Audit of USAID/Egypt"s population/family planning II project no. 263-0144

The audit covers the period 6/83-3/91. Some progress has been made in increasing FP practice among married couples of reproductive age; as of 12/90, the Mission reported 1.61 million new FP acceptors. However, an average of 1.176 million new acceptors will have to be added annually to reach the target of 4.55 million new by the 5/93 PACD. Distributors are generally keeping accurate inventory records and providing adequate storage facilities for USAID-donated contraceptives. However, the Egyptian Pharmaceutical Trading Company (EPTC), one of Egypt"s two major distributors of USAID- donated contraceptives, has made sales that were wasteful and in violation of an agreement with USAID/E. Although EPTC had agreed to sell only 40% of its condom quota to pharmacies (and to distribute the rest free to other USAID-supported implementing agencies), EPTC sold 94.35% of its 1989/1990 quota in condoms, valued at more than $1 million, to a handful of high-volume pharmacies in the Cairo area. The pharmacies apparently resold the condoms to wholesalers, one of whom reported that he had sold the condoms for use as toy balloons. The Mission has recently halted EPTC"s sales of these products and acted to prevent the recurrence of wasteful practices. It is recommended that EPTC be prohibited from selling USAID- supplied contraceptives to pharmacies and that the Ministry of Health (MOH) be asked to submit a refund of the cost of the condoms sold in contravention of revenue agreement terms.