Audit report : USAID/Laos, military technical support, project no. 439-11-995-068

Examinatn included review of program documnts, prior audits, accounting & procuremnt records, procedures & controls, and discussns with Mission leaders. Evaluators did not review food storage & distributn controls after food was physically transferrd to Regionl Quartrmastr depots of the Laos army. The project purpose was to assist the Laos army to provide suffic subsistence commodities to feed its military units. The commodities program was financd from supporting assist funds & contingency funds with AID/W approval for 7 yrs up to the end of FY74. The funds were not to be used for military purposes. Beginning in FY71, funds were provided by US Dept of Defense (DOD) to USAID/Laos but the funds were used for commercial consumables & common-use items by the military establshmnt for military purposes as had been forbidden by AID/W Administratr"s Memo PD-45. The matter was referred to AID/W Office of Audit. Cumulative obligatns & expenditures of econ assist funds amounted to $21,206,245 & $21,145,997 respectively, leaving $60,248 unliquidated FY69/70 obligatns. AID should deobligate unused portion since Laos receives funds from DOD. USAID/Laos should take advantage of devaluation of the KIP to reduce transport costs of rice purchased from the Thailand government and to assure that all contracted freight rates are feasible. The close-out of a temporary expense account resulted in expenditures for various commodities being transferred in error to the rice purchase account record card. Costs were overstated and effected mistakes on other cards. The problem was brought to attention and corrected. Some account cards were mistitled but that problem was solved too.