Audit of USAID/Egypt"s peace fellowship program

The program provides fellowships for graduate-level studies at U.S. institutions for Egyptian students. The audit covers the period 9/85-4/91. The program has funded more than 600 fellowships and will probably achieve its goal of 1,250 fellowships. However, a number of areas could be improved. Targets for participation of the private sector and women are not being achieved. Only 8% of students are from the private sector, compared with the target of 20%, and only 14% are women, less than half of the target of 30%. Over $10 million in program funds have been expended to date, without being audited. Moreover, there is no plan to ensure that program expenditures are audited in the future. Consequently, a total of $28.1 million in estimated life-of-program funding, of which $19.4 million has already been obligated, could be expended without being subject to a financial audit. The Egyptian Cultural and Educational Bureau (ECEB) has disbursed over $3 million in program funds to various U.S. institutions to cover tuition, fees, and research costs for participants. However, the ECEB does not have a system for ensuring that these funds are appropriately used, and it is possible that a significant amount was not fully used or refunded. Of the 39 returned participants surveyed, 2 had not remained in Egypt for the required two years to utilize their training for the benefit of the country. Another participant was working for a foreign bank in Egypt. Three other participants did not comply with the requirement to return to work for the pre-training employer. In general, USAID/E has not provided adequate follow- up activities, and has not maintained adequate records to track returned participants.