AIJI)[T 01F LISAI I)iI1 SA YAIXItimes -

A(RARIAN RlFOPR I L(YLOk JPPOI(I piOI Ati IROJICT NO 519-0265

Audit Report No 1-519-87-14 Jmnary 30 1987

IM Arfi[)] AGENCY FOR INTERNATIONAL DEVELOPMENTIN( FSb I OiF T It (J AIr iv k G I OR GEtE RAL 111IM ilo Es

AMERICAN EMBASSY 32-O044 amp 320092

TEGUCIGALPA - HONDURAS also 32-31209 EXT 293 amp 29

January 30 1987

NDIORANDUM4

FOR Robin Gomez Director JSAI)El Salvador

FROM RIGAT oinae N Gothard Jr SUBJECT Audit of El Salvador Agrarian Reform Sector Support (Project

No 519-0265) Report No 1-519-87-14

This report presents the resultsReform Sector Support

of audit of the El Salvador AgrarianProje-t No 519-0265Inspector General The Office of the Regionalfor AuditTegLcigalI)athe project made a program results auditThe audit objective of having an impact the

wis to determine if the project wason Salvadoran Governments agrarianSpecifically reform )rogramthe audit evalluted the transfer of land titles and theeffective use of project resources The audit found that the titling process had beenbut should benefit slower than expected[rom several recenttransferring and titling laid

reforms Overall progress into reform beneficiariesservices andto reform beneficiaries in deployinghad moved slowly thusnumber of cases far In a limitedproject resources wereHowever the Government not being effectively used could

of El Salvador has initiated several reformsexpedite tile transferring whichand titling landrequired suu)ort services of and deployment ofIn May and September 1986El Salvador passed the Government oflegislation which simlifiedregistering prolrties and which tile overall system ofovercame manyregistering previous hturdles toproperties encumbered

Salvador also by liens The Government Elhas streamlined ofits titling proceduresefforts Ihile these recentwere significant and should help inpurposes further action achieving the projectneeds to be intaken certain aspects of theproject

The audit showed that the Governmentprojects land titling goals of El Salvador was not meeting the

the agrarian )lacing enough managers and accountants atreform cooperatives properly accounting for ofvehicles or fully uti]i zing

use projectan AID-funded computer

The report recommends that the MIlission obtainprograms a plan to accomplishtitling objectives theincrease training and incentivescooperat ive maimgers and accountants for maintenance and repair of

and improve internal Colt rols overproject vehiclesimprovements It also recommendsin computer information systems

I

IISAIIDl a I vador ag reed it h the recoiirenda t i ons and in i ti ate I orroc ( i acCe iln s(SlssMIl cIts lltsl w re il rOplated in th is Ieporon

and recomminenda t ioin ) is considered closed upon its issuance Pleaseadvise us within 30 days oF any additional information relating to ac t ions taken or plnned to impleent the audit recommendations

ippreciate the cooperation dl( court tesy extended to our- s-iff during the audit

EXLiCJTTIVE SIUMARY

In larch 1980 the Government of El Salvador instituted an agrarianreform program to transfer ownership of farmlands from large landholdersto those who worked the land The progritn was to be accomplishedthree phases tithting peasan t cooperatives ( Phase and in

1) individuals(Phase II ) Phas I cons isted of voluntary land sales of Iandlo[dingsin excess of 605 aclreS

Project - grarian[9-0265 e(form Sector Support started in September1983 Its puLrpose was to increase the efficiency and( effectiveness oftie Agrar ian Reform lrog ram by acce](Olera t Ilng the land tlransfefr process andimprovig tie ability of the Government of lI Salvador to providte1e 1irIc a d ice I olrarill rtfor lIlll)veltql] l -iil s (oi(1 irr en1Iy the plo~jct wagt t i rcerSe tie mllriiatnarial capacity of agrarirn relfori CO pt l (-is ox 1)pi ip1 -ald 1I i va c I()I i live IIllill ill wI nIodIi rect Iv roIi ld to (Inl arrarriail relori lot a All) fundirg to tlitl)10(W I was $37 7 million and tie (overmlunt of F Sal vador contribution

was $2111 million The projects planned completion drte is l)ecember 311987

The Office of tihe prog raii

Regional Inispector General for Au litTegucigalpa made aresl ts arud it of lJSA[ I)1 Salvadors Agrarian Re form SectorSupport lroject 519-0265 The audit objective was to deterimine if theproject was having an impact on the Salvadoran Governmentsreform program Specifically the ardit evaluate1 the transfer

agrarianof landtitles and elfe( Iive ofthe use project resources l] mulitri covered$2102 million disbursed under the project as of June 30 1986

Te and it found that the titlinig process had ben slower than expec tedbut should Frombeuefit several recent reforms In a limited nmtber ofcases project resources were not being effectively used Progress hadbeen made since 1983 wh en we last reviewel this program The Governmentof H1 Salvador Irs iliitiaited several reforn-ms which col d expedite thetransferring and itling of land and deployment of relni i r(l Supportservices In lay and September L986 the Gove rnjmlelit of 4I1 Salvadorpassed legislation which (1) simpliftied the overall system of registeringproperties aind (2) ove rcame many previous hundlies to registeringproperties enicmrvbered 1) lions The GoverlMent of II Salvador has alsostreamlinel i ts titling ptrocedItures While these recent efforts weresignificant and should Ielp in achieving the project purposes Furtheraction needs to he in certain aspects oftaken the project

The audit showed that tire Governmient of HI Salvivdor was not meeting the projects land titling goals placing enugh manragers and accountantsthe agrarian reform coo)eratiyes properly accon iri for use of

on projectvehicles or fuil uitilizing an AlD)-funded colputer

As of -JilV 31 198 thre Goveriienrt of I-il Salvador iad registered eightPhase I lain it ites of a p1 lmied 317 and 7325 Phase II Li I les of aplannled 10000 (originally 400(00) to reg istred thehe by projectassi st ane conmplet i on late of lecemlber 31 1987 lre processes had movedl

-1ishy

slowly because of cumbersome titling procedures not adequately consideredat the start of the project and a lack of funds to compensateowners Itthe plamned number titles is prior

of not issued and registered bythe project completion date the reform beneficiaries may not obtainlegal tenure rights to tihe land -- a major goal of the project AI t houghstill seriously behil schedule the program working muchwas better thanin 1983 when we conducted out- Iast rev iew We recomimended tha t themiss ion )ob which willtai n - plan accomp I ish the titling targe ts of theproject The Mission agreed with tire recommendation

Accord i fig to the amended project ag reemlenlt signed June 30 1986 thereviscd goal for trained cooperative managers and accountants placedcooperatives was reduced from 280 with

to 250 of each A July 31 1980project status epor t inricated that only 137accountanlits anagers and 110were employed at Phase I CooperaLtives bit these figures werenot re l iable bOcause an accurate t rack i rig sys tern had not beentimplemented )ue to lack of coordination among responsible Gove rnment ofF al agencies manyalvador coope rative managers and accountaLts notreceived an adequate orielnttti(on on how to effectively had

anralge agrarianreform cooperatives The re alsowas some reluictance by the cooperativesto assirne the burden of paying the managers amri iccourntants Vi tlrloitcooperative acceptance and contuitv in thv ml)ploymen of trainedmanagers ands accoriritan ts prospectscooperat ires

for many Rlid e I agrarianto )ecomero economicrll v viable reform are greatly Inluced Werecomneldi ye opieart of an approl)r iat ori ol ta Li ol p og rai andstrerig threning incentives for cooperat ive nra nage rs ard accoumtants 1hission agreed with tLhe rcorrmenlati o

The project agreemre-nt set forthL guridaice for using and acco-irting for All)provided resources under tie proj(ect At Nationaltwo Finance Office forgrlarian IReforil) Lands crgiol offices visi ted we Found no internalcon trol proctdhi ns over tire 1s( of vehicles or F ie Immlporrs Veliclerepa i r x en)OiiSewere vrF igh aid imaV )e CorXCS iVC ID1 tole pooral n t prat ices the Office hadI ot ip I eer itd linistryiAgr ic(ultuire yoehicrle it iii z~i on giideli

of lo it reqiiire itserniployees nes 0 idto sign Imel Coupon iii ordher to acquire I il ellrllowas allrl rtnot imriplem nLting a lllir Lenaitl trol aidcon F() prog raim 4liinot sol icit e 0(ll010h)idis to oh Lain the best repair prices Withot intirial controlprocef res project m(11iprielrt anrd commo itLies become ulferahle to fraudwaste and abuse Additionally the lack of a ra inLt1MiCe on trol prorarandI lack of knowle 4e of sLaidard repair costs lead to excessive vehiclerepa i r expenses divertinrg finds the offrom goas tlre project lerecommnded iuplementa tion of appropr iate internal controlsmainterance am andrepair procedures The 1i ss i oil areed 14i tL tie

[rCOiiiiilei Od Li OIn

1II) guihel i ries s La t Lha [ tile coo rating gove 1-l~lwIit is respois i)l forle a o1q0aiIto use of c onnrod i Li es 1 -ced by All) A lso g0ood Iianageilrl(litpractice calls for deqato plann i ngarltonrtted wlhe dove lop ing tr modiffyinrg Ininforrmi tion systemi Oae of the stes) thit shoild he iicludedin tire development off any systm is the dteerminitio ofproduced by the system inclardi ri files for

oilt llIs t )en in)iut to other systems The

- ii shy

National Finance Office for Agrarian Reform lands computer has not beenable to read the magnetic tapes sent by the National Geographic InstituL itcontaininig data on properties of Phase Ill henefici aries This coniputerincoipatibility problem was (lue to poor systein planning and to a lack ofcommunicition andI coord inat ion between the two agencies lntilfinace oiffice improves the current information-transfer the

process which isnow time-consuning and error-prone it will not be able to fully utiliKzits coilipiter resoiurces to reduce delays i issuting titles to Ihas I11beneflici aries Ite recomilended obtaining assurance o1 initeragencycooperation and establishment of a tinetable for (evlopingdata an efficienttransfer michanism The I ission agreeNI with the recoiimendaltion btdiagreed ii ile1it cause They ated tlhat the systms were set 1pselrit ly Iat differe t Li imes for diFferent purposes ile InspectorGeneral s off ice re i tera ted tie need for advanced pl ning

Accord i to th project payer the Agri cultLral Sector Plann i riOfHI ceinistry of Agtricul tLre Data Process i rg Cenute was cha reed wi tlthe respons iil) lity for processing di ta furnished by agrarian sectorinstit luioslS Aliost three vers after receipt of t he necessary computerequiplment which was lrocured it h A[I) Loan funds it a Combined co-st$547000 ofthe (0)12 still had not imileiiLeitei n 2iiratet informationl systom to process Agrarian Rformii informLtion Acc(ording to one HSAll)ilKalvador off i ciI an informa tion systom had nover been i lment edmfibecause ol pas t ditfreinces hotween the heals of the institltions involved uhd tle (uririi ucrinlyik as to whatImade puhliclY infoiIjat ion should beavailahle 1uls governnei I hden io-isuiaking auid plain lingohfficia Is are lp rived of niededl i ntformHla tion We recomuiuended thatI DHlIhJISalvador oWtiain ecvi hvnie tihat tie (overnmnet of IiSalvador hadprepared I plfi which i lilh a tiie table ahrid Ow stLps and resourcesneeded to complet the infouimtion system to a i IiLtato the work or theqalvdoran Airarian Reform The Mission agreed witwL the recolmwildntation

-iii shy

AUDIT OF USAIDL SAIVA)ORS AGRARIAN

RIIK)Rm SIECTOR SUPPor PROJE(T NO 519-0265

TABLEi OF CONTEINTS

PART I - 1NROIJUcTION

A 3ackg round

P Audit Objectives and Scope

1

1i

1

PART I - RESULTS OF AI)IT

A Finlings and Recomendat ions

1 Titling Achievelivents Were Behind

Schedu e

2 Nore ianagers and Accountants

Needed to I Placed with Cooperatives and Tracke

3 Imp lemnting Agency Was Not Acconting for Its uso of Project-Funded Vehicles

4 Agencies Neeled to Make Better Use of Computer Capabilities

5 An Integirated Infonation Processing System ad Not Been implemented

3

4

4

6

8

10

12

B Compliance and Internal Controls 1

PART III - APPENDICES

A Mission Comments

B List of Recomminend ations

C Di stribuL ion 1ist

At fl) IT OF USAI1)EL SALVADORS AGRARIAN

REFORM SECTOR SUPPORT IROJFCT NO 519-0265

PN(r I - INAZODUCTION

A Background

In larch 1980 the Government of El Salvador (COS) instituted an agrarianreform program to transfer ownership of farmlands From large landholdersto those who worked the land The program was to be accomplished in three phases

-- Phase I cal led for the expropriation with compensation allof farmsof muore than 1235 acres The expropriated land was allocated to coopera ti ve ag r icL ttira I assoc ia t ions managed aml opera ted pr imar i lyby those wio had previously worked on the privately owned Farms

-- Phase I call-ed for the volunitary sale of la-nIdholdings in excess of605 acres b1 I)ec ember 1986 and possible expropriation of any sich excess holdings thereafter

-- Phase III provided For the transfer of ownership) of up to t73 acresto tillers who had previously rented the land from largo landholders

The A rar i an Reform Sec tLor tpl)orLt Project (519-0265) startel inSepteml)emr 1983 Its purpose was to increase the efficiency andeffectiveness of the Agrarian Reform Program )y accelerating the landtralnsfer process and the ofimlp rov i ability the Government of lISalvador t) provide FampSt serVi t aga rianICes a1m es o I reformhbeficiaries (o ico r ren t I y tie project was to increase the managerialcapaci tV of agrarian reforFml cooperatives aind eXpaIn(d private sec torinvestmen t in en terpries dir ctly related to agrarianthe reform

According to the project greellelt total AID funding for the project was$377 iillion anl de (overnhlont of HI Salvador contribution was $241million from fuds generated by ti sale of PL 480 Title I comiioditiesAs of lune 30 1)86 All) had dlislursed $172)800 From a $77 mill iongrant miM $1930390) from a $300 mi 11 ion loan The projects plannedcomplet ion date is )ecember 31 1)87

B udit Objectives and Scope

Ihe Office of the Regional In pector General For Audi tlTegucigallpa made a program lesull ts aidit f ISAI)lI Salvadors Agrarian Reform SectorSupport Project The audit objective was to determine if the project washaving all ilpact on the Salvadoran Government s agirari reform proIrall Specifically te valimted transferaud it the of 1l( titles and theffective use of project resoirces The atulit covered $2102 miill iondisbursedF liier the project as of June 30 19HX6 Audi t work wascondicted from AugustU 18 198(6 through September 19 1986

t

IM Arfi[)] AGENCY FOR INTERNATIONAL DEVELOPMENTIN( FSb I OiF T It (J AIr iv k G I OR GEtE RAL 111IM ilo Es

AMERICAN EMBASSY 32-O044 amp 320092

TEGUCIGALPA - HONDURAS also 32-31209 EXT 293 amp 29

January 30 1987

NDIORANDUM4

FOR Robin Gomez Director JSAI)El Salvador

FROM RIGAT oinae N Gothard Jr SUBJECT Audit of El Salvador Agrarian Reform Sector Support (Project

No 519-0265) Report No 1-519-87-14

This report presents the resultsReform Sector Support

of audit of the El Salvador AgrarianProje-t No 519-0265Inspector General The Office of the Regionalfor AuditTegLcigalI)athe project made a program results auditThe audit objective of having an impact the

wis to determine if the project wason Salvadoran Governments agrarianSpecifically reform )rogramthe audit evalluted the transfer of land titles and theeffective use of project resources The audit found that the titling process had beenbut should benefit slower than expected[rom several recenttransferring and titling laid

reforms Overall progress into reform beneficiariesservices andto reform beneficiaries in deployinghad moved slowly thusnumber of cases far In a limitedproject resources wereHowever the Government not being effectively used could

of El Salvador has initiated several reformsexpedite tile transferring whichand titling landrequired suu)ort services of and deployment ofIn May and September 1986El Salvador passed the Government oflegislation which simlifiedregistering prolrties and which tile overall system ofovercame manyregistering previous hturdles toproperties encumbered

Salvador also by liens The Government Elhas streamlined ofits titling proceduresefforts Ihile these recentwere significant and should help inpurposes further action achieving the projectneeds to be intaken certain aspects of theproject

The audit showed that the Governmentprojects land titling goals of El Salvador was not meeting the

the agrarian )lacing enough managers and accountants atreform cooperatives properly accounting for ofvehicles or fully uti]i zing

use projectan AID-funded computer

The report recommends that the MIlission obtainprograms a plan to accomplishtitling objectives theincrease training and incentivescooperat ive maimgers and accountants for maintenance and repair of

and improve internal Colt rols overproject vehiclesimprovements It also recommendsin computer information systems

I

IISAIIDl a I vador ag reed it h the recoiirenda t i ons and in i ti ate I orroc ( i acCe iln s(SlssMIl cIts lltsl w re il rOplated in th is Ieporon

and recomminenda t ioin ) is considered closed upon its issuance Pleaseadvise us within 30 days oF any additional information relating to ac t ions taken or plnned to impleent the audit recommendations

ippreciate the cooperation dl( court tesy extended to our- s-iff during the audit

EXLiCJTTIVE SIUMARY

In larch 1980 the Government of El Salvador instituted an agrarianreform program to transfer ownership of farmlands from large landholdersto those who worked the land The progritn was to be accomplishedthree phases tithting peasan t cooperatives ( Phase and in

1) individuals(Phase II ) Phas I cons isted of voluntary land sales of Iandlo[dingsin excess of 605 aclreS

Project - grarian[9-0265 e(form Sector Support started in September1983 Its puLrpose was to increase the efficiency and( effectiveness oftie Agrar ian Reform lrog ram by acce](Olera t Ilng the land tlransfefr process andimprovig tie ability of the Government of lI Salvador to providte1e 1irIc a d ice I olrarill rtfor lIlll)veltql] l -iil s (oi(1 irr en1Iy the plo~jct wagt t i rcerSe tie mllriiatnarial capacity of agrarirn relfori CO pt l (-is ox 1)pi ip1 -ald 1I i va c I()I i live IIllill ill wI nIodIi rect Iv roIi ld to (Inl arrarriail relori lot a All) fundirg to tlitl)10(W I was $37 7 million and tie (overmlunt of F Sal vador contribution

was $2111 million The projects planned completion drte is l)ecember 311987

The Office of tihe prog raii

Regional Inispector General for Au litTegucigalpa made aresl ts arud it of lJSA[ I)1 Salvadors Agrarian Re form SectorSupport lroject 519-0265 The audit objective was to deterimine if theproject was having an impact on the Salvadoran Governmentsreform program Specifically the ardit evaluate1 the transfer

agrarianof landtitles and elfe( Iive ofthe use project resources l] mulitri covered$2102 million disbursed under the project as of June 30 1986

Te and it found that the titlinig process had ben slower than expec tedbut should Frombeuefit several recent reforms In a limited nmtber ofcases project resources were not being effectively used Progress hadbeen made since 1983 wh en we last reviewel this program The Governmentof H1 Salvador Irs iliitiaited several reforn-ms which col d expedite thetransferring and itling of land and deployment of relni i r(l Supportservices In lay and September L986 the Gove rnjmlelit of 4I1 Salvadorpassed legislation which (1) simpliftied the overall system of registeringproperties aind (2) ove rcame many previous hundlies to registeringproperties enicmrvbered 1) lions The GoverlMent of II Salvador has alsostreamlinel i ts titling ptrocedItures While these recent efforts weresignificant and should Ielp in achieving the project purposes Furtheraction needs to he in certain aspects oftaken the project

The audit showed that tire Governmient of HI Salvivdor was not meeting the projects land titling goals placing enugh manragers and accountantsthe agrarian reform coo)eratiyes properly accon iri for use of

on projectvehicles or fuil uitilizing an AlD)-funded colputer

As of -JilV 31 198 thre Goveriienrt of I-il Salvador iad registered eightPhase I lain it ites of a p1 lmied 317 and 7325 Phase II Li I les of aplannled 10000 (originally 400(00) to reg istred thehe by projectassi st ane conmplet i on late of lecemlber 31 1987 lre processes had movedl

-1ishy

slowly because of cumbersome titling procedures not adequately consideredat the start of the project and a lack of funds to compensateowners Itthe plamned number titles is prior

of not issued and registered bythe project completion date the reform beneficiaries may not obtainlegal tenure rights to tihe land -- a major goal of the project AI t houghstill seriously behil schedule the program working muchwas better thanin 1983 when we conducted out- Iast rev iew We recomimended tha t themiss ion )ob which willtai n - plan accomp I ish the titling targe ts of theproject The Mission agreed with tire recommendation

Accord i fig to the amended project ag reemlenlt signed June 30 1986 thereviscd goal for trained cooperative managers and accountants placedcooperatives was reduced from 280 with

to 250 of each A July 31 1980project status epor t inricated that only 137accountanlits anagers and 110were employed at Phase I CooperaLtives bit these figures werenot re l iable bOcause an accurate t rack i rig sys tern had not beentimplemented )ue to lack of coordination among responsible Gove rnment ofF al agencies manyalvador coope rative managers and accountaLts notreceived an adequate orielnttti(on on how to effectively had

anralge agrarianreform cooperatives The re alsowas some reluictance by the cooperativesto assirne the burden of paying the managers amri iccourntants Vi tlrloitcooperative acceptance and contuitv in thv ml)ploymen of trainedmanagers ands accoriritan ts prospectscooperat ires

for many Rlid e I agrarianto )ecomero economicrll v viable reform are greatly Inluced Werecomneldi ye opieart of an approl)r iat ori ol ta Li ol p og rai andstrerig threning incentives for cooperat ive nra nage rs ard accoumtants 1hission agreed with tLhe rcorrmenlati o

The project agreemre-nt set forthL guridaice for using and acco-irting for All)provided resources under tie proj(ect At Nationaltwo Finance Office forgrlarian IReforil) Lands crgiol offices visi ted we Found no internalcon trol proctdhi ns over tire 1s( of vehicles or F ie Immlporrs Veliclerepa i r x en)OiiSewere vrF igh aid imaV )e CorXCS iVC ID1 tole pooral n t prat ices the Office hadI ot ip I eer itd linistryiAgr ic(ultuire yoehicrle it iii z~i on giideli

of lo it reqiiire itserniployees nes 0 idto sign Imel Coupon iii ordher to acquire I il ellrllowas allrl rtnot imriplem nLting a lllir Lenaitl trol aidcon F() prog raim 4liinot sol icit e 0(ll010h)idis to oh Lain the best repair prices Withot intirial controlprocef res project m(11iprielrt anrd commo itLies become ulferahle to fraudwaste and abuse Additionally the lack of a ra inLt1MiCe on trol prorarandI lack of knowle 4e of sLaidard repair costs lead to excessive vehiclerepa i r expenses divertinrg finds the offrom goas tlre project lerecommnded iuplementa tion of appropr iate internal controlsmainterance am andrepair procedures The 1i ss i oil areed 14i tL tie

[rCOiiiiilei Od Li OIn

1II) guihel i ries s La t Lha [ tile coo rating gove 1-l~lwIit is respois i)l forle a o1q0aiIto use of c onnrod i Li es 1 -ced by All) A lso g0ood Iianageilrl(litpractice calls for deqato plann i ngarltonrtted wlhe dove lop ing tr modiffyinrg Ininforrmi tion systemi Oae of the stes) thit shoild he iicludedin tire development off any systm is the dteerminitio ofproduced by the system inclardi ri files for

oilt llIs t )en in)iut to other systems The

- ii shy

National Finance Office for Agrarian Reform lands computer has not beenable to read the magnetic tapes sent by the National Geographic InstituL itcontaininig data on properties of Phase Ill henefici aries This coniputerincoipatibility problem was (lue to poor systein planning and to a lack ofcommunicition andI coord inat ion between the two agencies lntilfinace oiffice improves the current information-transfer the

process which isnow time-consuning and error-prone it will not be able to fully utiliKzits coilipiter resoiurces to reduce delays i issuting titles to Ihas I11beneflici aries Ite recomilended obtaining assurance o1 initeragencycooperation and establishment of a tinetable for (evlopingdata an efficienttransfer michanism The I ission agreeNI with the recoiimendaltion btdiagreed ii ile1it cause They ated tlhat the systms were set 1pselrit ly Iat differe t Li imes for diFferent purposes ile InspectorGeneral s off ice re i tera ted tie need for advanced pl ning

Accord i to th project payer the Agri cultLral Sector Plann i riOfHI ceinistry of Agtricul tLre Data Process i rg Cenute was cha reed wi tlthe respons iil) lity for processing di ta furnished by agrarian sectorinstit luioslS Aliost three vers after receipt of t he necessary computerequiplment which was lrocured it h A[I) Loan funds it a Combined co-st$547000 ofthe (0)12 still had not imileiiLeitei n 2iiratet informationl systom to process Agrarian Rformii informLtion Acc(ording to one HSAll)ilKalvador off i ciI an informa tion systom had nover been i lment edmfibecause ol pas t ditfreinces hotween the heals of the institltions involved uhd tle (uririi ucrinlyik as to whatImade puhliclY infoiIjat ion should beavailahle 1uls governnei I hden io-isuiaking auid plain lingohfficia Is are lp rived of niededl i ntformHla tion We recomuiuended thatI DHlIhJISalvador oWtiain ecvi hvnie tihat tie (overnmnet of IiSalvador hadprepared I plfi which i lilh a tiie table ahrid Ow stLps and resourcesneeded to complet the infouimtion system to a i IiLtato the work or theqalvdoran Airarian Reform The Mission agreed witwL the recolmwildntation

