Audit of management of the food program in India

480, Title II program in India is mainly conducted through two voluntary organizations -- the Cooperative for American Relief Everywhere (CARE) and Catholic Relief Services. The voluntary organizations distributed 283,000 metric tons of commodities (valued at $76 million) to 9.3 million beneficiaries in 1988 and 295,000 metric tons (valued at $85 million) to 10.2 million beneficiaries in 1989. USAID/India is responsible for overseeing these operations to ensure effective operations and compliance with various requirements. During recent years, USAID/India was also involved in overseeing the receipt and distribution of Section 416 commodities donated for alleviating food shortages caused by a drought and the sale of commodities to provide funds for enhancing activities under the CARE program. Our office conducted a performance audit to evaluate USAID/India"s management of the food programs. The audit disclosed satisfactory performance in various important areas but the following areas required improvements. (1) Necessary steps were not taken to ensure that voluntary organizations took timely action to correct known problems. This seriously detracted from the effectiveness of the operations and compliance with requirements. (2) Field monitoring of the voluntary organizations was minimal due to staff reductions and fund restrictions. Consequently, the voluntary organizations" operations received almost no oversight and many problems went undetected. (3) Few commodity losses were being reported. Thus, officials were unaware of how serious the losses were or what action was necessary to attempt to reduce the losses. This report has three recommendations to address these issues. In their comments to the draft report, USAID/India officials indicated extensive disagreement with the findings. They believed that too much emphasis was placed on the problems found at one voluntary organization and that the audit lacked objectivity. USAID/India"s comments are summarized after each finding and are presented in their entirety in Appendix A. Additional auditor comments are also provided after each finding and address all major disagreements. Since there was no agreement, the recommendations are considered unresolved. Accordingly, based on any additional comments which USAID/India may provide within the 30 days allowed, this report will be forwarded to A.I.D./Washington for resolution. (Author abstract)