG officials said that there were no
    indications from audits conducted that systemic problems existed.

       AGENCY COMMENTS
    ---------------------------------------------------------- Chapter 2:5

    USAID stated that it was pleased with the overall presentation and
    objectivity of the report.

    THE JOINT U.N.  PROGRAMME ON
    HIV/AIDS HAS MADE LIMITED PROGRESS
    ============================================================ Chapter 3

    UNAIDS has made limited progress toward achieving its goal of leading
    a broad-based, expanded worldwide response to the HIV/AIDS epidemic.
    Reasons for the limited progress include a lack of clarity in the
    mission and roles of cosponsor agencies in the field and lack of
    staff accountability for theme group success.  Cosponsor agency
    estimates of overall U.N.  spending on HIV/AIDS show that resources
    have not increased with the creation of UNAIDS.\1 In addition, while
    the UNAIDS Secretariat has made significant efforts at the
    international level to mobilize private sector support, Secretariat
    officials acknowledge that U.N.  efforts at the local level have been
    limited.  Data are not available to get an accurate measure of
    UNAIDS' success in mobilizing an expanded response among donors or
    affected countries.  In some countries, cosponsor agencies are just
    beginning to work together in theme groups.  Finally, the UNAIDS
    Secretariat has not been very successful in providing technical
    assistance and other support to facilitate theme group activities and
    has only started to establish a framework to measure performance.

    --------------------
    \1 Throughout this report, reference to overall U.N.  funding for
    HIV/AIDS activities is limited to the six cosponsor agencies and the
    Secretariat.

       U.N.  EXPENDITURES FOR HIV/AIDS
       DID NOT INCREASE
    ---------------------------------------------------------- Chapter 3:1

    The U.N.  Economic and Social Council, which created UNAIDS, stated
    that the success of the program was dependent on the provision of
    increased resources for HIV/AIDS activities by the cosponsor
    agencies.  U.N.  agency spending began to decrease under WHO's GPA,
    declining by 20.3 percent during the last 2 years of the program
    (1994-95).  For the first 2 years since the creation of UNAIDS in
    1996, cosponsor agencies estimate that the decline has leveled off,
    with spending at about $332 million--a slight decline from the $337
    million spent during the last 2 years of GPA.  Funding for
    HIV/AIDS-related activities remained stable even though overall
    cosponsor agency spending increased by 6.5 percent during the same
    period.

    Data in figure 3.1 demonstrate differences among cosponsor agencies
    that underlie the overall U.N.  expenditure estimates for HIV/AIDS.
    Two agencies, UNDP and UNFPA, increased spending on HIV/AIDS by $10.8
    million and $5.4 million, respectively, and UNESCO began programming
    money for HIV/AIDS after the creation of UNAIDS.  However, the World
    Bank and UNICEF decreased funding by $10.5 million and $3.5 million,
    respectively.\2 Spending on HIV/AIDS also declined as a percentage of
    these agencies' budgets.  Finally, WHO, the agency that spearheaded
    U.N.  efforts to fight the HIV/AIDS epidemic in the early 1990s, with
    about $140 million added to its core budget every 2 years for
    HIV/AIDS activities, first began programming core funds following the
    creation of UNAIDS.  It spent $16 million in 1996-97.

       Figure 3.1:  U.N.  HIV/AIDS
       Funding Under GPA and UNAIDS,
       1992-97

       (See figure in printed
       edition.)

    \a Unavailable.

       Sources:  U.N.  cosponsor
       agencies and UNAIDS Secretariat
       (funding not verified).

       (See figure in printed
       edition.)

    U.N.  agency officials gave several reasons for the lack of increased
    spending on HIV/AIDS programs.  A WHO official said that because WHO
    no longer had additional funding for its HIV/AIDS efforts after GPA
    ended, 200 professionals who had been working on the program left or
    changed jobs, and the agency had to reorganize its staff and budget
    to undertake HIV/AIDS activities.  According to cosponsor officials
    and the Secretariat, other agencies did not increase support for
    HIV/AIDS due to difficulties incorporating HIV/AIDS activities into
    programs in the midst of their 5-year planning cycle; lack of
    commitment to HIV/AIDS by affected governments; and lack of
    commitment to HIV/AIDS as a priority on the part of field
    representatives.

