Effectiveness of the Cooperative League of the United States to develop cooperatives in Indonesia, India, and Swaziland

Audit report covers the period 9/76-12/79 and is based on a review of records and interviews with A.I.D. and host government officials. Although CLUSA is effectively carrying out its responsibilities in assisting development of cooperatives (co-ops), there are a number of management and implementation problems. A.I.D. did not assign permanent oversight responsibility for CLUSA activities to the Bureau for Private and Development Cooperation until 3/80 and has conducted no evaluations of CLUSA activities in over 4 years. CLUSA, although having set end-of-project goals, has established no interim benchmarks to measure accomplishments. A.I.D."s ability to detect problems and improve implementation have thus been inhibited. Of CLUSA"s $3,051,248 in claims, $110,855 in costs were questioned. Specific problems included: lack of an accounting system for A.I.D. funds at CLUSA/Indonesia; inadequate collaboration and communication between co-ops in Java, Sulawesi, and Aru, Indonesia; significant delays in the Aru Seaweed Farming and Village Co-op Project; management difficulties regarding locally generated currency, U.S. audit rights, and consumer acceptability of P.L. 480 oil in the Indian Oilseed Project; difficulty in using co-ops to improve small farm conditions in Indonesia; and lack of government support for CLUSA activities in Swaziland and Indonesia. It is therefore recommended that A.I.D. require CLUSA to: (1) establish interim project benchmarks; (2) set up an accounting system at its Indonesia office; (3) revise the schedule of the Aru Island project; (4) ensure that P.L. 480 oil is acceptable to Indian consumers and deposit currency generated from the sale of oil into one special account; and (5) develop alternate courses of action for activities in Indonesia and Swaziland in the event that these governments withdraw support. It is also recommended that A.I.D. add an audit provision to the Indian Oilseed Growers Co-op subproject agreement, and that USAID/Swaziland establish a timetable for the Co-op and Market Project.