Audit of the Maharashtra social forestry project in India, project no. 386-0478

Although 4,300 villages are participating in the project as targeted, progress in achieving the project"s purpose of institution strengthening cannot be accurately measured. Some essential components have been seriously delayed and may not be achieved. Four problem areas are noted. (1) USAID/I"s use of the fixed amount reimbursement procedure does not satisfy A.I.D. criteria regarding the establishment of reimbursement amounts and inspection of project outputs. As a result, the propriety of about $17 million in reimbursements to the Government of India (GOI) is questionable. This occurred due to inadequate project design, e.g., unreasonable cost estimates for each output, and the failure to implement the project as designed, e.g., the failure to hire contract staff to ensure that targeted outputs were completed. (2) USAID/I has not developed quantifiable indicators (targets and time-frames) to measure achievements or adequate procedures for monitoring and reporting on project accomplishments. As a result, the Mission is unable to measure project achievements, determine what could be accomplished within the remaining time-frame and budget, and make timely decisions on deobligation of funds. (3) Most of the recommendations of the mid-term evaluation of the project have not been implemented due to USAID/I"s lack of a follow-up system for resolving and implementing recommended actions. As a result, 2 years after the evaluation the problems it identified continue to seriously impair project implementation and preclude measurable achievements. (4) The GOI has not fulfilled all of its commitments regarding project funding, the training of project staff, and the establishment of a monitoring and evaluation unit. This problem, which impaired project implementation and USAID/I"s ability to assess project problems and correct them, was due to USAID/I"s failure to ensure compliance with the Pro-Ag. Recommendations address these problems. Except for a recommendation to establish quantifiable indicators, the Mission was in agreement with the audit.