    --------------------
    \2 The decrease in World Bank spending is based on official estimates
    provided by the World Bank.  Preliminary data on World Bank spending
    gathered by the UNAIDS Secretariat at the country level are
    significantly higher than these data.  According to Secretariat
    UNAIDS officials, they are working on reconciling the differences.

       BASELINE SPENDING BY MAJOR
       DONORS AND AFFECTED COUNTRIES
       IS BEING DEVELOPED
    ---------------------------------------------------------- Chapter 3:2

    Building worldwide support for HIV/AIDS was a key objective of
    UNAIDS.  The U.N.  Secretary General noted that in order to achieve
    an expanded response, governments of countries most affected by the
    epidemic would have to increase resources for HIV/AIDS.  Officials
    from the UNAIDS Secretariat also noted the importance of increasing
    the financial support of donor countries.  However, the Secretariat
    is not yet in a position to measure USAIDS' progress because it does
    not yet have baseline data on spending for HIV/AIDS at the country
    level.  It has only recently developed baseline data for donors.

    The UNAIDS' Secretariat is in the process of analyzing survey data to
    develop estimates of spending on HIV/AIDS by affected countries.
    Secretariat officials said that the data would be available in the
    fall of 1998.  While half of the theme groups surveyed by UNAIDS
    reported that in 1997 they had mobilized resources at the country
    level, they noted that the large majority of these resources was from
    U.N.  agencies.

    U.N.  officials told us that the lack of data on the impact of
    HIV/AIDS, measured in the number of deaths and illnesses, made it
    difficult to persuade developing countries to divert limited national
    resources from other important health problems.  In many developing
    countries, the numbers of deaths and the costs of caring for HIV/AIDS
    patients are not identifiable because records only indicate secondary
    causes of illness or death, such as pneumonia, rather than HIV/AIDS
    infection.

    Preliminary data from its most recent survey\3

    indicate that contributions by major donors\4

    have remained relatively stable between 1993 and 1996, at
    approximately $250 million a year.  However, data are not available
    for 1997.  Thus, it is not possible to determine whether UNAIDS'
    first year's efforts have led to increased spending by donors.  A
    USAID official told us that Secretariat officials made regular visits
    to executive and parliamentary branches of governments in donor
    countries, including the United States, in an attempt to keep the
    spotlight on HIV/AIDS issues and avert "donor fatigue."

    --------------------
    \3 Study on the National and International Financing of the National
    Response to HIV/AIDS.

    \4 The United Nations defines major donors as Australia, Canada,
    Denmark, France, Germany, Japan, Luxembourg, the Netherlands, Norway,
    Sweden, the United Kingdom, and the United States.

       UNAIDS HAD LIMITED SUCCESS IN
       MOBILIZING THE PRIVATE SECTOR
    ---------------------------------------------------------- Chapter 3:3

    The UNAIDS Secretariat and cosponsor agencies were expected to
    mobilize the private sector as part of the comprehensive global
    response to the HIV/AIDS epidemic.  Despite this objective, efforts
    have been limited at the country level, and overall results are not
    clear.  UNAIDS officials reported they have made efforts to encourage
    support for HIV/AIDS activities in the international community.
    However, at the country level, cosponsor agencies had solicited
    private involvement in only one country we visited.  Moreover, UNAIDS
    lacks data to determine whether the level of resources devoted to
    HIV/AIDS by the private sector has increased or decreased.
    Secretariat officials told us that they believe the level of private
    sector resources dedicated to HIV/AIDS activities has remained
    limited.

    In the international community, the UNAIDS Secretariat has encouraged
    private sector support through advocacy efforts with leading
    corporate organizations, such as The Conference Board and Rotary
    International, and individual companies.  For example, the
    Secretariat organized a 1997 World Economic Forum plenary session in
    which South African President Nelson Mandela gave the keynote address
    to the world's business leaders calling for a public/private
    partnership to fight HIV/AIDS.  The Secretariat also organized a
    Public/Private Sector Partnership Strategy Meeting on International
    HIV/AIDS in London, England, in November 1996 and is working to
    establish a Global Business Council to organize businesses to serve
    as advocates in their industry and region.

