Survey Of Internal Audits And Inspections Relating To United States Activities In Viet Nam

B-159451: Published: Jul 18, 1966. Publicly Released: Jul 18, 1966.

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GAO reviewed: (1) the work being done in Vietnam by the 15 principal audit or inspection organizations, or units having responsibilities in Vietnam to carry out their assignments for internal audit, inspection, and management review; (2) some of the more important and more pressing areas in which greater agency efforts are needed; (3) actions taken by the agencies toward more effective review and corrective measures since the time of GAO field work in March 1966; and (4) any further plans which agencies have stated to GAO.

GAO noted that: (1) the most significant problem areas in terms of magnitude, vulnerability to operational and management deficiencies, and consequent waste in regard to economic assistance are the commercial import program and the rural construction program; (2) substantive-type audits had been completed or were in process for parts of the economic assistance, commercial import, and rural construction programs, relating to about $67 million from July 1, 1964, to the time of GAO's survey in March 1966; (3) special-purpose inspections and investigations also have been performed, principally by the Management Inspection Staff of the Agency for International Development (AID) and by the Inspector General of Foreign Assistance; (4) in view of the known difficulties in effectively carrying out the economic assistance program in Vietnam, there appears to be an urgent need for a continuing evaluation of program makeup and performance for agency top management use; (5) the underlying problems relating to management control of the economic assistance programs in Vietnam, although intensified, are generally not new; (6) AID has taken aggressive action in recent months toward applying greater audit and review effort in significant program areas; (7) in connection with the military construction program, totalling nearly $600 million up to March 1966, $504 million had been incurred under a single joint-venture contract for construction of air bases, port facilities, cantonments and logistical and administrative facilities for United States and Vietnamese military forces, and other projects; (8) defense agencies' audits have been limited to examinations of the contractors' cost representations as shown on vouchers presented for payment; (9) the atmosphere surrounding the billion-dollar construction undertaking in Vietnam and the conditions of urgency under which the work is proceeding are at best conducive to a large element of waste, some of it unavoidable; (10) GAO found no audits being conducted nor any current plans by the audit agencies of the Army and Navy to perform audits of military supply or logistics activity other than construction in Vietnam; and (11) the circumstances under which the economic and military assistance and military construction programs are conducted and the scope, complexity, and uniqueness of the activities in Vietnam suggest a greater than ordinary need for a continuing plan of top management surveillance.

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