Review of emergency food assistance provided to Nicaragua

Audit report covers the period 7/79-12/80 and is based on document review, discussions with recipients and with USAID/N and co-sponsor personnel, and site visits. A total of 121,772 metric tons (MT) of food worth $30 million has been distributed through five programs. Of 4,237 MT"s received by the Red Cross, 3,325 were distributed; the rest were transferred to the Government of Nicaragua (GON) for free distribution. In the Government-to-Government (GTG) program, only 2,744 of 12,567 MT"s received have been distributed due to the GON"s inability to provide trained personnel and adequate transportation and storage and to establish adequate inventory control procedures. Unauthorized sales, exchanges, or loans of Title II commodities have totalled 11,128 MT and foods have been distributed to ineligible recipients. Commodities (1,043 MT"s) received for a CARE school feeding program have not been fully utilized due to a suspension of classes (to allow teachers and students to participate in a national literacy campaign), a lack of school kitchen facilities, and organizational and budgetary problems. No procedures for gathering data on the program"s impact on the children have been established. In the emergency cash transfer program, the GON, departing from the grant agreement, used all $6 million allotted to the grain stabilization program for grain purchases instead of using $1 million to purchase equipment (which was to be provided by the European Economic Community) the lack of which could lead to $1.2 million in grain losses. The entire program is now being evaluated by the Empresa Nicaraguense de Alimentos Basicos. In the P.L. 480, Title I commodity sales program, port facilities at Corinto were inadequate to account for commodities; procedures for reconciling Title I accounts had not been established; GON reports presented conflicting data; and $2.6 million earmarked for the literacy campaign were not used. The U.S. origin of the commodities has not been publicized, and lack of GON cooperation and unstable political conditions have made USAID/N project monitoring somewhat ineffective. A total of 23 recommendations are made to address the project"s major deficiencies.