-iii shy

AUDIT OF USAIDL SAIVA)ORS AGRARIAN

RIIK)Rm SIECTOR SUPPor PROJE(T NO 519-0265

TABLEi OF CONTEINTS

PART I - 1NROIJUcTION

A 3ackg round

P Audit Objectives and Scope

1

1i

1

PART I - RESULTS OF AI)IT

A Finlings and Recomendat ions

1 Titling Achievelivents Were Behind

Schedu e

2 Nore ianagers and Accountants

Needed to I Placed with Cooperatives and Tracke

3 Imp lemnting Agency Was Not Acconting for Its uso of Project-Funded Vehicles

4 Agencies Neeled to Make Better Use of Computer Capabilities

5 An Integirated Infonation Processing System ad Not Been implemented

3

4

4

6

8

10

12

B Compliance and Internal Controls 1

PART III - APPENDICES

A Mission Comments

B List of Recomminend ations

C Di stribuL ion 1ist

At fl) IT OF USAI1)EL SALVADORS AGRARIAN

REFORM SECTOR SUPPORT IROJFCT NO 519-0265

PN(r I - INAZODUCTION

A Background

In larch 1980 the Government of El Salvador (COS) instituted an agrarianreform program to transfer ownership of farmlands From large landholdersto those who worked the land The program was to be accomplished in three phases

-- Phase I cal led for the expropriation with compensation allof farmsof muore than 1235 acres The expropriated land was allocated to coopera ti ve ag r icL ttira I assoc ia t ions managed aml opera ted pr imar i lyby those wio had previously worked on the privately owned Farms

-- Phase I call-ed for the volunitary sale of la-nIdholdings in excess of605 acres b1 I)ec ember 1986 and possible expropriation of any sich excess holdings thereafter

-- Phase III provided For the transfer of ownership) of up to t73 acresto tillers who had previously rented the land from largo landholders

The A rar i an Reform Sec tLor tpl)orLt Project (519-0265) startel inSepteml)emr 1983 Its purpose was to increase the efficiency andeffectiveness of the Agrarian Reform Program )y accelerating the landtralnsfer process and the ofimlp rov i ability the Government of lISalvador t) provide FampSt serVi t aga rianICes a1m es o I reformhbeficiaries (o ico r ren t I y tie project was to increase the managerialcapaci tV of agrarian reforFml cooperatives aind eXpaIn(d private sec torinvestmen t in en terpries dir ctly related to agrarianthe reform

According to the project greellelt total AID funding for the project was$377 iillion anl de (overnhlont of HI Salvador contribution was $241million from fuds generated by ti sale of PL 480 Title I comiioditiesAs of lune 30 1)86 All) had dlislursed $172)800 From a $77 mill iongrant miM $1930390) from a $300 mi 11 ion loan The projects plannedcomplet ion date is )ecember 31 1)87

B udit Objectives and Scope

Ihe Office of the Regional In pector General For Audi tlTegucigallpa made a program lesull ts aidit f ISAI)lI Salvadors Agrarian Reform SectorSupport Project The audit objective was to determine if the project washaving all ilpact on the Salvadoran Government s agirari reform proIrall Specifically te valimted transferaud it the of 1l( titles and theffective use of project resoirces The atulit covered $2102 miill iondisbursedF liier the project as of June 30 19HX6 Audi t work wascondicted from AugustU 18 198(6 through September 19 1986

t

I

IISAIIDl a I vador ag reed it h the recoiirenda t i ons and in i ti ate I orroc ( i acCe iln s(SlssMIl cIts lltsl w re il rOplated in th is Ieporon

and recomminenda t ioin ) is considered closed upon its issuance Pleaseadvise us within 30 days oF any additional information relating to ac t ions taken or plnned to impleent the audit recommendations

ippreciate the cooperation dl( court tesy extended to our- s-iff during the audit

EXLiCJTTIVE SIUMARY

In larch 1980 the Government of El Salvador instituted an agrarianreform program to transfer ownership of farmlands from large landholdersto those who worked the land The progritn was to be accomplishedthree phases tithting peasan t cooperatives ( Phase and in

1) individuals(Phase II ) Phas I cons isted of voluntary land sales of Iandlo[dingsin excess of 605 aclreS

Project - grarian[9-0265 e(form Sector Support started in September1983 Its puLrpose was to increase the efficiency and( effectiveness oftie Agrar ian Reform lrog ram by acce](Olera t Ilng the land tlransfefr process andimprovig tie ability of the Government of lI Salvador to providte1e 1irIc a d ice I olrarill rtfor lIlll)veltql] l -iil s (oi(1 irr en1Iy the plo~jct wagt t i rcerSe tie mllriiatnarial capacity of agrarirn relfori CO pt l (-is ox 1)pi ip1 -ald 1I i va c I()I i live IIllill ill wI nIodIi rect Iv roIi ld to (Inl arrarriail relori lot a All) fundirg to tlitl)10(W I was $37 7 million and tie (overmlunt of F Sal vador contribution

was $2111 million The projects planned completion drte is l)ecember 311987

The Office of tihe prog raii

Regional Inispector General for Au litTegucigalpa made aresl ts arud it of lJSA[ I)1 Salvadors Agrarian Re form SectorSupport lroject 519-0265 The audit objective was to deterimine if theproject was having an impact on the Salvadoran Governmentsreform program Specifically the ardit evaluate1 the transfer

agrarianof landtitles and elfe( Iive ofthe use project resources l] mulitri covered$2102 million disbursed under the project as of June 30 1986

Te and it found that the titlinig process had ben slower than expec tedbut should Frombeuefit several recent reforms In a limited nmtber ofcases project resources were not being effectively used Progress hadbeen made since 1983 wh en we last reviewel this program The Governmentof H1 Salvador Irs iliitiaited several reforn-ms which col d expedite thetransferring and itling of land and deployment of relni i r(l Supportservices In lay and September L986 the Gove rnjmlelit of 4I1 Salvadorpassed legislation which (1) simpliftied the overall system of registeringproperties aind (2) ove rcame many previous hundlies to registeringproperties enicmrvbered 1) lions The GoverlMent of II Salvador has alsostreamlinel i ts titling ptrocedItures While these recent efforts weresignificant and should Ielp in achieving the project purposes Furtheraction needs to he in certain aspects oftaken the project

The audit showed that tire Governmient of HI Salvivdor was not meeting the projects land titling goals placing enugh manragers and accountantsthe agrarian reform coo)eratiyes properly accon iri for use of

on projectvehicles or fuil uitilizing an AlD)-funded colputer

As of -JilV 31 198 thre Goveriienrt of I-il Salvador iad registered eightPhase I lain it ites of a p1 lmied 317 and 7325 Phase II Li I les of aplannled 10000 (originally 400(00) to reg istred thehe by projectassi st ane conmplet i on late of lecemlber 31 1987 lre processes had movedl

-1ishy

slowly because of cumbersome titling procedures not adequately consideredat the start of the project and a lack of funds to compensateowners Itthe plamned number titles is prior

of not issued and registered bythe project completion date the reform beneficiaries may not obtainlegal tenure rights to tihe land -- a major goal of the project AI t houghstill seriously behil schedule the program working muchwas better thanin 1983 when we conducted out- Iast rev iew We recomimended tha t themiss ion )ob which willtai n - plan accomp I ish the titling targe ts of theproject The Mission agreed with tire recommendation

Accord i fig to the amended project ag reemlenlt signed June 30 1986 thereviscd goal for trained cooperative managers and accountants placedcooperatives was reduced from 280 with

to 250 of each A July 31 1980project status epor t inricated that only 137accountanlits anagers and 110were employed at Phase I CooperaLtives bit these figures werenot re l iable bOcause an accurate t rack i rig sys tern had not beentimplemented )ue to lack of coordination among responsible Gove rnment ofF al agencies manyalvador coope rative managers and accountaLts notreceived an adequate orielnttti(on on how to effectively had

anralge agrarianreform cooperatives The re alsowas some reluictance by the cooperativesto assirne the burden of paying the managers amri iccourntants Vi tlrloitcooperative acceptance and contuitv in thv ml)ploymen of trainedmanagers ands accoriritan ts prospectscooperat ires

for many Rlid e I agrarianto )ecomero economicrll v viable reform are greatly Inluced Werecomneldi ye opieart of an approl)r iat ori ol ta Li ol p og rai andstrerig threning incentives for cooperat ive nra nage rs ard accoumtants 1hission agreed with tLhe rcorrmenlati o

The project agreemre-nt set forthL guridaice for using and acco-irting for All)provided resources under tie proj(ect At Nationaltwo Finance Office forgrlarian IReforil) Lands crgiol offices visi ted we Found no internalcon trol proctdhi ns over tire 1s( of vehicles or F ie Immlporrs Veliclerepa i r x en)OiiSewere vrF igh aid imaV )e CorXCS iVC ID1 tole pooral n t prat ices the Office hadI ot ip I eer itd linistryiAgr ic(ultuire yoehicrle it iii z~i on giideli

of lo it reqiiire itserniployees nes 0 idto sign Imel Coupon iii ordher to acquire I il ellrllowas allrl rtnot imriplem nLting a lllir Lenaitl trol aidcon F() prog raim 4liinot sol icit e 0(ll010h)idis to oh Lain the best repair prices Withot intirial controlprocef res project m(11iprielrt anrd commo itLies become ulferahle to fraudwaste and abuse Additionally the lack of a ra inLt1MiCe on trol prorarandI lack of knowle 4e of sLaidard repair costs lead to excessive vehiclerepa i r expenses divertinrg finds the offrom goas tlre project lerecommnded iuplementa tion of appropr iate internal controlsmainterance am andrepair procedures The 1i ss i oil areed 14i tL tie

[rCOiiiiilei Od Li OIn

1II) guihel i ries s La t Lha [ tile coo rating gove 1-l~lwIit is respois i)l forle a o1q0aiIto use of c onnrod i Li es 1 -ced by All) A lso g0ood Iianageilrl(litpractice calls for deqato plann i ngarltonrtted wlhe dove lop ing tr modiffyinrg Ininforrmi tion systemi Oae of the stes) thit shoild he iicludedin tire development off any systm is the dteerminitio ofproduced by the system inclardi ri files for

oilt llIs t )en in)iut to other systems The

- ii shy

National Finance Office for Agrarian Reform lands computer has not beenable to read the magnetic tapes sent by the National Geographic InstituL itcontaininig data on properties of Phase Ill henefici aries This coniputerincoipatibility problem was (lue to poor systein planning and to a lack ofcommunicition andI coord inat ion between the two agencies lntilfinace oiffice improves the current information-transfer the

process which isnow time-consuning and error-prone it will not be able to fully utiliKzits coilipiter resoiurces to reduce delays i issuting titles to Ihas I11beneflici aries Ite recomilended obtaining assurance o1 initeragencycooperation and establishment of a tinetable for (evlopingdata an efficienttransfer michanism The I ission agreeNI with the recoiimendaltion btdiagreed ii ile1it cause They ated tlhat the systms were set 1pselrit ly Iat differe t Li imes for diFferent purposes ile InspectorGeneral s off ice re i tera ted tie need for advanced pl ning

Accord i to th project payer the Agri cultLral Sector Plann i riOfHI ceinistry of Agtricul tLre Data Process i rg Cenute was cha reed wi tlthe respons iil) lity for processing di ta furnished by agrarian sectorinstit luioslS Aliost three vers after receipt of t he necessary computerequiplment which was lrocured it h A[I) Loan funds it a Combined co-st$547000 ofthe (0)12 still had not imileiiLeitei n 2iiratet informationl systom to process Agrarian Rformii informLtion Acc(ording to one HSAll)ilKalvador off i ciI an informa tion systom had nover been i lment edmfibecause ol pas t ditfreinces hotween the heals of the institltions involved uhd tle (uririi ucrinlyik as to whatImade puhliclY infoiIjat ion should beavailahle 1uls governnei I hden io-isuiaking auid plain lingohfficia Is are lp rived of niededl i ntformHla tion We recomuiuended thatI DHlIhJISalvador oWtiain ecvi hvnie tihat tie (overnmnet of IiSalvador hadprepared I plfi which i lilh a tiie table ahrid Ow stLps and resourcesneeded to complet the infouimtion system to a i IiLtato the work or theqalvdoran Airarian Reform The Mission agreed witwL the recolmwildntation

-iii shy

AUDIT OF USAIDL SAIVA)ORS AGRARIAN

RIIK)Rm SIECTOR SUPPor PROJE(T NO 519-0265

TABLEi OF CONTEINTS

PART I - 1NROIJUcTION

A 3ackg round

P Audit Objectives and Scope

1

1i

1

PART I - RESULTS OF AI)IT

A Finlings and Recomendat ions

1 Titling Achievelivents Were Behind

Schedu e

2 Nore ianagers and Accountants

Needed to I Placed with Cooperatives and Tracke

3 Imp lemnting Agency Was Not Acconting for Its uso of Project-Funded Vehicles

4 Agencies Neeled to Make Better Use of Computer Capabilities

5 An Integirated Infonation Processing System ad Not Been implemented

3

4

4

6

8

10

12

B Compliance and Internal Controls 1

PART III - APPENDICES

A Mission Comments

B List of Recomminend ations

C Di stribuL ion 1ist

At fl) IT OF USAI1)EL SALVADORS AGRARIAN

REFORM SECTOR SUPPORT IROJFCT NO 519-0265

PN(r I - INAZODUCTION

A Background

In larch 1980 the Government of El Salvador (COS) instituted an agrarianreform program to transfer ownership of farmlands From large landholdersto those who worked the land The program was to be accomplished in three phases

-- Phase I cal led for the expropriation with compensation allof farmsof muore than 1235 acres The expropriated land was allocated to coopera ti ve ag r icL ttira I assoc ia t ions managed aml opera ted pr imar i lyby those wio had previously worked on the privately owned Farms

-- Phase I call-ed for the volunitary sale of la-nIdholdings in excess of605 acres b1 I)ec ember 1986 and possible expropriation of any sich excess holdings thereafter

-- Phase III provided For the transfer of ownership) of up to t73 acresto tillers who had previously rented the land from largo landholders

The A rar i an Reform Sec tLor tpl)orLt Project (519-0265) startel inSepteml)emr 1983 Its purpose was to increase the efficiency andeffectiveness of the Agrarian Reform Program )y accelerating the landtralnsfer process and the ofimlp rov i ability the Government of lISalvador t) provide FampSt serVi t aga rianICes a1m es o I reformhbeficiaries (o ico r ren t I y tie project was to increase the managerialcapaci tV of agrarian reforFml cooperatives aind eXpaIn(d private sec torinvestmen t in en terpries dir ctly related to agrarianthe reform

According to the project greellelt total AID funding for the project was$377 iillion anl de (overnhlont of HI Salvador contribution was $241million from fuds generated by ti sale of PL 480 Title I comiioditiesAs of lune 30 1)86 All) had dlislursed $172)800 From a $77 mill iongrant miM $1930390) from a $300 mi 11 ion loan The projects plannedcomplet ion date is )ecember 31 1)87

B udit Objectives and Scope

Ihe Office of the Regional In pector General For Audi tlTegucigallpa made a program lesull ts aidit f ISAI)lI Salvadors Agrarian Reform SectorSupport Project The audit objective was to determine if the project washaving all ilpact on the Salvadoran Government s agirari reform proIrall Specifically te valimted transferaud it the of 1l( titles and theffective use of project resoirces The atulit covered $2102 miill iondisbursedF liier the project as of June 30 19HX6 Audi t work wascondicted from AugustU 18 198(6 through September 19 1986

t

EXLiCJTTIVE SIUMARY

In larch 1980 the Government of El Salvador instituted an agrarianreform program to transfer ownership of farmlands from large landholdersto those who worked the land The progritn was to be accomplishedthree phases tithting peasan t cooperatives ( Phase and in

1) individuals(Phase II ) Phas I cons isted of voluntary land sales of Iandlo[dingsin excess of 605 aclreS

Project - grarian[9-0265 e(form Sector Support started in September1983 Its puLrpose was to increase the efficiency and( effectiveness oftie Agrar ian Reform lrog ram by acce](Olera t Ilng the land tlransfefr process andimprovig tie ability of the Government of lI Salvador to providte1e 1irIc a d ice I olrarill rtfor lIlll)veltql] l -iil s (oi(1 irr en1Iy the plo~jct wagt t i rcerSe tie mllriiatnarial capacity of agrarirn relfori CO pt l (-is ox 1)pi ip1 -ald 1I i va c I()I i live IIllill ill wI nIodIi rect Iv roIi ld to (Inl arrarriail relori lot a All) fundirg to tlitl)10(W I was $37 7 million and tie (overmlunt of F Sal vador contribution

was $2111 million The projects planned completion drte is l)ecember 311987

The Office of tihe prog raii

Regional Inispector General for Au litTegucigalpa made aresl ts arud it of lJSA[ I)1 Salvadors Agrarian Re form SectorSupport lroject 519-0265 The audit objective was to deterimine if theproject was having an impact on the Salvadoran Governmentsreform program Specifically the ardit evaluate1 the transfer

agrarianof landtitles and elfe( Iive ofthe use project resources l] mulitri covered$2102 million disbursed under the project as of June 30 1986

Te and it found that the titlinig process had ben slower than expec tedbut should Frombeuefit several recent reforms In a limited nmtber ofcases project resources were not being effectively used Progress hadbeen made since 1983 wh en we last reviewel this program The Governmentof H1 Salvador Irs iliitiaited several reforn-ms which col d expedite thetransferring and itling of land and deployment of relni i r(l Supportservices In lay and September L986 the Gove rnjmlelit of 4I1 Salvadorpassed legislation which (1) simpliftied the overall system of registeringproperties aind (2) ove rcame many previous hundlies to registeringproperties enicmrvbered 1) lions The GoverlMent of II Salvador has alsostreamlinel i ts titling ptrocedItures While these recent efforts weresignificant and should Ielp in achieving the project purposes Furtheraction needs to he in certain aspects oftaken the project

The audit showed that tire Governmient of HI Salvivdor was not meeting the projects land titling goals placing enugh manragers and accountantsthe agrarian reform coo)eratiyes properly accon iri for use of

on projectvehicles or fuil uitilizing an AlD)-funded colputer

As of -JilV 31 198 thre Goveriienrt of I-il Salvador iad registered eightPhase I lain it ites of a p1 lmied 317 and 7325 Phase II Li I les of aplannled 10000 (originally 400(00) to reg istred thehe by projectassi st ane conmplet i on late of lecemlber 31 1987 lre processes had movedl

-1ishy

slowly because of cumbersome titling procedures not adequately consideredat the start of the project and a lack of funds to compensateowners Itthe plamned number titles is prior

of not issued and registered bythe project completion date the reform beneficiaries may not obtainlegal tenure rights to tihe land -- a major goal of the project AI t houghstill seriously behil schedule the program working muchwas better thanin 1983 when we conducted out- Iast rev iew We recomimended tha t themiss ion )ob which willtai n - plan accomp I ish the titling targe ts of theproject The Mission agreed with tire recommendation

Accord i fig to the amended project ag reemlenlt signed June 30 1986 thereviscd goal for trained cooperative managers and accountants placedcooperatives was reduced from 280 with

to 250 of each A July 31 1980project status epor t inricated that only 137accountanlits anagers and 110were employed at Phase I CooperaLtives bit these figures werenot re l iable bOcause an accurate t rack i rig sys tern had not beentimplemented )ue to lack of coordination among responsible Gove rnment ofF al agencies manyalvador coope rative managers and accountaLts notreceived an adequate orielnttti(on on how to effectively had

anralge agrarianreform cooperatives The re alsowas some reluictance by the cooperativesto assirne the burden of paying the managers amri iccourntants Vi tlrloitcooperative acceptance and contuitv in thv ml)ploymen of trainedmanagers ands accoriritan ts prospectscooperat ires

for many Rlid e I agrarianto )ecomero economicrll v viable reform are greatly Inluced Werecomneldi ye opieart of an approl)r iat ori ol ta Li ol p og rai andstrerig threning incentives for cooperat ive nra nage rs ard accoumtants 1hission agreed with tLhe rcorrmenlati o

The project agreemre-nt set forthL guridaice for using and acco-irting for All)provided resources under tie proj(ect At Nationaltwo Finance Office forgrlarian IReforil) Lands crgiol offices visi ted we Found no internalcon trol proctdhi ns over tire 1s( of vehicles or F ie Immlporrs Veliclerepa i r x en)OiiSewere vrF igh aid imaV )e CorXCS iVC ID1 tole pooral n t prat ices the Office hadI ot ip I eer itd linistryiAgr ic(ultuire yoehicrle it iii z~i on giideli

of lo it reqiiire itserniployees nes 0 idto sign Imel Coupon iii ordher to acquire I il ellrllowas allrl rtnot imriplem nLting a lllir Lenaitl trol aidcon F() prog raim 4liinot sol icit e 0(ll010h)idis to oh Lain the best repair prices Withot intirial controlprocef res project m(11iprielrt anrd commo itLies become ulferahle to fraudwaste and abuse Additionally the lack of a ra inLt1MiCe on trol prorarandI lack of knowle 4e of sLaidard repair costs lead to excessive vehiclerepa i r expenses divertinrg finds the offrom goas tlre project lerecommnded iuplementa tion of appropr iate internal controlsmainterance am andrepair procedures The 1i ss i oil areed 14i tL tie

[rCOiiiiilei Od Li OIn

1II) guihel i ries s La t Lha [ tile coo rating gove 1-l~lwIit is respois i)l forle a o1q0aiIto use of c onnrod i Li es 1 -ced by All) A lso g0ood Iianageilrl(litpractice calls for deqato plann i ngarltonrtted wlhe dove lop ing tr modiffyinrg Ininforrmi tion systemi Oae of the stes) thit shoild he iicludedin tire development off any systm is the dteerminitio ofproduced by the system inclardi ri files for

oilt llIs t )en in)iut to other systems The

- ii shy

National Finance Office for Agrarian Reform lands computer has not beenable to read the magnetic tapes sent by the National Geographic InstituL itcontaininig data on properties of Phase Ill henefici aries This coniputerincoipatibility problem was (lue to poor systein planning and to a lack ofcommunicition andI coord inat ion between the two agencies lntilfinace oiffice improves the current information-transfer the

process which isnow time-consuning and error-prone it will not be able to fully utiliKzits coilipiter resoiurces to reduce delays i issuting titles to Ihas I11beneflici aries Ite recomilended obtaining assurance o1 initeragencycooperation and establishment of a tinetable for (evlopingdata an efficienttransfer michanism The I ission agreeNI with the recoiimendaltion btdiagreed ii ile1it cause They ated tlhat the systms were set 1pselrit ly Iat differe t Li imes for diFferent purposes ile InspectorGeneral s off ice re i tera ted tie need for advanced pl ning

Accord i to th project payer the Agri cultLral Sector Plann i riOfHI ceinistry of Agtricul tLre Data Process i rg Cenute was cha reed wi tlthe respons iil) lity for processing di ta furnished by agrarian sectorinstit luioslS Aliost three vers after receipt of t he necessary computerequiplment which was lrocured it h A[I) Loan funds it a Combined co-st$547000 ofthe (0)12 still had not imileiiLeitei n 2iiratet informationl systom to process Agrarian Rformii informLtion Acc(ording to one HSAll)ilKalvador off i ciI an informa tion systom had nover been i lment edmfibecause ol pas t ditfreinces hotween the heals of the institltions involved uhd tle (uririi ucrinlyik as to whatImade puhliclY infoiIjat ion should beavailahle 1uls governnei I hden io-isuiaking auid plain lingohfficia Is are lp rived of niededl i ntformHla tion We recomuiuended thatI DHlIhJISalvador oWtiain ecvi hvnie tihat tie (overnmnet of IiSalvador hadprepared I plfi which i lilh a tiie table ahrid Ow stLps and resourcesneeded to complet the infouimtion system to a i IiLtato the work or theqalvdoran Airarian Reform The Mission agreed witwL the recolmwildntation

-iii shy

AUDIT OF USAIDL SAIVA)ORS AGRARIAN

RIIK)Rm SIECTOR SUPPor PROJE(T NO 519-0265

TABLEi OF CONTEINTS

PART I - 1NROIJUcTION

A 3ackg round

P Audit Objectives and Scope

1

1i

1

PART I - RESULTS OF AI)IT

A Finlings and Recomendat ions

1 Titling Achievelivents Were Behind

Schedu e

2 Nore ianagers and Accountants

Needed to I Placed with Cooperatives and Tracke

3 Imp lemnting Agency Was Not Acconting for Its uso of Project-Funded Vehicles

4 Agencies Neeled to Make Better Use of Computer Capabilities

5 An Integirated Infonation Processing System ad Not Been implemented

3

4

4

6

8

10

12

B Compliance and Internal Controls 1

PART III - APPENDICES

A Mission Comments

B List of Recomminend ations

C Di stribuL ion 1ist

At fl) IT OF USAI1)EL SALVADORS AGRARIAN

REFORM SECTOR SUPPORT IROJFCT NO 519-0265

PN(r I - INAZODUCTION

A Background

In larch 1980 the Government of El Salvador (COS) instituted an agrarianreform program to transfer ownership of farmlands From large landholdersto those who worked the land The program was to be accomplished in three phases

-- Phase I cal led for the expropriation with compensation allof farmsof muore than 1235 acres The expropriated land was allocated to coopera ti ve ag r icL ttira I assoc ia t ions managed aml opera ted pr imar i lyby those wio had previously worked on the privately owned Farms

-- Phase I call-ed for the volunitary sale of la-nIdholdings in excess of605 acres b1 I)ec ember 1986 and possible expropriation of any sich excess holdings thereafter

-- Phase III provided For the transfer of ownership) of up to t73 acresto tillers who had previously rented the land from largo landholders

The A rar i an Reform Sec tLor tpl)orLt Project (519-0265) startel inSepteml)emr 1983 Its purpose was to increase the efficiency andeffectiveness of the Agrarian Reform Program )y accelerating the landtralnsfer process and the ofimlp rov i ability the Government of lISalvador t) provide FampSt serVi t aga rianICes a1m es o I reformhbeficiaries (o ico r ren t I y tie project was to increase the managerialcapaci tV of agrarian reforFml cooperatives aind eXpaIn(d private sec torinvestmen t in en terpries dir ctly related to agrarianthe reform

According to the project greellelt total AID funding for the project was$377 iillion anl de (overnhlont of HI Salvador contribution was $241million from fuds generated by ti sale of PL 480 Title I comiioditiesAs of lune 30 1)86 All) had dlislursed $172)800 From a $77 mill iongrant miM $1930390) from a $300 mi 11 ion loan The projects plannedcomplet ion date is )ecember 31 1)87

