Follow-up audit of AID-financed project vehicles in Egypt

Follow-up audit covers the period 2/83-9/84 and is based on document review, audit of 174 vehicles assigned to 5 projects, and interviews with USAID/E and Government of Egypt (GOE) officials. One of the five recommendations made in the 2/83 audit has been closed - guidelines were established in 8/83 requiring all projects to submit a vehicle utilization plan before procurement can be approved. A second recommendation - to suspend procurement of vehicles for the Cairo Water Supply and the Strengthening Rural Health Delivery Projects - while technically still open, has been satisfied and should be closed. USAID/E has taken limited actions to close the remaining three recommendations, as follows. (1) A report identifying problems with vehicle utilization and disposition was prepared by a consultant in 4/84. However, problems identified in the 2/83 audit and in the 4/84 report (e.g., use of vehicles by GOE and project officials for nonproject purposes, incomplete or inaccurate utilization reports) continue and USAID/E has neither established procedures nor initiated actions with the GOE to resolve these problems. (2) All AID-financed vehicles were inventoried in 2/84 through an automated system (AIDCARS) prepared under contract for USAID/E, but system input and data maintenance problems have been discovered; at least 259 vehicles were never included in the system, and as USAID/E has not assigned responsibility for maintaining AIDCARS, recently acquired vehicles are not being added to the system. (3) Several problems related to AID-financed procurement of U.S. vehicles remain: delays in clearing GOE customs for licensing; customs-related problems in vehicle disposal; and high maintenance, operating, and purchase costs (relative to those for locally assembled vehicles). USAID/E has discussed this issue with the GOE, but no decision has been made. It is recommended that USAID/E implement adequate vehicle utilization and disposition controls or require the GOE to provide all project vehicles.