    As a result of its efforts, the UNAIDS Secretariat has had some
    successes, particularly in advocating research and distribution of
    medical interventions appropriate in the developing world.  According
    to a senior USAID official, the UNAIDS Secretariat and WHO should be
    credited with encouraging pharmaceutical companies to continue and
    increase their efforts to develop affordable HIV/AIDS vaccines.
    Glaxo Wellcome, a major pharmaceutical company, recently announced
    that it would provide zidovudine (AZT), a viral inhibitor, to
    pregnant, HIV-positive women in developing countries at a
    substantially reduced price.  In addition, for more than 2 years, the
    UNAIDS Secretariat has been coordinating international research on
    mother-to-child transmission and addressing ways to implement
    clinical trials with the private sector, international agencies, and
    donor countries.  USAID also credits the Secretariat with working
    with the private sector to increase the availability and
    affordability of the female condom.

    However, according to a report produced by the UNAIDS Secretariat and
    the Prince of Wales' Business Leaders' Forum,\5 the corporate
    response to HIV/AIDS has generally been limited and largely
    defensive.  With few exceptions, the business community around the
    world has not sought a leadership role in confronting the epidemic.
    Among the reasons for this lack of involvement are

      -- inadequate information on the disease and understanding about
         how it affects their companies,

      -- unease about association with a controversial issue,

      -- lack of encouragement by the public sector, and

      -- competition for resources for HIV/AIDS with other good causes.

    Unlike the Secretariat's efforts with the international business
    community, in-country efforts by the cosponsor agencies to encourage
    private sector involvement in HIV/AIDS activities have been very
    limited.  We saw examples of private, in-country activities that
    indicated that companies could play an important role in the U.N.'s
    efforts to reduce the spread of HIV/AIDS.  For example, the theme
    group in India solicited free air time from an Indian television
    network and worked jointly to develop a media campaign involving
    national artists in on-air promotions and public events.  We saw
    other private-sponsored activities such as companies in Honduras
    allowing government or NGO-sponsored HIV/AIDS prevention and control
    activities to occur within their place of business.  Another example
    was in the Philippines, where a manufacturing company provided direct
    financial support for prevention activities.  None of these was
    initiated by U.N.  agencies.

    Several U.N.  agency officials said that the reason for a lack of
    focus on private involvement in HIV/AIDS activities was that U.N.
    agencies did not generally work with the private sector.  Their
    contacts in the field are almost exclusively with government
    ministries.  Officials added that because the United Nations is not
    accustomed to working with private partners, guidance on best
    practices in this area would be useful.

    --------------------
    \5 The report was entitled The Business Response to HIV/AIDS:
    Innovation and Partnership (Geneva and London:  1997).  The Prince of
    Wales' Business Forum was established in 1990 as a global network of
    business leaders and their companies to work to promote continuous
    improvement in the practice of corporate citizenship and sustainable
    development internationally.

       DIFFICULT BEGINNING FOR THEME
       GROUPS
    ---------------------------------------------------------- Chapter 3:4

    The UNAIDS Secretariat was expected to organize theme groups as the
    coordinating entity for U.N.  activities in the field, and U.N.
    cosponsor agencies agreed to work together to ensure a unified
    response to HIV/AIDS.  Their ultimate objective was to support host
    countries' national HIV/AIDS programs.  To operate effectively,
    agency representatives were expected to meet regularly to discuss
    opportunities for joint programming and assistance to the host
    country.  We found such an example in the Dominican Republic where
    agencies met regularly and even conducted joint programming.
    However, Secretariat officials acknowledged that as of 1997 most
    theme groups were not working effectively and that they
    underestimated the difficulty of getting U.N.  agencies to coordinate
    and conduct joint programming.  For example, in two of the five
    countries we visited--Honduras and India--we found poorly functioning
    theme groups that rarely met.  Preliminary results from a 1997 survey
    conducted by the UNAIDS Secretariat of theme groups showed that data
    received as of April 30, 1998, indicated that theme groups had made
    some progress in cosponsor coordination since their 1996 survey of
    theme groups, particularly in the areas of advocacy and resource
    mobilization.  However, of the theme groups that responded to the
    1997 survey, less than 50 percent were judged effective in those
    areas.  In addition, while respondents said that the level of U.N.
    coordination at the country level had improved over the last year,
    only 28 percent rated it strong or better.  Overall, fewer than half
    of the theme groups had undertaken efforts in 7 out of 10 of the key
    outputs measured.

    Several factors have hindered theme group operations, including the
    following:

      -- Cosponsor agencies and the UNAIDS Secretariat did not provide
         guidance to staff in the field regarding how theme groups should
         operate and the scope of their mission.

      -- Cosponsor agencies did not hold their staff accountable for
         theme group success, and UNAIDS Secretariat staff lacked
         authority to require participation.

