REVIEW OF THE RELATIONSHIPS BETWEEN THE PATHFINDER FUND AND THE AGENCY FOR INTERNATIONAL DEVELOPMENT UNDER GRANT NO. AID/CSD 1870

Eval includes consideration of tentative findings & conclusions of a special review team contracted by PF and excludes the traditional internal control & cost audit, which has been performed elsewhere. Upon study of reports and procedures, auditors found PF"s internal control & audit system satisfactory. Active PF subprojects include 19 in Indonesia, 9 in the Philippines, 5 in Colombia, & single or twin subprojs in Senegal, Ethiopia, Zululand, & Zaire. AID rejected other subprojs in Zambia, Zaire, & Colombia, and a Venezuelan subproj underwent major modification. PF is judged to be generally accomplishing grant objs and to merit continued support. Auditors recommend increased PF efforts to achieve better programming and mgmt competence; to improve proj design & eval policies, procedures, & techniques; and to train personnel to accomplish these ends. Auditors further recommend that the AID/PF agreement be recast into a true grantor/grantee relationship, since the present agreement, with 13 amendments, is too cumbersome, internally inconsistent, & difficult to administer. Arrangements should be included for PF"s establishment of target dates for full operational application of subprjs, and improved cost effectiveness measurement practices should be introduced. Auditors recommend that PF prepare appropriate country strategies along AID guidelines for multiple proj countries and that PF apply them consistently. Under the recommended arrangement, the Direct Program Support budget item should be eliminated and dependent subitems funded under Administrative Costs.