PL-480 TITLE II PROGRAM IN ETHIOPIA

This audit report covers the period 3/13/79-3/31/81 and is based on site visits, a review of files, and interviews. The Title II program faces the following problems. Support from the Military Government of Socialist Ethiopia (PMGSE) has been lacking. Title II food remains undistributed in some areas and transports to move commodities to areas of need were not provided; e.g., Sidamo has not received food in the last two months. In addition, auditors were not permitted to visit PL 480 facilities in Assab or Asmara, despite previous agreements. The record keeping and reporting procedures of PMGSE"s Relief and Rehabilitation Commission (RRC) and UNICEF are inadequate. RRC could only give estimates on food received and issued. Although storage facilities exist, procedures are poor. The Catholic Relief Service"s outreach was limited by inadequate logistical support from RRC. The General Council should determine if project activities constitute development assistance and violate U.S. law under the Hickenlooper Amendment; if so, proper action must be taken. RRC should be advised that Title II food must be used as intended or future requests may not be honored. A.I.D. must be allowed to inspect Title II activities, or the program should be ended. UNICEF should improve its records of Title II foods. PMGSE should make an inventory of Title II food and improve its recording operations. RRC"s warehouses in Welo, Bale, and Sidamo should be examined to determine if storage conditions have improved. RRC must be informed that unless the $792,000 in U.S. funds is expended, it will be collected. RRC must be informed of the reporting and accounting requirements contained in TA 9633 and determine compliance. The Office of Food for Peace and the Office of Contract Management should deobligate unexpended funds of grant AID/SOD/PDC-G-0166.