AUDIT REPORT ON AID ASSISTANCE TO PAKISTAN (AS OF DECEMBER 31, 1976)

Evaluation covers the period from each project"s inception to 12/31/76 and is based on audit tests of records, site visits, and interviews with USAID and GOP personnel. Since 1973, A.I.D."s emphasis has shifted from easy-to-implement PL 480, commodity import loan, and capital assistance projects to more difficult development assistance projects targeting the rural poor. This shift has been hampered by inadequate information on rural life, delays in project start-up, and overly optimistic scheduling. Obtaining long-term GOP implementers, ensuring provincial government compliance with project agreements, attempts to establish indigenous support for foreign advisors, and lax GOP project reporting have been problematic, but because of the GOP"s balance of payments deficits, USAID is reluctant to reduce its assistance. It is recommended that USAID: (1) reduce funding to levels that can be properly planned and managed; (2) explore using additional covenants/conditions precedent to assure the GOP provides counterparts; (3) obtain GOP assurance that provincial governments will implement projects in accordance with agreements; (4) phase out the Logistic and Program Support Agency and reassess the value of building a GOP foreign advisors support capability; (5) review unauthorized Agricultural Research Council construction costs; (6) re-evaluate the need for the full amount of the $15 million On-Farm Water Management loan tranche planned for FY 1978; (7) require a complete accounting of all major equipment procured under the Precision Land Leveling Project and reassign this equipment to the On-Farm Water Management Project; (8) revise the Colorado State University contract to provide more definite objectives and better control over project activities; (9) reassess GOP reporting requirements on a project-by-project basis; (10) increase surveillance of GOP use of AID-owned local currency; and (11) institute a formal follow-up system to assure that local currency releases are received promptly at the project level.