AUDIT REPORT ON INTERNAL OPERATING PROCEDURES APPLICABLE TO PROJECT-like ACTIVITIES OF THE COMMODITY IMPORT PROGRAMS OF EGYPT

Evaluation covers the period 2/75-7/80 and is based on a review of project files, interviews with project officials, and visits to project sites. Project-like activities financed through the basically non-project CIP program have, in general, been poorly planned and implemented; most either have not yet begun or are far from completion. The main problem has been that these activities were managed as routine commodity imports although they were in the nature of projects requiring separate management procedures, controls, and monitoring. There have been other problems: Project plans have been incomplete and have lacked full cost estimates, while activity justification papers have been incorrect or misleading. Implementation control has been poor since only partial financing (i.e., equipment) is possible under CIP"s and since financing is through the costly Bank Letter of Commitment procedure instead of the AID-preferred Direct Letters of Commitment method. Commodity suppliers have noncompetitively controlled the direction, scope, and costs of the activities without regard for the fairness of costs and efficiency of implementation. Faulty contracting procedures have led to excessive disbursements not linked to work progress or performance, and CIP files at AID/W and USAID/E are incomplete and confused. It is recommended that: (1) specific criteria be used in selecting a proper financing mode; (2) a policy be devised for planning, managing, and monitoring project-like activities under the CIP; (3) new funding limits be set for the activities; (4) procedures be established to ensure that CIP funds will cover total costs of the activities and will not later be shunted to other commodity imports; (5) program managers be assigned to manage each activity; and (6) site visits and progress reports be made periodically. Audits of individual CIP activities are included.