Management?s Response and Corrective Action Plan: As noted in the audit, NED management is and has been aware of the FFATA reporting requirements. For the record, NED management takes a serious approach to FFATA regulations. NED?s concerns regarding FFATA compliance are rooted in concern for our gr...
Management?s Response and Corrective Action Plan: As noted in the audit, NED management is and has been aware of the FFATA reporting requirements. For the record, NED management takes a serious approach to FFATA regulations. NED?s concerns regarding FFATA compliance are rooted in concern for our grantees working in the sphere of human rights and democracy, particularly those NED partners working in the world?s most hostile authoritarian countries. As stated in our response to the FY 21 Audit, NED staff analysis of the potential reporting requirements recognized two significant risks to NED?s partners and the success of its programs: 1) reporting all first-tier subawardees would mean posting the identity of recipients and details of sensitive awards on a publicly accessible website, and 2) reporting NED partners as first-tier subawardees of the Department of State on a public website of federal funding accountability undermines the Congress? intentional decision to protect the independence of NED?s programmatic decision-making when it crafted the NED Act. However, NED seeks to balance these legitimate concerns with our desire to comply with the spirit of transparency rooted in FFATA, recognizing the importance of transparency and accountability as foundational tenets of a democratic society. As NED management stated in response to the FY 21 audit, in 2015, DOS offered NED the option of case-by-case waivers of individual subgrantees, rather than a per-country or blanket waiver of subgrantees which would have allowed for a practicable solution to meet the reporting requirements. In response and with notice to DOS, NED proposed and implemented an alternate method of compliance by posting information about subrecipients and funded programs on a searchable online database with content controlled by NED, with anonymized records for sensitive programs. This flexibility is essential to NED?s sensitive grantmaking program, where we often must make quick adjustments to anonymize information when partners face new risks in their operating environment. In total, NED currently has more than 700 grants in 50 countries requiring special protection of grantee identities. Corrective Action Plan NED renewed discussions to find a resolution to this issue in 2022, with leadership at NED and at DOS serving as a catalyst for a fresh approach to the issue. In our correspondence and discussion with DOS officials, NED management and staff have continually cited the legitimate concern for the security of our grantees and that the disclosure of NED?s grantees on a federal website runs contrary to NED?s standing as an independent entity. In response, DOS once again stated that a blanket waiver was not possible. Further, DOS advised NED that it approached OMB on this issue and that OMB would not entertain granting a formal exemption to NED. Unfortunately, this response from DOS fails to address NED?s concerns or offer any solutions regarding risks that public disclosure poses to its grantees. We aim to prevent this from becoming a reoccurring issue on our audits, and NED management believes there are viable solutions beyond a blanket exemption. It is NED?s understanding that DOS conducts its own assessment of risks to grantees before any public disclosure, and issues waivers from disclosure for individual grants deemed sensitive. NED would like to learn more about the process DOS uses to make that risk determination and apply it to the disclosure requirements related to NED?s most sensitive grants. Further, NED would like to explore using NED?s public website portal to disclose all non-sensitive grants to maintain a level of transparency. This would allow NED the flexibility to respond to evolving threats to our grantees and allow for public disclosure without using a US government website. NED Management is continuing the discussion of FFATA compliance with the Department of State and is scheduled to meet with the Acting Assistant Secretary, Bureau of Democracy, Human Rights, and Labor and other senior DOS staff to find a path forward on this issue. As stated above, NED takes this issue seriously and management will work on a solution to this issue that is consistent with NED?s mission and one that prioritizes the security of NED?s most vulnerable partners around the world. Responsible person is: Maju Varghese, Chief Operating Officer Anticipated completion date: 09/30/2023