Audit of salary supplements in Zaire

projects. Salary supplyments are a common practice in Zaire, where government base pay is very low. In 1987, USAID/Z paid the local currency equivalent of about $740,000 to supplement the base pay of 804 host government employees working on ten A.I.D. projects. The local currency had been obtained from the sale of agricultural commodities under P.L. 480 Title I and commodity import programs. The audit found that USAID/Z"s practices and procedures for paying salary supplements were only partially in accordance with A.I.D."s 6/87 policy guidance on this issue. Specifically, USAID/Z was in accordance with four of the seven criteria in the policy guidance, namely, that: salary supplements be permitted under host country law and regulations; the cooperating country demonstrate that it could not make the payments from its own resources; salary supplements be essential to achieve project objectives; and the proposed recipients would not be carrying out broad policy functions. The audit could not assess whether USAID/Z complied with one of the seven criteria, namely that the Mission determine the total amount of salary supplements which the host country could pay from its own resources over a reasonable period of time. USAID/Z did not comply with the remaining two criteria. (1) Some duplicate and excessive payments had been made. In fact, compared to local standards, 24% of host government employees working on A.I.D. projects were overcompensated. (2) The Mission"s internal controls for providing supplements did not prevent this abuse and did not establish adequate monitoring and reporting. As a result, about $32,000 of extra expense was incurred, plus an undetermined amount for transportation. Although new policy guidance has been issued by A.I.D. subsequent to this audit, USAID/Z has not been evaluated with respect to the new guidance (which in any case remains substantially unchanged). (Author abstract, modified)