Audit of health and jobs for displaced families : USAID/El Salvador project no. 519-0281

Audit report covers the period 5/82-12/85 and is based on document review and interviews with project officials and beneficiaries. Project goals are being met in most areas and in some important respects have surpassed targets. The project"s success can be attributed to the establishment of realistic goals and to close supervision by USAID/ES of the 18 PVO"s assigned to conduct implementation. Improvements could be made, however, in three areas relating to financial management. (1) Three PVO"s - World Relief, Project Hope, and the Salvadoran Evangelic Committee for Assistance and Development (CESAD) - need to improve their controls over the use of project funds, which in several instances have not complied with standards set in cooperative agreements and have resulted in excessive charges to A.I.D. (and, in the case of CESAD, in interest earned on A.I.D. funds). These problems were caused by poorly qualified staff and a lack of payment verification and could, if not corrected, result in excess annual costs to A.I.D. of over $42,000. (2) The reporting procedures of the PVO"s (except for two U.S.-based organizations) and of the Division of Humanitarian Assistance"s Evaluation Specialist have been inadequate. Reporting formats were developed early in the project when few activities were being reported and have not been revised. Overall, the reports have not compared project accomplishments with goals. As a result, project management lacks an important evaluation tool. (3) The Government of El Salvador (GOES) has not made and, USAID/ES has not required, adequate counterpart contributions despite the fact that the project paper showed that contributions of $4.7 million would be needed. There was some mention of the need for counterpart funds in a fifth project amendment; however, subsequent amendments added additional increments of A.I.D. funding but did not require counterpart contributions. In addition to in-kind contributions which had not been accounted for, the GOES has spent 20.1 million colones, or about $4.4 million, on the project.