Memorandum report on American schools and hospitals abroad grant to American - Italian Children"s Foundation

Audit, conducted at the request of the U.S. Ambassador to Italy, covers the period 8/10/77-3/20/81 and is based on a review of PDC/ASHA records and discussions with PDC/ASHA officials. At AICF"s request, A.I.D. amended the grant on 10/5/79 to allow grant funds to be used not to construct a new clinic but to refurbish for use as a clinic a wing of Columbus Hospital, construction of which had been funded by a prior PDC/ASHA grant to Association Columbus, an Illinois corporation. As of 3/20/81, no disbursements had been made under the ACIF grant. A review showed, inter alia, that ACIF has virtually no definable financial or management responsibilities for the clinic, while those of Association Columbus are substantial; that ACIF does not seem to qualify as a sponsor for the clinic under the amended grant; and that Association Columbus has issued no information on the status of Columbus Hospital and has not, as it promised, either named the Hospital the American Hospital or made it a show-case of the best U.S. medical care. As a result of the above review, there are four questions which should be answered prior to disbursement of grant funds: (1) Should the ACIF be accepted as a sponsor for the clinic when real sponsorship rests with Association Columbus? (2) Should PDC/ASHA allow Association Columbus to sponsor the clinic in light of the Association"s behavior regarding its own grant? (3) Should A.I.D. pay rent for space that was largely acquired with A.I.D. funds? (4) Was the Children"s Cancer Clinic grant based on the false premise that it would be the only facility in Italy able to properly treat and research cancer in children? PDC has agreed to assess in detail the above issues and will withhold disbursements until they are resolved.