      -- Concerns about the concept of a joint program and theme group
         operations led to lack of commitment to working together on the
         part of some agency representatives.

             LACK OF TIMELY GUIDANCE
    ------------------------------------------------------ Chapter 3:4.0.1

    According to cosponsor agency officials, neither the Secretariat nor
    the cosponsors issued timely guidance to theme group participants
    about how to operate or about their roles and responsibilities within
    the theme groups.  In a 1996 UNAIDS survey of theme group operations
    conducted by the UNAIDS Secretariat, U.N.  officials in the field
    cited the lack of understanding about the roles of each agency at the
    country level and lack of support from cosponsor agencies and the
    Secretariat as major obstacles to progress.  Acknowledging these
    problems, the Secretariat provided operational guidelines to theme
    groups early in 1998.

             LACK OF REQUIREMENTS TO
             PARTICIPATE
    ------------------------------------------------------ Chapter 3:4.0.2

    The individual job expectations provided for U.N.  cosponsor
    representatives in the field did not include an expectation to
    participate in the theme groups.  Field staff with whom we met said
    that their annual personnel assessments did not mention participation
    in UNAIDS activities.  The career, promotion, and reward paths for
    U.N.  officials are through their parent organizations, and their
    work on UNAIDS activities was considered an adjunct to their regular
    duties.  Typical of the responses we heard was a U.N.  cosponsor
    agency official in Honduras who described UNAIDS work as "an add-on,
    an additional function outside of regular work responsibilities."
    Secretariat representatives who were responsible for organizing theme
    groups and encouraging joint participation did not have the authority
    to require participation.

             LACK OF COMMITMENT TO
             WORK TOGETHER
    ------------------------------------------------------ Chapter 3:4.0.3

    Despite agreements by cosponsor agencies to support and work
    collaboratively in the theme groups, according to senior U.N.
    officials, concerns about the concept of a joint program held by some
    senior agency officials contributed to their lack of commitment to
    working together.  Such concerns were reflected in a 1997 USAID
    survey of 31 of its overseas missions that addressed problems faced
    by U.N.  agencies in planning and implementing their HIV/AIDS
    activities.  Respondents cited uneven U.N.  agency commitment to
    HIV/AIDS-related endeavors and the lack of coordination among U.N.
    agencies.

    In particular, some officials from the World Bank and WHO said that
    they questioned the role of UNAIDS as the organizing vehicle for the
    U.N.  response.  One WHO representative in the field said that
    because he works directly with the host government, he views UNAIDS
    as irrelevant.  In addition, a World Bank official said he did not
    see the usefulness or relevancy of coordinating or integrating the
    Bank's activities with other cosponsor agencies, noting that U.N.
    agencies were already doing all they could to address HIV/AIDS.\6 The
    World Bank's lack of commitment to the theme groups and UNAIDS was
    evident in a number of our case study countries where the World Bank
    had programs.  Though the country representative of each U.N.
    cosponsor agency is automatically a member of the theme group and is
    expected to participate in its activities, in three of the five
    countries we visited, the World Bank representative never attended a
    theme group meeting, according to other cosponsor agency officials.
    However, in two of the countries, a lower-level staff member was
    present at a couple of theme group meetings.

    UNAIDS Secretariat officials said they recognized these problems and
    met with cosponsor agencies in March 1998 to address interagency
    cooperation and develop strategies to improve theme group
    coordination.

    --------------------
    \6 According to officials from the UNAIDS Secretariat, senior-level
    meetings between World Bank and the Secretariat January 1998
    addressed outstanding complaints concerning the Bank's participation
    in UNAIDS and should result in greater coordination and collaboration
    with the other cosponsor agencies.

       LIMITED SUCCESS IN PROVIDING
       TECHNICAL SUPPORT FOR UNAIDS
       COUNTRY ACTIVITIES
    ---------------------------------------------------------- Chapter 3:5

    One key role for the UNAIDS Secretariat was to provide technical
    assistance to theme groups to facilitate cosponsor agency efforts.
    The two Secretariat departments responsible for providing technical
    support and disseminating best practices accounted for 80 percent of
    the Secretariat's budget.  However, during our site visits, we found
    few U.N.  agencies utilizing the Secretariat's technical support, and
    some agency officials were unaware of the services or technical
    assistance that were available.  For example, cosponsor agencies in
    the Philippines stated that best practice information is useful for
    introducing an idea to the government, but not particularly helpful
    in defining how to implement it.  The UNDP representative said it
    would be useful to obtain information on how to incorporate HIV/AIDS
    prevention in their good governance projects.  UNAIDS official
    acknowledged the Secretariat had poorly marketed available support
    and noted that its fixed menu of technical support was not always
    relevant or flexible enough to meet a country's specific needs.  In
    addition, because of the limited number of experts on the UNAIDS'
    staff, he noted that the Secretariat should have made more of an
    effort to mobilize regional resources to provide technical
    assistance.  Secretariat officials indicated substantial investments
    in this area will be needed in the future.

