Memorandum audit report on the Food for Peace Program in Chile

Memorandum audit report covers the period 10/77-3/80 and is based on visits to facilities, warehouses, and Food For Work projects and on interviews with program personnel. A full audit was curtailed as it became apparent that the program was well managed by A.I.D. and the three PVO implementors -- CARE, Catholic Relief Services (CRS), and Seventh Day Adventist World Services, Inc. (SAWS). During the period under review, $16,914,000 worth of food was distributed through six programs--minimum employment, school feeding, nursery feeding, children in institutions, malnourished child feeding, and food for work. Beneficiary levels reached 1,735,091 in FY1978, but declined to 669,709 in FY1980 following the termination of minimum employment and school feeding activities in FY1979. The program is a model of good management. CARE, CRS, and SAWS have carefully coordinated their efforts, primarily through a mechanized data system (started in 1978) which maintains up-to-date registers of warehouses and feeding centers and generates data needed to manage commodities at the national level and to identify problems. CARE, the best managed of the PVO"s, distributed food under four programs. CRS, also effectively managed, works through its Chilean affiliate, CARITAS, and has managed five programs. In 1979 CARITAS discovered the theft of $47,201 worth of food. The guilty employees were discharged and adequate corrective actions taken. A.I.D. has billed CRS for the full amount. SAWS has managed three food programs through its Chilean affiliate. All three PVO"s have held losses to an acceptable level and have reported losses and made claims against carriers as required. In 1979, losses ranged from 0.2% for SAWS to 1.3% for CARE. USAID/C field inspections have uncovered only minimal deficiencies, which were corrected on the spot. Warehouses, distribution centers, kitchens, and storage facilities are all clean and adequate for their intended purposes. The Ambassador has recommended that the Title II program be terminated and that A.I.D. activities be transferred to the Chilean Government at the end of FY1982. The Ambassador subsequently endorsed A.I.D."s request that one employee be retained through FY1982 to maintain the integrity of the program.