Audit of the USAID/Egypt"s cost recovery programs for health project

The audit covers the period 9/88-12/95, with a focus on the period following the 8/93 downsizing and clarification of the project. At the time of the audit, $38.1 million of $78.5 million in obligated funds had been spent. Although some activities are progressing satisfactorily, the project as a whole is not making satisfactory progress. Under the first component, to develop and test a cost recovery model, Ministry of Health and Population (MOHP) pilot facilities have made only limited progress toward successful cost recovery operations, and the methodology for converting these facilities to cost recovery operations is still being developed. Information activities under this component, while somewhat delayed, have had more success. Under the second component, to develop management information systems (MISs) for the Health Insurance Organization (HIO) and the Cairo Curative Organization (CCO), the MIS for HIO is proceeding approximately according to schedule, but the planned MIS for the CCO has been seriously delayed. The third component, aimed at expanding the private health care sector by making loans to providers and establishing new prepaid programs, is proceeding somewhat more slowly than planned, but additional assistance arranged for by the Mission should accelerate progress. USAID/Egypt has generally reported accurate information on the project"s progress; however, information on three of the seven indicators reviewed was not accurate. The variance between the reported information and the underlying documentary evidence for these three indicators ranged from 6% to 33%. It is recommended that USAID/E: (1) obtain evidence that the MOHP has implemented a financial accounting system that will permit a comparison of costs and revenues for pilot facilities; (2) obtain regular progress reports from the MOHP and each of the TA contractors and compare the reported information with established performance indicators; (3) arrange for annual assessments of the pilot facilities to measure progress toward meeting the established criteria for successful cost recovery operation; (4) establish targets and time frames for assistance to the CCO so that it can measure progress and take corrective actions when necessary; (5) obtain periodic progress reports from the CCO and any contractors hired to assist it, and compare the information in these reports to established targets and time frames; and (6) correct the information which was inaccurately reported in its Results Review and Resource Request. USAID/E agreed with the report recommendations and has already implemented all but one of them. (Author abstract, modified)