    Another key role of the UNAIDS Secretariat was to identify, develop,
    and function as a major source of information on best practices; that
    is, to identify and disseminate information about HIV/AIDS prevention
    policies and strategies and to promote research to develop new tools
    to address HIV/AIDS.  According to cosponsor agency officials we
    interviewed, best practices information from the Secretariat was
    disseminated and read, but the information was too general to be of
    practical use and lacked practical "how-to" guidance.  For example,
    according to a USAID official familiar with material on best
    practices produced by the Secretariat, the information provided a
    good summary and starting point for discussion of a particular issue,
    such as how to deal with AIDS in prisons.  However, he noted that
    practitioners in the field, who are generally well informed, needed
    practical guidance on how to carry out specific projects.  According
    to a Secretariat official, the focus was on producing the most
    up-to-date, comprehensive document on a particular issue but not to
    tailor best practices to meet the needs of officials in the field.
    He added that the department responsible for best practices needed to
    begin by improving its knowledge of customers' needs so that it could
    make itself more relevant.  According to Secretariat officials, steps
    are under way to address these deficiencies.  For example, the
    Secretariat has reorganized the support departments and instituted
    management changes.  Additionally, USAID stated that along with other
    bilateral donors, USAID is helping to establish a network of
    technical resources that can be used by Secretariat and cosponsor
    staff in-country staff to enhance the design and implementation of
    national HIV/AIDS programs.  However, it is too early to evaluate the
    impact of these efforts.

       PERFORMANCE INDICATORS
    ---------------------------------------------------------- Chapter 3:6

    The Secretariat was directed by its governing board to coordinate the
    development of performance-based programming and measurable
    objectives.  As an international organization, the United Nations is
    not required to comply with the U.S.  Results Act.\7

    However, the act sets forth the characteristics of a
    performance-based system, requiring (1) the statement of a clearly
    defined mission; (2) the establishment of long-term strategic goals,
    as well as annual goals that are linked to them; (3) the measurement
    of performance against the goals; and (4) the public reporting of how
    well the agency is doing.  Development of performance indicators will
    assist in making the Secretariat and the cosponsor agencies
    accountable for their performance, to gauge progress toward meeting
    objectives, to promote UNAIDS activities with host governments, and
    to generate information decisionmakers need in considering ways to
    improve performance.

    However, the Secretariat has been slow to create and implement an
    evaluation framework that employs performance indicators.  Despite
    being instructed to start efforts immediately, it did not begin
    staffing an evaluation unit until September 1997.  According to the
    Secretariat's evaluation officer, the goal is to field-test a
    performance-based evaluation system in 20 to 30 countries by the end
    of 1998.  Secretariat officials attribute the slow start in
    developing performance indicators to the rush to get UNAIDS up and
    running programmatically and country-level activities under way.
    Results from the theme group survey covering 1997 activities showed
    that, where theme groups had developed an integrated U.N.  work plan,
    only 22 percent had developed indicators to measure progress, and
    only 13 percent had assessed their performance using the indicators.

    USAID officials noted that the lack of a credible monitoring and
    evaluation plan by the UNAIDS Secretariat is a significant weakness.
    Officials added that at the May 1998 meeting of UNAIDS' governing
    board, a Monitoring and Evaluation Technical Review Group was
    created.  This group is expected to develop a plan for approval by
    the board at its next meeting, scheduled for December 1998.

    --------------------
    \7 The Government Performance and Results Act of 1993 (P.L.  103-62).

