Foreign Aid: Better Management of Commodity Import Programs Could Improve Development Impact

Highlights

Pursuant to a congressional request, GAO reviewed the Agency for International Development's (AID) commodity import programs (CIP) in Egypt, Pakistan, Zambia, and Zaire to assess how CIP could achieve greater development impact.

Recommendations

Recommendations for Executive Action

Agency Affected	Recommendation	Status
U.S. Agency for International Development	The Administrator, AID, should require missions to independently verify, on a sample basis, host government reports on the uses of local currencies.	Closed – Implemented The AID Office of Financial Management issued guidance in June 1991 which requires missions to verify the accuracy of host government reports on local currency special accounts at least annually.
U.S. Agency for International Development	The Administrator, AID, should develop with Egypt a plan to liquidate accumulations of local currency funds and program future generation for development at a pace more commensurate with the rate that funds are deposited.	Closed – Implemented AID and Egypt programmed $184.9 million in local currency for development purposes and agreed to program future deposits for support of development budgets. These funds had been idle in the account and were not contributing to the goal of promoting the use of local currency funds to support development activities.
U.S. Agency for International Development	To ensure that AID can adequately account for the arrival and disposition of CIP commodities, the Administrator, AID, should require that arrival accounting systems provide a clear link between CIP obligations, commodity receipts, and local currency deposits for all import transactions.	Closed – Implemented AID has instituted such a system in Egypt and is investigating whether that system could be modified and extended to other CIP programs in other countries.
U.S. Agency for International Development	To ensure that AID can adequately account for the arrival and disposition of CIP commodities, the Administrator, AID, should specify the extent to which missions should conduct end-use checks and a minimum level of expected coverage.	Closed – Implemented AID issued a worldwide cable on June 8, 1990 reiterating individual mission responsibilities for end-use checks, citing relevant AID regulations, and advising missions to review procedures.
U.S. Agency for International Development	To ensure that AID can adequately account for the arrival and disposition of CIP commodities, the Administrator, AID, should require missions to resolve problems of underused commodities before approving financing of additional transactions by the importer.	Closed – Implemented AID believes its strengthening of end-use monitoring will greatly reduce the incidence of underutilized AID-funded commodities.

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International Affairs

Accounting systemsCommodity salesEconomic developmentForeign aid programsForeign currencyForeign economic assistanceForeign financial assistanceForeign governmentsMonitoringProgram management