Audit of selected delayed projects : USAID/Dominican Republic

Audit report is based on review of USAID and Government of Dominican Republic (GODR) documents and interviews with officials from USAID/DR, implementing agencies, and the GODR Central Bank. The principal causes of project delays within USAID/DR"s control were design weaknesses (i.e., overly complex, overly ambitious, or ill-conceived designs); a lack of procurement planning and assessments of procurement capability (procurement delays, moreover, often caused delays in other project areas); weak implementation monitoring (in at least 4 projects, and in some cases due to other demands on project managers); and unrealistic implementation plans (e.g., plans in several cases apparently based on best case assumptions rather than realistic feasibility studies which could have been used to detect and correct delays early on). Project delays for reasons outside of USAID control were most often due to delays in obtaining ratification of loan agreements from the Congress of the Dominican Republic, in GODR compliance with other conditions precedent, and in GODR disbursement ofcounterpart funds. USAID/DR"s exchange rate practices did not comply with A.I.D. guidance or the U.S./GODR bilateral agreement. Until 1/85, USAID/DR used an official exchange rate rather than a more favorable parallel rate to which it was entitled. When the official exchange rate was eliminated in 1/85, USAID/DR began to use the new "unified" rate to exchange dollars for pesos but continued to use the old official rate to determine the equivalence of counterpart contributions to agreed-upon dollar amounts. USAID/DR generally agreed with audit findings, but felt that actions taken to correct the problems identified justified deleting the 5 recommendations from the report. While the Mission has made a promising start toward implementing the recommendations, the auditors consider the actions completed thus far adequate to close only that recommendation concerning assessment of staff resources.