       U.N.  AGENCIES UNDERTOOK
       INNOVATIVE GRASSROOTS
       INTERVENTIONS
    ---------------------------------------------------------- Chapter 3:7

    Although we did not conduct an evaluation of individual cosponsor
    HIV/AIDS activities, in the countries we visited we observed
    innovative cosponsor activities in each of our case study countries.
    U.N.  agencies relied on proven control and prevention activities
    such as condom education and promotion, information and behavioral
    change communication, and treatment of STDs.  In addition, the
    activities were targeted to high-risk groups (such as commercial sex
    workers and truckers), individuals who engage in high-risk activity
    (clients of commercial sex workers, men who have sex with men,
    intravenous drug users), and those considered particularly vulnerable
    (women and youths).

    Moreover, the activities we observed were generally inexpensive,
    ranging from $200 to several thousand dollars.  In addition, in an
    effort to increase sustainability, the activities were often managed
    by host country officials and implemented by locally recruited
    activists.  While many developing countries remain dependent on
    external donor support to finance HIV/AIDS activities, a cadre of
    trained and experienced HIV/AIDS activists existed in all the
    countries.  Particularly noteworthy was the use of peer
    educators--such as commercial sex workers and intravenous drug
    users--who are able to reach and communicate effectively with at-risk
    populations who normally fall outside the reach of
    government-sponsored public health programs.

    Examples of intervention activities we observed in our case study
    countries include the following:

      -- In the Dominican Republic, an adolescent peer educator training
         session and a prison AIDS awareness workshop were funded by
         joint contributions from all the theme group members.

      -- In Honduras, a street theater organization conducted HIV/AIDS
         awareness skits at schools and festivals and during half-time at
         professional and amateur soccer matches (see fig.  3.2).

       Figure 3.2:  A USAID and
       UNICEF-supported Community
       Center and Youth Theater in San
       Pedro Sula, Honduras (with
       props used in HIV/AIDS skits)

       (See figure in printed
       edition.)

      -- In the Philippines, commercial sex workers and
         men-who-have-sex-with-men peer educators provided counseling,
         information packets, and condoms in brothels and locales
         frequented by individuals who engage in high-risk behavior.

      -- In India, the first HIV testing center in New Delhi was
         developed, providing free voluntary testing; counseling
         services; dissemination of information about HIV/AIDS, STDs, and
         condom use; support and care services for HIV-positive clients;
         and advocacy and sensitization about the rights and needs of
         HIV-positive individuals.

      -- In Zambia, a pilot project for home-based care mobilized
         community groups to deal with the consequences of the HIV/AIDS
         epidemic, including (1) educating the community about HIV/AIDS;
         (2) caring for orphans, the chronically ill, and the dying; and
         (3) developing income-generating projects for women, orphans,
         and people living with AIDS.

       CONCLUSIONS
    ---------------------------------------------------------- Chapter 3:8

    UNAIDS has made limited progress toward achieving its goal of leading
    a broad-based, expanded, worldwide response to the HIV/AIDS epidemic.
    Cosponsor agency estimates of overall U.N.  spending on HIV/AIDS show
    that resources have not increased with the creation of UNAIDS, as was
    expected.  Agency spending on HIV/AIDS began declining before the
    creation of UNAIDS in 1996 and since then has leveled off, despite an
    increase in overall cosponsor agency spending of 6.5 percent.

    Building worldwide support for HIV/AIDS was a key objective of
    UNAIDS.  However, the UNAIDS Secretariat is not able to measure
    progress in meeting this goal because it does not yet have baseline
    data on spending on HIV/AIDS at the country level and has only
    recently developed baseline data for contributions by donor
    countries.  Secretariat officials said that spending estimates for
    affected countries should be available in the fall of 1998.  In
    addition, the Secretariat lacks data to determine whether the level
    of private sector resources directed to HIV/AIDS has increased or
    decreased.  While the UNAIDS Secretariat has made significant efforts
    at the international level to mobilize private sector support, we
    found that U.N.  efforts at the local level were very limited in the
    countries we visited.

    Secretariat officials acknowledged that as of 1997, most theme groups
    were not working effectively and that they underestimated the
    difficulty of getting U.N.  agencies to coordinate and conduct joint
    programming.  For example, in two of the five countries we visited,
    we found poorly functioning theme groups that rarely met.  Factors
    that hindered theme group operations included insufficient guidance
    to staff in the field regarding how theme groups should operate, not
    holding staff accountable for theme group success, and U.N.  agency
    staff's lack of commitment to working together.

    In addition, the UNAIDS Secretariat has not been very successful in
    providing technical assistance and other support to facilitate theme
    group activities and has only started to establish performance
    measures.  Despite UNAIDS' difficulties, we observed innovative and
    U.N.  agency intervention projects in each of our case study
    countries.