B udit Objectives and Scope

Ihe Office of the Regional In pector General For Audi tlTegucigallpa made a program lesull ts aidit f ISAI)lI Salvadors Agrarian Reform SectorSupport Project The audit objective was to determine if the project washaving all ilpact on the Salvadoran Government s agirari reform proIrall Specifically te valimted transferaud it the of 1l( titles and theffective use of project resoirces The atulit covered $2102 miill iondisbursedF liier the project as of June 30 19HX6 Audi t work wascondicted from AugustU 18 198(6 through September 19 1986

t

slowly because of cumbersome titling procedures not adequately consideredat the start of the project and a lack of funds to compensateowners Itthe plamned number titles is prior

of not issued and registered bythe project completion date the reform beneficiaries may not obtainlegal tenure rights to tihe land -- a major goal of the project AI t houghstill seriously behil schedule the program working muchwas better thanin 1983 when we conducted out- Iast rev iew We recomimended tha t themiss ion )ob which willtai n - plan accomp I ish the titling targe ts of theproject The Mission agreed with tire recommendation

Accord i fig to the amended project ag reemlenlt signed June 30 1986 thereviscd goal for trained cooperative managers and accountants placedcooperatives was reduced from 280 with

to 250 of each A July 31 1980project status epor t inricated that only 137accountanlits anagers and 110were employed at Phase I CooperaLtives bit these figures werenot re l iable bOcause an accurate t rack i rig sys tern had not beentimplemented )ue to lack of coordination among responsible Gove rnment ofF al agencies manyalvador coope rative managers and accountaLts notreceived an adequate orielnttti(on on how to effectively had

anralge agrarianreform cooperatives The re alsowas some reluictance by the cooperativesto assirne the burden of paying the managers amri iccourntants Vi tlrloitcooperative acceptance and contuitv in thv ml)ploymen of trainedmanagers ands accoriritan ts prospectscooperat ires

for many Rlid e I agrarianto )ecomero economicrll v viable reform are greatly Inluced Werecomneldi ye opieart of an approl)r iat ori ol ta Li ol p og rai andstrerig threning incentives for cooperat ive nra nage rs ard accoumtants 1hission agreed with tLhe rcorrmenlati o

The project agreemre-nt set forthL guridaice for using and acco-irting for All)provided resources under tie proj(ect At Nationaltwo Finance Office forgrlarian IReforil) Lands crgiol offices visi ted we Found no internalcon trol proctdhi ns over tire 1s( of vehicles or F ie Immlporrs Veliclerepa i r x en)OiiSewere vrF igh aid imaV )e CorXCS iVC ID1 tole pooral n t prat ices the Office hadI ot ip I eer itd linistryiAgr ic(ultuire yoehicrle it iii z~i on giideli

of lo it reqiiire itserniployees nes 0 idto sign Imel Coupon iii ordher to acquire I il ellrllowas allrl rtnot imriplem nLting a lllir Lenaitl trol aidcon F() prog raim 4liinot sol icit e 0(ll010h)idis to oh Lain the best repair prices Withot intirial controlprocef res project m(11iprielrt anrd commo itLies become ulferahle to fraudwaste and abuse Additionally the lack of a ra inLt1MiCe on trol prorarandI lack of knowle 4e of sLaidard repair costs lead to excessive vehiclerepa i r expenses divertinrg finds the offrom goas tlre project lerecommnded iuplementa tion of appropr iate internal controlsmainterance am andrepair procedures The 1i ss i oil areed 14i tL tie

[rCOiiiiilei Od Li OIn

1II) guihel i ries s La t Lha [ tile coo rating gove 1-l~lwIit is respois i)l forle a o1q0aiIto use of c onnrod i Li es 1 -ced by All) A lso g0ood Iianageilrl(litpractice calls for deqato plann i ngarltonrtted wlhe dove lop ing tr modiffyinrg Ininforrmi tion systemi Oae of the stes) thit shoild he iicludedin tire development off any systm is the dteerminitio ofproduced by the system inclardi ri files for

oilt llIs t )en in)iut to other systems The

- ii shy

National Finance Office for Agrarian Reform lands computer has not beenable to read the magnetic tapes sent by the National Geographic InstituL itcontaininig data on properties of Phase Ill henefici aries This coniputerincoipatibility problem was (lue to poor systein planning and to a lack ofcommunicition andI coord inat ion between the two agencies lntilfinace oiffice improves the current information-transfer the

process which isnow time-consuning and error-prone it will not be able to fully utiliKzits coilipiter resoiurces to reduce delays i issuting titles to Ihas I11beneflici aries Ite recomilended obtaining assurance o1 initeragencycooperation and establishment of a tinetable for (evlopingdata an efficienttransfer michanism The I ission agreeNI with the recoiimendaltion btdiagreed ii ile1it cause They ated tlhat the systms were set 1pselrit ly Iat differe t Li imes for diFferent purposes ile InspectorGeneral s off ice re i tera ted tie need for advanced pl ning

Accord i to th project payer the Agri cultLral Sector Plann i riOfHI ceinistry of Agtricul tLre Data Process i rg Cenute was cha reed wi tlthe respons iil) lity for processing di ta furnished by agrarian sectorinstit luioslS Aliost three vers after receipt of t he necessary computerequiplment which was lrocured it h A[I) Loan funds it a Combined co-st$547000 ofthe (0)12 still had not imileiiLeitei n 2iiratet informationl systom to process Agrarian Rformii informLtion Acc(ording to one HSAll)ilKalvador off i ciI an informa tion systom had nover been i lment edmfibecause ol pas t ditfreinces hotween the heals of the institltions involved uhd tle (uririi ucrinlyik as to whatImade puhliclY infoiIjat ion should beavailahle 1uls governnei I hden io-isuiaking auid plain lingohfficia Is are lp rived of niededl i ntformHla tion We recomuiuended thatI DHlIhJISalvador oWtiain ecvi hvnie tihat tie (overnmnet of IiSalvador hadprepared I plfi which i lilh a tiie table ahrid Ow stLps and resourcesneeded to complet the infouimtion system to a i IiLtato the work or theqalvdoran Airarian Reform The Mission agreed witwL the recolmwildntation

-iii shy

AUDIT OF USAIDL SAIVA)ORS AGRARIAN

RIIK)Rm SIECTOR SUPPor PROJE(T NO 519-0265

TABLEi OF CONTEINTS

PART I - 1NROIJUcTION

A 3ackg round

P Audit Objectives and Scope

1

1i

1

PART I - RESULTS OF AI)IT

A Finlings and Recomendat ions

1 Titling Achievelivents Were Behind

Schedu e

2 Nore ianagers and Accountants

Needed to I Placed with Cooperatives and Tracke

3 Imp lemnting Agency Was Not Acconting for Its uso of Project-Funded Vehicles

4 Agencies Neeled to Make Better Use of Computer Capabilities

5 An Integirated Infonation Processing System ad Not Been implemented

3

4

4

6

8

10

12

B Compliance and Internal Controls 1

PART III - APPENDICES

A Mission Comments

B List of Recomminend ations

C Di stribuL ion 1ist

At fl) IT OF USAI1)EL SALVADORS AGRARIAN

REFORM SECTOR SUPPORT IROJFCT NO 519-0265

PN(r I - INAZODUCTION

A Background

In larch 1980 the Government of El Salvador (COS) instituted an agrarianreform program to transfer ownership of farmlands From large landholdersto those who worked the land The program was to be accomplished in three phases

-- Phase I cal led for the expropriation with compensation allof farmsof muore than 1235 acres The expropriated land was allocated to coopera ti ve ag r icL ttira I assoc ia t ions managed aml opera ted pr imar i lyby those wio had previously worked on the privately owned Farms

-- Phase I call-ed for the volunitary sale of la-nIdholdings in excess of605 acres b1 I)ec ember 1986 and possible expropriation of any sich excess holdings thereafter

-- Phase III provided For the transfer of ownership) of up to t73 acresto tillers who had previously rented the land from largo landholders

The A rar i an Reform Sec tLor tpl)orLt Project (519-0265) startel inSepteml)emr 1983 Its purpose was to increase the efficiency andeffectiveness of the Agrarian Reform Program )y accelerating the landtralnsfer process and the ofimlp rov i ability the Government of lISalvador t) provide FampSt serVi t aga rianICes a1m es o I reformhbeficiaries (o ico r ren t I y tie project was to increase the managerialcapaci tV of agrarian reforFml cooperatives aind eXpaIn(d private sec torinvestmen t in en terpries dir ctly related to agrarianthe reform

According to the project greellelt total AID funding for the project was$377 iillion anl de (overnhlont of HI Salvador contribution was $241million from fuds generated by ti sale of PL 480 Title I comiioditiesAs of lune 30 1)86 All) had dlislursed $172)800 From a $77 mill iongrant miM $1930390) from a $300 mi 11 ion loan The projects plannedcomplet ion date is )ecember 31 1)87

B udit Objectives and Scope

Ihe Office of the Regional In pector General For Audi tlTegucigallpa made a program lesull ts aidit f ISAI)lI Salvadors Agrarian Reform SectorSupport Project The audit objective was to determine if the project washaving all ilpact on the Salvadoran Government s agirari reform proIrall Specifically te valimted transferaud it the of 1l( titles and theffective use of project resoirces The atulit covered $2102 miill iondisbursedF liier the project as of June 30 19HX6 Audi t work wascondicted from AugustU 18 198(6 through September 19 1986

t

National Finance Office for Agrarian Reform lands computer has not beenable to read the magnetic tapes sent by the National Geographic InstituL itcontaininig data on properties of Phase Ill henefici aries This coniputerincoipatibility problem was (lue to poor systein planning and to a lack ofcommunicition andI coord inat ion between the two agencies lntilfinace oiffice improves the current information-transfer the

process which isnow time-consuning and error-prone it will not be able to fully utiliKzits coilipiter resoiurces to reduce delays i issuting titles to Ihas I11beneflici aries Ite recomilended obtaining assurance o1 initeragencycooperation and establishment of a tinetable for (evlopingdata an efficienttransfer michanism The I ission agreeNI with the recoiimendaltion btdiagreed ii ile1it cause They ated tlhat the systms were set 1pselrit ly Iat differe t Li imes for diFferent purposes ile InspectorGeneral s off ice re i tera ted tie need for advanced pl ning

Accord i to th project payer the Agri cultLral Sector Plann i riOfHI ceinistry of Agtricul tLre Data Process i rg Cenute was cha reed wi tlthe respons iil) lity for processing di ta furnished by agrarian sectorinstit luioslS Aliost three vers after receipt of t he necessary computerequiplment which was lrocured it h A[I) Loan funds it a Combined co-st$547000 ofthe (0)12 still had not imileiiLeitei n 2iiratet informationl systom to process Agrarian Rformii informLtion Acc(ording to one HSAll)ilKalvador off i ciI an informa tion systom had nover been i lment edmfibecause ol pas t ditfreinces hotween the heals of the institltions involved uhd tle (uririi ucrinlyik as to whatImade puhliclY infoiIjat ion should beavailahle 1uls governnei I hden io-isuiaking auid plain lingohfficia Is are lp rived of niededl i ntformHla tion We recomuiuended thatI DHlIhJISalvador oWtiain ecvi hvnie tihat tie (overnmnet of IiSalvador hadprepared I plfi which i lilh a tiie table ahrid Ow stLps and resourcesneeded to complet the infouimtion system to a i IiLtato the work or theqalvdoran Airarian Reform The Mission agreed witwL the recolmwildntation

-iii shy

AUDIT OF USAIDL SAIVA)ORS AGRARIAN

RIIK)Rm SIECTOR SUPPor PROJE(T NO 519-0265

TABLEi OF CONTEINTS

PART I - 1NROIJUcTION

A 3ackg round

P Audit Objectives and Scope

1

1i

1

PART I - RESULTS OF AI)IT

A Finlings and Recomendat ions

1 Titling Achievelivents Were Behind

Schedu e

2 Nore ianagers and Accountants

Needed to I Placed with Cooperatives and Tracke

3 Imp lemnting Agency Was Not Acconting for Its uso of Project-Funded Vehicles

4 Agencies Neeled to Make Better Use of Computer Capabilities

5 An Integirated Infonation Processing System ad Not Been implemented

3

4

4

6

8

10

12

B Compliance and Internal Controls 1

PART III - APPENDICES

A Mission Comments

B List of Recomminend ations

C Di stribuL ion 1ist

At fl) IT OF USAI1)EL SALVADORS AGRARIAN

REFORM SECTOR SUPPORT IROJFCT NO 519-0265

PN(r I - INAZODUCTION

A Background

In larch 1980 the Government of El Salvador (COS) instituted an agrarianreform program to transfer ownership of farmlands From large landholdersto those who worked the land The program was to be accomplished in three phases

-- Phase I cal led for the expropriation with compensation allof farmsof muore than 1235 acres The expropriated land was allocated to coopera ti ve ag r icL ttira I assoc ia t ions managed aml opera ted pr imar i lyby those wio had previously worked on the privately owned Farms

-- Phase I call-ed for the volunitary sale of la-nIdholdings in excess of605 acres b1 I)ec ember 1986 and possible expropriation of any sich excess holdings thereafter

-- Phase III provided For the transfer of ownership) of up to t73 acresto tillers who had previously rented the land from largo landholders

The A rar i an Reform Sec tLor tpl)orLt Project (519-0265) startel inSepteml)emr 1983 Its purpose was to increase the efficiency andeffectiveness of the Agrarian Reform Program )y accelerating the landtralnsfer process and the ofimlp rov i ability the Government of lISalvador t) provide FampSt serVi t aga rianICes a1m es o I reformhbeficiaries (o ico r ren t I y tie project was to increase the managerialcapaci tV of agrarian reforFml cooperatives aind eXpaIn(d private sec torinvestmen t in en terpries dir ctly related to agrarianthe reform

According to the project greellelt total AID funding for the project was$377 iillion anl de (overnhlont of HI Salvador contribution was $241million from fuds generated by ti sale of PL 480 Title I comiioditiesAs of lune 30 1)86 All) had dlislursed $172)800 From a $77 mill iongrant miM $1930390) from a $300 mi 11 ion loan The projects plannedcomplet ion date is )ecember 31 1)87

B udit Objectives and Scope

Ihe Office of the Regional In pector General For Audi tlTegucigallpa made a program lesull ts aidit f ISAI)lI Salvadors Agrarian Reform SectorSupport Project The audit objective was to determine if the project washaving all ilpact on the Salvadoran Government s agirari reform proIrall Specifically te valimted transferaud it the of 1l( titles and theffective use of project resoirces The atulit covered $2102 miill iondisbursedF liier the project as of June 30 19HX6 Audi t work wascondicted from AugustU 18 198(6 through September 19 1986

t

AUDIT OF USAIDL SAIVA)ORS AGRARIAN

RIIK)Rm SIECTOR SUPPor PROJE(T NO 519-0265

TABLEi OF CONTEINTS

PART I - 1NROIJUcTION

A 3ackg round

P Audit Objectives and Scope

1

1i

1

PART I - RESULTS OF AI)IT

A Finlings and Recomendat ions

1 Titling Achievelivents Were Behind

Schedu e

2 Nore ianagers and Accountants

Needed to I Placed with Cooperatives and Tracke

3 Imp lemnting Agency Was Not Acconting for Its uso of Project-Funded Vehicles

4 Agencies Neeled to Make Better Use of Computer Capabilities

5 An Integirated Infonation Processing System ad Not Been implemented

3

4

4

6

8

10

12

B Compliance and Internal Controls 1

PART III - APPENDICES

A Mission Comments

B List of Recomminend ations

C Di stribuL ion 1ist

At fl) IT OF USAI1)EL SALVADORS AGRARIAN

REFORM SECTOR SUPPORT IROJFCT NO 519-0265

PN(r I - INAZODUCTION

A Background

In larch 1980 the Government of El Salvador (COS) instituted an agrarianreform program to transfer ownership of farmlands From large landholdersto those who worked the land The program was to be accomplished in three phases

-- Phase I cal led for the expropriation with compensation allof farmsof muore than 1235 acres The expropriated land was allocated to coopera ti ve ag r icL ttira I assoc ia t ions managed aml opera ted pr imar i lyby those wio had previously worked on the privately owned Farms

-- Phase I call-ed for the volunitary sale of la-nIdholdings in excess of605 acres b1 I)ec ember 1986 and possible expropriation of any sich excess holdings thereafter

-- Phase III provided For the transfer of ownership) of up to t73 acresto tillers who had previously rented the land from largo landholders

The A rar i an Reform Sec tLor tpl)orLt Project (519-0265) startel inSepteml)emr 1983 Its purpose was to increase the efficiency andeffectiveness of the Agrarian Reform Program )y accelerating the landtralnsfer process and the ofimlp rov i ability the Government of lISalvador t) provide FampSt serVi t aga rianICes a1m es o I reformhbeficiaries (o ico r ren t I y tie project was to increase the managerialcapaci tV of agrarian reforFml cooperatives aind eXpaIn(d private sec torinvestmen t in en terpries dir ctly related to agrarianthe reform

According to the project greellelt total AID funding for the project was$377 iillion anl de (overnhlont of HI Salvador contribution was $241million from fuds generated by ti sale of PL 480 Title I comiioditiesAs of lune 30 1)86 All) had dlislursed $172)800 From a $77 mill iongrant miM $1930390) from a $300 mi 11 ion loan The projects plannedcomplet ion date is )ecember 31 1)87

B udit Objectives and Scope

Ihe Office of the Regional In pector General For Audi tlTegucigallpa made a program lesull ts aidit f ISAI)lI Salvadors Agrarian Reform SectorSupport Project The audit objective was to determine if the project washaving all ilpact on the Salvadoran Government s agirari reform proIrall Specifically te valimted transferaud it the of 1l( titles and theffective use of project resoirces The atulit covered $2102 miill iondisbursedF liier the project as of June 30 19HX6 Audi t work wascondicted from AugustU 18 198(6 through September 19 1986

t

At fl) IT OF USAI1)EL SALVADORS AGRARIAN

REFORM SECTOR SUPPORT IROJFCT NO 519-0265

PN(r I - INAZODUCTION

A Background

In larch 1980 the Government of El Salvador (COS) instituted an agrarianreform program to transfer ownership of farmlands From large landholdersto those who worked the land The program was to be accomplished in three phases

-- Phase I cal led for the expropriation with compensation allof farmsof muore than 1235 acres The expropriated land was allocated to coopera ti ve ag r icL ttira I assoc ia t ions managed aml opera ted pr imar i lyby those wio had previously worked on the privately owned Farms

-- Phase I call-ed for the volunitary sale of la-nIdholdings in excess of605 acres b1 I)ec ember 1986 and possible expropriation of any sich excess holdings thereafter

-- Phase III provided For the transfer of ownership) of up to t73 acresto tillers who had previously rented the land from largo landholders

The A rar i an Reform Sec tLor tpl)orLt Project (519-0265) startel inSepteml)emr 1983 Its purpose was to increase the efficiency andeffectiveness of the Agrarian Reform Program )y accelerating the landtralnsfer process and the ofimlp rov i ability the Government of lISalvador t) provide FampSt serVi t aga rianICes a1m es o I reformhbeficiaries (o ico r ren t I y tie project was to increase the managerialcapaci tV of agrarian reforFml cooperatives aind eXpaIn(d private sec torinvestmen t in en terpries dir ctly related to agrarianthe reform

According to the project greellelt total AID funding for the project was$377 iillion anl de (overnhlont of HI Salvador contribution was $241million from fuds generated by ti sale of PL 480 Title I comiioditiesAs of lune 30 1)86 All) had dlislursed $172)800 From a $77 mill iongrant miM $1930390) from a $300 mi 11 ion loan The projects plannedcomplet ion date is )ecember 31 1)87

B udit Objectives and Scope

Ihe Office of the Regional In pector General For Audi tlTegucigallpa made a program lesull ts aidit f ISAI)lI Salvadors Agrarian Reform SectorSupport Project The audit objective was to determine if the project washaving all ilpact on the Salvadoran Government s agirari reform proIrall Specifically te valimted transferaud it the of 1l( titles and theffective use of project resoirces The atulit covered $2102 miill iondisbursedF liier the project as of June 30 19HX6 Audi t work wascondicted from AugustU 18 198(6 through September 19 1986

t

Audi it work inc Itided reviewing project tocumenta t ion at USAID)I-I Sa Ivadorand ( )l implementing agencies aiC1 interviewing ISAI)DliI Salvador and(OIIS project manage rs and officiais Site visits were itade to eightlol ariaii reforl cooperatives atd two regional offices of the NationalFinance Olffice for Phase III Agrarian Reform lands (FINAIA) Visits tocooperatives were based on random selections made Iby the auditors f loIthose cooperatives Iocated in accessi)le areas where io Fighting waslakinq lace l Ivlat ion of iterlal -ont I(ls o1sliiti Led to thosealfectin prob [em areas i dltii ied Ihy the aut(dit Withl tIis exception nuthee ld iSWt coidi IC Oc accringte CC ( to g(eeralI ly acce)ted governmentshy

auid itting s tantdards

We a Iso rev i ewed i sstes rai sed I a p rev iozs aud it ol the Ag rar ian Reform program (Audit Report No 1-519-84-2 January 18 1984)

22shy

ALIR)IT OF USAIIEL SALVA)ORS AGRARIAN

REFORM SECTOI SUPPORT PROJECT NO 519-0265

Ptr [I - RI-SILTS OF AUDIT

The audit found that the titling process had been slower than expectedI)0 t should benefit From several recent reforms In a limited number ofcases project resources were not bein effectiVCly used Progressbeen made since 1983 when we last reviewel this program had

The Governmentof El Salvador his initiated several reforms which could expediteo tietransferring andl titling 0f land and deploymen t of reiireI Supportselv ices

In lay ln(I September 1986 the Governmen t of HI alvador passedlegislation which (1) simplified the overall systen of registeringproperties amd (2) overcame many previous hurdlles to registe ringproperties encumbered by I iens The Goverrnment of l Salvador has alsostreaml iuned its titl ing proced res li ile these FeCLCe L 1o t sigrnificant aid should help in aclhieving the projec I purposes furtheraction needs to he taken in certailn aspects of the project

The audI it showed that the (01-- (1) was not meetiju the projects landtit] ing goals (2) hal not been successful in placing and maintainingenoil11 trailned 1irinagers arnd accoIritan ts to manage the ag rarian reformcooperai tives (3) was not prope -Iy accounting for the use of FINATAsproject-fnded veliicles and (1) was not fun ly itil izinrg the capabilitiesof AI)- funded conipuitar systems

The report reconiemnds that IUISA)I- Salvador take appropriate steps toensure the Governnen t of El Sal vador effect i vely addresses timshortcoming~s listed in this report

-

A FindigVs and Recorrurend t iois

I Ti t ling Achievemeits Were Behind Schedule

As of July 31 1986 the OlFS had registered eight Phase I land titles of a planned 317 and 7325 Phase [Il titles of a planned 10000 (originally10000) to be reg itered by the project assistance comipetion date of )ecember 31 1987 The processes had moved slowly because of cumbersometitling procedures not adeqtuately considered at the start of the projectand a lack oF funds to competsate prior owners If the planned number oftitles is not issutedt and reg istered by the project completion date thereform benefici aries may not obtain legal tenure riglhts to the land -- aitajor goalI )F the iproject Although still seriously behind schedule the program was workin mtuch better than in 1983 when we condlcted our last rev iew

Recommendation No I

We recommend that IISAMIlI SalIador obtain indicating from the Goverlmentof H1 Salvador a revised implementation pl an indicating the steps and resources necessary to accompl ish the titl ing targets by the projectscomple tion date

Di sciss ion

The projects original goal was to transfer 315 definitive Phase I titleall of wlich would be registered by the Land Registry Office 1 and45000 def initive Phase IIl titles of which would410000 be registeredThese goals were modif ied in July 1986 based on a revised project pal)erThe change called for the transfer and registraLion of 317 defin iti vellase I titles and the issuance of 4500) definitive Phgase IT titlesof which 10000 wouIl be registered by December 1987

As of lully 31 1986 after All) dishursements of rtore ttan 124 milliontihe O had irocessod 161 definitive Phase I titles of which eighrt Iadbeen registered and 1353( detinitive Phase [Il titles of which 7325had been registoered Al IIproperty sub jc t to Phase hadI beenexpropriatedo Almost 200(000) formerly landless p ersons organized into317 coopera t i ves enjoy at least u sufructuary rights to some of ElSalvador s I imi te land resouIrces

A tt nbet of Factors lelayed the t it l ing process Salvadoran 1awprevented the Land Registry Off ice from registering properties which hadliens recorded aga inst them There were ntmerous difficulties in accurato iy marki ng Iarid botiritlaries (Ie to poor property records aidbecauirse sortie p roper t ies we e Ioca ted zoneosiln where conf l ic t wasoCCurr ing FlIids to cOttlpensatt ormier owtiers for thre i r j)roi)OFi y we re Ir scarce Furtlermore nei ther the Salvadoran Institlte for Ag rari al

1 A reogistered title confers legal lropietorship of the land

-4shy

Transformuation (ISTA) the entity tasked with processing Phase I titlesnor the National Finance Office for Phase IlI Agrarian Reform Lands(FINATA) responsible for processing Phase IL titles were adequatelyprepared to handle this complicated task At the time the titlingprocess began neither organization realized fully what theirresponsibilities would entail not

The system used to register titles hadbeen upda ted s ince the 1890s therefore it was archaic and ex t remle ly cllibersorle

These problems had slowed thre LitLing process but actions have beentaken to resolve mary of them For examriple a liens law was passed inSeptember 1986 to allow titles to be registered even if there are liensagainst the proper ty Also a property regist ration law passed in May1986 simplified tie title registration process by having the titleregiste redi under the propertys identification number rather than theowners name FINATA has recontly taken steps to reorganize andstreamline its processing system in order to speed up the titling processand the system is being compr terized so as to operate more efficientlyand accutrately ISTA was reorganized in late 1985) to focus principallyon laid acquisi t ion anl t ransfer Al though rnwhcl remains to e (honecomplet the titlinrig process many

to of tampe major barriers Wae now boniaddl-esse None theless 1JSAI1)l1 Salvador needs to exercise closeoversighIt with regard to ISTA and FINAIA to ensure that tie i LI ingcomponent of the project progresses as planned If tie planmed number oftitles is not issno(I the reform beneficiaries will not obtain legaltenure rights by project completion -- a major goal of the project

