The U.S. Must Improve Tracking of Its Contributions to the U.N. and Other International Organizations

Report Budget and Spending

The U.S. Must Improve Tracking of Its Contributions to the U.N. and Other International Organizations

March 11, 2019 19 min read Download Report
Schaefer
Senior Research Fellow in International Regulatory Affairs
Brett D. Schaefer is the Jay Kingham Fellow in International Regulatory Affairs at Heritage's Margaret Thatcher Center for Freedom.

Summary

Each year, the United States provides billions of dollars in taxpayer funds to the United Nations and other international organizations. Because these funds come from multiple U.S. government departments and agencies, and are dispersed in different budget cycles, the total annual amounts are difficult to track, which has resulted in inconsistent reporting. To address this issue, Congress mandated in 2016 that the Office of Management and Budget report annually to Congress on such U.S. contributions. While this requirement has greatly improved transparency of, and accountability for, U.S. contributions, Congress can and should strengthen reporting requirements further. This Heritage Foundation Backgrounder details additional reforms.

Key Takeaways

Americans deserve to know what our taxpayer money is funding and how it’s being spent at the U.N. and other international organizations.

The number and disparate nature of organizations, multiple funding streams, and various budget cycles and funding types have made data inconsistent and inaccurate.

Congress must improve the accuracy and transparency of contributions and reform current reporting requirements to ensure that U.S. taxpayer money is properly spent.

Each year, the United States provides billions of dollars in taxpayer funds to the United Nations and other international organizations. Because these funds come from multiple U.S. government departments and agencies, the total annual amounts are difficult to track, which has resulted in inconsistent and inaccurate reporting. To address this issue, Congress mandated in 2016 that the Office of Management and Budget (OMB) report annually to Congress on “all assessed and voluntary contributions with a value greater than $100,000, including in-kind, of the United States Government to the United Nations and its affiliated agencies and related bodies during the previous fiscal year.”REF

This requirement greatly improves transparency of, and accountability for, U.S. contributions, but Congress could strengthen it. Specifically, Congress should:

  • Expand the OMB report on contributions to the U.N. system to include contributions to all international organizations. Doing so would incorporate the information included in the State Department’s annual report on contributions to international organizations, so Congress should eliminate that report. However, since tracking these contributions requires dedicated staff, and the State Department and the U.S. Agency for International Development (USAID) are the source of most contributions, the State Department’s Bureau of International Organization Affairs should be directed to assist in compiling the expanded OMB report.
  • Require the OMB report to distinguish in the summary tables between contributions to non-U.N. international organizations and contributions to the U.N. and its specialized agencies, funds, programs, and other affiliated or related bodies.
  • Require all parts of the U.S. government to notify the OMB and the Bureau of International Organization Affairs of any contribution to any international organization. Ideally, Congress should require these notifications. However, even lacking such a statutory mandate, an OMB request encourages more thorough reporting than a request from the State Department.
  • Instruct the Department of State to publicly list all international organizations and define which characteristics lead the U.S. to consider an international organization to be part of the U.N. system or otherwise affiliated or related to the U.N. system.
  • Instruct the Department of State to conduct an analysis of, and publicly report on, U.S. participation in all international organizations to identify those most and least vital to U.S. interests and providing the most and least value for money. Congress should require the report to list international organizations in quintiles to avoid an “every organization is vital” conclusion.

These changes would reduce duplication in reporting requirements, maintain OMB authority to require all parts of the U.S. government to report contributions to international organizations, enhance speed and accuracy of tracking such contributions, and provide a national interest basis for prioritizing U.S. funding among international organizations.

Challenges to Compiling Accurate Funding Data

Having sound, complete data on U.S. contributions to international organizations seems like it would be a straightforward matter. The United States has been the largest financial supporter of the United Nations since its founding in 1945, and has provided financial support to other international organizations dating back to the 1800s. With that level of experience, America should be well versed in accounting for these contributions. However, it is surprisingly complex due to the number and disparate nature of organizations, multiple U.S. funding streams, and different budget cycles and funding types.