       AGENCY COMMENTS AND OUR
       EVALUATION
    ---------------------------------------------------------- Chapter 3:9

    Comments from USAID, the Department of State, and the UNAIDS
    Secretariat generally focused on concerns about our review of UNAIDS.
    USAID stated that it shares our concerns about areas in which UNAIDS
    has not made sufficient progress.  However, USAID expressed its
    strong endorsement and support for the program and the unique role
    UNAIDS plays in the global response to HIV/AIDS.  USAID also pointed
    to the difficulty of UNAIDS' mandate and UNAIDS' relatively short
    existence (2 years at the time of our review).  USAID stated that
    progress had been made in some areas since our review.  For example,
    USAID noted that at a recent meeting, a Monitoring and Evaluation
    Technical Review Group was created to develop a monitoring and
    evaluation plan targeted for December 1998.

    UNAIDS Secretariat officials agreed with our conclusion that U.N.
    expenditures for HIV/AIDS did not substantially increase since the
    creation of UNAIDS.  However, it questioned the quality of the
    financial data reported by the cosponsor agencies because agencies
    have difficulty estimating expenditures and use different methods of
    reporting.  The Secretariat stated that relying on financial
    expenditures alone masks the increased expenditures of human
    resources on HIV/AIDS by cosponsor agencies in many countries.  The
    Secretariat stated that progress has been made toward mobilizing the
    private sector and coordinating efforts at the country level,
    providing support to theme groups, and developing a framework for
    measuring the progress of the U.N.  effort on HIV/AIDS was reasonable
    given the challenges it faced and the short time since the creation
    of UNAIDS.  The Secretariat provided updated information on
    activities undertaken after we completed our fieldwork.

    Our conclusion about the decline in U.N.  spending on HIV/AIDS is
    based on data reported by the respective cosponsor agencies.  We
    recognize that agencies use different methods to report expenditures
    and that it is difficult to estimate expenditures, particularly when
    HIV/AIDS expenditures are integrated into spending for other
    activities.  However, because each agency has reported the data in a
    consistent manner over time, we believe that the data are useful to
    identify trends.  We also agree with the Secretariat that adding
    other measures of the U.N.  effort, such as human resources, would be
    useful.  However, the Secretariat does not currently have an
    evaluation and monitoring system to measure non-financial
    contributions to HIV/AIDS.

    We did not make a judgment about whether cosponsor agencies should
    have made more progress toward mobilizing the private sector.  The
    concern we raised in the report was less about the level of private
    involvement than the fact that cosponsor agencies in all but one of
    the countries we visited were not making efforts to involve the
    private sector.  We acknowledge in the report that theme groups have
    made some progress since the Secretariat's 1996 survey; it was
    conducted the same year that most theme groups were established, so
    some progress would be expected.  However, the 1997 survey indicated
    that half or fewer of the theme groups had undertaken efforts in 7
    out of 10 of the key outputs measured.  We also note that despite
    being instructed by its governing board to immediately begin
    developing an evaluation and monitoring plan, the Secretariat did not
    hire staff to develop the plan until a year and a half after UNAIDS
    was established.

    USAID, State, and the UNAIDS Secretariat also noted that UNAIDS has
    only been in existence for 2-1/2 years and were concerned that it may
    have been too early to assess the program.  State also said it was
    disappointed at the very negative tone in the report concerning
    UNAIDS' activities and believed that the report did not give any
    credit to UNAIDS for what it had achieved.  Furthermore, State said
    that we implied that U.N.  agencies and the U.S.  government should
    stop supporting UNAIDS.

    While we recognize that UNAIDS has been in existence for only 2-1/2
    years, we did not evaluate the program's impact on the HIV/AIDS
    epidemic.  In our report, we present the facts as we found them to
    be, including areas needing improvement and areas that have worked
    well.  In fact, the report specifically identifies UNAIDS'
    accomplishments, including information on innovative grassroots
    interventions.  Also, we did not evaluate whether support for UNAIDS
    should be continued.  Our objective, as stated in the report, was to
    examine the program's progress, since its inception, in meeting
    established objectives such as increasing resources devoted to
    HIV/AIDS and working together in theme groups at the country level.

    (See figure in printed edition.)APPENDIX I
    COMMENTS FROM THE U.S.  AGENCY FOR
    INTERNATIONAL DEVELOPMENT
    ============================================================ Chapter 3

    (See figure in printed edition.)

