Audit of USAID"s policies and procedures over USAID/Jordan"s private sector commodity import program

Plant components were bought from Comet Rice, a U.S. rice retailer, with which Amman Resources had an agreement giving it exclusive marketing rights for Comet"s products in Jordan and Iraq. The audit uses the CIP as a test case to determine whether USAID policies and procedures are adequate to (1) prevent the loss/relocation of U.S. jobs as a result of the CIP, and (2) ensure that USAID does not pay inflated prices for commodities. While construction of the plant has benefited both the United States and Jordan -- helping to improve infrastructure at the port, creating 250 permanent and 100 daily jobs for Jordanians, and increasing U.S. supplier sales to Jordan, including transport on U.S.-registered ships, by $4 million -- CIP policies could be strengthened to fully ensure that USAID does not export U.S. jobs or pay inflated prices. USAID policy guidance does not clearly state that the prohibition against providing U.S. companies financial incentives to relocate U.S. jobs overseas applies to nonproject as well as project funds. As a result, USAID officials could unwittingly authorize transactions for project-like activities such as the Aqaba plant, that result in the loss of U.S. jobs, especially when the U.S. supplier and host country importer have formed a joint venture or share ownership in one another. Although Amman Resources was the only project-like transaction involving a joint venture identified at USAID/J, weak CIP controls in this area make it possible for similar transactions to result in the loss of U.S. jobs, which is of course contrary to the general perception that CIP is a "Buy American" program and promotes U.S. jobs. USAID should close this loophole by requiring U.S. suppliers to certify that their CIP participation would not result in the loss of U.S. jobs due to exportation of production capacity. The auditors were unable to determine if USAID policies and procedures were adequate to prevent inflated commodity prices because available files contained insufficient documentation and other applicable files were destroyed before Agency deadlines. Recommendations are made in this regard.