Audit of Mozambique private sector rehabilitation program, project no. 656-0201

The audit covers the period 9/84-5/90. The Commodity Import Program is making satisfactory progress in providing various commodities and equipment to manufacturers and farmers, while the TA component is succeeding in developing the Government of Mozambique"s (GOM) managerial and technical skills in support of the private sector. Some $44.7 million worth of commodities have been received, including tractors, trucks, irrigation pumps, raw materials and spare parts for the manufacturing sector, farm implements, fertilizer, and seeds. The Mission has established an adequate systems to account for commodity arrivals and end-use. Due to security constraints, Mozambican personal service contractors have been used to verify whether commodities are being distributed and used by the target population outside Maputo. Of the local currency generated from these imports, $39.1 billion has been deposited into special accounts for the purposes of budget support ($25.2 million), Mission operating expenses ($3.5 million), and development programs ($10.4 million). However, the remaining $5.6 million in local currency has not been deposited as required because the Mission has not demanded that the GOM deposit past due amounts and because the GOM lacks procedures to ensure that importers make required deposits in a timely manner. The TA component has funded a variety of contracts. Contracts to monitor the CIP (see above) and to service agricultural machinery were successful. However, contracts to establish computer systems/training programs in the Bank of Mozambique, attract foreign investment in ammonia and oil, and conduct research on Mozambique"s construction industry were not entirely successful due to inadequate contractor monitoring and guidance from USAID/M. As a result, a total of $242,982 should be recovered from the three contractors involved (Shearson Lehman Brothers, Arthur D. Little, and Coopers & Lybrand) and should be reprogrammed, and the undisbursed balance of $114,553 that was to be spent under the Arthur D. Little contract should be reprogrammed.