Audit of reactivated projects, USAID/Bolivia

Audit report covers the period 1/83-9/85 and is based on a review of financial reports and records, interviews with Government of Bolivia (GOB) and other officials, visits to 35 project sites, and equipment/facilities inspections. The projects have not achieved their intended results, project operations are neither efficient nor well administered, and internal controls and compliance with A.I.D. procedures are lacking. In general, all projects are behind schedule due to unrealistic project goals, inadequate commodity safeguarding and accountability, and unwieldy approval procedures for project implementation. USAID/B has not implemented existing accounting procedures to ensure GOB compliance with counterpart fund obligations, and information on GOB contributions was not always made available to project managers. The projects have been hindered by the resulting shortfall in counterpart contributions which are now $9 million behind schedule. In addition, some $3.16 million in advances for 7 of the 8 projects was not liquidated because USAID/B did not process the liquidation vouchers on a timely basis and the GOB, Bolivian banks, and other supporting institutions did not provide adequate documentation. As a result, over a quarter of a million dollars in unnecessary borrowing costs were incurred by USAID/B programs. Recommendations are to: (1) Adjust Agriculture Sector II and Rural Access Roads II objectives in accordance with available counterpart funds; establish project commodity inventory procedures; and streamline procedures for approving Departmental Development subprojects. (2) Prepare information reports for USAID project managers on GOB contributions. (3) Discontinue further advances until all advances outstanding beyond 30 days have been liquidated; issue written instructions for timely liquidation voucher processing; prepare a written determination that serious project interruptions would be caused by limiting advances to 30 days" advance requirements; and issue Bills of Collection for outstanding advances with inadequate documentation or ineligible expenses.