This sum comprises 3 technical assistance programs: (1) $224,500,000 for worldwide programs; (2) $116,000,000 for the Alliance for Progress; and (3) $122,520,000 for multilateral organizations. 2 Included in overall request for technical assistance. At least $350,000 to be made available from Alliance for Progress grants. Funds for this item are included in: (1) technical assistance, $122,620,000; and (2) supporting assistance, $19,600,000. $ $820,000 in loans was authorized in 1967. The remaining $7,530,000 is for grants. 6 Of this sum, $19,600,000 is for U.N. peacekeeping operations and refugee programs. 7 Permanent authorization. Request is for authorization of "such amounts as may be necessary." Excludes $31,300,000 for International Military Headquarters to be funded under DOD budget, and expected $50,000,000 supplemental request for Spain. 10 Authorized and appropriated separately. PRAISE FOR INSPECTOR GENERAL Senator WILLIAMS. One other point, Mr. Secretary. As has been pointed out, we get some criticism of the aid program, occasionally, and it becomes hard to justify it. I want to close my remarks with a little bit of a compliment for one phase of your agency, and that is the Inspector General's Office. It has rendered a great service to at least one member of the committee. I have appreciated the cooperation we have had. I think while the facts disclose some instances that may have been embarrassing to all of us at times, nevertheless, I think the fact that they have, has served a useful purpose. I do not know of any plans for changes to the contrary, but if there are I hope they will be toward strengthening that office rather than weakening it. Secretary ROGERS. Thank you, Senator. Senator WILLIAMS. I know in connection with that, Mr. Chairman, I would like to have included for the record a report that was furnished to us by the Inspector General recently, which I commented on, and furnished to the committee, along with a letter concerning another phase of his work that was furnished to Senator Mundt and myself. I would like to have this printed in the record at this point. The CHAIRMAN. Without objection it is so ordered. (The document referred to follows:) DEPARTMENT OF STATE, OFFICE OF THE INSPECTOR GENERAL OF FOREIGN ASSISTANCE (IGA), SOME EXAMPLES OF IGA WORK This memorandum has been prepared in response to Congressional requests for another set of unclassified examples of the work of the office of The Inspector General of Foreign Assistance. It is similar to compilations furnished to the Congress in the past. Most of the summaries in this memorandum have to do with work performed in 1968. Some are 1967 examples which have not been reported previously. Supporting documentation for these summaries is contained in an annex. AFGHANISTAN 1. There were long-standing plans for building an AID-financed railroad spur between Chaman, in Pakistan, and Spin Baldak, in Afghanistan. Finding no real economic justification for the project, IGA recommended that the project not go forward and that the $650,000 set aside for it be deobligated. This was done. The decision not to proceed with the spur also freed for other purposes some $200,000 worth of local currency which had been generated under P.L. 480 and earmarked for the project. Thus, the total of the equivalent of $850,000 was freed for more productive uses. 2. At the Kandahar Airport, an IGA team inspected an idle twin-engine C-45 airplane which had been given to Afghanistan in 1959, flown but a few times, and never used for its intended purpose. Steps were thereupon taken to employ the aircraft for instructional purposes in a training school. BOLIVIA 1. IGA contributed to the locating of 53 U.S.-financed trucks worth $32,000 which had been supplied to the Bolivian Army. Because of some slip-up in the control system, the United States country team did not know these trucks were in the country, and knew nothing about their location, condition or use. The situation was immediately corrected. 2. IGA recommended that three U.S.-financed mobile shop vans costing a total of $47,000, which were going unused in La Paz, where they were not needed, be moved to the countryside, where they were needed. Two of the vans were thereupon sent to operating units and efforts are being made to find a use for the third van. BRAZIL 1. IGA inspectors visiting the Port of Santos came across a military assistancefinanced airport cleaner machine which they were told had been sitting in a customs warehouse for eleven years. The machine was thereupon released from the warehouse and issued for use. 2. IGA reported that an AID-financed generator, which had been granted to the Brazilian Air Ministry at least four years before, had never been used. The generator was thereupon installed at the Sao Paulo airport for use in running weather radar equipment. 