LETTER OF TRANSMITTAL HOUSE OF REPRESENTATIVES, FOREIGN OPERATIONS AND GOVERNMENT INFORMATION SUBCOMMITTEE Hon. WILLIAM L. DAWSON, Chairman, Committee on Government Operations, DEAR MR. CHAIRMAN: As you know the House Committee on Government Operations issued a major report in 1968 entitled, "U.S. AID Operations in Latin America Under the Alliance for Progress." The report was based on an 18-month study, including two field inspection missions to Latin America, by the Foreign Operations and Government Information Subcommittee. Since then, the subcommittee has maintained a continuous check on the economy and efficiency of selected U.S. foreign aid activities in Latin America and intends to make future followups on these subjects. Our original report called for greater audit activity and auditor independence along with a review of certain special commodity financing procedures (de minimis) under which large amounts, totaling as much as $95 million annually, are used to generate needed local currencies for AID projects. The committee also cited the need for a preaudit of capital assistance projects to help prevent poor planning, faulty estimates, and other waste. In addition, the report evaluated what progress had been made to achieve the goals of the Alliance and pointed out areas where significant improvements could be made. The Bureau for Latin America of the Agency for International Development submitted a report to the subcommittee in December 1969 detailing what steps have been taken to implement the committee's recommendations. That report, which in my view indicates worthwhile actions in many areas, is found on the following pages. Sincerely, JOHN E. Moss, Chairman, Foreign Operations and Government Information Subcommittee. (III) CONTENTS Commodities financed under the "de minimis" procedure. - AID's failure to meet and need to review the goals of the Alliance for Page PROGRESS REPORT ON IMPROVING U.S. AID OPERATIONS IN LATIN AMERICA UNDER THE ALLIANCE FOR PROGRESS (By the Bureau for Latin America, Agency for International Development) AUDITS AND REVIEWS Recommendation No. 1.-AID/Washington should send only welltrained and experienced U.S. auditors to Latin America. Every effort should be made to provide auditors with the language training necessary to bring them up to the required level of language proficiency before they enter on duty in the country to which they are assigned. Response. The current complement of auditors in Latin America includes 18 people assigned in the year since the Administrator's report of November 20, 1968. This number consists of 11 with previous Agency experience and seven new hires. All of the latter have relevant experience either in other Government agencies, industry internal auditing, and/or public accounting. With respect to country-of-assignment language capability, the 18 assignments this past year included one bilingual auditor, four men with demonstrated fluency, and one with technical level proficiency. Of the remaining 12, 10 received intensive language training before departure for post. We intend to maintain this language proficiency/training program for Latin American assignments, and hope to entirely eliminate the occasional situation where workload or shortage of technically qualified candidates has forced us to rely on part-time on-job language training at the post. Recommendations No. 2 and No. 3.-AID/Washington should initiate a program to fill authorized positions and increase the positions authorized to the number required to make comprehensive audits and reviews of all U.S. aid programs in Latin America. Policies and procedures for recruiting and hiring auditors should be reviewed for the purpose of making overseas positions more attractive and desirable. and AID missions in Latin America should devise policies and procedures which would offer greater incentives and encourage continued employment of both U.S. and local auditors. Response No. 2 (first sentence).-The Administrator noted in his report of November 20, 1968, that all authorized audit positions were filled at that date and that five additional positions were being authorized. At the present time, all authorized audit positions in Latin America (including the five mentioned and one additional authorized subsequently) are filled. Of the total Latin American complement of 38 auditors, 34 are at post and four are in process (clearance, orientation, language training). |