Audit of USAID/Mozambique"s management of PL 480 Title III program

480 Title III program for FYs 1991-94. During that period, the U.S. Government donated 458,242 MTs of commodities to Mozambique, which cost approximately $50.3 million for the commodities and $38 million in freight and bagging charges. USAID/M has established and implemented a monitoring system to ensure that Title III commodities were received and sold in accordance with USAID policies and procedures. The Mission also ensured that timely local currency deposits were made for FY 1991-92 commodity deliveries. There were significant delays in local currency deposits for 1993, but the Government of Mozambique (GRM) recently paid that account in full and has made a substantial deposit into the FY 1994 account. The Mission has ensured that local currency has been withdrawn only for agreed upon purposes, but there have been no GRM financial audits to verify that the funds were actually used for these purposes. Two major problems have occurred. The first is significant pilferage of food at the Port of Maputo. For example, officers of the ship Lash Atlantico estimated that 1,024 MTs of corn and 58,000 empty food bags were stolen while the ship"s cargo was being unloaded in July 1992, and similar thefts occurred from the vessels Ashley Lykes, Meezan I, and George Lyras. In most of these instances, the commodities were stolen by port laborers in full view of security guards. There has also been significant theft from the Port Authority Warehouse. It is recommended that the Mission advise the GRM in writing that future shipments of Title III commercial food aid will be conditioned on significant improvements in port security, warehouse facilities, and operating procedures. The second major problem was the poor quality of the food shipped from the United States. In fact, the food was of such bad quality that in January 1994 the U.S. Ambassador sent a cable to USAID/W and the U.S. Department of Agriculture (USDA) to report the situation. The food, he explained, had been shipped with a higher moisture content than allowed, resulting in 4,958 MTs of corn being declared unfit for human consumption. One cargo was so seriously infested with insects that it had to be fumigated twice and one ship hold fumigated three times. When the situation was reported by a local newspaper, consignees refused to take delivery of the corn. The Ambassador also reported serious quality problems with Title II and Section 416B commodities. In all, 33,700 of the 143,000 MTs of yellow corn imported into Mozambique were declared unfit for human consumption, entailing an overall loss of $8 million to U.S. taxpayers. In response, USAID/W and USDA suggested that the Mission upgrade the specifications for the corn requested (the quality of the original shipments, though consistent with standard specifications for P.L. 480 corn, had deteriorated due to floods in the Mississippi watershed) and apply more rigid transport specifications from U.S. ports to Mozambique. The Mission has acted on this advice, and the quality of the food has improved accordingly.