USAID/Jamaica"s monitoring of and controls over dollar and local currency resources provided under economic support fund and PL-480 Title I programs

480 Title I programs. Memorandum audit report covers the period 1/81-4/85 and is based on document review and interviews with personnel from USAID/J, the Bank of Jamaica, the Government of Jamaica (GOJ), the Jamaica Commodity Trading Company, and the International Monetary Fund. Although USAID/J"s monitoring and control procedures are acceptable overall, a few weaknesses have been noted: deposits into the ESF local currency trust fund were not recorded by loan number for adequate documentation and determination of amounts due; an important covenant in an ESF loan agreement (and USAID/J"s judgment of GOJ compliance) were unclear; and USAID/J failed to request delinquent GOJ reports and statements regarding P.L. 480 commodity receipt and sales proceeds. Some deficiencies were due in part to GOJ laxity in reporting and complying with loan covenants. Specifically: (1) as of 4/30/85, 6 reports detailing imports financed by the loans were past due; (2) the GOJ has made no significant progress in divesting itself of 30 or more enterprises eligible for privatization; and (3) local currency P.L. 480 sales proceeds were not deposited in special accounts until 5 to 10 months after commodity receipt, nor were the proceeds then deposited in interest-bearing accounts. However, 4 of the 6 recommendations made in the draft audit have been closed: USAID/J has obtained ESF commodity reports and requested or received P.L. 480 documents, has verified GOJ compliance with ESF loan covenants, and - while the auditors still believe that the GOJ is not divesting as planned - has adequately documented its records relating to divestiture and urged the GOJ to continue the process. Pending recommendations are, therefore, that USAID/J: (1) include realistic time limits in future Title I loan agreements governing the deposit of sales proceeds into special accounts and establish interest-bearing accounts (or document why this is not done); and (2) devise a system to alert project managers when GOJ reports are due and require written notification when such are overdue.