Audit of school construction III project - Jordan : project no. 278-0276

Audit covers the period 1982-9/87 and is based on document review and interviews. The project was progressing quite well. Project objectives were being met, in that the project would result in well-designed and constructed schools and the number of classrooms would meet the project"s quantitative goals (40 schools and about 1,200 classrooms). Project resources were being efficiently and effectively used within terms of the project agreement. Individual schools were expected to cost less than estimated, and most schools should be completed by the Project Assistance Completion Date of September 30, 1989. The success of the project, in our opinion, can be attributed in part to the method of financing chosen during the initial project design. The estimated project cost of $41.4 million includes a potential A.I.D. contribution of $30 million, which was obligated in September 1985. As agreed with the Government of Jordan (GOJ), USAID/J contributed 75% of an individual school"s cost, up to a maximum of $750,000 per school. Once the amount of A.I.D."s contribution was determined, it was fixed, regardless of the amount of actual costs subsequently experienced. A modified Fixed Amount Reimbursement (FAR) system was used to disburse project funds. Under the terms of the modified FAR, USAID/J would make an initial disbursement of 20% of the amount approved for each school after the GOJ had submitted evidence showing that construction was ready to proceed. Four additional payments totaling 80% of the approved amount were payable in increments as construction progressed and furnishings and equipment were put into place. As of 9/22/87, USAID/J had approved disbursements totaling $3.1 million, which represents the first FAR payment for 22 of the 37 schools officially approved to date. USAID/J also adequately monitored and enforced project conditionalities and contracting and construction activities during project implementation. (Author abstract, modified)