Myriad Organizations. According to the latest report, the U.S. contributed more than $12.1 billion in funding to 194 international organizations, funds, treaty bodies, councils, groups, bureaus, centers, commissions, and peacekeeping operations in fiscal year (FY) 2017.REF The vast majority of this funding (approximately $10.5 billion) was distributed to the U.N. and over 60 U.N. specialized agencies, peacekeeping operations, funds, programs, treaty bodies, or other entities related to, or affiliated with, the U.N. The remaining international organizations receiving U.S. funding, nearly 130 in total, are incredibly varied, and include:

  • Commodity-focused entities, such as the International Coffee Organization, the International Cotton Advisory Committee, and the International Maize and Wheat Improvement Center;
  • Large non-U.N. international organizations focused on humanitarian relief, such as the International Committee of the Red Cross (ICRC), or development, such as the Organization for Economic Co-operation and Development (OECD), or law enforcement, such as the International Criminal Police Organization (INTERPOL);
  • Regional governance bodies, such as the African Union and the Council of Europe;
  • Regional international organizations, such as the Organization of American States and the Asia-Pacific Economic Cooperation (APEC);
  • Regional cooperative treaties focused on fisheries or setting policy for the Antarctic;
  • Security alliances, such as the North Atlantic Treaty Organization (NATO); and
  • Small non-U.N. scientific or technical organizations, such as the International Bureau of Weights and Measures and the International Union of Crystallography.

Tracking U.S. funding and participation across this disparate landscape is time-consuming and tedious, especially for the more obscure organizations receiving relatively small contributions. It is far from clear that the State Department report, even listing 194 international organizations, captures all contributions. To give two examples: The FY 2008 Report on Contributions to International Organizations included contributions to (1) the Permanent Engineering Board of the Columbia River Treaty and (2) the World Road Association.REF The U.S. continues to contribute to these organizations, but the FY 2017 report does not include U.S. funding to them.

Multiple U.S. Funding Streams. These inconsistencies are in part because U.S. contributions to international organizations originate from many parts of the U.S. government. Most U.S. contributions originate in the State Department and USAID. For FY 2017, for instance, the State Department and USAID accounted for over 90 percent of all U.S. contributions to international organizations listed in the report. However, other parts of the U.S. government contributed nearly a billion in U.S. taxpayer dollars to international organizations. Specifically, the FY 2017 Report on Contributions to International Organizations listed 21 U.S. government agencies that contributed to international organizations. Some of these contributions are large and expected, such as the Department of Defense contributing $499 million to NATO. Others, however, are relatively small and less intuitive, like the Environmental Protection Agency, the National Academy of Sciences, and the National Endowment for the Arts contributing, collectively, $12.6 million to 22 international organizations.

Different Budget Cycles and Funding Types. Each international organization has unique features, including its mission and membership, which distinguish it from other international organizations. One frequent area of difference is budget cycles. While many international organizations operate on a calendar year for budget purposes, some international organizations do not. For instance, the U.N. peacekeeping budget extends from July to June, and the United Nations regular budget operates on a two-year (biennial) budget that is adjusted mid-cycle.REF Further muddying the process is that the U.S. uses a fiscal year that starts in October and ends in September the following calendar year. This complicates the process of tracking funds in terms of budget cycles—especially if the U.S. appropriates funds in short-term continuing resolutions as has occurred with relative frequency in recent years—since the U.S. provides funding to most international organizations at the end of the calendar year.REF

In addition, there is no uniform funding arrangement for international organizations. Some international organizations are funded through mandatory dues (assessments) paid by member states. For instance, in 2019 the U.S. is assessed 22 percent of the U.N. regular budget and 27.8912 percent of the U.N. peacekeeping budget.REF In dollar terms, this works out to $639 million for the U.N. regular budget and more than $1.866 billion for the U.N. peacekeeping budget in 2019.REF

Even within the U.N. system, however, funding mechanisms vary widely. Some U.N. organizations, such as the Food and Agriculture Organization,REF base their rate of assessment on the U.N. regular budget to fund their core expenditures even though they receive significant voluntary contributions. By contrast, the International Maritime Organization bases its assessment on economic factors and merchant fleet tonnage, which resulted in a relatively low U.S. assessment of 2.76 percent in 2017.REF As another example, the World Intellectual Property Organization receives only about 4 percent of its income from member states and nearly 95 percent from fees and services.REF

Other organizations rely on voluntary contributions from member states or nongovernmental organizations. U.N. funds and programs rely primarily on voluntary contributions from member states and the private sector. Some, however, like the United Nations Environment Program, also receive assessed funding indirectly through the U.N. regular budget.

In addition, the U.S. contributes hundreds of millions of dollars to other organizations outside the U.N. system each year whose funding mechanisms are equally disparate. For instance, the member states fund NATO through assessed contributions according to a cost-share formula based on gross national income (GNI) and voluntary contributions of troops and equipment to military operations. The Organization of American States also has an assessment formula based on GNI adjusted for debt and low per capita income, under which the U.S. is charged 59.47 percent, but receives voluntary funding as well. Other organizations, like the International Coffee Organization, allocated expenses based on a country’s proportion of the amount of coffee exports or imports.REF

Gaps Revealed

The complexities listed above illustrate why reporting on U.S. contributions to the U.N. system, much less to all international organizations, is a challenging endeavor and why different sources and reports yield different results. Chart 1 below illustrates the significant variance in funding data between U.S. reports and U.N. sources.

