AUDIT REPORT ON REVIEW OF FOOD AND NUTRITION SECTOR USAID/NEPAL AS OF SEPTEMBER 30, 1978

EVALUATION COVERS THE PERIOD FROM THE INCEPTION OF EACH PROJECT THROUGH 9/30/78 AND IS BASED ON STANDARD AUDIT PROCEDURES. AUDIT REPORT CONTAINS EVALUATIONS OF PROJECTS 3670102, 3670114, 4980251, 9310209, AND 9310254. THIS DISCUSSION CONCERNS THE INTEGRATED CEREALS PROJECT (ICP), A PROJECT DESIGNED TO INCREASE THE NATIONAL CAPABILITY TO STUDY CEREALS AND RELATED CROPS AND TO IMPROVE THE METHOD OF TECHNOLOGICAL TRANSFER. INTERNATIONAL AGRICULTURAL DEVELOPMENT SERVICE (IADS) RESEARCH TEAMS WERE FUNDED TO COORDINATE THREE EXPERIMENT STATIONS, DEVELOP TRAINING PROGRAMS, AND ASSIST PERSONNEL FROM THE MINISTRY OF FOOD, AGRICULTURE, AND IRRIGATION IN ACQUIRING EQUIPMENT AND CONSTRUCTING OR UPGRADING RESEARCH FACILITIES. IADS WAS UNABLE TO RECRUIT REPLACEMENT SENIOR AGRONOMISTS TO HEAD RESEARCH TEAMS AT TWO OF THREE RESEARCH STATIONS. BECAUSE IADS STAFFING IS CRUCIAL TO PROJECT SUCCESS, THE AUDITORS RECOMMEND THAT USAID ENSURE THAT IADS CONDUCTS AN INTERNATIONAL RECRUITING CAMPAIGN FOR REQUIRED SPECIALISTS. SHORTAGES OF CEMENT AND LACK OF FULL CONSTRUCTION CREWS AND SUPERVISORS DELAYED THE CONSTRUCTION OF OFFICE, LABORATORY, AND SEED STORAGE FACILITIES. IT IS RECOMMENDED THAT USAID ENSURE THAT THE GOVERNMENT OF NEPAL APPOINTS AN OFFICER TO EXPEDITE ICP CONSTRUCTION AND TO HANDLE RELATED FINANCIAL ACCOUNTABILITY MATTERS. SURPLUS COMMODITIES AND HEAVY EQUIPMENT ON HAND AT EACH RESEARCH STATION UNNECESSARILY ADD TO PROJECT REPAIR AND MAINTENANCE COSTS. IT IS RECOMMENDED THAT THE PRESENT INVENTORIES OF THIS EQUIPMENT MEET PROJECT REQUIREMENTS AND THAT EXCESS QUANTITIES ARE DISPOSED. US OFFICE OF MANAGEMENT AND BUDGET (OMB) ALLOCATION LETTERS FROM FY75-77 HAVE ELAPSED EXPIRATION DATES; THEREFORE MONEY EARMARKED FOR ICP CANNOT BE PROPERLY OBLIGATED. IT IS RECOMMENDED THAT USAID PURSUE, THROUGH AID/W, AN OMB EXTENSION OF TIME OR OTHER PROCEDURES FOR REPROGRAMMING CURRENCY INTO ICP.