DEVELOPMENT OF THE LAO NATIONAL ROADS SYSTEM

AUDIT INCLUDED LIMITED VISITS (BECAUSE OF SECURITY CONDITIONS) TO FIELD STATIONS. THE PROJ WAS NOT FULLY OPERATIONAL UNTIL FY"66,BECAUSE OF POLITICAL UNREST. US FEDERAL HIGHWAY ADMIN (FHWA) ADVISORY ASSISTED THE TRAVEAU PUBLIC (TP) IN THE PLNNG,ADMIN & MAINTENANCE OF THE NATL ROAD SYST. USAID FINANCED HEAVY EQUIPMENT & SUPPLIES & MATERIALS. ALSO,TWO-THIRDS OF THE LOCAL CURRENCY COSTS FOR CASUAL-HIRE LABOR & LOCALLY PRODUCED MATERIALS WERE PROVIDED THRU THE MISSION COUNTERPART FUND. ROAD CONSTRUCTION INCLUDED THE MAIN NORTH-SOUTH ARTERY FROM THE ROYAL CAPITAL TO THE CAMBODIAN BORDER,1242KM TO THE SOUTH. AN ADDITIONAL 285KM OF ROADS WERE CONSTRUCTED OR IMPROVED & 2675KM MAINTAINED. CLASSROOM & ON-JOB TRNG WERE PROVIDED FOR 734 ENGINEERING,TECH & ADMIN PERSONNEL. 84 LAO NAILS RECEIVED PARTICIPANT TRNG. FROM 1/1/56-9/30/72,US DOLLAR OBLIGATIONS & EXPENDITURES TOTALED $39,706,000 & $37,111,000 RESPECTIVELY. LOCAL CURRENCY(KIP) OBILIGATIONS & EXPENDITURES TOTALED IN US $, 23,391,000 & $23,355,000,RESPECTIVELY, A REVIEW OF JOINT-FUND EXPENDITURES REVEALED DISCREPANCIES IN TIME & ATTENDANCE RECORDS & LEAVE ALLOWANCES. ALSO,THE USE OF FICTITIOUS NAMES ON TP PAYROLLS CONTINUES. BUDGETARY ADJUSTMENTS,ALTHOUGH WITHIN THE APPROVED 20% FLEXIBILITY RANGE,DID NOT RECEIVE JOINT CONCURRENCE-AS REQUIRED. REPORT RECOMMENDS STANDARDIZATION OF WORK REPORTS,PROVISION OF PAY WITH LEAVE & A DETERMINATION OF WAGE RATES FOR EACH TP SUBDIVISION. CASH ADVANCES SHOULD BE DISCONTINUED. AUDIT RECOMMENDS INCORPORATION OF THE FOREIGN CURRENCY STANDARD PROVISIONS ANNEX INTO THE PROAG TO ENSURE REFUNDS FOR EXPENDITURES LATER DETERMINED TO BE IMPROPER. A STUDY SHOULD BE UNDERTAKEN TO DETERMINE WHETHER PROGRAMMING TECHNIQUES USED IN THE USAID ACTIVITY PLAN SYST COULD BE USED BY THE TP. REVIEW RECOMMENDS THAT A NEW PASA BE MADE WITH FHWA -- ESP IN VIEW OF THE RAPIDLY CHANGING MILITARY SITUATION. IT ALSO NOTES THAT AN EARLIER RECOMMENDATION -- THAT USAID ANALYZE SMD (MISSION SUPPLY MGMT DIV) & FHWA PROCUREMENT COSTS FOR SIMILAR ITEMS -- HAS YET TO BE IMPLEMENTED.