Manhqgerri t Comrnyits

The Mission agreed with the recommendation

-5shy

2 More Manaeers and AccounL-ants Needed to be Placed with (ooperIti ves adl lracked

According to the amended project agreement signed June 30 1986 therevised goal for trained cooperative managers and accountants placed withcooperatives was reduced oim 280 to 250 of each A Jly 31 1986 p rojec t sta tus repor I indica ted tha t only 137 managers and 140 accountants were employed at Phase I cooperatives bit these figures were not rel iable because an accurate tracking s)s tern had not beenimplemented DIue to lack of coordination among responsible GO ESagencies many cooperative ianagers arid accountan ts had not received anadequate orientation on how to effecti yely manage ag rarian reformcooperatives There was also some reluctance by the coopera tives to assume the burden of paying the managers and accountants iithout cooperat ive acceptance and in thecontinu ity employment of trained managers and accountan ts prospects [or many Phase I agrarian reforicooperatives to become economically viable are greatly reduced

Recommendation No 2

We recommend that USAII)-I Salvador

a) obtain from tire Goveriren t of IkSalvador a revised imp lementation p lain wh ich states the steps and resources necessary to provideadequate orientation for cooperative managers and accountants

b) ohtain evidence that an effective tracking system has been developedto ascertain tihe number awl location of manaer-s ald accouitants arid the type of trainingi hey have received and

c) review and analyze tihe constraints to placing anw keeping managersand accoutants employed by tie cooperatives and explore options forincentives which would correct their currently unsa ti sfac to ryperformance

Disrss ion

Amendment No 7 to the project agreement dated June 30 1986 reducedthe project goal for trained managers and accountants placed with Phase I cooperatiyes from 280 to 250

July 31 1986 projec sLatLi report irdicated that 137 cooperative managers and 110 accountants were employed at Phase I coopera LivesHowever the FSAII) technician in charge of this segment informed us thatthe iliss i had no way of kncwing if the figures were accurate b)ecaurse arel ihle (racking system did not exist Ilialso said turniover amongnaae-- maid icconiirts was high ard the momeitat there was no way of

stayig crtrent as to the tuirrnver rate For example we visitt eightcooperatives Mhat iqli -I1))0)5i to have resident 11111ia eirs ha ed o1 alisting provided by ISAII)lil Salvador hut ir half throse cases no manager was wo ig at the coopcruitive

- 6shy

The USAID) technician cited several difficulties in implementing thetraining segment Fi r t the responsibility for recruiting and placing111li O S t Iraald iii dCCotuI Litan ts frOIm 1 Institute for Agrarian Transformation (ISTA) to

wi s transfer red the alvadoranl die Ministry ofAgriculture because of coordination problems between the two entities andlEV s ack of capacity to implement both this nd its land transferactivity )oirinl the transition period wlich lasted a)ouit a year very

litt le recruim11111 t arid a (oneI anCoellnt was

Second ho project in ulerestimated the difficulties inivolved wviththe mangemen t of a coope rat i ve tliforFeseelI was te high inumover ofshymanagers iiid IccoIin talits (ile seVer-alto causes such as CooperativesrelcI tanice to cover the Ilanaiers Sa tary (even wi tiha subs idy prov i ded bythe project duringo the f ii st [hre years) or tle economic insecurityexperienced by niagers whose salary is subsidied thez()d by

Third tllere were ilsLtiltinnal arrangements between ISTA and the Centerfor gricul ti ral Trainilg to proyvide managers and accotinants wi thtrainiL to thei toorient theagrarian reform and to landle problems1111ique1 to coocra LiVe mnail mentL IlOweVer [ies e arianlimel ts were neverinitiated due to a lack of coordimtion between tu geli In April1980 the Ministry of Agricu Lres Regional Offices startd to providethis training t) coo)eraiv e iianriagers and accouiintaits on an ad hocbasis [hiis iWi t iatiie beshouldl aqgress iye I y i)irsued amnd if successfll instittionilizedI into o formal training program

Witlhout cooperative acceptance and continity in the employlienttrained managers aid accotiitIs the chances for ially

of of the agmarian

reform cooperatLi ves to become economica 11 y viable are greatly reduced

Mangemen t Commein t s

The Mission commented that recouridation NW 2(b) should be deletedbecaise ui adeqiato trackitng system has beei developed The Missions198 7 act ion plans will contain provisions for its implementation

I)[ Commen ts

Based on Sle Missions comments recommendation No 2(b) is closed upon issu1alce of the report

-7shy

3 ImplementiUng Agency Was Not Accounting for Its Use of Project-FundedVehicles

The project agreement set forth guidance for using and accounting for All)provided resources under the project At two FINATA regional oFficesvisited we found no internal control procedures over the use of vehicles or fuel coupons FINATAs vehicle repair expenses were very high and maybe excessive Due to poor management practices FINATA hadimplemented the Ministry of Agriculture vehicle uitilization

not giidelines

nor did it require its employees to sign fuel coupons in order to acquirefuel F[NATA management was not implementing a main tenance control program and did rot solicit enough bids to obtain the best repairprices Without internal control procedures project equipment andcommodities become vulnerable to fraud waste avid abuse Additionallythe lack of a maintenance control program and lack of knowledges Linda rd repa i r cos ts Iead to excess ive veh i cI repa ir expeinses

of

diverting funds from the goals of tihe project

Recommrrendation No 3

We recommend that ISAIslI SalIvador obtain evidence that the National Finance Office for Ag rarian Reform Land1s

a) has impteImented internal control procedures for boti vehicle use and fuel ptrchases and

b) has implemented maintenance control procedures and instituted a system to o)tain the best prices for vehicle repair work

Discuss ion

Section B2 (a) of the Staiuard Provisions to the project aLcement states thit the Government of HL Salvaor will carry oit the Project withrdue diligence ard efficiency in conformity witi sord technicalfinancial and practices 5(a)management Sectior of the StandarIPro visi )IIS states tlia t any resOtrces F[i rianampce llrdr t ass istaiice wi IIbe tevotel to tire p)roject ain tlierealtutr will be rist so as to furtherthe objectivyes sought in carrying onut the p~rojecct Additionally Section BS(h) states tiat the GikS will nairitiin in accordance witih generallyaccepted accointing primciples and prac tices consislontly applied booksand records rel a ti g to the project adeqra L to sihow wi thou tI imita iion tire recO ipt and use o goods and serv ices acqur i r(d wi tl All) ass is tance

Vehr ic I ose - The ranat~er at FINAIA s Sar L rlia Regi ora I Oft ice s ta ted that le did not mailLi in ili rnal coitrol records oil velricle use liesaid tUilat vehicles were ofteir Ised oIn weekerih )) mpl oyees to condut bulsiness was wi y corIbit tirre in of- tloll inr per -onal sise of vehiclesCon trol of veiicles wa (Y res onsibili ty of- tie persons i)laced iiicharge of them A weekly al ivity report was prepar(d whicr showed whereFINATA emrp loyees to arid the type ofwere go hlrii(ne tie v were to t raursat llowever ac tul II CCOlrrp I ishirmr iits were not rel)or tel Tiierefore

-8 shy

there was no way of determining what had actually beenl (lone with tirevehicle The manager at FINATAs La Libertad Regional Office also stated HIat Ie did not matinttin initernal control records cver vehicle use Even if he had records lie would not Ihave been able to monitor two of his three velr icles becauise of broken odometers

Although vehicle control Iitilization guidelines were sent to FINATA iliSeptember 1981 by the Ministry of Agriculture the guidelines were noti up I emen td by FINATA management At FINATA headquarters and the regional offices we were told that FINATA efployees presenting fuel coupons to serv ice s ta Iions were not required to vouch for their useFINATA managers admitted it was possible for anyoine to use a FINATA fuel coupon for any purpose withou t fear of detection In 1985 USAII)IlSalvador management evaluated F[NATA motor fuel purchases From Februarythroulgh lMecember FINATA purchased 15000 gallons of gasoline and 3000 gallons of liespl Accord inhg evaliuat (lto the io hp fuel purchases equa ted to travellinjg about 29 million kilometers (kim) This aroiunt of travel considering the size Hl Salvador asmall of raised Lltstion as to the proper rise and con t rol over file t BotI si tlai ions qere (lie to l)-o manlagemernit priactices ol part FINAIA headIqltui Itersthe of officials

Repair losts FINIA vehiri ul) air expenses appeareod excesqive FINAIA record s shrowed thiat in 1985 $117931 lad Roe spentl ii rlpa iirs to maintain o2 pr~oject average costvehicl-s an of $2380per velhicle Il a di5c(1s5 ion wilh FINATA i anAgemenorit brot to) i tonit was hlri rtnttt tla ttYre organ izat inI liarhd iniplenui a lltelnacllce progran aridriot ted iWIi cltroI Iechar ic s-hop price lists were irot oh t ai ned il order to d(terennlille how much repair whdrops lould he Lna rgin

tin terra I coil t rol Iprocettinhs ho dI rec 1ullid1)1-oj ec t eqn ipuen I anrl]comimnod ities Cro hoctt lrbe oIin vtlIIera Ie to fraid was te arI id ablse Add it iona lIy thre lack of a i ntenrrnc(( control p)rogram anld tire lack of knowledge of tihe Icost of couildresonalIe repaiS lal to excessive funs being expended for vel U loe rpi r Those fluids coi I heInmore appro)riately pent t i the gotrisme riq of tire project It slhould be

oiw ItIaSAI1) tlvador had initiatd mnonitor iii wnTor nveessarv ilit FINATA vehicle ise expenses

p)ointed i ila I illllilgilerll lit action to

MIi ssi omimirieirts

The Missi(n ag reed withi tie recommendation

9shy

4 Agencies Needed to Make Better Use of Computer Capabilities

All) guidelines state that the cooperating government is responsible forthe adequate use of commodities financed by All) Also good managementpractice ca3lls for adequate plaining when developing or modifying anautomated inforiation system (AIS) One of the steps that should beincluded i the develo)ment of any AIS is the determ inition of outputs to be p-oduced I)y t1c systl in cluding [files for inpuit to olier systemsihe Na tional Finance Office for Agrarian Reformr Inaills (IFINATAs) COIflpul tiot haS not been abl e to read the magnet ic tapes sen t by theNational Ieograplic Instituite (IGN) containing dati on properties ofPhase Ill benef iciries Iis computer incompatibility problem was due to poor system planning and to aI lack of corltrmictixi and coordinationl be tween I (N and FINATA intil tINAIA and [(N improve tihe current i forArt ion-transfer process wh i ch is now Li1e-constllrlillg ar I orIol -i)ro it FINAT woi II not b)e abIeo to lul ly 1t1I 1ize i t computerresources to rediiuce delays in I 5 iing titles to Phase ll beneficitaries

Recomlleri lt ion No

e recoilililid that I DHIlil SNrtlvador

a) obtain(l ci mni ooliaisri ic f die tiorn romti Ch ierrirenorl I Salvaidor tlaltie Nitional IIirniince Office for Agrarian Refori Laids olni Natiornal(eog raplhic Irs-it u iill inc rease tlieir level of corr niciI(ation and will join eflorts to deorlirnii the best wiy to successflly transfer dti bet wen ISe two c(omputr systrlrS arin

b) ohtain ain accep~table t irrtarxle for establ ish ing a )rocedure for tr insferii ring ita via coi tti rI illunretic Li p1)0 betweeni Nat iorna l Geogramphic in-titte aid National l Fiiance Office for Agrarian Reforri landW

D~iscuiss ioni

Thii slnrd(lprl)rovis ions to the i)roject agreermenrlt Irri(Ier SucLio(a 8 2 Statetliat t (overn reit of lI alvador will carry ()lit Lie Project or cause it to be Carried out with dii e diligence andl etliciency in conformrritywi ti souirrd tcirri icalt 1irrar ial and ilrariagelrri t prac ti ces aril iii (0iIf orlrli t v wi Lh tluire l cirrllrmen t s pliris speci fications corilracLssche(iiles OF 1tl04 arrnirgee(nlts aii(1 wi tI i ioli f-icit ions there in ipprol by A I li pil silar t Ito tth is g rclr(r) le Also one of the -stepstLia sli)ld ) ri liided in tIre developurri t ot an AIS is tire dteriiilatimiof outpuLts to be prodiced )) the systemir inmcl(iding files for input in to o thr Sy Irrsm(

1TN pre)aires coirputeri zed data of property doscriptions which it thenriransri ts to FINATA for processiig itio tit los for the Phiase Ill agrarian

refor1rr boiicficiaries IHowever FINAIA was ile 1 to uSe its corplli toicipal) ilities to eimal the coiitorized aril desc riti(tior rita prepred b)[IN istead FINAI4 was lpl icatinrg work already done by IGN byrel)rocess i iig tle iiforimation The end rsr I L tas il ief ci ient Luse ofexpensi ve cOili r resouirces uli delays in issti ing dWfini iiti i toLi LIes Phase Ill beneficiaries

- 10 shy

ALIR)IT OF USAIIEL SALVA)ORS AGRARIAN

REFORM SECTOI SUPPORT PROJECT NO 519-0265

Ptr [I - RI-SILTS OF AUDIT

The audit found that the titling process had been slower than expectedI)0 t should benefit From several recent reforms In a limited number ofcases project resources were not bein effectiVCly used Progressbeen made since 1983 when we last reviewel this program had

The Governmentof El Salvador his initiated several reforms which could expediteo tietransferring andl titling 0f land and deploymen t of reiireI Supportselv ices

In lay ln(I September 1986 the Governmen t of HI alvador passedlegislation which (1) simplified the overall systen of registeringproperties amd (2) overcame many previous hurdlles to registe ringproperties encumbered by I iens The Goverrnment of l Salvador has alsostreaml iuned its titl ing proced res li ile these FeCLCe L 1o t sigrnificant aid should help in aclhieving the projec I purposes furtheraction needs to he taken in certailn aspects of the project

The audI it showed that the (01-- (1) was not meetiju the projects landtit] ing goals (2) hal not been successful in placing and maintainingenoil11 trailned 1irinagers arnd accoIritan ts to manage the ag rarian reformcooperai tives (3) was not prope -Iy accounting for the use of FINATAsproject-fnded veliicles and (1) was not fun ly itil izinrg the capabilitiesof AI)- funded conipuitar systems

The report reconiemnds that IUISA)I- Salvador take appropriate steps toensure the Governnen t of El Sal vador effect i vely addresses timshortcoming~s listed in this report

-

A FindigVs and Recorrurend t iois

I Ti t ling Achievemeits Were Behind Schedule

As of July 31 1986 the OlFS had registered eight Phase I land titles of a planned 317 and 7325 Phase [Il titles of a planned 10000 (originally10000) to be reg itered by the project assistance comipetion date of )ecember 31 1987 The processes had moved slowly because of cumbersometitling procedures not adeqtuately considered at the start of the projectand a lack oF funds to competsate prior owners If the planned number oftitles is not issutedt and reg istered by the project completion date thereform benefici aries may not obtain legal tenure riglhts to the land -- aitajor goalI )F the iproject Although still seriously behind schedule the program was workin mtuch better than in 1983 when we condlcted our last rev iew

Recommendation No I

We recommend that IISAMIlI SalIador obtain indicating from the Goverlmentof H1 Salvador a revised implementation pl an indicating the steps and resources necessary to accompl ish the titl ing targets by the projectscomple tion date

Di sciss ion

The projects original goal was to transfer 315 definitive Phase I titleall of wlich would be registered by the Land Registry Office 1 and45000 def initive Phase IIl titles of which would410000 be registeredThese goals were modif ied in July 1986 based on a revised project pal)erThe change called for the transfer and registraLion of 317 defin iti vellase I titles and the issuance of 4500) definitive Phgase IT titlesof which 10000 wouIl be registered by December 1987

As of lully 31 1986 after All) dishursements of rtore ttan 124 milliontihe O had irocessod 161 definitive Phase I titles of which eighrt Iadbeen registered and 1353( detinitive Phase [Il titles of which 7325had been registoered Al IIproperty sub jc t to Phase hadI beenexpropriatedo Almost 200(000) formerly landless p ersons organized into317 coopera t i ves enjoy at least u sufructuary rights to some of ElSalvador s I imi te land resouIrces

A tt nbet of Factors lelayed the t it l ing process Salvadoran 1awprevented the Land Registry Off ice from registering properties which hadliens recorded aga inst them There were ntmerous difficulties in accurato iy marki ng Iarid botiritlaries (Ie to poor property records aidbecauirse sortie p roper t ies we e Ioca ted zoneosiln where conf l ic t wasoCCurr ing FlIids to cOttlpensatt ormier owtiers for thre i r j)roi)OFi y we re Ir scarce Furtlermore nei ther the Salvadoran Institlte for Ag rari al

1 A reogistered title confers legal lropietorship of the land

-4shy

Transformuation (ISTA) the entity tasked with processing Phase I titlesnor the National Finance Office for Phase IlI Agrarian Reform Lands(FINATA) responsible for processing Phase IL titles were adequatelyprepared to handle this complicated task At the time the titlingprocess began neither organization realized fully what theirresponsibilities would entail not

The system used to register titles hadbeen upda ted s ince the 1890s therefore it was archaic and ex t remle ly cllibersorle

These problems had slowed thre LitLing process but actions have beentaken to resolve mary of them For examriple a liens law was passed inSeptember 1986 to allow titles to be registered even if there are liensagainst the proper ty Also a property regist ration law passed in May1986 simplified tie title registration process by having the titleregiste redi under the propertys identification number rather than theowners name FINATA has recontly taken steps to reorganize andstreamline its processing system in order to speed up the titling processand the system is being compr terized so as to operate more efficientlyand accutrately ISTA was reorganized in late 1985) to focus principallyon laid acquisi t ion anl t ransfer Al though rnwhcl remains to e (honecomplet the titlinrig process many

to of tampe major barriers Wae now boniaddl-esse None theless 1JSAI1)l1 Salvador needs to exercise closeoversighIt with regard to ISTA and FINAIA to ensure that tie i LI ingcomponent of the project progresses as planned If tie planmed number oftitles is not issno(I the reform beneficiaries will not obtain legaltenure rights by project completion -- a major goal of the project

Manhqgerri t Comrnyits

The Mission agreed with the recommendation

-5shy

2 More Manaeers and AccounL-ants Needed to be Placed with (ooperIti ves adl lracked

According to the amended project agreement signed June 30 1986 therevised goal for trained cooperative managers and accountants placed withcooperatives was reduced oim 280 to 250 of each A Jly 31 1986 p rojec t sta tus repor I indica ted tha t only 137 managers and 140 accountants were employed at Phase I cooperatives bit these figures were not rel iable because an accurate tracking s)s tern had not beenimplemented DIue to lack of coordination among responsible GO ESagencies many cooperative ianagers arid accountan ts had not received anadequate orientation on how to effecti yely manage ag rarian reformcooperatives There was also some reluctance by the coopera tives to assume the burden of paying the managers and accountants iithout cooperat ive acceptance and in thecontinu ity employment of trained managers and accountan ts prospects [or many Phase I agrarian reforicooperatives to become economically viable are greatly reduced

Recommendation No 2

We recommend that USAII)-I Salvador

a) obtain from tire Goveriren t of IkSalvador a revised imp lementation p lain wh ich states the steps and resources necessary to provideadequate orientation for cooperative managers and accountants

b) ohtain evidence that an effective tracking system has been developedto ascertain tihe number awl location of manaer-s ald accouitants arid the type of trainingi hey have received and

c) review and analyze tihe constraints to placing anw keeping managersand accoutants employed by tie cooperatives and explore options forincentives which would correct their currently unsa ti sfac to ryperformance

Disrss ion

Amendment No 7 to the project agreement dated June 30 1986 reducedthe project goal for trained managers and accountants placed with Phase I cooperatiyes from 280 to 250

July 31 1986 projec sLatLi report irdicated that 137 cooperative managers and 110 accountants were employed at Phase I coopera LivesHowever the FSAII) technician in charge of this segment informed us thatthe iliss i had no way of kncwing if the figures were accurate b)ecaurse arel ihle (racking system did not exist Ilialso said turniover amongnaae-- maid icconiirts was high ard the momeitat there was no way of

stayig crtrent as to the tuirrnver rate For example we visitt eightcooperatives Mhat iqli -I1))0)5i to have resident 11111ia eirs ha ed o1 alisting provided by ISAII)lil Salvador hut ir half throse cases no manager was wo ig at the coopcruitive

- 6shy

The USAID) technician cited several difficulties in implementing thetraining segment Fi r t the responsibility for recruiting and placing111li O S t Iraald iii dCCotuI Litan ts frOIm 1 Institute for Agrarian Transformation (ISTA) to

wi s transfer red the alvadoranl die Ministry ofAgriculture because of coordination problems between the two entities andlEV s ack of capacity to implement both this nd its land transferactivity )oirinl the transition period wlich lasted a)ouit a year very

litt le recruim11111 t arid a (oneI anCoellnt was

Second ho project in ulerestimated the difficulties inivolved wviththe mangemen t of a coope rat i ve tliforFeseelI was te high inumover ofshymanagers iiid IccoIin talits (ile seVer-alto causes such as CooperativesrelcI tanice to cover the Ilanaiers Sa tary (even wi tiha subs idy prov i ded bythe project duringo the f ii st [hre years) or tle economic insecurityexperienced by niagers whose salary is subsidied thez()d by

Third tllere were ilsLtiltinnal arrangements between ISTA and the Centerfor gricul ti ral Trainilg to proyvide managers and accotinants wi thtrainiL to thei toorient theagrarian reform and to landle problems1111ique1 to coocra LiVe mnail mentL IlOweVer [ies e arianlimel ts were neverinitiated due to a lack of coordimtion between tu geli In April1980 the Ministry of Agricu Lres Regional Offices startd to providethis training t) coo)eraiv e iianriagers and accouiintaits on an ad hocbasis [hiis iWi t iatiie beshouldl aqgress iye I y i)irsued amnd if successfll instittionilizedI into o formal training program

Witlhout cooperative acceptance and continity in the employlienttrained managers aid accotiitIs the chances for ially

of of the agmarian

reform cooperatLi ves to become economica 11 y viable are greatly reduced

Mangemen t Commein t s

The Mission commented that recouridation NW 2(b) should be deletedbecaise ui adeqiato trackitng system has beei developed The Missions198 7 act ion plans will contain provisions for its implementation

I)[ Commen ts

Based on Sle Missions comments recommendation No 2(b) is closed upon issu1alce of the report

-7shy

3 ImplementiUng Agency Was Not Accounting for Its Use of Project-FundedVehicles

The project agreement set forth guidance for using and accounting for All)provided resources under the project At two FINATA regional oFficesvisited we found no internal control procedures over the use of vehicles or fuel coupons FINATAs vehicle repair expenses were very high and maybe excessive Due to poor management practices FINATA hadimplemented the Ministry of Agriculture vehicle uitilization

not giidelines

nor did it require its employees to sign fuel coupons in order to acquirefuel F[NATA management was not implementing a main tenance control program and did rot solicit enough bids to obtain the best repairprices Without internal control procedures project equipment andcommodities become vulnerable to fraud waste avid abuse Additionallythe lack of a maintenance control program and lack of knowledges Linda rd repa i r cos ts Iead to excess ive veh i cI repa ir expeinses

of

diverting funds from the goals of tihe project

Recommrrendation No 3

We recommend that ISAIslI SalIvador obtain evidence that the National Finance Office for Ag rarian Reform Land1s

a) has impteImented internal control procedures for boti vehicle use and fuel ptrchases and

b) has implemented maintenance control procedures and instituted a system to o)tain the best prices for vehicle repair work

Discuss ion

Section B2 (a) of the Staiuard Provisions to the project aLcement states thit the Government of HL Salvaor will carry oit the Project withrdue diligence ard efficiency in conformity witi sord technicalfinancial and practices 5(a)management Sectior of the StandarIPro visi )IIS states tlia t any resOtrces F[i rianampce llrdr t ass istaiice wi IIbe tevotel to tire p)roject ain tlierealtutr will be rist so as to furtherthe objectivyes sought in carrying onut the p~rojecct Additionally Section BS(h) states tiat the GikS will nairitiin in accordance witih generallyaccepted accointing primciples and prac tices consislontly applied booksand records rel a ti g to the project adeqra L to sihow wi thou tI imita iion tire recO ipt and use o goods and serv ices acqur i r(d wi tl All) ass is tance

Vehr ic I ose - The ranat~er at FINAIA s Sar L rlia Regi ora I Oft ice s ta ted that le did not mailLi in ili rnal coitrol records oil velricle use liesaid tUilat vehicles were ofteir Ised oIn weekerih )) mpl oyees to condut bulsiness was wi y corIbit tirre in of- tloll inr per -onal sise of vehiclesCon trol of veiicles wa (Y res onsibili ty of- tie persons i)laced iiicharge of them A weekly al ivity report was prepar(d whicr showed whereFINATA emrp loyees to arid the type ofwere go hlrii(ne tie v were to t raursat llowever ac tul II CCOlrrp I ishirmr iits were not rel)or tel Tiierefore

-8 shy

there was no way of determining what had actually beenl (lone with tirevehicle The manager at FINATAs La Libertad Regional Office also stated HIat Ie did not matinttin initernal control records cver vehicle use Even if he had records lie would not Ihave been able to monitor two of his three velr icles becauise of broken odometers

Although vehicle control Iitilization guidelines were sent to FINATA iliSeptember 1981 by the Ministry of Agriculture the guidelines were noti up I emen td by FINATA management At FINATA headquarters and the regional offices we were told that FINATA efployees presenting fuel coupons to serv ice s ta Iions were not required to vouch for their useFINATA managers admitted it was possible for anyoine to use a FINATA fuel coupon for any purpose withou t fear of detection In 1985 USAII)IlSalvador management evaluated F[NATA motor fuel purchases From Februarythroulgh lMecember FINATA purchased 15000 gallons of gasoline and 3000 gallons of liespl Accord inhg evaliuat (lto the io hp fuel purchases equa ted to travellinjg about 29 million kilometers (kim) This aroiunt of travel considering the size Hl Salvador asmall of raised Lltstion as to the proper rise and con t rol over file t BotI si tlai ions qere (lie to l)-o manlagemernit priactices ol part FINAIA headIqltui Itersthe of officials

