Audit of USAID/Zaire commodity management

commodities in West and Central Africa. At the end of September 1989, 14 of the Mission"s active projects had budgeted for the purchase of about $55 million in commodities. The Mission"s U.S. dollar procurement of project commodities is handled by the Commodity Management Section (CMS) of the Program Development and Operations Office. Other procurements using counterpart funds are administratively controlled by project Personal Services Contractors who assume similar responsibilities as those of the Commodity Management Section. The Office of the Regional Inspector General for Audit, Dakar, made a performance audit of commodity management in Zaire. The audit found that the Commodity Management Section was well organized and, in general, was properly following established systems and complying with procurement regulations. On the other hand, project personnel were not routinely carrying out their responsibilities to assure that the commodities were received, accounted for, and used as intended. The audit disclosed cases where receiving reports were not completed, inventory records were not accurate, and annual physical inventories and end-use checks were not conducted. These shortcomings exposed the projects to the risk of undetected theft, waste, and non-usage of project commodities. Additionally, the Mission may have inadvertently relinquished damage claim rights on commodity shipments. Similarly, project personnel responsible for the administration and control of counterpart fund procurements were not always applying sound procurement practices. The audit found cases where the need for commodities had not been documented, competition had not been sought, required approvals had not been received, and payment support files were not complete. The Mission, therefore, was not assured that only required commodities were purchased at the most advantageous price. Finally, the audit found that the Mission was charging costs of the Commodity Management Section to one project, even though the procurements were made for numerous projects and should have been charged to the operating expense account. The auditors identified at least $670,000 charged to specific projects that should have been charged as overhead expenses of the Mission. The report recommends that USAID/Z charge to projects only those costs directly relatable to the project and to strengthen commodity management at the project level. The Mission did not agree that it had charged operating expenses to projects but, rather, had used innovative approaches to accomplishing Mission goals. They did agree to take steps to strengthen commodity management at the project level. (Author abstract)