The United Nations Chief Executives Board (UNCEB) publishes annual revenue statistics for the U.N. system.REF The UNCEB data is often billions of dollars higher than the funding data reported to Congress by the OMB and the Department of State. Some variance is natural because the U.N. data is on a calendar-year schedule, while the U.S. reports are on a fiscal year schedule. However, when the multi-year U.N. total is higher by $7.65 billion, it indicates that at least one source is significantly inaccurate.REF

BG3394 Table 1

The variance between data reported by the State Department and similar reports compiled by the OMB highlights another pattern: Reported funding to international organizations is generally less when the State Department compiles the report than when the OMB compiles the report. FY 2014 is illustrative because the State Department report on Contributions to International Organizations, compiled shortly after the end of that fiscal year, was nearly $600 million less than the OMB report on the subset (a smaller number of international organizations) of U.S. contributions to the U.N. system compiled in 2017 for FY 2014. This happens, in large part, because while most U.S. contributions to the U.N. system come from the State Department and USAID, millions of dollars also flow from other parts of the federal government, and the State Department lacks the authority to require other agencies to provide full data in a timely manner.REF

In 2016, Congress addressed this problem by requiring the OMB to report annually to Congress on “all assessed and voluntary contributions with a value greater than $100,000, including in-kind, of the United States Government to the United Nations and its affiliated agencies and related bodies during the previous fiscal year.”REF The first report compiled by the OMB, submitted in 2017, covered FY 2014,REF and included summary tables of U.S. contributions to the U.N. and its affiliated agencies and related bodies for FY 2015 and FY 2016. However, the report deferred to State Department reports on Contributions to International Organizations for specific details for FY 2015 and FY 2016.

While the 2016 law resulted in more detailed and comprehensive reports on U.S. contributions to the United Nations system for FY 2014 to FY 2017, some gaps remain:

  • The legislation requires the report to include “all assessed and voluntary contributions with a value greater than $100,000.” However, some organizations receive less than this amount and might be excluded if this limit is interpreted strictly.
  • As noted in the FY 2017 Report on Contributions to International Organizations, “Not all Executive Branch agencies provided information for inclusion in the report.”REF Thus, relying on the State Department report for a detailed breakdown of U.S. contributions to the U.N. system might result in incomplete information. Requiring the OMB to report on all contributions to all international organizations would improve reporting by other parts of the U.S. government.
  • The report does not include U.S. contributions to the International Monetary Fund, the World Bank, or the regional development banks because the Department of the Treasury submits them to Congress in a separate report. They should be included in the report for the sake of completeness, even if in a separate category.
  • There exists no definitive definition of a U.N.-affiliated agency or related body, and it is sometimes unclear when organizations fit into this category. For instance, some may disagree with the decision by the OMB to list the World Trade Organization (WTO), the Organization for the Prohibition of Chemical Weapons (OPCW), and the United Nations Framework Convention on Climate Change (UNFCCC) as U.N.-affiliated agencies and related bodies, even though the WTO is a UNCEB member,REF and the UNCEB lists the OPCW and UNFCCC among “Other UN System Organizations and Entities.”REF

Fixing the Flaws

Although the 2016 law greatly improved transparency and accountability of U.S. contributions to the U.N. system, Congress could strengthen it. Specifically, Congress should:

