USAID OIG Afghanistan and Pakistan Oversight Report, April-June ...

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In recent years, OIG has covered an array of USAIDprograms in Pakistan, for relief and stabilization,reconstruction, sustainable development, education,and health care. Since the start of FY 2003, USAIDOIG has issued 84 financial audits, performanceaudits, and reviews of Pakistan-related assistanceefforts. These reports made 152 recommendationsfor improvements to USAID programs and activities.Performance Audits and ReviewsUSAID OIG has issued 23 performance audits andreviews relating to USAID programs and activitiesin Pakistan since FY 2003. Performance audits andreviews conducted in recent years have noted theneed for improvements in a range of managementand performance areas. Most have identifiedMap of Pakistan. (Central Intelligence AgencyWorld Factbook, 2011)contract or project management deficiencies, andmore than four in ten have found internal control weaknesses and noncompliance with relevantprocedures or regulations.From April 1 to June 30, 2012, OIG completed two performance audits and one review.Audit of USAID/Pakistan’s Support to the Benazir Income Support Program (ReportNo. G-391-12-006-P, May 21, 2012). The Government of Pakistan launched the BenazirIncome Support Program in 2008 to provide a permanent cash support mechanism for familiesin poverty. To support this effort, USAID/Pakistan signed an $85 million cash transfer grantagreement with the Government of Pakistan. The Government of Pakistan and USAID/Pakistansigned an amendment to the agreement in June 2010, providing $75 million in additionalfunding and bringing the total amount to $160 million. 4 Under the terms of the agreement,upon receiving the USAID cash transfer, the Pakistani Government is supposed to deposit theequivalent amount of Pakistani rupees immediately in a special local currency account tosupport program payments to eligible families. The mission must approve disbursements offunds from the U.S. dollar account to the program, and the mission’s program office isresponsible for monitoring the agreement.OIG found that the first installment of $85 million transferred to Pakistan in February 2010 wasdisbursed by the program to approximately 480,000 beneficiaries, and that a USAIDcommissionedsurvey documented that 98 percent of randomly sampled beneficiaries had4 The Benazir Income Support Program is not a USAID program; it is a Government of Pakistan program receivingbudget support from USAID through Agreement No. 391-012-01.USAID OIG Afghanistan and Pakistan Oversight Report 17
eceived payments. OIG’s review of a statistically valid sample of program records found thatrecipients’ names, addresses, and payments were accurate.However, OIG found problems with the second installment of $75 million. As of March 2012,the mission had not authorized the Government of Pakistan to transfer the money to theprogram because mission officials were unable to verify that the program had implemented aneffective monitoring and evaluation plan. The mission requested documentation of an effectivemonitoring and evaluation plan multiple times; however, the Government of Pakistan had notyet complied with these requests. USAID/Pakistan had also not received any bank statementsfrom the Government of Pakistan since the program’s inception in 2009. Consequently, whenthe Pakistani Government transferred funds from the authorized special local currency accountand comingled them in a general budget account in September 2010, the mission was notaware of the transfer. Mission officials indicated that staff turnover had contributed to thedifficulties in obtaining information. Over the previous 20 months, four mission programmanagers had supervised the program, and similar turnover had occurred among Governmentof Pakistan officials.Management decisions were made on all three report recommendations, and final action hasbeen taken on two.Audit of USAID/Pakistan’s Entrepreneurs Project (Report No. G-391-12-005-P, April 20,2012). USAID’s 5-year, $30 million cooperative agreement with Mennonite EconomicDevelopment Associates is designed to increase the incomes of predominantly female ownersof microenterprises in in Pakistan. The project provided local partners with training on USAIDfinancial management, procurement, and human resource requirements as well as technicalinstruction on the value chain concept 5 to help owners of microenterprises increase output andimprove their commodities’ quality and marketability. Local partners assisted in developingvalue chains in four sectors: dairy, embellished fabrics, medicinal and aromatic plants, andhoney.OIG found that the project trained more entrepreneurs than expected in business development,and achieved 80 percent of its target for providing training in business management andmarketing. However, efforts to build capacity in developing value chains did not start untilMay 2011, almost 2 years after the award. Two factors contributed to the delays. First,USAID/Pakistan used project resources to provide assistance to people in the Swat Valleydisplaced as a result of conflict and floods in 2010. Mission officials acknowledged this workdiverted time and resources from the project’s activities, as no additional funding was providedto cover the costs. Second, local partners’ lack of awareness of the value chain concept caused5 A value chain includes the full range of activities required to bring a product or service from concept to end use. Valuechains include activities such as design, production, marketing, and distribution.18 USAID OIG Afghanistan and Pakistan Oversight Report
Page 1 and 2: April - June 2012
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Page 7 and 8: Audit ProgramOIG auditors, certifie
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Page 11 and 12: site visits. In the past, building
Page 13 and 14: In recent years, OIG has covered a
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Page 19 and 20: investigation. While the employee h
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Page 25 and 26: program is improving the capacity o
Page 27 and 28: Under Cooperative Agreement No. 391
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Page 35 and 36: Other ExclusionsWalker, Scott Antho
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Page 45 and 46: DateReport Title and NumberAmountAu
Page 61 and 62: 10/10/11 F-306-12-002-N Financial A
Page 63 and 64: 02/25/10 5-306-10-002-NFinancial Au
Page 65 and 66: 08/10/06 5-306-06-004-D Financial A
Page 67 and 68: 03/26/04 5-306-04-003-N Financial A
Page 69 and 70: 06/23/11 G-391-11-003-Q Quality Con
Page 71 and 72: 04/30/09 5-391-09-008-R Financial A
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09/26/06 5-391-06-003-Q Quality Con
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The project had many successes, inc
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complicated process, and OIG could
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The objective of the audit was to d
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According to information provided b
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OIG’s audit found that the univer
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Audit of USAID/Afghanistan's Altern
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and DOD PSCs in Afghanistan because
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Afghanistan has one of the highest
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contractor estimated that cost over
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Audit of USAID/Pakistan’s Energy
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Audit of USAID/Pakistan’s Road Re
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establishing a distribution policy,
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planned results was hindered by a s
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Although USAID carried out numerous
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AbbreviationsAACCAEDATVIAUAfCERPDAB
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USAID Office of Inspector General13
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