Audit of commodity import programs in Pakistan

funded three Commodity Import Programs in Pakistan: Agricultural Commodities and Equipment, Energy Commodities and Equipment, and the Agricultural Sector Support Program. A primary objective of these programs was to provide balance of payment support to the Government of Pakistan through imports of commodities from the United States. As of 5/89, total obligations and expenditures under the three programs were $752 million and $597 million, respectively. The audit disclosed the following. (1) USAID/P did not ensure that about $184 million in local currency was deposited in special accounts and used for authorized purposes. This included about $44 million that was reported as paid for unallowable incidental costs. These problems occurred because USAID/P was not successful in its efforts to obtain required reports from the Government of Pakistan or to be involved in the programing of local currency. (2) Commodities may not have been received in the quantity and condition for which payment was made. This occurred because the required reviews were not made of the Government of Pakistan"s commodities arrival and disposition systems, and USAID/P did not effectively implement its established procedures. (3) About $4.8 million of the $10.8 million in equipment reviewed was not effectively utilized. This occurred because necessary information was not available to monitor equipment utilization and actions taken to resolve identified problems were not successful. (4) Apparently about $8.3 million in program funds were not liquidated or decommitted in a timely manner. This occurred because actions were not taken to resolve questions related to expired Letters of Commitment. USAID/P generally concurred with the findings and recommendations, but it did not concur with a recommendation to have the Government of Pakistan deposit into special accounts the amount of local currency reported as paid for unallowable incidental costs, and it was not fully responsive to the finding and recommendations concerning controls over the receipt of commodities. Management comments are summarized after each finding and presented in their entirety as Appendix 1 to this report. (Author abstract)