Bangladesh Food for Work program; audit report, November 29, 1981

Audit report covers FY1980-81 and is based on document review, site visits, and interviews with officials of USAID/B and CARE, the implementing agency. The project, which annually provides some 120,000 MT of wheat as wages for laborers on approximately 1,940 rural earthwork projects, has been seriously deficient in both planning and performance. There have been acute wheat shortages throughout the system; up to half the U.S.-supplied wheat was used for other purposes while low quality and infested wheat from non-U.S. sources was supplied to FFW projects. Misuse and misappropriation of wheat resulted in underpayments to laborers totaling over $4 million worth of wheat; at least another $600,000 worth was sold for profit and to pay local support costs. In addition, little effort has been made to choose projects that will increase food production and alleviate the need for food aid. These problems result primarily from poor control and lack of monitoring on the part of the Government of Bangladesh (BDG). While CARE has repeatedly noted deficiencies in its monitoring reports, it has not filed claims for losses and neither the BDG, CARE, nor USAID/B has taken corrective action. CARE has been unable to effectively monitor and manage the project because its authority is not defined. Recommendations are to: (1) substantially improve BDG management; (2) reduce annual wheat programming to 100,000 MT or less until recommended changes are made and program experience warrants increase; (3) select projects that will reduce the need for food aid; (4) develop local cost funding procedures; (5) amend the CARE/BDG Agreement and Action Plan, clearly defining CARE"s monitoring responsibilities and requiring CARE to withdraw support from projects where food is sold or cash wages paid; (6) have CARE file claims against the BDG for approximately 22,000 MT of wheat for laborer underpayments and wheat sold; (7) revise the Action Plan to allow CARE to select fewer but better projects, simplify the wage scheme, and control reimbursements to the BDG; (8) require USAID/B to support CARE in its evaluation actions; and (9) require that CARE"s reports provide detailed wage payment data and be summarized periodically.