Audit report on USAID assistance for the Cooperative League of the USA (CLUSA) Programs in India

(CLUSA) provide oilseed processing assistance to India"s National Cooperative Development Corporation (NCDC) and National Dairy Development Board (NDDB). Audit report - which focuses on a P.L. 480 transfer authorization but includes information on 3 small OPG"s - covers the period through 6/80 and is based on document review, site visits, and interviews with CLUSA, NDDB, and NCDC officials. Under the P.L. 480 transfer, which provides support to the Oilseed Growers Cooperative project, major programmatic, implementation, management, and financial problems have occurred. Implementation is behind schedule due to, inter alia, lack of other-donor resources, the failure of state governments to provide land for district farms and agronomic centers, and uncertainty as to GOI approval of new groundnut processing facilities. Oil quantities called forward were not realistic; as a result, fund generations greatly exceeded requirements and some $20 million is invested in long-term, interest-bearing, fixed accounts, with earnings not properly attributed to project resources. There have also been serious accountability problems: total oil sales proceeds were not initially accounted for; substantial sums of sales proceeds were to be used outside normal control areas; large unauthorized withdrawals were made from cash accounts; some disbursements are questionable; CLUSA has not submitted required commodity reports; and bank transfers and sales proceeds were not deposited to the proper accounts. Corrective actions have been initiated on many of these problems, but much remains to be done. Achievements include: 84 co-ops covering 300 villages and 125 demonstration plots (vs. life-of-project targets of 850 of each); one 18-ha district farm (vs. three 300-400 ha farms targeted); two processing facilities acquired, but only 3,888 MT of groundnuts acquired from village co-ops; an operations research group formed but no system for monitoring oil production/supply yet created; marketing activities limited to Title II oil as NDDB failed to procure 154,000 MT of oil as planned; limited research into oil processing; and 282 person-months of training (vs. 1,500 targeted. Also, implementation was behind schedule in two of the three OPG"s. Nineteen recommendations are made.