Repair losts FINIA vehiri ul) air expenses appeareod excesqive FINAIA record s shrowed thiat in 1985 $117931 lad Roe spentl ii rlpa iirs to maintain o2 pr~oject average costvehicl-s an of $2380per velhicle Il a di5c(1s5 ion wilh FINATA i anAgemenorit brot to) i tonit was hlri rtnttt tla ttYre organ izat inI liarhd iniplenui a lltelnacllce progran aridriot ted iWIi cltroI Iechar ic s-hop price lists were irot oh t ai ned il order to d(terennlille how much repair whdrops lould he Lna rgin

tin terra I coil t rol Iprocettinhs ho dI rec 1ullid1)1-oj ec t eqn ipuen I anrl]comimnod ities Cro hoctt lrbe oIin vtlIIera Ie to fraid was te arI id ablse Add it iona lIy thre lack of a i ntenrrnc(( control p)rogram anld tire lack of knowledge of tihe Icost of couildresonalIe repaiS lal to excessive funs being expended for vel U loe rpi r Those fluids coi I heInmore appro)riately pent t i the gotrisme riq of tire project It slhould be

oiw ItIaSAI1) tlvador had initiatd mnonitor iii wnTor nveessarv ilit FINATA vehicle ise expenses

p)ointed i ila I illllilgilerll lit action to

MIi ssi omimirieirts

The Missi(n ag reed withi tie recommendation

9shy

4 Agencies Needed to Make Better Use of Computer Capabilities

All) guidelines state that the cooperating government is responsible forthe adequate use of commodities financed by All) Also good managementpractice ca3lls for adequate plaining when developing or modifying anautomated inforiation system (AIS) One of the steps that should beincluded i the develo)ment of any AIS is the determ inition of outputs to be p-oduced I)y t1c systl in cluding [files for inpuit to olier systemsihe Na tional Finance Office for Agrarian Reformr Inaills (IFINATAs) COIflpul tiot haS not been abl e to read the magnet ic tapes sen t by theNational Ieograplic Instituite (IGN) containing dati on properties ofPhase Ill benef iciries Iis computer incompatibility problem was due to poor system planning and to aI lack of corltrmictixi and coordinationl be tween I (N and FINATA intil tINAIA and [(N improve tihe current i forArt ion-transfer process wh i ch is now Li1e-constllrlillg ar I orIol -i)ro it FINAT woi II not b)e abIeo to lul ly 1t1I 1ize i t computerresources to rediiuce delays in I 5 iing titles to Phase ll beneficitaries

Recomlleri lt ion No

e recoilililid that I DHIlil SNrtlvador

a) obtain(l ci mni ooliaisri ic f die tiorn romti Ch ierrirenorl I Salvaidor tlaltie Nitional IIirniince Office for Agrarian Refori Laids olni Natiornal(eog raplhic Irs-it u iill inc rease tlieir level of corr niciI(ation and will join eflorts to deorlirnii the best wiy to successflly transfer dti bet wen ISe two c(omputr systrlrS arin

b) ohtain ain accep~table t irrtarxle for establ ish ing a )rocedure for tr insferii ring ita via coi tti rI illunretic Li p1)0 betweeni Nat iorna l Geogramphic in-titte aid National l Fiiance Office for Agrarian Reforri landW

D~iscuiss ioni

Thii slnrd(lprl)rovis ions to the i)roject agreermenrlt Irri(Ier SucLio(a 8 2 Statetliat t (overn reit of lI alvador will carry ()lit Lie Project or cause it to be Carried out with dii e diligence andl etliciency in conformrritywi ti souirrd tcirri icalt 1irrar ial and ilrariagelrri t prac ti ces aril iii (0iIf orlrli t v wi Lh tluire l cirrllrmen t s pliris speci fications corilracLssche(iiles OF 1tl04 arrnirgee(nlts aii(1 wi tI i ioli f-icit ions there in ipprol by A I li pil silar t Ito tth is g rclr(r) le Also one of the -stepstLia sli)ld ) ri liided in tIre developurri t ot an AIS is tire dteriiilatimiof outpuLts to be prodiced )) the systemir inmcl(iding files for input in to o thr Sy Irrsm(

1TN pre)aires coirputeri zed data of property doscriptions which it thenriransri ts to FINATA for processiig itio tit los for the Phiase Ill agrarian

refor1rr boiicficiaries IHowever FINAIA was ile 1 to uSe its corplli toicipal) ilities to eimal the coiitorized aril desc riti(tior rita prepred b)[IN istead FINAI4 was lpl icatinrg work already done by IGN byrel)rocess i iig tle iiforimation The end rsr I L tas il ief ci ient Luse ofexpensi ve cOili r resouirces uli delays in issti ing dWfini iiti i toLi LIes Phase Ill beneficiaries

- 10 shy

A FindigVs and Recorrurend t iois

I Ti t ling Achievemeits Were Behind Schedule

As of July 31 1986 the OlFS had registered eight Phase I land titles of a planned 317 and 7325 Phase [Il titles of a planned 10000 (originally10000) to be reg itered by the project assistance comipetion date of )ecember 31 1987 The processes had moved slowly because of cumbersometitling procedures not adeqtuately considered at the start of the projectand a lack oF funds to competsate prior owners If the planned number oftitles is not issutedt and reg istered by the project completion date thereform benefici aries may not obtain legal tenure riglhts to the land -- aitajor goalI )F the iproject Although still seriously behind schedule the program was workin mtuch better than in 1983 when we condlcted our last rev iew

Recommendation No I

We recommend that IISAMIlI SalIador obtain indicating from the Goverlmentof H1 Salvador a revised implementation pl an indicating the steps and resources necessary to accompl ish the titl ing targets by the projectscomple tion date

Di sciss ion

The projects original goal was to transfer 315 definitive Phase I titleall of wlich would be registered by the Land Registry Office 1 and45000 def initive Phase IIl titles of which would410000 be registeredThese goals were modif ied in July 1986 based on a revised project pal)erThe change called for the transfer and registraLion of 317 defin iti vellase I titles and the issuance of 4500) definitive Phgase IT titlesof which 10000 wouIl be registered by December 1987

As of lully 31 1986 after All) dishursements of rtore ttan 124 milliontihe O had irocessod 161 definitive Phase I titles of which eighrt Iadbeen registered and 1353( detinitive Phase [Il titles of which 7325had been registoered Al IIproperty sub jc t to Phase hadI beenexpropriatedo Almost 200(000) formerly landless p ersons organized into317 coopera t i ves enjoy at least u sufructuary rights to some of ElSalvador s I imi te land resouIrces

A tt nbet of Factors lelayed the t it l ing process Salvadoran 1awprevented the Land Registry Off ice from registering properties which hadliens recorded aga inst them There were ntmerous difficulties in accurato iy marki ng Iarid botiritlaries (Ie to poor property records aidbecauirse sortie p roper t ies we e Ioca ted zoneosiln where conf l ic t wasoCCurr ing FlIids to cOttlpensatt ormier owtiers for thre i r j)roi)OFi y we re Ir scarce Furtlermore nei ther the Salvadoran Institlte for Ag rari al

1 A reogistered title confers legal lropietorship of the land

-4shy

Transformuation (ISTA) the entity tasked with processing Phase I titlesnor the National Finance Office for Phase IlI Agrarian Reform Lands(FINATA) responsible for processing Phase IL titles were adequatelyprepared to handle this complicated task At the time the titlingprocess began neither organization realized fully what theirresponsibilities would entail not

The system used to register titles hadbeen upda ted s ince the 1890s therefore it was archaic and ex t remle ly cllibersorle

These problems had slowed thre LitLing process but actions have beentaken to resolve mary of them For examriple a liens law was passed inSeptember 1986 to allow titles to be registered even if there are liensagainst the proper ty Also a property regist ration law passed in May1986 simplified tie title registration process by having the titleregiste redi under the propertys identification number rather than theowners name FINATA has recontly taken steps to reorganize andstreamline its processing system in order to speed up the titling processand the system is being compr terized so as to operate more efficientlyand accutrately ISTA was reorganized in late 1985) to focus principallyon laid acquisi t ion anl t ransfer Al though rnwhcl remains to e (honecomplet the titlinrig process many

to of tampe major barriers Wae now boniaddl-esse None theless 1JSAI1)l1 Salvador needs to exercise closeoversighIt with regard to ISTA and FINAIA to ensure that tie i LI ingcomponent of the project progresses as planned If tie planmed number oftitles is not issno(I the reform beneficiaries will not obtain legaltenure rights by project completion -- a major goal of the project

Manhqgerri t Comrnyits

The Mission agreed with the recommendation

-5shy

2 More Manaeers and AccounL-ants Needed to be Placed with (ooperIti ves adl lracked

According to the amended project agreement signed June 30 1986 therevised goal for trained cooperative managers and accountants placed withcooperatives was reduced oim 280 to 250 of each A Jly 31 1986 p rojec t sta tus repor I indica ted tha t only 137 managers and 140 accountants were employed at Phase I cooperatives bit these figures were not rel iable because an accurate tracking s)s tern had not beenimplemented DIue to lack of coordination among responsible GO ESagencies many cooperative ianagers arid accountan ts had not received anadequate orientation on how to effecti yely manage ag rarian reformcooperatives There was also some reluctance by the coopera tives to assume the burden of paying the managers and accountants iithout cooperat ive acceptance and in thecontinu ity employment of trained managers and accountan ts prospects [or many Phase I agrarian reforicooperatives to become economically viable are greatly reduced

Recommendation No 2

We recommend that USAII)-I Salvador

a) obtain from tire Goveriren t of IkSalvador a revised imp lementation p lain wh ich states the steps and resources necessary to provideadequate orientation for cooperative managers and accountants

b) ohtain evidence that an effective tracking system has been developedto ascertain tihe number awl location of manaer-s ald accouitants arid the type of trainingi hey have received and

c) review and analyze tihe constraints to placing anw keeping managersand accoutants employed by tie cooperatives and explore options forincentives which would correct their currently unsa ti sfac to ryperformance

Disrss ion

Amendment No 7 to the project agreement dated June 30 1986 reducedthe project goal for trained managers and accountants placed with Phase I cooperatiyes from 280 to 250

July 31 1986 projec sLatLi report irdicated that 137 cooperative managers and 110 accountants were employed at Phase I coopera LivesHowever the FSAII) technician in charge of this segment informed us thatthe iliss i had no way of kncwing if the figures were accurate b)ecaurse arel ihle (racking system did not exist Ilialso said turniover amongnaae-- maid icconiirts was high ard the momeitat there was no way of

stayig crtrent as to the tuirrnver rate For example we visitt eightcooperatives Mhat iqli -I1))0)5i to have resident 11111ia eirs ha ed o1 alisting provided by ISAII)lil Salvador hut ir half throse cases no manager was wo ig at the coopcruitive

- 6shy

The USAID) technician cited several difficulties in implementing thetraining segment Fi r t the responsibility for recruiting and placing111li O S t Iraald iii dCCotuI Litan ts frOIm 1 Institute for Agrarian Transformation (ISTA) to

wi s transfer red the alvadoranl die Ministry ofAgriculture because of coordination problems between the two entities andlEV s ack of capacity to implement both this nd its land transferactivity )oirinl the transition period wlich lasted a)ouit a year very

litt le recruim11111 t arid a (oneI anCoellnt was

Second ho project in ulerestimated the difficulties inivolved wviththe mangemen t of a coope rat i ve tliforFeseelI was te high inumover ofshymanagers iiid IccoIin talits (ile seVer-alto causes such as CooperativesrelcI tanice to cover the Ilanaiers Sa tary (even wi tiha subs idy prov i ded bythe project duringo the f ii st [hre years) or tle economic insecurityexperienced by niagers whose salary is subsidied thez()d by

Third tllere were ilsLtiltinnal arrangements between ISTA and the Centerfor gricul ti ral Trainilg to proyvide managers and accotinants wi thtrainiL to thei toorient theagrarian reform and to landle problems1111ique1 to coocra LiVe mnail mentL IlOweVer [ies e arianlimel ts were neverinitiated due to a lack of coordimtion between tu geli In April1980 the Ministry of Agricu Lres Regional Offices startd to providethis training t) coo)eraiv e iianriagers and accouiintaits on an ad hocbasis [hiis iWi t iatiie beshouldl aqgress iye I y i)irsued amnd if successfll instittionilizedI into o formal training program

Witlhout cooperative acceptance and continity in the employlienttrained managers aid accotiitIs the chances for ially

of of the agmarian

reform cooperatLi ves to become economica 11 y viable are greatly reduced

Mangemen t Commein t s

The Mission commented that recouridation NW 2(b) should be deletedbecaise ui adeqiato trackitng system has beei developed The Missions198 7 act ion plans will contain provisions for its implementation

I)[ Commen ts

Based on Sle Missions comments recommendation No 2(b) is closed upon issu1alce of the report

-7shy

3 ImplementiUng Agency Was Not Accounting for Its Use of Project-FundedVehicles

The project agreement set forth guidance for using and accounting for All)provided resources under the project At two FINATA regional oFficesvisited we found no internal control procedures over the use of vehicles or fuel coupons FINATAs vehicle repair expenses were very high and maybe excessive Due to poor management practices FINATA hadimplemented the Ministry of Agriculture vehicle uitilization

not giidelines

nor did it require its employees to sign fuel coupons in order to acquirefuel F[NATA management was not implementing a main tenance control program and did rot solicit enough bids to obtain the best repairprices Without internal control procedures project equipment andcommodities become vulnerable to fraud waste avid abuse Additionallythe lack of a maintenance control program and lack of knowledges Linda rd repa i r cos ts Iead to excess ive veh i cI repa ir expeinses

of

diverting funds from the goals of tihe project

Recommrrendation No 3

We recommend that ISAIslI SalIvador obtain evidence that the National Finance Office for Ag rarian Reform Land1s

a) has impteImented internal control procedures for boti vehicle use and fuel ptrchases and

b) has implemented maintenance control procedures and instituted a system to o)tain the best prices for vehicle repair work

Discuss ion

Section B2 (a) of the Staiuard Provisions to the project aLcement states thit the Government of HL Salvaor will carry oit the Project withrdue diligence ard efficiency in conformity witi sord technicalfinancial and practices 5(a)management Sectior of the StandarIPro visi )IIS states tlia t any resOtrces F[i rianampce llrdr t ass istaiice wi IIbe tevotel to tire p)roject ain tlierealtutr will be rist so as to furtherthe objectivyes sought in carrying onut the p~rojecct Additionally Section BS(h) states tiat the GikS will nairitiin in accordance witih generallyaccepted accointing primciples and prac tices consislontly applied booksand records rel a ti g to the project adeqra L to sihow wi thou tI imita iion tire recO ipt and use o goods and serv ices acqur i r(d wi tl All) ass is tance

Vehr ic I ose - The ranat~er at FINAIA s Sar L rlia Regi ora I Oft ice s ta ted that le did not mailLi in ili rnal coitrol records oil velricle use liesaid tUilat vehicles were ofteir Ised oIn weekerih )) mpl oyees to condut bulsiness was wi y corIbit tirre in of- tloll inr per -onal sise of vehiclesCon trol of veiicles wa (Y res onsibili ty of- tie persons i)laced iiicharge of them A weekly al ivity report was prepar(d whicr showed whereFINATA emrp loyees to arid the type ofwere go hlrii(ne tie v were to t raursat llowever ac tul II CCOlrrp I ishirmr iits were not rel)or tel Tiierefore

-8 shy

there was no way of determining what had actually beenl (lone with tirevehicle The manager at FINATAs La Libertad Regional Office also stated HIat Ie did not matinttin initernal control records cver vehicle use Even if he had records lie would not Ihave been able to monitor two of his three velr icles becauise of broken odometers

Although vehicle control Iitilization guidelines were sent to FINATA iliSeptember 1981 by the Ministry of Agriculture the guidelines were noti up I emen td by FINATA management At FINATA headquarters and the regional offices we were told that FINATA efployees presenting fuel coupons to serv ice s ta Iions were not required to vouch for their useFINATA managers admitted it was possible for anyoine to use a FINATA fuel coupon for any purpose withou t fear of detection In 1985 USAII)IlSalvador management evaluated F[NATA motor fuel purchases From Februarythroulgh lMecember FINATA purchased 15000 gallons of gasoline and 3000 gallons of liespl Accord inhg evaliuat (lto the io hp fuel purchases equa ted to travellinjg about 29 million kilometers (kim) This aroiunt of travel considering the size Hl Salvador asmall of raised Lltstion as to the proper rise and con t rol over file t BotI si tlai ions qere (lie to l)-o manlagemernit priactices ol part FINAIA headIqltui Itersthe of officials

Repair losts FINIA vehiri ul) air expenses appeareod excesqive FINAIA record s shrowed thiat in 1985 $117931 lad Roe spentl ii rlpa iirs to maintain o2 pr~oject average costvehicl-s an of $2380per velhicle Il a di5c(1s5 ion wilh FINATA i anAgemenorit brot to) i tonit was hlri rtnttt tla ttYre organ izat inI liarhd iniplenui a lltelnacllce progran aridriot ted iWIi cltroI Iechar ic s-hop price lists were irot oh t ai ned il order to d(terennlille how much repair whdrops lould he Lna rgin

tin terra I coil t rol Iprocettinhs ho dI rec 1ullid1)1-oj ec t eqn ipuen I anrl]comimnod ities Cro hoctt lrbe oIin vtlIIera Ie to fraid was te arI id ablse Add it iona lIy thre lack of a i ntenrrnc(( control p)rogram anld tire lack of knowledge of tihe Icost of couildresonalIe repaiS lal to excessive funs being expended for vel U loe rpi r Those fluids coi I heInmore appro)riately pent t i the gotrisme riq of tire project It slhould be

oiw ItIaSAI1) tlvador had initiatd mnonitor iii wnTor nveessarv ilit FINATA vehicle ise expenses

p)ointed i ila I illllilgilerll lit action to

MIi ssi omimirieirts

The Missi(n ag reed withi tie recommendation

9shy

4 Agencies Needed to Make Better Use of Computer Capabilities

All) guidelines state that the cooperating government is responsible forthe adequate use of commodities financed by All) Also good managementpractice ca3lls for adequate plaining when developing or modifying anautomated inforiation system (AIS) One of the steps that should beincluded i the develo)ment of any AIS is the determ inition of outputs to be p-oduced I)y t1c systl in cluding [files for inpuit to olier systemsihe Na tional Finance Office for Agrarian Reformr Inaills (IFINATAs) COIflpul tiot haS not been abl e to read the magnet ic tapes sen t by theNational Ieograplic Instituite (IGN) containing dati on properties ofPhase Ill benef iciries Iis computer incompatibility problem was due to poor system planning and to aI lack of corltrmictixi and coordinationl be tween I (N and FINATA intil tINAIA and [(N improve tihe current i forArt ion-transfer process wh i ch is now Li1e-constllrlillg ar I orIol -i)ro it FINAT woi II not b)e abIeo to lul ly 1t1I 1ize i t computerresources to rediiuce delays in I 5 iing titles to Phase ll beneficitaries

Recomlleri lt ion No

e recoilililid that I DHIlil SNrtlvador

a) obtain(l ci mni ooliaisri ic f die tiorn romti Ch ierrirenorl I Salvaidor tlaltie Nitional IIirniince Office for Agrarian Refori Laids olni Natiornal(eog raplhic Irs-it u iill inc rease tlieir level of corr niciI(ation and will join eflorts to deorlirnii the best wiy to successflly transfer dti bet wen ISe two c(omputr systrlrS arin

b) ohtain ain accep~table t irrtarxle for establ ish ing a )rocedure for tr insferii ring ita via coi tti rI illunretic Li p1)0 betweeni Nat iorna l Geogramphic in-titte aid National l Fiiance Office for Agrarian Reforri landW

D~iscuiss ioni

Thii slnrd(lprl)rovis ions to the i)roject agreermenrlt Irri(Ier SucLio(a 8 2 Statetliat t (overn reit of lI alvador will carry ()lit Lie Project or cause it to be Carried out with dii e diligence andl etliciency in conformrritywi ti souirrd tcirri icalt 1irrar ial and ilrariagelrri t prac ti ces aril iii (0iIf orlrli t v wi Lh tluire l cirrllrmen t s pliris speci fications corilracLssche(iiles OF 1tl04 arrnirgee(nlts aii(1 wi tI i ioli f-icit ions there in ipprol by A I li pil silar t Ito tth is g rclr(r) le Also one of the -stepstLia sli)ld ) ri liided in tIre developurri t ot an AIS is tire dteriiilatimiof outpuLts to be prodiced )) the systemir inmcl(iding files for input in to o thr Sy Irrsm(

1TN pre)aires coirputeri zed data of property doscriptions which it thenriransri ts to FINATA for processiig itio tit los for the Phiase Ill agrarian

refor1rr boiicficiaries IHowever FINAIA was ile 1 to uSe its corplli toicipal) ilities to eimal the coiitorized aril desc riti(tior rita prepred b)[IN istead FINAI4 was lpl icatinrg work already done by IGN byrel)rocess i iig tle iiforimation The end rsr I L tas il ief ci ient Luse ofexpensi ve cOili r resouirces uli delays in issti ing dWfini iiti i toLi LIes Phase Ill beneficiaries

- 10 shy

Transformuation (ISTA) the entity tasked with processing Phase I titlesnor the National Finance Office for Phase IlI Agrarian Reform Lands(FINATA) responsible for processing Phase IL titles were adequatelyprepared to handle this complicated task At the time the titlingprocess began neither organization realized fully what theirresponsibilities would entail not

The system used to register titles hadbeen upda ted s ince the 1890s therefore it was archaic and ex t remle ly cllibersorle

These problems had slowed thre LitLing process but actions have beentaken to resolve mary of them For examriple a liens law was passed inSeptember 1986 to allow titles to be registered even if there are liensagainst the proper ty Also a property regist ration law passed in May1986 simplified tie title registration process by having the titleregiste redi under the propertys identification number rather than theowners name FINATA has recontly taken steps to reorganize andstreamline its processing system in order to speed up the titling processand the system is being compr terized so as to operate more efficientlyand accutrately ISTA was reorganized in late 1985) to focus principallyon laid acquisi t ion anl t ransfer Al though rnwhcl remains to e (honecomplet the titlinrig process many

to of tampe major barriers Wae now boniaddl-esse None theless 1JSAI1)l1 Salvador needs to exercise closeoversighIt with regard to ISTA and FINAIA to ensure that tie i LI ingcomponent of the project progresses as planned If tie planmed number oftitles is not issno(I the reform beneficiaries will not obtain legaltenure rights by project completion -- a major goal of the project

Manhqgerri t Comrnyits

The Mission agreed with the recommendation

-5shy

2 More Manaeers and AccounL-ants Needed to be Placed with (ooperIti ves adl lracked

According to the amended project agreement signed June 30 1986 therevised goal for trained cooperative managers and accountants placed withcooperatives was reduced oim 280 to 250 of each A Jly 31 1986 p rojec t sta tus repor I indica ted tha t only 137 managers and 140 accountants were employed at Phase I cooperatives bit these figures were not rel iable because an accurate tracking s)s tern had not beenimplemented DIue to lack of coordination among responsible GO ESagencies many cooperative ianagers arid accountan ts had not received anadequate orientation on how to effecti yely manage ag rarian reformcooperatives There was also some reluctance by the coopera tives to assume the burden of paying the managers and accountants iithout cooperat ive acceptance and in thecontinu ity employment of trained managers and accountan ts prospects [or many Phase I agrarian reforicooperatives to become economically viable are greatly reduced

Recommendation No 2

We recommend that USAII)-I Salvador

a) obtain from tire Goveriren t of IkSalvador a revised imp lementation p lain wh ich states the steps and resources necessary to provideadequate orientation for cooperative managers and accountants

b) ohtain evidence that an effective tracking system has been developedto ascertain tihe number awl location of manaer-s ald accouitants arid the type of trainingi hey have received and

c) review and analyze tihe constraints to placing anw keeping managersand accoutants employed by tie cooperatives and explore options forincentives which would correct their currently unsa ti sfac to ryperformance

Disrss ion

Amendment No 7 to the project agreement dated June 30 1986 reducedthe project goal for trained managers and accountants placed with Phase I cooperatiyes from 280 to 250

July 31 1986 projec sLatLi report irdicated that 137 cooperative managers and 110 accountants were employed at Phase I coopera LivesHowever the FSAII) technician in charge of this segment informed us thatthe iliss i had no way of kncwing if the figures were accurate b)ecaurse arel ihle (racking system did not exist Ilialso said turniover amongnaae-- maid icconiirts was high ard the momeitat there was no way of

stayig crtrent as to the tuirrnver rate For example we visitt eightcooperatives Mhat iqli -I1))0)5i to have resident 11111ia eirs ha ed o1 alisting provided by ISAII)lil Salvador hut ir half throse cases no manager was wo ig at the coopcruitive

- 6shy

The USAID) technician cited several difficulties in implementing thetraining segment Fi r t the responsibility for recruiting and placing111li O S t Iraald iii dCCotuI Litan ts frOIm 1 Institute for Agrarian Transformation (ISTA) to

wi s transfer red the alvadoranl die Ministry ofAgriculture because of coordination problems between the two entities andlEV s ack of capacity to implement both this nd its land transferactivity )oirinl the transition period wlich lasted a)ouit a year very

litt le recruim11111 t arid a (oneI anCoellnt was

Second ho project in ulerestimated the difficulties inivolved wviththe mangemen t of a coope rat i ve tliforFeseelI was te high inumover ofshymanagers iiid IccoIin talits (ile seVer-alto causes such as CooperativesrelcI tanice to cover the Ilanaiers Sa tary (even wi tiha subs idy prov i ded bythe project duringo the f ii st [hre years) or tle economic insecurityexperienced by niagers whose salary is subsidied thez()d by