  • Expand the OMB report on contributions to the U.N. system to include contributions to all international organizations. Doing so would incorporate the information in the State Department’s annual report on contributions to international organizations and, therefore, Congress should eliminate that report. Congressional oversight could be adequately served provided that: (1) The OMB remains the target of the reporting requirement to increase incentives for other parts of the executive branch to submit information for the report, and (2) that the report instructs the OMB to report contributions to all international organizations, including the U.N. and U.N.-affiliated and related organizations.REF Congress should specify that the report must include all contributions, identify them as assessed, voluntary, or in-kind contributions, and, for contributions over $100,000, include a brief description of their purpose.REF However, since tracking these contributions requires dedicated staff, and the State Department and USAID are the source of most contributions, the State Department’s Bureau of International Organization Affairs should be directed to assist in compiling the expanded OMB report.
  • Require the report to identify separately contributions to the U.N. and its specialized agencies, funds, programs, and other affiliated or related bodies and contributions to non-U.N. international organizations. The United Nations and its affiliated or related organizations are a subset of all international organizations. Based on the reporting requirements, Congress wants to know the total amount that the U.S. is contributing to international organizations, how much the U.S. is contributing to international organizations affiliated with the U.N., how much the U.S. is providing to each individual organization, the source of that funding, and whether that funding is assessed, voluntary, or in-kind. This separation can be accomplished if the 2017 Contributions to International Organizations report slightly alters its presentation to separate U.N.-affiliated and related organizations from non-U.N. international organizations in the summary tables, and lists voluntary, assessed, and in-kind contributions in separate columns. In addition, for those international organizations that have assessed contributions, the report should list the U.S. assessment rate.
  • Require all parts of the U.S. government to notify the OMB and the State Department Bureau of International Organization Affairs of all contributions to any international organization. The 2016 reporting requirement partially addressed the problem that the State Department lacks authority to compel reporting by other parts of the U.S. government on contributions to international organizations by requiring the OMB to submit a report to Congress on contributions to the U.N. system. Even though the OMB can elicit more thorough reporting, some inconsistencies continue. Ideally, Congress should require these notifications and specify that they include a brief summary of the purpose of the contribution; the amount or value of the contribution; the recipient entity; and whether it was an assessed, voluntary, or in-kind contribution.
  • Direct the Department of State to publicly list all international organizations in which the U.S. participates or contributes funding, and define which characteristics lead the U.S. to consider an international organization to be part of the U.N. system or otherwise affiliated with, or related to, the U.N. system. The list of international organizations should include all international organizations listed in previous reports to Congress by the State Department, the Treasury Department, and the OMB, and should be supplemented by an OMB inquiry to all executive branch departments and agencies. Although determining whether an international organization is part of the U.N. system or affiliated with the U.N. may seem straightforward, there have been disputes in the past. Specifically, U.S. law prohibits any voluntary or assessed contribution “to any affiliated organization of the United Nations which grants full membership as a state to any organization or group that does not have the internationally recognized attributes of statehood.”REF The U.S. does not recognize a Palestinian state, but “Palestine” is now a full member of a number of international organizations, including the UNFCCC. The Obama Administration argued that the UNFCCC was not a U.N.-affiliated organization, even though the UNCEB lists the UNFCCC among “Other UN System Organizations and Entities” REF and includes contributions to it among U.N. system revenues. By contrast, however, the 2017 OMB report to Congress included the UNFCCC among its list of U.N. organizations. Establishing objective standards under which the U.S. would consider international organizations part of the U.N. system or affiliated with the U.N. would constrain the subjectivity of those judgments.
  • Instruct the Department of State to conduct an analysis of, and publicly report on, how U.S. interests are served through U.S. participation in each international organization. The purpose of the report would be to identify the organizations most, and least, vital to U.S. interests, and which provide the most, and least, value for money. This report would be useful for the appropriations process and in ascertaining the benefit versus cost of U.S. membership in individual organizations. Congress should require the report to list international organizations in quintiles ranging from most important to U.S. interests to those least important to U.S. interests to avoid an “every organization is vital” conclusion. Because U.S. membership does not vary significantly from year to year, the report need not be annual, but should be conducted at least once every four years to ensure that each Administration gives the matter due consideration.

Conclusion

United Nations system revenues increased by more than a third between 2010 and 2017—from nearly $39.5 billion to $53.2 billion. Cumulatively, the U.N. received $364.6 billion over that period. The U.S. has been and remains the U.N. system’s largest contributor, providing approximately one-fifth of total contributions on average annually over that period. According to U.N. data and U.S. reporting, the U.S. has provided more than $60 billion to the U.N. system over that eight-year period. Unfortunately, there is significant disparity—billions of dollars—between sources on U.S. contributions. In addition, unlike the U.N. system where the UNCEB tracks revenues, there is no alternative source to the U.S. government for U.S. contributions to non-U.N. organizations, and some periodically fall through the reporting cracks.

Congress and the Administration, as stewards of U.S. taxpayer dollars, have a responsibility to accurately track and report on U.S. contributions to the U.N. system and other international organizations. Congress should improve the accuracy and transparency of these contributions by reforming current reporting requirements, and requiring the Department of State to conduct a periodic cost-benefit analysis of U.S. contributions and membership in all international organizations. The U.S. must ensure that it is prioritizing its funds according to U.S. interests and that U.S. taxpayers get real value for their money.

—Brett D. Schaefer is the Jay Kingham Senior Research Fellow in International Regulatory Affairs in the Margaret Thatcher Center for Freedom, of the Kathryn and Shelby Cullom Davis Institute for National Security and Foreign Policy, at The Heritage Foundation.

Authors

Schaefer
Brett Schaefer

Senior Research Fellow in International Regulatory Affairs