Audit of USAID/Bosnia-Herzegovina"s municipal infrastructure and services program for the period April 1 through September 30, 1998

Audit report covers the period 4/1/98-9/30/98. As of 9/30/98, USAID/Bosnia-Herzegovina had disbursed $160.7 million for MIS projects -- $63.7 million for FY 1996, $52 million for FY 1997, and $45 million for FY 1998. These funds are being used as intended. The current status of approved projects for the three years is as follows: (1) FY 1996. Of the 48 MIS projects, construction was in progress on 5 projects, essentially complete for 1 project, and complete for 42 projects. Subcontractors had completed 163 of the 169 CIRPs. (2) FY 1997. Of the 49 MIS projects, construction was in progress on 16 projects, essentially complete for 4 projects, and complete for 29 projects. Subcontractors had completed 129 of the 143 CIRPs. (3) FY 1998. Of the 57 MIS projects, construction was in-progress on 48 projects, essentially complete for I project, and complete for 1 project. Work had not yet begun on 7 projects. Subcontractors had completed 9 of the 84 CIRPs. (4) For FY 1999, the program will distribute $46.4 million in five sectors (energy/power, water resources, transportation, health, and education) plus another $12.2 million budget for CIRPs. MIS program accomplishments for FYs 1996-1998 are obvious when compared to the original construction targets. For example, the MIS program targets included 65 projects; but just past the midpoint of the 54-month program, 78 such projects were essentially complete. The construction targets also included completion of 40 small infrastructure projects over the life of the program. Here, again, 29 months into the program, subcontractors have completed six times that many, or 242 small infrastructure projects. An inspection of 8 MIS and 22 CIRP sites revealed no major problems. Potential problems at three CIRP facilities (the Ravne-Brcko Health Center in Zovik, an elementary school in Zivinice, and a bridge in Sekovici) have been resolved by the Mission. The MIS program office in Tuzla satisfactorily addressed all but one of the recommendations of the 1997 CIRP evaluation by: (1) streamlining the CIRP proposal process; (2) developing a new training package and conducting joint briefings for the military teams assisting the CIRP program in Tuzla; and (3) assigning a full-time Stabilization Force (SFOR) reconstruction officer to work with the USAID Tuzla office. USAID did not implement the recommendation to hire two more local engineers and a U. S. personal services contractor to manage the CIRP program in Tuzla. The assignment of an SFOR reconstruction officer was intended to address the coordination and communication of tasks recommended in the evaluation. The procurement process will be audited separately. For the future, RIG/Budapest, in the short run, is replacing high-level audit testing of the MIS program with special audits, as resources permit. RIG/Budapest has also arranged for the Defense Contract Audit Agency to conduct a cost- incurred audit of Parsons, the implementing contractor, and its subcontractors. For these reasons, and after consulting with Mission officials, RIG/Budapest has decided to end its concurrent audit reporting of the MIS program with this report.