Audit report on the examination of USAID/Nepal"s health and family planning program

Audit report covers the period 4/77-6/79 and is based on document review, site visits, and discussions with USAID/N and Government of Nepal (GON) officials. The GON"s Integrated Community Health Project (ICHP), of which the four A.I.D. projects are key elements, has made little progress toward becoming an efficient and effective provider of HC and FP due to inadequate GON administrative and financial support. While the ICHP"s five single-purpose programs have made marked achievements in malaria control, smallpox eradication, and early sterilization, they have sometimes diverged or overlapped. Moreover, because the GON Ministry of Health has not given the ICHP adequate direction or support, integration of these programs has led to an overall decrease in their effectiveness. The GON"s targetting of only 0.1% of the 1978-79 GON development budget to the ICHP has resulted in a shortage of medicines, medical supplies, and equipment so severe as to impede development of an effective rural health post system in the near future. The GON"s central procurement, storage, distribution, and inventorying of AID-funded commodities are also inadequate. More importantly, USAID/N"s consistent understating of FP commodity inventories (by 24-64%) and overestimating of the number of users (by 36-38%) has led to a 6-year backlog of contraceptives resulting in a net loss to A.I.D. of $200,000. Further, in 1/79, USAID/N ordered an additional $437,622 worth of condoms and birth control pills. Finally, GON accounting for U.S.-owned local currency contributions remains inadequate. It is therefore recommended that USAID/N condition continued funding on the GON"s progress in: (1) developing a time-phased organization plan to centralize rural health services management; (2) budgeting and releasing funds for medical supplies to provide full support to rural health post programs; (3) developing and implementing a logistical supply system to ensure proper procurement, inventory, storage, and distribution of commodities; and (4) resolving accounting difficulties. USAID/N should also obtain complete data on the volume and condition of contraceptive stocks, destroy unusable condoms, and accurately estimate future contraceptive needs.