AID Needs To Strengthen Management of Commodity Import Programs

NSIAD-84-47: Published: Feb 29, 1984. Publicly Released: Feb 29, 1984.

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GAO evaluated the extent of the Agency for International Development's (AID) program and financial controls over the Commodity Import Program.

GAO found that AID has not always adequately planned procurements or commodity deliveries. In some instances, commodities arrive too late and at increased cost. Although regulations prescribe that AID-financed commodities must meet eligibility and price requirements, AID has not always used adequate internal controls to ensure compliance, and insufficient reviews of commodity transactions have contributed to waste and improper expenditures that could amount to millions of dollars annually. In addition, GAO found that AID does not adequately monitor the implementation of commodity import programs and local currency generation and use. AID missions have not conducted or documented required evaluations of the host-government commodity arrival accounting systems nor systematically followed up on the distribution and end-use of commodities. As a result, AID cannot adequately account for the arrival and disposition of commodities. This occurs because missions do not have sufficient staff and guidance for monitoring program implementation. Furthermore, GAO found that AID missions are not effectively monitoring the proceeds from commodity sales. Finally, despite a legislative mandate to improve the assessment of its programs, AID has not developed procedures for evaluation of the program which would provide information to design future programs.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Administrator, AID, should increase audit coverage of commodity transactions financed under bank letters of commitment.

    Agency Affected: United States Agency for International Development

  2. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Administrator, AID, should strengthen established procedures for financing commodities under the direct reimbursement method by determining that personnel authorized to perform eligibility reviews are qualified.

    Agency Affected: United States Agency for International Development

  3. Status: Closed - Implemented

    Comments: The Administrator of AID believes that the issue is not one of independence but assurance that AID commodity audit function management is technically proficient. With steps taken to improve the commodity management office, he felt it would not be practical or cost-effective and concluded that the post-audit review and analysis function should not be transferred at this time.

    Recommendation: The Administrator, AID, should study the need to transfer the commodity voucher audit function from the Office of Commodity Management to another organization within AID where its degree of independence would be enhanced.

    Agency Affected: United States Agency for International Development

  4. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Administrator, AID, should require responsible officials to issue letters of commitment in appropriate standard language which would clearly inform and bind suppliers to AID requirements.

    Agency Affected: United States Agency for International Development

  5. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Administrator, AID, should issue specific guidance to AID missions on monitoring the implementation of commodity import programs, including the arrival accounting and disposition of commodities.

    Agency Affected: United States Agency for International Development

  6. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Administrator, AID, should ensure that missions comply with established monitoring procedures.

    Agency Affected: United States Agency for International Development

  7. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Administrator, AID, should issue guidelines on accounting for the generation of local currency proceeds resulting from the sale of AID-financed commodities.

    Agency Affected: United States Agency for International Development

  8. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Administrator, AID, should issue appropriate guidance on monitoring the use of local currency generated from the sale of commodities.

    Agency Affected: United States Agency for International Development

  9. Status: Closed - Implemented

    Comments: AID has issued guidance and procedures to strengthen commodity import programs, specifically in monitoring implementation from the agreement stages through authorization, shipment, and disposition. While these actions relate more to the recommendation of monitoring and arrival accounting, they are expected to result in improvements in the implementation planning process.

    Recommendation: The Administrator, AID, should establish procedures requiring more specific pre-implementation of Commodity Import Program planning which would include realistic, time-phased implementation schedules and would provide for modifying plans when established milestones can no longer be reasonably met.

    Agency Affected: United States Agency for International Development

  10. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Administrator, AID, should direct the Office of Evaluation to establish a requirement for evaluating Commodity Import Program assistance and develop specific guidance for those performing such evaluations.

    Agency Affected: United States Agency for International Development

 

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