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

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