MEMORANDUM AUDIT REPORT NO. 6-263-81-8 OF 3/22/81; SURVEY OF AID LOAN NO. 263-K-040 AND GRANT NO. 2630035 FOR CANAL DREDGING EQUIPMENT

This memorandum audit report covers the period 1/31/81-3/22/81 and was based on interviews with project personnel and a review of project documents and USAID files. It appears that the revised project completion date of 3/1/82 will be met unless unforeseen problems develop. Earthmoving equipment provided under this project includes draglines, backhoes, scrapers, hydraulic dredgers, supporting transportation equipment, and shop and field maintenance equipment. At the time of this review, not all of the equipment had been received in-country. The equipment that had arrived was not in use and therefore could not be observed. The GOE Ministry of Irrigation will assign project equipment to the Egyptian Dredging Company (EDC) and the General Irrigation Company for Mechanical Dredging (GICMD) for irrigation canal maintenance projects to be conducted throughout the country. USAID has determined that GOE is unable to provide the additional project funding as originally agreed. GOE does not have the needed available free foreign exchange, and Arab development funds did not materialize after the signing of the peace treaty. As a result, USAID granted additional project funds on 6/21/79. Consulting services have been provided by Louis Berger International Inc. relative to the procurement of dredging and excavation equipment for EDC and GICMD use. All procurement transaction procedures were adequate and awards were made to the lowest bidder. At this time, there is no need for a full-scope audit of this project during the 1981 fiscal year.