3. After examining the system the AID Mission was using to keep track of goods arriving in Brazil, IGA suggested that it might be useful to adopt certain features of the arrival accounting system used in Turkey, which had previously attracted favorable notice from both AID headquarters and IGA. The suggestion was adopted. CHILE IGA said there had been excessive delay in putting to work some 30 million escudos generated from P.L. 480 sales. Because of inflation, the idle escudos were rapidly losing much of their value. Following the IGA comments, AID made renewed efforts to put these monies to work. Program uses were found for two-thirds of the money, and the remaining one-third-equivalent at the time to $1.7 million-was released for United States Government uses, thus assisting our balance-of-payments. 32-308-69- -5 CHINA 1. An IGA review helped focus attention upon $1,000,000 of Cooley loan funds which were standing idle. The funds were subsequently decommitted and placed in a Treasury account where they were available for general U.S. uses, thereby making a contribution to easing the balance-of-payments problem. 2. At a time when Voluntary Agency feeding programs were phasing out, IGA cooperated with AID in a review designed to make sure that good use was made of the large remaining inventories of foodstuffs. COLOMBIA 1. At IGA's suggestion, 141 U.S. Military Assistance-financed radio/vehicle installation units costing a total of $14,000 were declared excess to Colombia's needs and made available for use elsewhere. 2. An IGA team noted deficiencies in the manner in which U.S. Military Assistance-financed ammunition was stored. The situation posed a safety hazard. Corrective action was taken immediately. 3. IGA noted that some $60,000 had been set aside to import tires for civic action construction battalions, although many of the sizes needed were being manufactured locally. The AID Mission agreed the tires should be bought locally with Colombian pesos, and not dollars. CONGO (KINSHASA) AID had paid a company with an investment guaranty $80,000 worth of dollars in exchange for its local currency earnings. In the interest of the balance-of-payments, IGA strongly urged that the Congolese National Bank be asked to agree to convert the local currency earnings into dollars. This was done, and AID has made no further dollar payments. DOMINICAN REPUBLIC IGA inspectors crossing a bridge over the Yuna River noticed that, although the bridge was equipped with twelve tall lighting fixtures, there was no electricity. The bridge had been built more than two years before with AID help. Electricity was promptly provided after the situation was brought to the attention of the AID Mission. ETHIOPIA An IGA review of a vocational training project with a troubled history supported AID Mission decisions to defer the purchase of some $120,000 worth of training equipment and to take certain administrative steps which hold out promise of improving the project. GREECE Greece had a need for some uniform cloth which was in long supply in the United States Army. However, Greece was reluctant to buy the cloth using dollars exclusively. IGA noted that the United States Government was spending dollars to buy drachmas for its own needs in Greece. It pointed out that any drachmas obtained through sale of this cloth would reduce the need for buying drachmas with dollars. Such purchases with dollars have an adverse effect upon the U.S. balance-of-payments. IGA thereupon cooperated with State, Defense and Treasury in working out an arrangement whereby the cloth was sold for $225,000 plus the equivalent of $750,000 in drachmas. The drain on the United States balance-of-payments was reduced correspondingly. GUINEA Because of staff reductions, the AID Mission had excess furniture and vehicles at a time when the Peace Corps was resuming a program in Guinea. IGA alerted the Peace Corps to the existence of these surplus goods, and the Peace Corps is moving to make use of them. HONDURAS IGA observations proved useful when AID took steps to bolster an investment guaranty housing project which was in trouble. INDIA 1. After visiting several AID-financed projects in Eastern India, IGA recommended early deobligation action on four loans. Approximately $2.5 million was subsequently deobligated. 2. IGA suggestions played a part in bringing about more effective and economical management practices at the AID-financed Indian Institute of Technology at Kanpur. 3. At the Calcutta port, an IGA team found 20 cases of AID-financed heavy equipment which was to be used at the Central Ropeway project in the State of Bihar. The goods had been in storage for about six months. They were thereupon cleared from the port. INDONESIA Further progress was made in adopting a comprehensive series of IGA recommendations aimed at using U.S.