Audit of the Senegal African economic policy reform program

Audit covers the period 8/86-4/88. USAID/S has established an adequate monitoring and evaluation plan to measure the SAEPRP"s effectiveness and the Government of Senegal"s actions to meet conditions precedent. The audit did uncover a weakness in USAID/S monitoring of the use of local currency, however. The Mission relied on listings of payments provided by the GOS without independently verifying that payments had actually been received. For example, the GOS reported that local currency from the initial $5 million cash grant made in 1986 was used (as intended) to repay its debt to 68 enterprises, but lack of information made verification of payment receipts difficult. Twenty two of these enterprises were identified only by acronym, some of which neither the Mission nor the auditors could identify. Thirteen others were identified simply by the names of individuals. The auditors found that two payments, totaling the equivalent of $198,966, could not be verified. The Mission believed its reliance on the GOS listing was reasonable, in part because of the GOS"s satisfactory accountability during the ESF-V program, which used the same reporting procedures. No misuse of funds was uncovered; nevertheless, the Mission agreed that without improved verification procedures, the possibility for misuse of local currency remains. The audit recommends that USAID/S (1) establish a system of sample testing to better ensure that local currency is properly used; and (2) request that the GOS provide the information necessary to verify that the $198,966 of unconfirmed payments in the audit sample were received by bona fide payees. The Mission agreed and complied with the recommendation.