AUDIT REPORT, USAID/B : HIGHWAY ENGINEERING TRAINING AND ADVISORY SERVICES AND HIGH LEVEL TECHNICAL ASSISTANCE TO DEPARTAMENTO NACIONAL DE ESTRADAS DE RODAGEM. LOAN NO. 512-L-060.

LOAN WAS TO HELP DNER CHANGE FROM CONSTRUCTION ROLE (LIKE US STATE HYWAY DEPT) TO ONE OF SUPERVISION (LIKE US FED HWAY ADMIN -- FHWA). AUDIT WAS CONDUCTED ACCORDING TO ACCEPTED STANDARDS. BECAUSE OF DELAYS IN IMPLEMENTATION, PURPOSE OF LOAN WILL NOT BE ACHIEVED BY DISBURSEMENT TERMINAL DATE OF 6/30/73. LOAN WAS SIGNED 3/28/68 AFTER 21 MONTH DELAY IN OBTAININGGOVT SIGNATURES. TERMS WERE THAT MISSION ARRANGE FOR FHWA TECHNICIANS AND TEMPORARY DUTY (TDY) PERSONNEL TO AID IN ANALYSIS/REORGANIZATION OF DNER IN COOPERATION WITH FUNDACIO GETULIO VARGAS (GVF), CONSULTING FIRM RETAINED/FINANCED BY DNER,AND ARRANGE/EXECUTE US TRNG PROGRAM FOR DNER EMPLOYEES. IMPLEMENTATION OF FHWA AID HAS BEEN DELAYED DUE TO DISAGREEMENT BETWEEN MISSION/DNER RE PURPOSE/NECESSITY OF LOAN, ESPECIALLY RE FHWA ROLE. SURVEY OF 6/69 SHOWED THAT DNER STILL STRESSED OPERATIONS OVER SUPERVISION AND LACKED COUNTERPART/SUPPORT PERSONNEL. MISSION THEN ATTEMPTED TO CANCEL LOAN IN 8/69. DUE TO INTERVENTION OF WORLD BANK, LOAN WAS CONTINUED AND DNER ACCEPTED FHWA AID. CURRENT PROJ IMPLEMENTATION ORDER CALLS FOR FOLLOWING FHWA ENGINEERS: 2 HYWAY; PLANNING/PROGRAMMING; CONSTRUCTION; MAINTENANCE; AND FOR 7 MAN-MONTHS OF TDY PERSONNEL (ORIGINAL ORDER: 24). FHWA HAS AIDED DNER IN DEVELOPING DATA SYSTEM FOR HYWAY PLANNING; IMPROVING TRAFFIC COUNTING PROCEDURES; DESIGNING NATL HYWAY CLASSIFICATION SYSTEM; DEVELOPING NEW CONTRACT BIDDING PROCEDURES. MODEL MAINTENANCERESIDENCES HAVE BEEN ESTABLISHED IN 3 STATES. RE US TRNG PROGRAM: MISSION ALLOTTED $45,000 IN 1971 TO TRAIN UNSPECIFIEDNUMBER OF DNER EMPLOYEES. BECAUSE OF LACK OF DNER SPECIFICATION OF GOALS/CANDIDATES, ONLY $15,000 WAS DISBURSED FOR SHORT-TERM TRNG OF 6. NO MORE WILL BE SENT BECAUSE OF LANGUAGE DIFFICULTIES. MISSION HAS COMPLIED WITH DNER REQUEST THAT FUNDING FOR TRNG PROGRAM BE EXTENDED TO 12/13/72 SO FUNDS CAN BE USED FOR FHWA AID AND NOW AWAITS DNER COMMITMENT DOCUMENTATION. IT IS RECOMMENDED THAT MISSION REQUEST DNER REPORT ONACTIVITIES OF REORGANIZATION PROGRAM.