-owned near-excess Indonesian rupiahs, rather than dollars, to pay for housing rents, voluntary agency expenses, and air travel to the United States. The resulting contribution to the U.S. balance-of-payments is now approaching $500,000 annually. IRAN IGA pointed out that the United States military mission in Iran had received 1,175 official visitors from the United States during the course of one year. This number of visits appeared to IGA to be excessive-in terms both of drain on the time of the members of the Mission, and costs of per diem and transportation money. The per diem rate in Tehran is $20 per day, and a round-trip ticket from Washington to Tehran costs $979.00. These observations stimulated a world-wide Department of Defense review, aimed at cutting down unnecessary visits to overseas military missions. IVORY COAST In 1966 the United States Government furnished the Ivory Coast with a fishing ship toward which AID made a $495,000 contribution of which $265,000 was a grant and $230.000, a local currency loan. It was beset with technical and operating problems from the time it made its maiden voyage to Abidjan. IGA expressions of concern helped speed corrective action. KOREA IGA found that certain gaps in Peace Corps regulations were resulting in foreign procurement when buy-American would have been possible and preferable. New regulations were adopted. LAOS 1. Following IGA's suggestion that this be done, 20 new windmills costing a total of about $50,000, which were not needed in Laos, were declared excess in 1968 and transferred to Thailand, where they were needed. 2. To promote economy, IGA recommended that two separate AID Mission motor pools at Pakse be consolidated into one. This was done. LEBANON After IGA collaborated with AID in investigating an excess property transaction in Lebanon involving a voluntary agency, AID issued new manual orders to bring about closer monitoring of such matters in the future. LIBERIA IGA's suggestions contributed to putting some $4,000 worth of idle AIDfinanced machine tools to work. MALAYSIA On a trip to Malaysia in November, 1968, IGA noted that the Peace Corps was sending air freight for Malaysia to the United States via foreign air lines. In the interest of the balance-of-payments. IGA suggested that henceforth foreign lines be used only to a point of connection with an American carrier. This will be done. MICRONESIA The Peace Corps took corrective action after an IGA review focused attention on weaknesses in Peace Corps procurement procedures which had resulted in insufficient competitive bidding and a failure to use General Services Administration procurement services. MOROCCO IGA inspectors visited three tanneries and reported upon hazardous working conditions caused by inadequate safety guards on AID-financed machines. The Mission is working with the Government of Morocco to try to bring about improvements. NEPAL At the suggestion of IGA, the AID Mission developed a workable plan for putting to work nine steel truss bridge units which had long been in storage. NICARAGUA 1. In 1967, the United States Government bought $900,000 worth of local currency on the commercial market. This constituted a balance-of-payments outflow. In 1968, IGA suggested methods of securing additional local currency in Nicaragua through the use of Special Letters of Credit. The suggestion was adopted and our balance-of-payments outflow will be reduced by about $500,000 annually. 2. IGA made a detailed review of the status of sub-loans being made under an AID industrial development loan. It came upon two local currency sub-loans which were not being used for industrial development purposes. IGA suggested that a refund claim be filed. AID subsequently was reimbursed the equivalent of $179,000. NIGERIA 1. IGA expressions of concern over the lack of adequate maintenance at the Aiyetoro Comprehensive School, partially-AID financed, had a catalytic effect in bringing about corrective measures. 2. IGA observations played an important part in causing AID headquarters and the AID Mission in Nigeria to undertake a comprehensive management systems study of the Mission. Wide-ranging improvements in management practices and procedures are expected as a result. PAKISTAN 1. In the interest of the United States balance-of-payments, an IGA team recommended that a survey be made to see whether contractor employees under AID-financed loans were in fact buying rupees through official channels, rather than on the open market. The subsequent audit found that such rupee purchases were generally not being made through official channels, and estimated the magnitude of unofficial conversions at approximately $500,00 annually. There was a corresponding adverse impact upon the United States balance-of-payments. AID is now negotiating with the Treasury to devise procedures to avoid this problem. 2. IGA observed that, in the case of an American company providing AIDfinanced services to the Government of Pakistan, AID made payments to a foreign subsidiary of the company located in a third country, rather than the United States corporation itself. Such transactions appear on the United States balanceof-payments as a negative item. AID thereupon issued a manual order designed to prevent situations of this kind. PHILIPPINES IGA inspectors reviewed the status of Cooley and Section 402 local currency accounts. Their subsequent observations made a contribution to a decision to unfund about $510,000 worth of pesos, thus making them available for general United States uses and assisting the balance-of-payments in the process. SENEGAL IGA expressed concern over some $500,000 worth of MAP-furnished engineering equipment which had not been used since 1964. This equipment now is being put to its intended use. |