Audit of the status of USAID/West Bank and Gaza"s program

Audit covers the period from the Mission"s inception in early 1995 through 7/96. Three unique constraints have affected the USAID/West Bank and Gaza program and the Mission"s attempt to define its strategy: (1) the intensely political atmosphere which ties the program directly to the Mideast peace process; (2) lack of a clearly defined bilateral relationship with Palestinian counterparts (while no project is being directly implemented by the Palestinian Authority, Mission officials have made considerable efforts to coordinate and meet with Palestinians to ensure their support and understanding of the program); and (3) the need, due to the lack of Palestinian implementing organizations and the imperative to "quickstart" projects, to entrust much of the Mission"s portfolio to U.S. PVOs and international organizations (though an increasing number of activities are being directly contracted and managed by the Mission). Not counting projects originated by USAID/Washington prior to the Mission"s establishment and those managed centrally by USAID/Washington, 20 projects with authorizations totaling $273.7 million were active as of 9/30/95. Of the 20, 13 are not traditional projects; 12 consist of single contracts or agreements, and 1 (2940159.26) is used simply to capture the salary costs of foreign service national personal service contractors. The 20 projects fall into four areas. (1) Several projects have provided TA to the Palestinian Authority and other Palestinian activities. The Palestinian Authority Start-up Program (2940015) has provided $39.9 million through 11/22/95 to finance start-up expenditures of the Palestinian Authority. Other TA to the Palestinian Authority included $1 million for analyses and studies. Other Mission projects, including the $6.0 million Cooperative and Municipal Development Project, the $6.0 million Institutional Development Project, and the $5.2 million Cooperative Development Project, support TA to other Palestinian activities such as cooperatives and municipalities. (2) Much of the Mission"s funds have supported infrastructure improvements in housing, wastewater, and other areas. For example, the Gaza Housing Project has provided $25.5 million for new or renovated housing and neighborhood improvements in Gaza. Other projects, most notably the $40 million Gaza Wastewater Project and the $50 million Municipal Services Project, are oriented toward wastewater, water resources, access roads, and other infrastructure activities. (3) Jobs and employment through infrastructure activities have been a major Mission emphasis. Examples include the $25.0 million Small Scale Community Infrastructure Development Project and the $6.2 million Community Development and Jobs Program. (4) In the area of democracy and governance, the most significant effort to date has been the $20.0 million Democratic Understanding and Development Project, which provides assistance in establishing democratic and legal institutions. The Palestinian people have been the underlying recipients of the USAID/West Bank and Gaza program, either directly (infrastructure and economic reactivation and growth projects) or indirectly (TA and democracy and governance projects). Specific beneficiaries have included: low-income residents of Gaza who are able to purchase or lease subsidized housing that they would otherwise be unable to afford; small businesspeople in the West Bank and Gaza who receive loans to start small businesses; residents of Ramallah, Nablus, and Gaza who will benefit from wastewater projects; families living in refugee camps while their homes, schools, and neighborhoods are improved; and Palestinian people in general who benefit from free and open elections. In collaboration with representatives from the Embassy in Tel Aviv and the Consulate General in Jerusalem, the Mission began in 12/95 to develop a new 5-year strategic framework that was approved by USAID/Washington to include strategic objectives related to water resources, economic opportunities, and governance. Future resources will be focused in these areas. USAID/West Bank and Gaza has incorporated appropriate audit provisions into its agreements.