Third tllere were ilsLtiltinnal arrangements between ISTA and the Centerfor gricul ti ral Trainilg to proyvide managers and accotinants wi thtrainiL to thei toorient theagrarian reform and to landle problems1111ique1 to coocra LiVe mnail mentL IlOweVer [ies e arianlimel ts were neverinitiated due to a lack of coordimtion between tu geli In April1980 the Ministry of Agricu Lres Regional Offices startd to providethis training t) coo)eraiv e iianriagers and accouiintaits on an ad hocbasis [hiis iWi t iatiie beshouldl aqgress iye I y i)irsued amnd if successfll instittionilizedI into o formal training program

Witlhout cooperative acceptance and continity in the employlienttrained managers aid accotiitIs the chances for ially

of of the agmarian

reform cooperatLi ves to become economica 11 y viable are greatly reduced

Mangemen t Commein t s

The Mission commented that recouridation NW 2(b) should be deletedbecaise ui adeqiato trackitng system has beei developed The Missions198 7 act ion plans will contain provisions for its implementation

I)[ Commen ts

Based on Sle Missions comments recommendation No 2(b) is closed upon issu1alce of the report

-7shy

3 ImplementiUng Agency Was Not Accounting for Its Use of Project-FundedVehicles

The project agreement set forth guidance for using and accounting for All)provided resources under the project At two FINATA regional oFficesvisited we found no internal control procedures over the use of vehicles or fuel coupons FINATAs vehicle repair expenses were very high and maybe excessive Due to poor management practices FINATA hadimplemented the Ministry of Agriculture vehicle uitilization

not giidelines

nor did it require its employees to sign fuel coupons in order to acquirefuel F[NATA management was not implementing a main tenance control program and did rot solicit enough bids to obtain the best repairprices Without internal control procedures project equipment andcommodities become vulnerable to fraud waste avid abuse Additionallythe lack of a maintenance control program and lack of knowledges Linda rd repa i r cos ts Iead to excess ive veh i cI repa ir expeinses

of

diverting funds from the goals of tihe project

Recommrrendation No 3

We recommend that ISAIslI SalIvador obtain evidence that the National Finance Office for Ag rarian Reform Land1s

a) has impteImented internal control procedures for boti vehicle use and fuel ptrchases and

b) has implemented maintenance control procedures and instituted a system to o)tain the best prices for vehicle repair work

Discuss ion

Section B2 (a) of the Staiuard Provisions to the project aLcement states thit the Government of HL Salvaor will carry oit the Project withrdue diligence ard efficiency in conformity witi sord technicalfinancial and practices 5(a)management Sectior of the StandarIPro visi )IIS states tlia t any resOtrces F[i rianampce llrdr t ass istaiice wi IIbe tevotel to tire p)roject ain tlierealtutr will be rist so as to furtherthe objectivyes sought in carrying onut the p~rojecct Additionally Section BS(h) states tiat the GikS will nairitiin in accordance witih generallyaccepted accointing primciples and prac tices consislontly applied booksand records rel a ti g to the project adeqra L to sihow wi thou tI imita iion tire recO ipt and use o goods and serv ices acqur i r(d wi tl All) ass is tance

Vehr ic I ose - The ranat~er at FINAIA s Sar L rlia Regi ora I Oft ice s ta ted that le did not mailLi in ili rnal coitrol records oil velricle use liesaid tUilat vehicles were ofteir Ised oIn weekerih )) mpl oyees to condut bulsiness was wi y corIbit tirre in of- tloll inr per -onal sise of vehiclesCon trol of veiicles wa (Y res onsibili ty of- tie persons i)laced iiicharge of them A weekly al ivity report was prepar(d whicr showed whereFINATA emrp loyees to arid the type ofwere go hlrii(ne tie v were to t raursat llowever ac tul II CCOlrrp I ishirmr iits were not rel)or tel Tiierefore

-8 shy

there was no way of determining what had actually beenl (lone with tirevehicle The manager at FINATAs La Libertad Regional Office also stated HIat Ie did not matinttin initernal control records cver vehicle use Even if he had records lie would not Ihave been able to monitor two of his three velr icles becauise of broken odometers

Although vehicle control Iitilization guidelines were sent to FINATA iliSeptember 1981 by the Ministry of Agriculture the guidelines were noti up I emen td by FINATA management At FINATA headquarters and the regional offices we were told that FINATA efployees presenting fuel coupons to serv ice s ta Iions were not required to vouch for their useFINATA managers admitted it was possible for anyoine to use a FINATA fuel coupon for any purpose withou t fear of detection In 1985 USAII)IlSalvador management evaluated F[NATA motor fuel purchases From Februarythroulgh lMecember FINATA purchased 15000 gallons of gasoline and 3000 gallons of liespl Accord inhg evaliuat (lto the io hp fuel purchases equa ted to travellinjg about 29 million kilometers (kim) This aroiunt of travel considering the size Hl Salvador asmall of raised Lltstion as to the proper rise and con t rol over file t BotI si tlai ions qere (lie to l)-o manlagemernit priactices ol part FINAIA headIqltui Itersthe of officials

Repair losts FINIA vehiri ul) air expenses appeareod excesqive FINAIA record s shrowed thiat in 1985 $117931 lad Roe spentl ii rlpa iirs to maintain o2 pr~oject average costvehicl-s an of $2380per velhicle Il a di5c(1s5 ion wilh FINATA i anAgemenorit brot to) i tonit was hlri rtnttt tla ttYre organ izat inI liarhd iniplenui a lltelnacllce progran aridriot ted iWIi cltroI Iechar ic s-hop price lists were irot oh t ai ned il order to d(terennlille how much repair whdrops lould he Lna rgin

tin terra I coil t rol Iprocettinhs ho dI rec 1ullid1)1-oj ec t eqn ipuen I anrl]comimnod ities Cro hoctt lrbe oIin vtlIIera Ie to fraid was te arI id ablse Add it iona lIy thre lack of a i ntenrrnc(( control p)rogram anld tire lack of knowledge of tihe Icost of couildresonalIe repaiS lal to excessive funs being expended for vel U loe rpi r Those fluids coi I heInmore appro)riately pent t i the gotrisme riq of tire project It slhould be

oiw ItIaSAI1) tlvador had initiatd mnonitor iii wnTor nveessarv ilit FINATA vehicle ise expenses

p)ointed i ila I illllilgilerll lit action to

MIi ssi omimirieirts

The Missi(n ag reed withi tie recommendation

9shy

4 Agencies Needed to Make Better Use of Computer Capabilities

All) guidelines state that the cooperating government is responsible forthe adequate use of commodities financed by All) Also good managementpractice ca3lls for adequate plaining when developing or modifying anautomated inforiation system (AIS) One of the steps that should beincluded i the develo)ment of any AIS is the determ inition of outputs to be p-oduced I)y t1c systl in cluding [files for inpuit to olier systemsihe Na tional Finance Office for Agrarian Reformr Inaills (IFINATAs) COIflpul tiot haS not been abl e to read the magnet ic tapes sen t by theNational Ieograplic Instituite (IGN) containing dati on properties ofPhase Ill benef iciries Iis computer incompatibility problem was due to poor system planning and to aI lack of corltrmictixi and coordinationl be tween I (N and FINATA intil tINAIA and [(N improve tihe current i forArt ion-transfer process wh i ch is now Li1e-constllrlillg ar I orIol -i)ro it FINAT woi II not b)e abIeo to lul ly 1t1I 1ize i t computerresources to rediiuce delays in I 5 iing titles to Phase ll beneficitaries

Recomlleri lt ion No

e recoilililid that I DHIlil SNrtlvador

a) obtain(l ci mni ooliaisri ic f die tiorn romti Ch ierrirenorl I Salvaidor tlaltie Nitional IIirniince Office for Agrarian Refori Laids olni Natiornal(eog raplhic Irs-it u iill inc rease tlieir level of corr niciI(ation and will join eflorts to deorlirnii the best wiy to successflly transfer dti bet wen ISe two c(omputr systrlrS arin

b) ohtain ain accep~table t irrtarxle for establ ish ing a )rocedure for tr insferii ring ita via coi tti rI illunretic Li p1)0 betweeni Nat iorna l Geogramphic in-titte aid National l Fiiance Office for Agrarian Reforri landW

D~iscuiss ioni

Thii slnrd(lprl)rovis ions to the i)roject agreermenrlt Irri(Ier SucLio(a 8 2 Statetliat t (overn reit of lI alvador will carry ()lit Lie Project or cause it to be Carried out with dii e diligence andl etliciency in conformrritywi ti souirrd tcirri icalt 1irrar ial and ilrariagelrri t prac ti ces aril iii (0iIf orlrli t v wi Lh tluire l cirrllrmen t s pliris speci fications corilracLssche(iiles OF 1tl04 arrnirgee(nlts aii(1 wi tI i ioli f-icit ions there in ipprol by A I li pil silar t Ito tth is g rclr(r) le Also one of the -stepstLia sli)ld ) ri liided in tIre developurri t ot an AIS is tire dteriiilatimiof outpuLts to be prodiced )) the systemir inmcl(iding files for input in to o thr Sy Irrsm(

1TN pre)aires coirputeri zed data of property doscriptions which it thenriransri ts to FINATA for processiig itio tit los for the Phiase Ill agrarian

refor1rr boiicficiaries IHowever FINAIA was ile 1 to uSe its corplli toicipal) ilities to eimal the coiitorized aril desc riti(tior rita prepred b)[IN istead FINAI4 was lpl icatinrg work already done by IGN byrel)rocess i iig tle iiforimation The end rsr I L tas il ief ci ient Luse ofexpensi ve cOili r resouirces uli delays in issti ing dWfini iiti i toLi LIes Phase Ill beneficiaries

- 10 shy

2 More Manaeers and AccounL-ants Needed to be Placed with (ooperIti ves adl lracked

According to the amended project agreement signed June 30 1986 therevised goal for trained cooperative managers and accountants placed withcooperatives was reduced oim 280 to 250 of each A Jly 31 1986 p rojec t sta tus repor I indica ted tha t only 137 managers and 140 accountants were employed at Phase I cooperatives bit these figures were not rel iable because an accurate tracking s)s tern had not beenimplemented DIue to lack of coordination among responsible GO ESagencies many cooperative ianagers arid accountan ts had not received anadequate orientation on how to effecti yely manage ag rarian reformcooperatives There was also some reluctance by the coopera tives to assume the burden of paying the managers and accountants iithout cooperat ive acceptance and in thecontinu ity employment of trained managers and accountan ts prospects [or many Phase I agrarian reforicooperatives to become economically viable are greatly reduced

Recommendation No 2

We recommend that USAII)-I Salvador

a) obtain from tire Goveriren t of IkSalvador a revised imp lementation p lain wh ich states the steps and resources necessary to provideadequate orientation for cooperative managers and accountants

b) ohtain evidence that an effective tracking system has been developedto ascertain tihe number awl location of manaer-s ald accouitants arid the type of trainingi hey have received and

c) review and analyze tihe constraints to placing anw keeping managersand accoutants employed by tie cooperatives and explore options forincentives which would correct their currently unsa ti sfac to ryperformance

Disrss ion

Amendment No 7 to the project agreement dated June 30 1986 reducedthe project goal for trained managers and accountants placed with Phase I cooperatiyes from 280 to 250

July 31 1986 projec sLatLi report irdicated that 137 cooperative managers and 110 accountants were employed at Phase I coopera LivesHowever the FSAII) technician in charge of this segment informed us thatthe iliss i had no way of kncwing if the figures were accurate b)ecaurse arel ihle (racking system did not exist Ilialso said turniover amongnaae-- maid icconiirts was high ard the momeitat there was no way of

stayig crtrent as to the tuirrnver rate For example we visitt eightcooperatives Mhat iqli -I1))0)5i to have resident 11111ia eirs ha ed o1 alisting provided by ISAII)lil Salvador hut ir half throse cases no manager was wo ig at the coopcruitive

- 6shy

The USAID) technician cited several difficulties in implementing thetraining segment Fi r t the responsibility for recruiting and placing111li O S t Iraald iii dCCotuI Litan ts frOIm 1 Institute for Agrarian Transformation (ISTA) to

wi s transfer red the alvadoranl die Ministry ofAgriculture because of coordination problems between the two entities andlEV s ack of capacity to implement both this nd its land transferactivity )oirinl the transition period wlich lasted a)ouit a year very

litt le recruim11111 t arid a (oneI anCoellnt was

Second ho project in ulerestimated the difficulties inivolved wviththe mangemen t of a coope rat i ve tliforFeseelI was te high inumover ofshymanagers iiid IccoIin talits (ile seVer-alto causes such as CooperativesrelcI tanice to cover the Ilanaiers Sa tary (even wi tiha subs idy prov i ded bythe project duringo the f ii st [hre years) or tle economic insecurityexperienced by niagers whose salary is subsidied thez()d by

Third tllere were ilsLtiltinnal arrangements between ISTA and the Centerfor gricul ti ral Trainilg to proyvide managers and accotinants wi thtrainiL to thei toorient theagrarian reform and to landle problems1111ique1 to coocra LiVe mnail mentL IlOweVer [ies e arianlimel ts were neverinitiated due to a lack of coordimtion between tu geli In April1980 the Ministry of Agricu Lres Regional Offices startd to providethis training t) coo)eraiv e iianriagers and accouiintaits on an ad hocbasis [hiis iWi t iatiie beshouldl aqgress iye I y i)irsued amnd if successfll instittionilizedI into o formal training program

Witlhout cooperative acceptance and continity in the employlienttrained managers aid accotiitIs the chances for ially

of of the agmarian

reform cooperatLi ves to become economica 11 y viable are greatly reduced

Mangemen t Commein t s

The Mission commented that recouridation NW 2(b) should be deletedbecaise ui adeqiato trackitng system has beei developed The Missions198 7 act ion plans will contain provisions for its implementation

I)[ Commen ts

Based on Sle Missions comments recommendation No 2(b) is closed upon issu1alce of the report

-7shy

3 ImplementiUng Agency Was Not Accounting for Its Use of Project-FundedVehicles

The project agreement set forth guidance for using and accounting for All)provided resources under the project At two FINATA regional oFficesvisited we found no internal control procedures over the use of vehicles or fuel coupons FINATAs vehicle repair expenses were very high and maybe excessive Due to poor management practices FINATA hadimplemented the Ministry of Agriculture vehicle uitilization

not giidelines

nor did it require its employees to sign fuel coupons in order to acquirefuel F[NATA management was not implementing a main tenance control program and did rot solicit enough bids to obtain the best repairprices Without internal control procedures project equipment andcommodities become vulnerable to fraud waste avid abuse Additionallythe lack of a maintenance control program and lack of knowledges Linda rd repa i r cos ts Iead to excess ive veh i cI repa ir expeinses

of

diverting funds from the goals of tihe project

Recommrrendation No 3

We recommend that ISAIslI SalIvador obtain evidence that the National Finance Office for Ag rarian Reform Land1s

a) has impteImented internal control procedures for boti vehicle use and fuel ptrchases and

b) has implemented maintenance control procedures and instituted a system to o)tain the best prices for vehicle repair work

Discuss ion

Section B2 (a) of the Staiuard Provisions to the project aLcement states thit the Government of HL Salvaor will carry oit the Project withrdue diligence ard efficiency in conformity witi sord technicalfinancial and practices 5(a)management Sectior of the StandarIPro visi )IIS states tlia t any resOtrces F[i rianampce llrdr t ass istaiice wi IIbe tevotel to tire p)roject ain tlierealtutr will be rist so as to furtherthe objectivyes sought in carrying onut the p~rojecct Additionally Section BS(h) states tiat the GikS will nairitiin in accordance witih generallyaccepted accointing primciples and prac tices consislontly applied booksand records rel a ti g to the project adeqra L to sihow wi thou tI imita iion tire recO ipt and use o goods and serv ices acqur i r(d wi tl All) ass is tance

Vehr ic I ose - The ranat~er at FINAIA s Sar L rlia Regi ora I Oft ice s ta ted that le did not mailLi in ili rnal coitrol records oil velricle use liesaid tUilat vehicles were ofteir Ised oIn weekerih )) mpl oyees to condut bulsiness was wi y corIbit tirre in of- tloll inr per -onal sise of vehiclesCon trol of veiicles wa (Y res onsibili ty of- tie persons i)laced iiicharge of them A weekly al ivity report was prepar(d whicr showed whereFINATA emrp loyees to arid the type ofwere go hlrii(ne tie v were to t raursat llowever ac tul II CCOlrrp I ishirmr iits were not rel)or tel Tiierefore

-8 shy

there was no way of determining what had actually beenl (lone with tirevehicle The manager at FINATAs La Libertad Regional Office also stated HIat Ie did not matinttin initernal control records cver vehicle use Even if he had records lie would not Ihave been able to monitor two of his three velr icles becauise of broken odometers

Although vehicle control Iitilization guidelines were sent to FINATA iliSeptember 1981 by the Ministry of Agriculture the guidelines were noti up I emen td by FINATA management At FINATA headquarters and the regional offices we were told that FINATA efployees presenting fuel coupons to serv ice s ta Iions were not required to vouch for their useFINATA managers admitted it was possible for anyoine to use a FINATA fuel coupon for any purpose withou t fear of detection In 1985 USAII)IlSalvador management evaluated F[NATA motor fuel purchases From Februarythroulgh lMecember FINATA purchased 15000 gallons of gasoline and 3000 gallons of liespl Accord inhg evaliuat (lto the io hp fuel purchases equa ted to travellinjg about 29 million kilometers (kim) This aroiunt of travel considering the size Hl Salvador asmall of raised Lltstion as to the proper rise and con t rol over file t BotI si tlai ions qere (lie to l)-o manlagemernit priactices ol part FINAIA headIqltui Itersthe of officials

Repair losts FINIA vehiri ul) air expenses appeareod excesqive FINAIA record s shrowed thiat in 1985 $117931 lad Roe spentl ii rlpa iirs to maintain o2 pr~oject average costvehicl-s an of $2380per velhicle Il a di5c(1s5 ion wilh FINATA i anAgemenorit brot to) i tonit was hlri rtnttt tla ttYre organ izat inI liarhd iniplenui a lltelnacllce progran aridriot ted iWIi cltroI Iechar ic s-hop price lists were irot oh t ai ned il order to d(terennlille how much repair whdrops lould he Lna rgin

tin terra I coil t rol Iprocettinhs ho dI rec 1ullid1)1-oj ec t eqn ipuen I anrl]comimnod ities Cro hoctt lrbe oIin vtlIIera Ie to fraid was te arI id ablse Add it iona lIy thre lack of a i ntenrrnc(( control p)rogram anld tire lack of knowledge of tihe Icost of couildresonalIe repaiS lal to excessive funs being expended for vel U loe rpi r Those fluids coi I heInmore appro)riately pent t i the gotrisme riq of tire project It slhould be

oiw ItIaSAI1) tlvador had initiatd mnonitor iii wnTor nveessarv ilit FINATA vehicle ise expenses

p)ointed i ila I illllilgilerll lit action to

MIi ssi omimirieirts

The Missi(n ag reed withi tie recommendation

9shy

4 Agencies Needed to Make Better Use of Computer Capabilities

All) guidelines state that the cooperating government is responsible forthe adequate use of commodities financed by All) Also good managementpractice ca3lls for adequate plaining when developing or modifying anautomated inforiation system (AIS) One of the steps that should beincluded i the develo)ment of any AIS is the determ inition of outputs to be p-oduced I)y t1c systl in cluding [files for inpuit to olier systemsihe Na tional Finance Office for Agrarian Reformr Inaills (IFINATAs) COIflpul tiot haS not been abl e to read the magnet ic tapes sen t by theNational Ieograplic Instituite (IGN) containing dati on properties ofPhase Ill benef iciries Iis computer incompatibility problem was due to poor system planning and to aI lack of corltrmictixi and coordinationl be tween I (N and FINATA intil tINAIA and [(N improve tihe current i forArt ion-transfer process wh i ch is now Li1e-constllrlillg ar I orIol -i)ro it FINAT woi II not b)e abIeo to lul ly 1t1I 1ize i t computerresources to rediiuce delays in I 5 iing titles to Phase ll beneficitaries

Recomlleri lt ion No

e recoilililid that I DHIlil SNrtlvador

a) obtain(l ci mni ooliaisri ic f die tiorn romti Ch ierrirenorl I Salvaidor tlaltie Nitional IIirniince Office for Agrarian Refori Laids olni Natiornal(eog raplhic Irs-it u iill inc rease tlieir level of corr niciI(ation and will join eflorts to deorlirnii the best wiy to successflly transfer dti bet wen ISe two c(omputr systrlrS arin

b) ohtain ain accep~table t irrtarxle for establ ish ing a )rocedure for tr insferii ring ita via coi tti rI illunretic Li p1)0 betweeni Nat iorna l Geogramphic in-titte aid National l Fiiance Office for Agrarian Reforri landW

D~iscuiss ioni

Thii slnrd(lprl)rovis ions to the i)roject agreermenrlt Irri(Ier SucLio(a 8 2 Statetliat t (overn reit of lI alvador will carry ()lit Lie Project or cause it to be Carried out with dii e diligence andl etliciency in conformrritywi ti souirrd tcirri icalt 1irrar ial and ilrariagelrri t prac ti ces aril iii (0iIf orlrli t v wi Lh tluire l cirrllrmen t s pliris speci fications corilracLssche(iiles OF 1tl04 arrnirgee(nlts aii(1 wi tI i ioli f-icit ions there in ipprol by A I li pil silar t Ito tth is g rclr(r) le Also one of the -stepstLia sli)ld ) ri liided in tIre developurri t ot an AIS is tire dteriiilatimiof outpuLts to be prodiced )) the systemir inmcl(iding files for input in to o thr Sy Irrsm(

1TN pre)aires coirputeri zed data of property doscriptions which it thenriransri ts to FINATA for processiig itio tit los for the Phiase Ill agrarian

refor1rr boiicficiaries IHowever FINAIA was ile 1 to uSe its corplli toicipal) ilities to eimal the coiitorized aril desc riti(tior rita prepred b)[IN istead FINAI4 was lpl icatinrg work already done by IGN byrel)rocess i iig tle iiforimation The end rsr I L tas il ief ci ient Luse ofexpensi ve cOili r resouirces uli delays in issti ing dWfini iiti i toLi LIes Phase Ill beneficiaries

- 10 shy

The USAID) technician cited several difficulties in implementing thetraining segment Fi r t the responsibility for recruiting and placing111li O S t Iraald iii dCCotuI Litan ts frOIm 1 Institute for Agrarian Transformation (ISTA) to

wi s transfer red the alvadoranl die Ministry ofAgriculture because of coordination problems between the two entities andlEV s ack of capacity to implement both this nd its land transferactivity )oirinl the transition period wlich lasted a)ouit a year very

litt le recruim11111 t arid a (oneI anCoellnt was

Second ho project in ulerestimated the difficulties inivolved wviththe mangemen t of a coope rat i ve tliforFeseelI was te high inumover ofshymanagers iiid IccoIin talits (ile seVer-alto causes such as CooperativesrelcI tanice to cover the Ilanaiers Sa tary (even wi tiha subs idy prov i ded bythe project duringo the f ii st [hre years) or tle economic insecurityexperienced by niagers whose salary is subsidied thez()d by

Third tllere were ilsLtiltinnal arrangements between ISTA and the Centerfor gricul ti ral Trainilg to proyvide managers and accotinants wi thtrainiL to thei toorient theagrarian reform and to landle problems1111ique1 to coocra LiVe mnail mentL IlOweVer [ies e arianlimel ts were neverinitiated due to a lack of coordimtion between tu geli In April1980 the Ministry of Agricu Lres Regional Offices startd to providethis training t) coo)eraiv e iianriagers and accouiintaits on an ad hocbasis [hiis iWi t iatiie beshouldl aqgress iye I y i)irsued amnd if successfll instittionilizedI into o formal training program

Witlhout cooperative acceptance and continity in the employlienttrained managers aid accotiitIs the chances for ially

of of the agmarian

reform cooperatLi ves to become economica 11 y viable are greatly reduced

Mangemen t Commein t s

The Mission commented that recouridation NW 2(b) should be deletedbecaise ui adeqiato trackitng system has beei developed The Missions198 7 act ion plans will contain provisions for its implementation

I)[ Commen ts

Based on Sle Missions comments recommendation No 2(b) is closed upon issu1alce of the report

-7shy

3 ImplementiUng Agency Was Not Accounting for Its Use of Project-FundedVehicles

The project agreement set forth guidance for using and accounting for All)provided resources under the project At two FINATA regional oFficesvisited we found no internal control procedures over the use of vehicles or fuel coupons FINATAs vehicle repair expenses were very high and maybe excessive Due to poor management practices FINATA hadimplemented the Ministry of Agriculture vehicle uitilization

not giidelines

nor did it require its employees to sign fuel coupons in order to acquirefuel F[NATA management was not implementing a main tenance control program and did rot solicit enough bids to obtain the best repairprices Without internal control procedures project equipment andcommodities become vulnerable to fraud waste avid abuse Additionallythe lack of a maintenance control program and lack of knowledges Linda rd repa i r cos ts Iead to excess ive veh i cI repa ir expeinses

of

diverting funds from the goals of tihe project

Recommrrendation No 3

We recommend that ISAIslI SalIvador obtain evidence that the National Finance Office for Ag rarian Reform Land1s

a) has impteImented internal control procedures for boti vehicle use and fuel ptrchases and

b) has implemented maintenance control procedures and instituted a system to o)tain the best prices for vehicle repair work

Discuss ion

Section B2 (a) of the Staiuard Provisions to the project aLcement states thit the Government of HL Salvaor will carry oit the Project withrdue diligence ard efficiency in conformity witi sord technicalfinancial and practices 5(a)management Sectior of the StandarIPro visi )IIS states tlia t any resOtrces F[i rianampce llrdr t ass istaiice wi IIbe tevotel to tire p)roject ain tlierealtutr will be rist so as to furtherthe objectivyes sought in carrying onut the p~rojecct Additionally Section BS(h) states tiat the GikS will nairitiin in accordance witih generallyaccepted accointing primciples and prac tices consislontly applied booksand records rel a ti g to the project adeqra L to sihow wi thou tI imita iion tire recO ipt and use o goods and serv ices acqur i r(d wi tl All) ass is tance

