Audit of USAID/Guatemala"s rural access roads : project nos. 520-0274 and 520-0332

Audit covers the period 9/83-9/90 for the road maintenance component of Project 5200274 (Highlands Agricultural Development) and the period 3/85-6/91 for Project 5200332 (Farm to Market Access Roads). As of 9/90 the projects were obtaining their targets for road construction, rehabilitation, and maintenance. This was being accomplished despite two implementation problems. (1) Completion of an environmental assessment for Project 5200332 -- which was added as a condition precedent to construction in 1987 -- was delayed until 1989 by A.I.D./W. As a result, it is expected that the PACD will have to be extended beyond 9/91. (2) The second problem, which appears to have developed in late 1989, is that of late counterpart contributions for both projects. Although the irregularity in these contributions has resulted in unavailability of fuel and spare parts, targets are still being met due to the projects" emphasis on manual labor. Lately, however, the irregularity of the contributions has been delaying salary payments to laborers, resulting in morale problems. USAID/G has identified two causes of the contribution problem: a Government of Guatemala (GOG) austerity program, and a cumbersome reimbursement procedure within the GOG. Both of these problems are being addressed. However, the irregular contributions have also partially created two other problems: (1) as much as $14 million in A.I.D. funding cannot be effectively used before the projects are completed and may have to be deobligated; (2) A.I.D.-funded vehicles and heavy equipment costing some $9.6 million are underutilized.