Audit of food monetization program in Mozambique

480 Title II and Section 416 commodities to the Government of Mozambique (GOM) for both relief and monetization (i.e., commercial sale). Audit covers the period FY88-FY90. Over the three-year period, $101.1 million worth of commodities was provided for free distribution, and $48.9 million was monetized. PVO"s distributed emergency relief commodities, while the GOM and its parastatal import agent, Importador De Bens De Consumo (IMBEC), were responsible for the distribution and sale of most of the monetized commodities. Local currency generated was used to promote policy reforms aimed at increasing domestic food production and targeting food subsidies more effectively. Reforms were divided into three groups: (1) improving food security of the vulnerable groups through improved household surveys and nutritional impact studies; (2) reforming pricing and marketing policies for domestic agricultural products to increase production; and (3) improving public management of the food assistance program. The program has made significant progress. The GOM has conducted a follow-on household economic/nutritional impact survey, announced producer prices for maize, and liberalized pricing and removed subsidies to encourage local production. In addition, the GOM has announced that it will no longer use IMBEC as its import agent because of poor internal controls and cash management practices. USAID/M had established a system to ensure that monetization proceeds were accounted for and used in accordance with the agreements, but the system was not formalized and was prone to errors. Consequently, the GOM did not deposit $2.8 million in local currencies to the special accounts because of calculation errors.