Audit of Public Law 480 commodity assistance processed by La Minoterie d" Haiti for the period October 1, 1989 to April 30, 1990 and pre-award survey of its current capabilities

480 Title II and Title III commodities, principally wheat, by La Minoterie d"Haiti (the Mill), a parastatal grain processing enterprise in Haiti. Non- federal audit covers the period 9/1/89-4/30/90. The auditors did not observe the taking of the Mill"s inventories of finished products or raw materials. They were also informed that documentation of the Mill"s sales could not be located and that the Mill"s weight and measure devices were either not operating or were malfunctioning during the audit period. Because of these limitations, the auditors were unable to express an opinion on the Mill"s statement of operations and production costs for the period. Concerning the Mill"s management, financial, and operational capabilities, the auditors found that management had not yet completed either its scheduled reorganization, nor discussions with creditors to restructure existing loans, nor discussions with the Government of Haiti (GOH) to clearly define lines of authority, ownership, and conditions surrounding the Mill"s tangible and intangible assets. The minutes of Board of Directors" meetings were not available for review. Review of the Mill"s internal control structure disclosed 17 areas of weakness. In summary, these were: (1) a lack of management direction and proper controls; (2) unclear lines of authority and ownership of fixed assets; (3) an unsound financial situation; (4) a lack of functioning weight scales; (5) a lack of supporting documentation; (6) inadequate accounting policies and procurement practices; (7) inadequate filing system; and (8) inadequate controls over salaries and pension plans. The Mill has failed to comply, in all material respects, with the 8/7/89 Memorandum of Understanding with USAID/H; as a result, USAID/H terminated its relationship with the Mill in 4/90. Due to political turmoil, the auditors were unable to obtain any accounts from senior Mill representatives concerning compliance with local laws and regulations. It is recommended that USAID/H not negotiate any new P.L. 480 Programs with the GOH which provide either direct or indirect commodity and/or funding assistance to the Mill until the three parties have developed and implemented a plan aimed at correcting the problems detailed above.