Recurring issues from audits of the ASEAN regional development program

Brunei Darussalam became the sixth member in 1984. The principal objectives of the ASEAN regional program include strengthening regional institutional capabilities, facilitating technical exchanges, and enhancing the private sector"s role in development. A.I.D. assistance to ASEAN, which began in 1979, had increased to a total of $60.5 million by the end of 1989. At that time there were five on-going ASEAN projects: Human Resources Development, Energy Conservation and Management, Coastal Resources Management, Small and Medium Business Improvement and Private Investment and Trade Opportunities. Life of project funding for these projects was authorized at $46.7 million with obligations of $12.5 million through fiscal year 1989. This report discusses recurring problems identified in five project audits of the ASEAN Regional Development Program. These audits were conducted in Thailand, Malaysia, Singapore and the Philippines from 1987 through 1989. The recurring issues were: (1) Significant problems exist in the system for monitoring project progress. Projects were not designed with quantitative indicators of progress; baseline studies were not completed; data were not gathered to measure project accomplishments; project implementation, equipment utilization and site visit reports were not prepared; and inventories were not completed. (2) The participant training monitoring system for the ASEAN program does not comply with Agency requirements. Students who completed long-term training were not monitored to determine if they had returned to their home countries and were working in project-related activities. Further, over $417,000 in international air travel costs, which should not have been authorized, was paid by A.I.D. (3) A system to ensure that contributions are provided by the participating countries had not been implemented. Contributions to projects by ASEAN countries were much less than planned. On one project, contributions were not required by the grant agreement even though project approval was predicated, in part, on a substantial financial contribution by the participating countries. This report contains three recommendations. It also (l) presents an assessment of internal controls and (2) reports on the ASEAN RDO"s compliance with applicable laws and regulations. A draft of this report was provided to the Assistant Administrator, Bureau for Asia and Private Enterprise for comment. In responding to the draft report, the Bureau agreed with our recommendations but did not propose responsive courses of action. Also, the Bureau did not state whether it had determined whether a need existed for establishing revised policies and procedures applicable to the monitoring deficiencies of the ASEAN program identified in this report. Such a determination was an integral part of each recommendation. (Author abstract)