Audit of Lesotho agricultural production and institutional support, project no. 632-0221

The project had made little progress toward increasing crop production in Lesotho. The $9.6 million production component had not achieved the level of outputs specified and could not be expected to increase crop production or agricultural income by the project"s planned termination date. In addition, the $2.7 million Credit Union Program was contributing little to the project purpose. Further, the TA contractor"s expenditure reporting did not fully comply with applicable A.I.D. regulations and contract terms. Despite these problems, the project had resulted in several important accomplishments. For example, the education component improved two farmer training facilities, increased the capacity to provide agricultural information and strengthened the Lesotho Agricultural College. In addition, the project"s research component increased the use of station and farm trials to test research results, equipped a soil laboratory, and supplemented the educational component by incorporating research results into the educational curriculum. The audit identified three areas requiring modification. (1) The Grant Agreement needed to be amended to discontinue activities that were not contributing to the project goal. (2) The Credit Union Program needed to be discontinued and remaining resources redirected to more effective project areas. (3) The project contractor needed to strengthen internal controls to improve its expenditure reporting to USAID/L. (Author abstract)