Vehr ic I ose - The ranat~er at FINAIA s Sar L rlia Regi ora I Oft ice s ta ted that le did not mailLi in ili rnal coitrol records oil velricle use liesaid tUilat vehicles were ofteir Ised oIn weekerih )) mpl oyees to condut bulsiness was wi y corIbit tirre in of- tloll inr per -onal sise of vehiclesCon trol of veiicles wa (Y res onsibili ty of- tie persons i)laced iiicharge of them A weekly al ivity report was prepar(d whicr showed whereFINATA emrp loyees to arid the type ofwere go hlrii(ne tie v were to t raursat llowever ac tul II CCOlrrp I ishirmr iits were not rel)or tel Tiierefore

-8 shy

there was no way of determining what had actually beenl (lone with tirevehicle The manager at FINATAs La Libertad Regional Office also stated HIat Ie did not matinttin initernal control records cver vehicle use Even if he had records lie would not Ihave been able to monitor two of his three velr icles becauise of broken odometers

Although vehicle control Iitilization guidelines were sent to FINATA iliSeptember 1981 by the Ministry of Agriculture the guidelines were noti up I emen td by FINATA management At FINATA headquarters and the regional offices we were told that FINATA efployees presenting fuel coupons to serv ice s ta Iions were not required to vouch for their useFINATA managers admitted it was possible for anyoine to use a FINATA fuel coupon for any purpose withou t fear of detection In 1985 USAII)IlSalvador management evaluated F[NATA motor fuel purchases From Februarythroulgh lMecember FINATA purchased 15000 gallons of gasoline and 3000 gallons of liespl Accord inhg evaliuat (lto the io hp fuel purchases equa ted to travellinjg about 29 million kilometers (kim) This aroiunt of travel considering the size Hl Salvador asmall of raised Lltstion as to the proper rise and con t rol over file t BotI si tlai ions qere (lie to l)-o manlagemernit priactices ol part FINAIA headIqltui Itersthe of officials

Repair losts FINIA vehiri ul) air expenses appeareod excesqive FINAIA record s shrowed thiat in 1985 $117931 lad Roe spentl ii rlpa iirs to maintain o2 pr~oject average costvehicl-s an of $2380per velhicle Il a di5c(1s5 ion wilh FINATA i anAgemenorit brot to) i tonit was hlri rtnttt tla ttYre organ izat inI liarhd iniplenui a lltelnacllce progran aridriot ted iWIi cltroI Iechar ic s-hop price lists were irot oh t ai ned il order to d(terennlille how much repair whdrops lould he Lna rgin

tin terra I coil t rol Iprocettinhs ho dI rec 1ullid1)1-oj ec t eqn ipuen I anrl]comimnod ities Cro hoctt lrbe oIin vtlIIera Ie to fraid was te arI id ablse Add it iona lIy thre lack of a i ntenrrnc(( control p)rogram anld tire lack of knowledge of tihe Icost of couildresonalIe repaiS lal to excessive funs being expended for vel U loe rpi r Those fluids coi I heInmore appro)riately pent t i the gotrisme riq of tire project It slhould be

oiw ItIaSAI1) tlvador had initiatd mnonitor iii wnTor nveessarv ilit FINATA vehicle ise expenses

p)ointed i ila I illllilgilerll lit action to

MIi ssi omimirieirts

The Missi(n ag reed withi tie recommendation

9shy

4 Agencies Needed to Make Better Use of Computer Capabilities

All) guidelines state that the cooperating government is responsible forthe adequate use of commodities financed by All) Also good managementpractice ca3lls for adequate plaining when developing or modifying anautomated inforiation system (AIS) One of the steps that should beincluded i the develo)ment of any AIS is the determ inition of outputs to be p-oduced I)y t1c systl in cluding [files for inpuit to olier systemsihe Na tional Finance Office for Agrarian Reformr Inaills (IFINATAs) COIflpul tiot haS not been abl e to read the magnet ic tapes sen t by theNational Ieograplic Instituite (IGN) containing dati on properties ofPhase Ill benef iciries Iis computer incompatibility problem was due to poor system planning and to aI lack of corltrmictixi and coordinationl be tween I (N and FINATA intil tINAIA and [(N improve tihe current i forArt ion-transfer process wh i ch is now Li1e-constllrlillg ar I orIol -i)ro it FINAT woi II not b)e abIeo to lul ly 1t1I 1ize i t computerresources to rediiuce delays in I 5 iing titles to Phase ll beneficitaries

Recomlleri lt ion No

e recoilililid that I DHIlil SNrtlvador

a) obtain(l ci mni ooliaisri ic f die tiorn romti Ch ierrirenorl I Salvaidor tlaltie Nitional IIirniince Office for Agrarian Refori Laids olni Natiornal(eog raplhic Irs-it u iill inc rease tlieir level of corr niciI(ation and will join eflorts to deorlirnii the best wiy to successflly transfer dti bet wen ISe two c(omputr systrlrS arin

b) ohtain ain accep~table t irrtarxle for establ ish ing a )rocedure for tr insferii ring ita via coi tti rI illunretic Li p1)0 betweeni Nat iorna l Geogramphic in-titte aid National l Fiiance Office for Agrarian Reforri landW

D~iscuiss ioni

Thii slnrd(lprl)rovis ions to the i)roject agreermenrlt Irri(Ier SucLio(a 8 2 Statetliat t (overn reit of lI alvador will carry ()lit Lie Project or cause it to be Carried out with dii e diligence andl etliciency in conformrritywi ti souirrd tcirri icalt 1irrar ial and ilrariagelrri t prac ti ces aril iii (0iIf orlrli t v wi Lh tluire l cirrllrmen t s pliris speci fications corilracLssche(iiles OF 1tl04 arrnirgee(nlts aii(1 wi tI i ioli f-icit ions there in ipprol by A I li pil silar t Ito tth is g rclr(r) le Also one of the -stepstLia sli)ld ) ri liided in tIre developurri t ot an AIS is tire dteriiilatimiof outpuLts to be prodiced )) the systemir inmcl(iding files for input in to o thr Sy Irrsm(

1TN pre)aires coirputeri zed data of property doscriptions which it thenriransri ts to FINATA for processiig itio tit los for the Phiase Ill agrarian

refor1rr boiicficiaries IHowever FINAIA was ile 1 to uSe its corplli toicipal) ilities to eimal the coiitorized aril desc riti(tior rita prepred b)[IN istead FINAI4 was lpl icatinrg work already done by IGN byrel)rocess i iig tle iiforimation The end rsr I L tas il ief ci ient Luse ofexpensi ve cOili r resouirces uli delays in issti ing dWfini iiti i toLi LIes Phase Ill beneficiaries

- 10 shy

3 ImplementiUng Agency Was Not Accounting for Its Use of Project-FundedVehicles

The project agreement set forth guidance for using and accounting for All)provided resources under the project At two FINATA regional oFficesvisited we found no internal control procedures over the use of vehicles or fuel coupons FINATAs vehicle repair expenses were very high and maybe excessive Due to poor management practices FINATA hadimplemented the Ministry of Agriculture vehicle uitilization

not giidelines

nor did it require its employees to sign fuel coupons in order to acquirefuel F[NATA management was not implementing a main tenance control program and did rot solicit enough bids to obtain the best repairprices Without internal control procedures project equipment andcommodities become vulnerable to fraud waste avid abuse Additionallythe lack of a maintenance control program and lack of knowledges Linda rd repa i r cos ts Iead to excess ive veh i cI repa ir expeinses

of

diverting funds from the goals of tihe project

Recommrrendation No 3

We recommend that ISAIslI SalIvador obtain evidence that the National Finance Office for Ag rarian Reform Land1s

a) has impteImented internal control procedures for boti vehicle use and fuel ptrchases and

b) has implemented maintenance control procedures and instituted a system to o)tain the best prices for vehicle repair work

Discuss ion

Section B2 (a) of the Staiuard Provisions to the project aLcement states thit the Government of HL Salvaor will carry oit the Project withrdue diligence ard efficiency in conformity witi sord technicalfinancial and practices 5(a)management Sectior of the StandarIPro visi )IIS states tlia t any resOtrces F[i rianampce llrdr t ass istaiice wi IIbe tevotel to tire p)roject ain tlierealtutr will be rist so as to furtherthe objectivyes sought in carrying onut the p~rojecct Additionally Section BS(h) states tiat the GikS will nairitiin in accordance witih generallyaccepted accointing primciples and prac tices consislontly applied booksand records rel a ti g to the project adeqra L to sihow wi thou tI imita iion tire recO ipt and use o goods and serv ices acqur i r(d wi tl All) ass is tance

Vehr ic I ose - The ranat~er at FINAIA s Sar L rlia Regi ora I Oft ice s ta ted that le did not mailLi in ili rnal coitrol records oil velricle use liesaid tUilat vehicles were ofteir Ised oIn weekerih )) mpl oyees to condut bulsiness was wi y corIbit tirre in of- tloll inr per -onal sise of vehiclesCon trol of veiicles wa (Y res onsibili ty of- tie persons i)laced iiicharge of them A weekly al ivity report was prepar(d whicr showed whereFINATA emrp loyees to arid the type ofwere go hlrii(ne tie v were to t raursat llowever ac tul II CCOlrrp I ishirmr iits were not rel)or tel Tiierefore

-8 shy

there was no way of determining what had actually beenl (lone with tirevehicle The manager at FINATAs La Libertad Regional Office also stated HIat Ie did not matinttin initernal control records cver vehicle use Even if he had records lie would not Ihave been able to monitor two of his three velr icles becauise of broken odometers

Although vehicle control Iitilization guidelines were sent to FINATA iliSeptember 1981 by the Ministry of Agriculture the guidelines were noti up I emen td by FINATA management At FINATA headquarters and the regional offices we were told that FINATA efployees presenting fuel coupons to serv ice s ta Iions were not required to vouch for their useFINATA managers admitted it was possible for anyoine to use a FINATA fuel coupon for any purpose withou t fear of detection In 1985 USAII)IlSalvador management evaluated F[NATA motor fuel purchases From Februarythroulgh lMecember FINATA purchased 15000 gallons of gasoline and 3000 gallons of liespl Accord inhg evaliuat (lto the io hp fuel purchases equa ted to travellinjg about 29 million kilometers (kim) This aroiunt of travel considering the size Hl Salvador asmall of raised Lltstion as to the proper rise and con t rol over file t BotI si tlai ions qere (lie to l)-o manlagemernit priactices ol part FINAIA headIqltui Itersthe of officials

Repair losts FINIA vehiri ul) air expenses appeareod excesqive FINAIA record s shrowed thiat in 1985 $117931 lad Roe spentl ii rlpa iirs to maintain o2 pr~oject average costvehicl-s an of $2380per velhicle Il a di5c(1s5 ion wilh FINATA i anAgemenorit brot to) i tonit was hlri rtnttt tla ttYre organ izat inI liarhd iniplenui a lltelnacllce progran aridriot ted iWIi cltroI Iechar ic s-hop price lists were irot oh t ai ned il order to d(terennlille how much repair whdrops lould he Lna rgin

tin terra I coil t rol Iprocettinhs ho dI rec 1ullid1)1-oj ec t eqn ipuen I anrl]comimnod ities Cro hoctt lrbe oIin vtlIIera Ie to fraid was te arI id ablse Add it iona lIy thre lack of a i ntenrrnc(( control p)rogram anld tire lack of knowledge of tihe Icost of couildresonalIe repaiS lal to excessive funs being expended for vel U loe rpi r Those fluids coi I heInmore appro)riately pent t i the gotrisme riq of tire project It slhould be

oiw ItIaSAI1) tlvador had initiatd mnonitor iii wnTor nveessarv ilit FINATA vehicle ise expenses

p)ointed i ila I illllilgilerll lit action to

MIi ssi omimirieirts

The Missi(n ag reed withi tie recommendation

9shy

4 Agencies Needed to Make Better Use of Computer Capabilities

All) guidelines state that the cooperating government is responsible forthe adequate use of commodities financed by All) Also good managementpractice ca3lls for adequate plaining when developing or modifying anautomated inforiation system (AIS) One of the steps that should beincluded i the develo)ment of any AIS is the determ inition of outputs to be p-oduced I)y t1c systl in cluding [files for inpuit to olier systemsihe Na tional Finance Office for Agrarian Reformr Inaills (IFINATAs) COIflpul tiot haS not been abl e to read the magnet ic tapes sen t by theNational Ieograplic Instituite (IGN) containing dati on properties ofPhase Ill benef iciries Iis computer incompatibility problem was due to poor system planning and to aI lack of corltrmictixi and coordinationl be tween I (N and FINATA intil tINAIA and [(N improve tihe current i forArt ion-transfer process wh i ch is now Li1e-constllrlillg ar I orIol -i)ro it FINAT woi II not b)e abIeo to lul ly 1t1I 1ize i t computerresources to rediiuce delays in I 5 iing titles to Phase ll beneficitaries

Recomlleri lt ion No

e recoilililid that I DHIlil SNrtlvador

a) obtain(l ci mni ooliaisri ic f die tiorn romti Ch ierrirenorl I Salvaidor tlaltie Nitional IIirniince Office for Agrarian Refori Laids olni Natiornal(eog raplhic Irs-it u iill inc rease tlieir level of corr niciI(ation and will join eflorts to deorlirnii the best wiy to successflly transfer dti bet wen ISe two c(omputr systrlrS arin

b) ohtain ain accep~table t irrtarxle for establ ish ing a )rocedure for tr insferii ring ita via coi tti rI illunretic Li p1)0 betweeni Nat iorna l Geogramphic in-titte aid National l Fiiance Office for Agrarian Reforri landW

D~iscuiss ioni

Thii slnrd(lprl)rovis ions to the i)roject agreermenrlt Irri(Ier SucLio(a 8 2 Statetliat t (overn reit of lI alvador will carry ()lit Lie Project or cause it to be Carried out with dii e diligence andl etliciency in conformrritywi ti souirrd tcirri icalt 1irrar ial and ilrariagelrri t prac ti ces aril iii (0iIf orlrli t v wi Lh tluire l cirrllrmen t s pliris speci fications corilracLssche(iiles OF 1tl04 arrnirgee(nlts aii(1 wi tI i ioli f-icit ions there in ipprol by A I li pil silar t Ito tth is g rclr(r) le Also one of the -stepstLia sli)ld ) ri liided in tIre developurri t ot an AIS is tire dteriiilatimiof outpuLts to be prodiced )) the systemir inmcl(iding files for input in to o thr Sy Irrsm(

1TN pre)aires coirputeri zed data of property doscriptions which it thenriransri ts to FINATA for processiig itio tit los for the Phiase Ill agrarian

refor1rr boiicficiaries IHowever FINAIA was ile 1 to uSe its corplli toicipal) ilities to eimal the coiitorized aril desc riti(tior rita prepred b)[IN istead FINAI4 was lpl icatinrg work already done by IGN byrel)rocess i iig tle iiforimation The end rsr I L tas il ief ci ient Luse ofexpensi ve cOili r resouirces uli delays in issti ing dWfini iiti i toLi LIes Phase Ill beneficiaries

- 10 shy

there was no way of determining what had actually beenl (lone with tirevehicle The manager at FINATAs La Libertad Regional Office also stated HIat Ie did not matinttin initernal control records cver vehicle use Even if he had records lie would not Ihave been able to monitor two of his three velr icles becauise of broken odometers

Although vehicle control Iitilization guidelines were sent to FINATA iliSeptember 1981 by the Ministry of Agriculture the guidelines were noti up I emen td by FINATA management At FINATA headquarters and the regional offices we were told that FINATA efployees presenting fuel coupons to serv ice s ta Iions were not required to vouch for their useFINATA managers admitted it was possible for anyoine to use a FINATA fuel coupon for any purpose withou t fear of detection In 1985 USAII)IlSalvador management evaluated F[NATA motor fuel purchases From Februarythroulgh lMecember FINATA purchased 15000 gallons of gasoline and 3000 gallons of liespl Accord inhg evaliuat (lto the io hp fuel purchases equa ted to travellinjg about 29 million kilometers (kim) This aroiunt of travel considering the size Hl Salvador asmall of raised Lltstion as to the proper rise and con t rol over file t BotI si tlai ions qere (lie to l)-o manlagemernit priactices ol part FINAIA headIqltui Itersthe of officials

Repair losts FINIA vehiri ul) air expenses appeareod excesqive FINAIA record s shrowed thiat in 1985 $117931 lad Roe spentl ii rlpa iirs to maintain o2 pr~oject average costvehicl-s an of $2380per velhicle Il a di5c(1s5 ion wilh FINATA i anAgemenorit brot to) i tonit was hlri rtnttt tla ttYre organ izat inI liarhd iniplenui a lltelnacllce progran aridriot ted iWIi cltroI Iechar ic s-hop price lists were irot oh t ai ned il order to d(terennlille how much repair whdrops lould he Lna rgin

tin terra I coil t rol Iprocettinhs ho dI rec 1ullid1)1-oj ec t eqn ipuen I anrl]comimnod ities Cro hoctt lrbe oIin vtlIIera Ie to fraid was te arI id ablse Add it iona lIy thre lack of a i ntenrrnc(( control p)rogram anld tire lack of knowledge of tihe Icost of couildresonalIe repaiS lal to excessive funs being expended for vel U loe rpi r Those fluids coi I heInmore appro)riately pent t i the gotrisme riq of tire project It slhould be

oiw ItIaSAI1) tlvador had initiatd mnonitor iii wnTor nveessarv ilit FINATA vehicle ise expenses

p)ointed i ila I illllilgilerll lit action to

MIi ssi omimirieirts

The Missi(n ag reed withi tie recommendation

9shy

4 Agencies Needed to Make Better Use of Computer Capabilities

All) guidelines state that the cooperating government is responsible forthe adequate use of commodities financed by All) Also good managementpractice ca3lls for adequate plaining when developing or modifying anautomated inforiation system (AIS) One of the steps that should beincluded i the develo)ment of any AIS is the determ inition of outputs to be p-oduced I)y t1c systl in cluding [files for inpuit to olier systemsihe Na tional Finance Office for Agrarian Reformr Inaills (IFINATAs) COIflpul tiot haS not been abl e to read the magnet ic tapes sen t by theNational Ieograplic Instituite (IGN) containing dati on properties ofPhase Ill benef iciries Iis computer incompatibility problem was due to poor system planning and to aI lack of corltrmictixi and coordinationl be tween I (N and FINATA intil tINAIA and [(N improve tihe current i forArt ion-transfer process wh i ch is now Li1e-constllrlillg ar I orIol -i)ro it FINAT woi II not b)e abIeo to lul ly 1t1I 1ize i t computerresources to rediiuce delays in I 5 iing titles to Phase ll beneficitaries

Recomlleri lt ion No

e recoilililid that I DHIlil SNrtlvador

a) obtain(l ci mni ooliaisri ic f die tiorn romti Ch ierrirenorl I Salvaidor tlaltie Nitional IIirniince Office for Agrarian Refori Laids olni Natiornal(eog raplhic Irs-it u iill inc rease tlieir level of corr niciI(ation and will join eflorts to deorlirnii the best wiy to successflly transfer dti bet wen ISe two c(omputr systrlrS arin

b) ohtain ain accep~table t irrtarxle for establ ish ing a )rocedure for tr insferii ring ita via coi tti rI illunretic Li p1)0 betweeni Nat iorna l Geogramphic in-titte aid National l Fiiance Office for Agrarian Reforri landW

D~iscuiss ioni

Thii slnrd(lprl)rovis ions to the i)roject agreermenrlt Irri(Ier SucLio(a 8 2 Statetliat t (overn reit of lI alvador will carry ()lit Lie Project or cause it to be Carried out with dii e diligence andl etliciency in conformrritywi ti souirrd tcirri icalt 1irrar ial and ilrariagelrri t prac ti ces aril iii (0iIf orlrli t v wi Lh tluire l cirrllrmen t s pliris speci fications corilracLssche(iiles OF 1tl04 arrnirgee(nlts aii(1 wi tI i ioli f-icit ions there in ipprol by A I li pil silar t Ito tth is g rclr(r) le Also one of the -stepstLia sli)ld ) ri liided in tIre developurri t ot an AIS is tire dteriiilatimiof outpuLts to be prodiced )) the systemir inmcl(iding files for input in to o thr Sy Irrsm(

1TN pre)aires coirputeri zed data of property doscriptions which it thenriransri ts to FINATA for processiig itio tit los for the Phiase Ill agrarian

refor1rr boiicficiaries IHowever FINAIA was ile 1 to uSe its corplli toicipal) ilities to eimal the coiitorized aril desc riti(tior rita prepred b)[IN istead FINAI4 was lpl icatinrg work already done by IGN byrel)rocess i iig tle iiforimation The end rsr I L tas il ief ci ient Luse ofexpensi ve cOili r resouirces uli delays in issti ing dWfini iiti i toLi LIes Phase Ill beneficiaries

- 10 shy

4 Agencies Needed to Make Better Use of Computer Capabilities

All) guidelines state that the cooperating government is responsible forthe adequate use of commodities financed by All) Also good managementpractice ca3lls for adequate plaining when developing or modifying anautomated inforiation system (AIS) One of the steps that should beincluded i the develo)ment of any AIS is the determ inition of outputs to be p-oduced I)y t1c systl in cluding [files for inpuit to olier systemsihe Na tional Finance Office for Agrarian Reformr Inaills (IFINATAs) COIflpul tiot haS not been abl e to read the magnet ic tapes sen t by theNational Ieograplic Instituite (IGN) containing dati on properties ofPhase Ill benef iciries Iis computer incompatibility problem was due to poor system planning and to aI lack of corltrmictixi and coordinationl be tween I (N and FINATA intil tINAIA and [(N improve tihe current i forArt ion-transfer process wh i ch is now Li1e-constllrlillg ar I orIol -i)ro it FINAT woi II not b)e abIeo to lul ly 1t1I 1ize i t computerresources to rediiuce delays in I 5 iing titles to Phase ll beneficitaries

Recomlleri lt ion No

e recoilililid that I DHIlil SNrtlvador

a) obtain(l ci mni ooliaisri ic f die tiorn romti Ch ierrirenorl I Salvaidor tlaltie Nitional IIirniince Office for Agrarian Refori Laids olni Natiornal(eog raplhic Irs-it u iill inc rease tlieir level of corr niciI(ation and will join eflorts to deorlirnii the best wiy to successflly transfer dti bet wen ISe two c(omputr systrlrS arin

b) ohtain ain accep~table t irrtarxle for establ ish ing a )rocedure for tr insferii ring ita via coi tti rI illunretic Li p1)0 betweeni Nat iorna l Geogramphic in-titte aid National l Fiiance Office for Agrarian Reforri landW

D~iscuiss ioni

Thii slnrd(lprl)rovis ions to the i)roject agreermenrlt Irri(Ier SucLio(a 8 2 Statetliat t (overn reit of lI alvador will carry ()lit Lie Project or cause it to be Carried out with dii e diligence andl etliciency in conformrritywi ti souirrd tcirri icalt 1irrar ial and ilrariagelrri t prac ti ces aril iii (0iIf orlrli t v wi Lh tluire l cirrllrmen t s pliris speci fications corilracLssche(iiles OF 1tl04 arrnirgee(nlts aii(1 wi tI i ioli f-icit ions there in ipprol by A I li pil silar t Ito tth is g rclr(r) le Also one of the -stepstLia sli)ld ) ri liided in tIre developurri t ot an AIS is tire dteriiilatimiof outpuLts to be prodiced )) the systemir inmcl(iding files for input in to o thr Sy Irrsm(

1TN pre)aires coirputeri zed data of property doscriptions which it thenriransri ts to FINATA for processiig itio tit los for the Phiase Ill agrarian

refor1rr boiicficiaries IHowever FINAIA was ile 1 to uSe its corplli toicipal) ilities to eimal the coiitorized aril desc riti(tior rita prepred b)[IN istead FINAI4 was lpl icatinrg work already done by IGN byrel)rocess i iig tle iiforimation The end rsr I L tas il ief ci ient Luse ofexpensi ve cOili r resouirces uli delays in issti ing dWfini iiti i toLi LIes Phase Ill beneficiaries

- 10 shy

USAI II I a I vado r of Ficial s IIco not p rov ideO evidence that theinformation system at IGN procured at a cost of $155000 in All) loanfunds was adequa tel y (es iigned to prov i de land desc r ip t ion (ta ta toFI NATA As a resti I of t ie appa ren t lack of p1 ann i ng FINATA s computerha not been ab le to read the magnetic tape3 sent I y GN containing dataon ptopertie(s aul parcel (lfeni LI y I(N sends FINATA p rintouts withthe i tforalt ion needed TMe dLata is later transcribed entered intol[NATA s comptutii tid rel)rOCessed ITis p)rocelire Si error-prone andtime-cnsunmi llg for example accornlOiWg to a FINDT technician it takestwo to three pl)Crsontays to transcribe data whiclh potentially could haveRaeeni mitc-iireid arid processed by the countit er in 1less than houroneNei her FINA FA nor IN hid cons iIere( t ie Pw055isii i tv of t ranisferr indata via iiwti fqw i three nPi Iw 1i 01 1 ihs ago whrenit i anr sqLen hv 11Ii o I I

Itt olIIa t ciutrli I consu ItintL cons iders t icI INAl A and I (N compu t -[5incoptt iPLie I(N INATAund personnel heli eve they will he able to tiii[t QdrI he ti Some progress has heeir made si ic ( tl 1986 inAttell t to reitd thlu I(N miaie tic tapes it FINATI bit moore could beachieved if IN aind INAIA staffs impro their level of communication Iso tie joint efforts t) make better use of the computes capabilitiesmu-t he [raned ampit an delinte tinintahlle wliich would permit IINAFA to mee+t Mf- itng goa lstili

le i -ion agFeSd wi th the reco-mmfenda ti on

Ti( It a 1S)ss ion cotlmelni ted Lithat the comput er i ncOlpat ibi I i ty problem wasnot a rlt rA poor plann I atnI lack of coordination The two systemswere set rip s rate ly it 1irtorclt times for differenit purposes internalto the organizat ions Whu ile ideally a L systems sliouldI have beeninst lA lemd at the same timiu ard be comrpitti)le the real ities oftchnolo)ical advances anmake such ideal irpossih

