Audit of commodity import program in Zambia

Program results and compliance audit focuses on the FY83-85 agreements (covering the period 8/83-4/87) and is based on document review, interviews, and site visits. CIP foreign exchange resources were used to buy eligible commodities and these commodities were being properly utilized for intended purposes. However, USAID/Z did not have controls sufficient to ensure that CIP local currency revenues were effectively accounted for, collected, and disbursed. In addition, the timeliness of local currency programming needed improvement. More specifically, due in part to the fact that financial controls over the CIP were inadequate, Title I local currency proceeds were used to satisfy the deposit requirements of the CIP agreements. This resulted in the loss of the equivalent of $4.2 million to development activities. Further, given Zambia"s high inflation rate during 1986/87, USAID/Z"s and the GOZ"s slowness in programming local currency funds, compounded by delays in collecting revenues, contributed to a significant erosion (equivalent to some $5.4 million) in the purchasing power of the revenues. To correct these situations, the report contains recommendations to improve accountability over collections and improve the programming process. (Author abstract, modified)