Survey of the economic support fund program for the Philippines

Survey audit covers the period 1980-9/86. Since it began in 1980, the ESF Program has provided $459.6 million to the Government of the Philippines (GOP); of this amount, $426.7 has actually been released. The system of accountability and control established by USAID/P for expenditure of the equivalent number of pesos provided by the GOP for various development purposes has been generally sufficient to ensure that U.S. economic assistance funds have been used for purposes agreed upon by A.I.D. and the GOP. USAID/P is not required to monitor the use of ESF dollar transfers after the GOP"s provision of the peso equivalent. However, some potential programmatic difficulties do exist. (1) Pesos deposited in most Special Accounts for project assistance generate interest; as of 8/84 this amounted to the equivalent of $14.4 million, all closely monitored by USAID/P. Since, however, USAID/P and the GOP have not formally determined whether this interest, which A.I.D. has declared the property of the GOP, is to be used for developmental or other purposes, a separate audit report will be issued on interest control and utilization. (2) A separate audit will also be issued on the GOP system for selecting local contractors to construct ESF-funded subprojects and to determine whether their work meets established plans and specifications. (3) A review is currently underway of GOP fulfillment of its commitments regarding $92.5 million in nonproject assistance provided to finance counterpart funding requirements for selected A.I.D., World Bank, and African Development Bank projects, and of the integrity of local currency expenditure reports for this assistance.