    (See figure in printed edition.)

    (See figure in printed edition.)

    (See figure in printed edition.)

    The following are GAO's comments on the U.S.  Agency for
    International Development's (USAID) letter dated June 24, 1998.

    GAO COMMENTS

    1.  We modified the language to note that USAID primarily uses
    private voluntary organizations (PVO) to implement its programs.

    2.  We agree that the AIDS Control and Prevention (AIDSCAP) program
    in Honduras was in existence for a short period of time before the
    global AIDSCAP project ended.  However, our analysis showed that the
    program's short duration was due to the difficulty it had in getting
    started.  We modified the report with the following information to
    clarify what we found.  USAID officials in Honduras said that they
    began negotiating with AIDSCAP in 1993 to develop a program, but that
    AIDSCAP's proposals did not adequately emphasize participation by the
    government or involvement by local non-governmental organizations
    (NGO).  As a result, USAID did not reach agreement with AIDSCAP until
    1995, 2 years before it was scheduled to end.

    3.  We modified the report to reflect efforts by the Joint United
    Nations Programme on HIV/AIDS (UNAIDS).

    4.  We modified the report to reflect efforts by U.N.  donor
    countries.

    (See figure in printed edition.)APPENDIX II
    COMMENTS FROM THE DEPARTMENT OF
    STATE
    ============================================================ Chapter 3

    (See figure in printed edition.)

    (See figure in printed edition.)

    The following are GAO's comments on the Department of State's letter
    dated June 25, 1998.

    GAO COMMENTS

    1.  Our conclusions are not based on the criticisms of U.N.
    officials.  Rather, we gathered data from fieldwork in five
    countries, from the Secretariat's surveys of all theme groups in 1996
    and 1997, as well as from a survey of field staff conducted by USAID
    that also included questions on the progress of UNAIDS.

    2.  We agree that the evidence in our case studies showed that three
    of the five theme groups in the countries we visited were operating
    effectively.  However, our conclusion was also based on the
    Secretariat's overall assessment of theme group operations.  As we
    point out in the report, Secretariat officials acknowledged that as
    of 1997 most theme groups were not working effectively and that they
    underestimated the difficulty of getting U.N.  agencies to coordinate
    and conduct joint programming.  Moreover, the Secretariat's 1997
    survey of its theme groups indicated that less than half of the theme
    groups were judged effective in cosponsor coordination.

    (See figure in printed edition.)APPENDIX III
    COMMENTS FROM THE DEPARTMENT OF
    HEALTH AND HUMAN SERVICES
    ============================================================ Chapter 3

    (See figure in printed edition.)

    (See figure in printed edition.)APPENDIX IV
    COMMENTS FROM THE UNAIDS
    SECRETARIAT
    ============================================================ Chapter 3

    (See figure in printed edition.)

    (See figure in printed edition.)

    (See figure in printed edition.)

    (See figure in printed edition.)

    (See figure in printed edition.)

    (See figure in printed edition.)

    The following are GAO's comments on UNAIDS' letter dated June 24,
    1998.

    GAO COMMENTS

    1.  We made a judgment that the U.N.'s progress was limited based on
    its progress relative to the criteria set forth in the U.N.'s
    Economic and Social Council resolution endorsing the creation of
    UNAIDS.

    2.  Because this updated information was provided subsequent to our
    visits to the five countries, we could not verify it and therefore
    have not included the information in the report.  Although the
    Secretariat reports progress since our visits, we note that its April
    1998 report on a 1997 survey of theme groups indicates that, as of
    April 30, 1998, less than half of the groups responding had
    undertaken efforts in 7 out of 10 of the key outputs measured.

    3.  We modified the text to reflect this information.

    MAJOR CONTRIBUTORS TO THIS REPORT
    =========================================================== Appendix V

    NATIONAL SECURITY AND
    INTERNATIONAL AFFAIRS DIVISION,
    WASHINGTON, D.C.

    Jess T.  Ford
    Lynne M.  Holloway
    Joan M.  Slowitsky
    Patrick A.  Dickriede
    Rolf A.  Nilsson
    Rona H.  Mendelsohn

    OFFICE OF THE GENERAL COUNSEL,
    WASHINGTON, D.C.

    Mark C.  Speight

    LOS ANGELES FIELD OFFICE

    Aleta L.  Hancock
    Thomas W.  Zingale

    *** End of document. ***