) 1 Comment

We cont nd that tie p)oj ecL computor systems could have been utilized more eri cient iy and effectLively with the prol)er planning and coordinat t ion

- 11 shy

5 An Integrated Information Processing System llad Not Been Implemented

According to the projec t paper the Agricultural Sec tor PlanningOfFiceMinistry of Agriculture (OSPAMA() Data Processing Center ( )PC)was chared with the respons iibi I i t for process i ll d ta furnished by[5fT FINIA oiler Iions to teand inst it related agrarian sector Almost three )ears after receipt of the nIecessa ry comi1poter eqouiple t wh ich was procured with All) loan funds at a com )ined cost of $547000tie GO)1- still had not iliplenli ted an initegrate I in]forliLtiont system to process Ag rar ian [Refo rm informa tion from OS PA MAG ISTA and FINATA Accortin to one 1AIl 1)i Salvador orficial an informiatLion system had

iilllic becalsenever beon Ilomen to(l of past dif eftrences buetwei Qie heads of tihe OiNb IrstLtionst involved arid tihe current rincertaiitLy as to what intorma tion shoui ld be made public] y ava il able by OSPAMAG ISITA andtINATA Thus (Oi decision-imaking and planning officials are deprived of neteddi iforma lion

Recommenda tion No S

We recommend that IISAI)Eli Salvador obtain evidence that the Government of IS alvador has developed a plan which includes the steps and resouircPs roii to IP and il l1)emCnOIIt aIn in formationrured (tlop inltegratedI system to facilitate the work of the Salvadoran Agrarian Reform

Discisi ton

The project paper cha rges the OS PADC wi th the responsibility for processing data by FINATA aLnd other relatedfturnished ISTA institltions to the agrar ian sector so that OSPA and other planers andl decision-makers may have access to timely information and analysisconcernii g the iIpi)lenlat ion of the agrarian reform ind tire overall agricliltural sector )erformance Also the OSIPAI)IC s)ecific o)jective-call for the establishment of a data processing systeoi to integrate theSup)pl y arn demand of re liabl in formir t ion oi tL rAgrar ian Re form process

The Q)E Iad not implemented an Inte grated Information System t e LoughhCii the datdLprocess nl eqiuii pinit to be used foi this p0ur)oso was received iN January 1984 The equilpment was procuired under project -)[9-0201 a L a cost of 3 100000 Addlitional hardware pi irchases totalling $[r17000 were author ized and financed wi tl project S19-0265 loan funds

Certain efforts t develop such an informtw tion sys tem had )(een miade butaccordinrg to one AIission offirial i t tlI e was accoinp Ii shed d(re to pa t differences arid ci- ri t irlec is ion Is to wI t inf oriI Li on caci1institutio will make available for the datLa base An adequate AgtrarianReform informaL tioi system woult(I provide (M decision-makiilg officials wi thit inly and IapdLt d informiiation for planning di rec ti ng anI evaluat ing of Agrarian Reform process

Mission officials provicdol iv witLh a copy of a draFt proposal tat (i May1985 for a system to mechaniize agrarian sector informiation We be I ievethis proposal woul 1be a good starting point to doveo1o) the Integrate(dInformiti Lmi Syter wiich would help thre (AU)E to accurately Imnon itor anid ovaluto tie progress of the Agrairian Ref ori

- 12 shy

5 An Integrated Information Processing System llad Not Been Implemented

According to the projec t paper the Agricultural Sec tor PlanningOfFiceMinistry of Agriculture (OSPAMA() Data Processing Center ( )PC)was chared with the respons iibi I i t for process i ll d ta furnished by[5fT FINIA oiler Iions to teand inst it related agrarian sector Almost three )ears after receipt of the nIecessa ry comi1poter eqouiple t wh ich was procured with All) loan funds at a com )ined cost of $547000tie GO)1- still had not iliplenli ted an initegrate I in]forliLtiont system to process Ag rar ian [Refo rm informa tion from OS PA MAG ISTA and FINATA Accortin to one 1AIl 1)i Salvador orficial an informiatLion system had

iilllic becalsenever beon Ilomen to(l of past dif eftrences buetwei Qie heads of tihe OiNb IrstLtionst involved arid tihe current rincertaiitLy as to what intorma tion shoui ld be made public] y ava il able by OSPAMAG ISITA andtINATA Thus (Oi decision-imaking and planning officials are deprived of neteddi iforma lion

Recommenda tion No S

We recommend that IISAI)Eli Salvador obtain evidence that the Government of IS alvador has developed a plan which includes the steps and resouircPs roii to IP and il l1)emCnOIIt aIn in formationrured (tlop inltegratedI system to facilitate the work of the Salvadoran Agrarian Reform

Discisi ton

The project paper cha rges the OS PADC wi th the responsibility for processing data by FINATA aLnd other relatedfturnished ISTA institltions to the agrar ian sector so that OSPA and other planers andl decision-makers may have access to timely information and analysisconcernii g the iIpi)lenlat ion of the agrarian reform ind tire overall agricliltural sector )erformance Also the OSIPAI)IC s)ecific o)jective-call for the establishment of a data processing systeoi to integrate theSup)pl y arn demand of re liabl in formir t ion oi tL rAgrar ian Re form process

The Q)E Iad not implemented an Inte grated Information System t e LoughhCii the datdLprocess nl eqiuii pinit to be used foi this p0ur)oso was received iN January 1984 The equilpment was procuired under project -)[9-0201 a L a cost of 3 100000 Addlitional hardware pi irchases totalling $[r17000 were author ized and financed wi tl project S19-0265 loan funds

Certain efforts t develop such an informtw tion sys tem had )(een miade butaccordinrg to one AIission offirial i t tlI e was accoinp Ii shed d(re to pa t differences arid ci- ri t irlec is ion Is to wI t inf oriI Li on caci1institutio will make available for the datLa base An adequate AgtrarianReform informaL tioi system woult(I provide (M decision-makiilg officials wi thit inly and IapdLt d informiiation for planning di rec ti ng anI evaluat ing of Agrarian Reform process

Mission officials provicdol iv witLh a copy of a draFt proposal tat (i May1985 for a system to mechaniize agrarian sector informiation We be I ievethis proposal woul 1be a good starting point to doveo1o) the Integrate(dInformiti Lmi Syter wiich would help thre (AU)E to accurately Imnon itor anid ovaluto tie progress of the Agrairian Ref ori

- 12 shy

i ss io Comrnen t s

Tih e i ss i ol agreed wi i the recommenda t ion

- 13 shy

13 ComI I iance anII n terna I Controls

I Coipl I iance

TIhe audit diclosed twio compliarce exceptions

- - El lNlAs vehicle ma intenance program did not comply with standards est lhlishe in the project agreement (Finding 3)

-- FINAI[A hal not comtplied with Al) guidelines for the adequateutiliation of cOmlplter assets (Finding 1)

Oter than these Hills niothing caime to the auditors attention that caused them to he I eve UnLtested itens were not in compliance with Appl i cable la ws and regulat ioni

2 lInternl 1 Con t( o

We notod one internal control exception

FINAI id not establi shed sound internal control procedures over vehicle ulSo or )v tuel (Ip)si protect these assets from fraud waste anld abulise (induing 3)

- 14 shy

AUI)TI OF USAII)EI SALVAIX)RS AGRARIA

REFORM SECIOR SUPPORT PROJEC NO 519-0265

PART III - APPENDICE

UNITED STATES GOVERNMENT

A ToN

suaJc( i~s

DA TEmemorcindum

PLPL rCAPP~ENDIXHe1)t

onclnet n Draft Auit Iueport for Pjraria eomAd

(Page Itof A 8)

-To tMr Coinr age Gotha r(i RIG IkCJuIc ijz ipa

10e LA IOwi od~rt r1~uggcestcx1 revi sions of th Draf t ke~p-r ts~ x~i~ex oini thsi en rcki sid Wh di scusuiosdecijsions re he4yshy

ing fC th e ex it couf rer~o holde on IDccird 3 [CF8C

In the i nterest of osisi l nc ycm in t ryingj Lo pub[ ispound1 tii Seurf ~inI) rQib2r at inll UK x~ hej WHE Wat reachat ruIaslial agIccreeniknt on 110St j IntS I 1FitlN fr(U0CI kVthe u~Xi L we 11rv noL ine111(1sl)UjietaA wornliuqIs nufor sshiacolin its to ftA 11C IAi in thle fre jrL Ift yul CwriteIUL kIL re ol the dI iftI yC1 f-2e21 we mlrnl5

(~t i a~to di sa~n oI cer pIii its w w-in II ippreli ateIMeI 7 1u ii Clnric for LIh Li Irdrig of Mi ot wiL I-t incttyi~lol as

LLI o I ale our Spocif ic euumit puge inA INyWb nurdkcrs tHie

PcJe i AsNdi scuss in tore let i I inl the( culralnent s Ill Part I Intraluit ori wo tsu9(JLsL the l ast tcntetfe in the Li rst

paeigra hvinn i reill

Plhztse 11 ci ts Q vo lunt iry lard sc ts oif Larrl ho IiIi~sii t2Xi-u C-f G05 aIcres

PaKje i i As jicreu i at LWie ~i L coviburei ce we skxjgetst the following1 word ii i for Li(- Li r s L jir 0 iIph

We folon 0i 1~heLt i LI inq )JrSSh gI I(~enl I I or Lh ai 1 ex)XecQ1 IM 1Al i fru t nMfOrniW In 0 HUi0 1-02 bofCAiSKSWi pr0jQCxL v(S011lrCf2I W0I nfiI

1 1 A t ltiIivurI rcen

c-L i vey Iii [(I 1il (lI ljII ill t hnfrriii I W ing lul torefolrm 1Xl2jjnl Ili inl (lep) Yinc tjl-rvices t(-shy

reforml Wnlefikiu Wil w~11I Aol siuwly thus for Lhe Co~ven lilil of N gtu Ivaotu his iuk11 i at u IiVerol rewformlfs hli (Il (I IsIi X1 A 2 i t(W Iji Lransif~ lhingC Hampn tiilin 0of

OPTIONAL FORM NO 10 (REV I1180) GOA FPMR (41 CFR) 101-1 Lb j010-114

USGPO 19B40-121 52N 178

APPENDIlX A (Phil 2 Qf8

Tn May 1(W 01P Covernnent of T FSaivacr pisscyl1pen eIntion si liP1vy-ilh (juJitIv i i HIPlf ra 1syste7m

rc-qistoerina propox -cF-i omiif-ored h I-NTirs rp

Li i I prvvi Iiro et- C fr-s rc1f 1vlii lc ti-e re qiam i rLr a1n0 s-Ollloii 1 ir i rb m tic f-CJect

amf-s (F ill1 r )--il

rpl i(E l1 -v( p1jia( I Tli ~ op r io oteae r woro t-c ncv(ctii - irp 1 hj r Lis nmriaaers in-0 acnlpmtant s 2

arlchvinnal Mcmp~sinn lotor in f-1 ros-c~i io)

RaI~srcm i~C0 ISflh[ e]1atoril inp 1i s respxoiwe We sileqeskt-fheo latiX5iIf flf tIl( t-hirnI icah

arvrciistecv tLerefrmn h-enofid2arios will rief obtain 1eNa 1 tMnure r i(] I n f170 111 it(po jf-(cnltie( an f o

ie ypi nrid-l INba -Ot-le fT55 np M~Tai i pl al(e T-(1 Wimb ViI ace- lli- ItoIth Li f-inmi -cl( ()f 1W proloet(-I

2 ia iiiPor Mi m M n a F bOP oxit c-a rrnc qr-s-f-baf- tb fi rst- Full earii-i him Jlet d i t1e fo cvi nparurp sprt 01 jF OijFFcri-mms Will exisf-t Ww1-e- thr-b Mrshm and

Pll a st 1foTrlt nnl WI li(ilht i ci( it-lo P0 I- 51C~ 1

re iIiat-af t ut in ire I i- Cl iiPt-l 140 Y ai5a acwinit-I rai-i)i- vste Ixil I it 1 9R PnvroroI ~ I Ifpr1~u

ipl(] it jre Ff c Fvli C2fo iro- 15i i iIo -2 a i-v-If ( n il a Ir pnri i t Pin aI AfrIlI t I)nt n 1a4 f- ~ Ijnat i

1a rrl i -r Alt- (i)F J~l Sl~pe ilw-aifi( anfl ( lil it--l I s fshyrminvi sl-lrprnv (-(F 171 inn~ dm- 1-nC~for)T (If oclit- o

s()11vc- I(--yr [rI(-( 1iv ot T ilfpvifhifte ar t -x j F-l i

plr(~-~r ii cl eq ~-ni i c (l ( i- i I 1a oIifr -at - nof t1-j

13 ComI I iance anII n terna I Controls

I Coipl I iance

TIhe audit diclosed twio compliarce exceptions

- - El lNlAs vehicle ma intenance program did not comply with standards est lhlishe in the project agreement (Finding 3)

-- FINAI[A hal not comtplied with Al) guidelines for the adequateutiliation of cOmlplter assets (Finding 1)

Oter than these Hills niothing caime to the auditors attention that caused them to he I eve UnLtested itens were not in compliance with Appl i cable la ws and regulat ioni

2 lInternl 1 Con t( o

We notod one internal control exception

FINAI id not establi shed sound internal control procedures over vehicle ulSo or )v tuel (Ip)si protect these assets from fraud waste anld abulise (induing 3)

- 14 shy

AUI)TI OF USAII)EI SALVAIX)RS AGRARIA

REFORM SECIOR SUPPORT PROJEC NO 519-0265

PART III - APPENDICE

UNITED STATES GOVERNMENT

A ToN

suaJc( i~s

DA TEmemorcindum

PLPL rCAPP~ENDIXHe1)t

onclnet n Draft Auit Iueport for Pjraria eomAd

(Page Itof A 8)

-To tMr Coinr age Gotha r(i RIG IkCJuIc ijz ipa

10e LA IOwi od~rt r1~uggcestcx1 revi sions of th Draf t ke~p-r ts~ x~i~ex oini thsi en rcki sid Wh di scusuiosdecijsions re he4yshy

ing fC th e ex it couf rer~o holde on IDccird 3 [CF8C

In the i nterest of osisi l nc ycm in t ryingj Lo pub[ ispound1 tii Seurf ~inI) rQib2r at inll UK x~ hej WHE Wat reachat ruIaslial agIccreeniknt on 110St j IntS I 1FitlN fr(U0CI kVthe u~Xi L we 11rv noL ine111(1sl)UjietaA wornliuqIs nufor sshiacolin its to ftA 11C IAi in thle fre jrL Ift yul CwriteIUL kIL re ol the dI iftI yC1 f-2e21 we mlrnl5

(~t i a~to di sa~n oI cer pIii its w w-in II ippreli ateIMeI 7 1u ii Clnric for LIh Li Irdrig of Mi ot wiL I-t incttyi~lol as

LLI o I ale our Spocif ic euumit puge inA INyWb nurdkcrs tHie

PcJe i AsNdi scuss in tore let i I inl the( culralnent s Ill Part I Intraluit ori wo tsu9(JLsL the l ast tcntetfe in the Li rst

paeigra hvinn i reill

Plhztse 11 ci ts Q vo lunt iry lard sc ts oif Larrl ho IiIi~sii t2Xi-u C-f G05 aIcres

PaKje i i As jicreu i at LWie ~i L coviburei ce we skxjgetst the following1 word ii i for Li(- Li r s L jir 0 iIph

We folon 0i 1~heLt i LI inq )JrSSh gI I(~enl I I or Lh ai 1 ex)XecQ1 IM 1Al i fru t nMfOrniW In 0 HUi0 1-02 bofCAiSKSWi pr0jQCxL v(S011lrCf2I W0I nfiI

1 1 A t ltiIivurI rcen

c-L i vey Iii [(I 1il (lI ljII ill t hnfrriii I W ing lul torefolrm 1Xl2jjnl Ili inl (lep) Yinc tjl-rvices t(-shy

reforml Wnlefikiu Wil w~11I Aol siuwly thus for Lhe Co~ven lilil of N gtu Ivaotu his iuk11 i at u IiVerol rewformlfs hli (Il (I IsIi X1 A 2 i t(W Iji Lransif~ lhingC Hampn tiilin 0of

OPTIONAL FORM NO 10 (REV I1180) GOA FPMR (41 CFR) 101-1 Lb j010-114

USGPO 19B40-121 52N 178

APPENDIlX A (Phil 2 Qf8

Tn May 1(W 01P Covernnent of T FSaivacr pisscyl1pen eIntion si liP1vy-ilh (juJitIv i i HIPlf ra 1syste7m

rc-qistoerina propox -cF-i omiif-ored h I-NTirs rp

Li i I prvvi Iiro et- C fr-s rc1f 1vlii lc ti-e re qiam i rLr a1n0 s-Ollloii 1 ir i rb m tic f-CJect

amf-s (F ill1 r )--il

rpl i(E l1 -v( p1jia( I Tli ~ op r io oteae r woro t-c ncv(ctii - irp 1 hj r Lis nmriaaers in-0 acnlpmtant s 2

arlchvinnal Mcmp~sinn lotor in f-1 ros-c~i io)

RaI~srcm i~C0 ISflh[ e]1atoril inp 1i s respxoiwe We sileqeskt-fheo latiX5iIf flf tIl( t-hirnI icah

arvrciistecv tLerefrmn h-enofid2arios will rief obtain 1eNa 1 tMnure r i(] I n f170 111 it(po jf-(cnltie( an f o

ie ypi nrid-l INba -Ot-le fT55 np M~Tai i pl al(e T-(1 Wimb ViI ace- lli- ItoIth Li f-inmi -cl( ()f 1W proloet(-I

2 ia iiiPor Mi m M n a F bOP oxit c-a rrnc qr-s-f-baf- tb fi rst- Full earii-i him Jlet d i t1e fo cvi nparurp sprt 01 jF OijFFcri-mms Will exisf-t Ww1-e- thr-b Mrshm and

Pll a st 1foTrlt nnl WI li(ilht i ci( it-lo P0 I- 51C~ 1

re iIiat-af t ut in ire I i- Cl iiPt-l 140 Y ai5a acwinit-I rai-i)i- vste Ixil I it 1 9R PnvroroI ~ I Ifpr1~u

ipl(] it jre Ff c Fvli C2fo iro- 15i i iIo -2 a i-v-If ( n il a Ir pnri i t Pin aI AfrIlI t I)nt n 1a4 f- ~ Ijnat i

1a rrl i -r Alt- (i)F J~l Sl~pe ilw-aifi( anfl ( lil it--l I s fshyrminvi sl-lrprnv (-(F 171 inn~ dm- 1-nC~for)T (If oclit- o

s()11vc- I(--yr [rI(-( 1iv ot T ilfpvifhifte ar t -x j F-l i

plr(~-~r ii cl eq ~-ni i c (l ( i- i I 1a oIifr -at - nof t1-j

AUI)TI OF USAII)EI SALVAIX)RS AGRARIA

REFORM SECIOR SUPPORT PROJEC NO 519-0265

PART III - APPENDICE

UNITED STATES GOVERNMENT

A ToN

suaJc( i~s

DA TEmemorcindum

PLPL rCAPP~ENDIXHe1)t

onclnet n Draft Auit Iueport for Pjraria eomAd

(Page Itof A 8)

-To tMr Coinr age Gotha r(i RIG IkCJuIc ijz ipa

10e LA IOwi od~rt r1~uggcestcx1 revi sions of th Draf t ke~p-r ts~ x~i~ex oini thsi en rcki sid Wh di scusuiosdecijsions re he4yshy

ing fC th e ex it couf rer~o holde on IDccird 3 [CF8C

In the i nterest of osisi l nc ycm in t ryingj Lo pub[ ispound1 tii Seurf ~inI) rQib2r at inll UK x~ hej WHE Wat reachat ruIaslial agIccreeniknt on 110St j IntS I 1FitlN fr(U0CI kVthe u~Xi L we 11rv noL ine111(1sl)UjietaA wornliuqIs nufor sshiacolin its to ftA 11C IAi in thle fre jrL Ift yul CwriteIUL kIL re ol the dI iftI yC1 f-2e21 we mlrnl5

(~t i a~to di sa~n oI cer pIii its w w-in II ippreli ateIMeI 7 1u ii Clnric for LIh Li Irdrig of Mi ot wiL I-t incttyi~lol as

LLI o I ale our Spocif ic euumit puge inA INyWb nurdkcrs tHie

PcJe i AsNdi scuss in tore let i I inl the( culralnent s Ill Part I Intraluit ori wo tsu9(JLsL the l ast tcntetfe in the Li rst

paeigra hvinn i reill

Plhztse 11 ci ts Q vo lunt iry lard sc ts oif Larrl ho IiIi~sii t2Xi-u C-f G05 aIcres

PaKje i i As jicreu i at LWie ~i L coviburei ce we skxjgetst the following1 word ii i for Li(- Li r s L jir 0 iIph

We folon 0i 1~heLt i LI inq )JrSSh gI I(~enl I I or Lh ai 1 ex)XecQ1 IM 1Al i fru t nMfOrniW In 0 HUi0 1-02 bofCAiSKSWi pr0jQCxL v(S011lrCf2I W0I nfiI

1 1 A t ltiIivurI rcen

c-L i vey Iii [(I 1il (lI ljII ill t hnfrriii I W ing lul torefolrm 1Xl2jjnl Ili inl (lep) Yinc tjl-rvices t(-shy

reforml Wnlefikiu Wil w~11I Aol siuwly thus for Lhe Co~ven lilil of N gtu Ivaotu his iuk11 i at u IiVerol rewformlfs hli (Il (I IsIi X1 A 2 i t(W Iji Lransif~ lhingC Hampn tiilin 0of

OPTIONAL FORM NO 10 (REV I1180) GOA FPMR (41 CFR) 101-1 Lb j010-114

USGPO 19B40-121 52N 178

APPENDIlX A (Phil 2 Qf8

Tn May 1(W 01P Covernnent of T FSaivacr pisscyl1pen eIntion si liP1vy-ilh (juJitIv i i HIPlf ra 1syste7m

rc-qistoerina propox -cF-i omiif-ored h I-NTirs rp

Li i I prvvi Iiro et- C fr-s rc1f 1vlii lc ti-e re qiam i rLr a1n0 s-Ollloii 1 ir i rb m tic f-CJect

amf-s (F ill1 r )--il

rpl i(E l1 -v( p1jia( I Tli ~ op r io oteae r woro t-c ncv(ctii - irp 1 hj r Lis nmriaaers in-0 acnlpmtant s 2

arlchvinnal Mcmp~sinn lotor in f-1 ros-c~i io)

RaI~srcm i~C0 ISflh[ e]1atoril inp 1i s respxoiwe We sileqeskt-fheo latiX5iIf flf tIl( t-hirnI icah

arvrciistecv tLerefrmn h-enofid2arios will rief obtain 1eNa 1 tMnure r i(] I n f170 111 it(po jf-(cnltie( an f o

ie ypi nrid-l INba -Ot-le fT55 np M~Tai i pl al(e T-(1 Wimb ViI ace- lli- ItoIth Li f-inmi -cl( ()f 1W proloet(-I

2 ia iiiPor Mi m M n a F bOP oxit c-a rrnc qr-s-f-baf- tb fi rst- Full earii-i him Jlet d i t1e fo cvi nparurp sprt 01 jF OijFFcri-mms Will exisf-t Ww1-e- thr-b Mrshm and

Pll a st 1foTrlt nnl WI li(ilht i ci( it-lo P0 I- 51C~ 1

re iIiat-af t ut in ire I i- Cl iiPt-l 140 Y ai5a acwinit-I rai-i)i- vste Ixil I it 1 9R PnvroroI ~ I Ifpr1~u

ipl(] it jre Ff c Fvli C2fo iro- 15i i iIo -2 a i-v-If ( n il a Ir pnri i t Pin aI AfrIlI t I)nt n 1a4 f- ~ Ijnat i

1a rrl i -r Alt- (i)F J~l Sl~pe ilw-aifi( anfl ( lil it--l I s fshyrminvi sl-lrprnv (-(F 171 inn~ dm- 1-nC~for)T (If oclit- o

s()11vc- I(--yr [rI(-( 1iv ot T ilfpvifhifte ar t -x j F-l i

plr(~-~r ii cl eq ~-ni i c (l ( i- i I 1a oIifr -at - nof t1-j

UNITED STATES GOVERNMENT

A ToN

suaJc( i~s

DA TEmemorcindum

PLPL rCAPP~ENDIXHe1)t

onclnet n Draft Auit Iueport for Pjraria eomAd

(Page Itof A 8)

-To tMr Coinr age Gotha r(i RIG IkCJuIc ijz ipa

10e LA IOwi od~rt r1~uggcestcx1 revi sions of th Draf t ke~p-r ts~ x~i~ex oini thsi en rcki sid Wh di scusuiosdecijsions re he4yshy

ing fC th e ex it couf rer~o holde on IDccird 3 [CF8C

In the i nterest of osisi l nc ycm in t ryingj Lo pub[ ispound1 tii Seurf ~inI) rQib2r at inll UK x~ hej WHE Wat reachat ruIaslial agIccreeniknt on 110St j IntS I 1FitlN fr(U0CI kVthe u~Xi L we 11rv noL ine111(1sl)UjietaA wornliuqIs nufor sshiacolin its to ftA 11C IAi in thle fre jrL Ift yul CwriteIUL kIL re ol the dI iftI yC1 f-2e21 we mlrnl5

(~t i a~to di sa~n oI cer pIii its w w-in II ippreli ateIMeI 7 1u ii Clnric for LIh Li Irdrig of Mi ot wiL I-t incttyi~lol as

LLI o I ale our Spocif ic euumit puge inA INyWb nurdkcrs tHie

PcJe i AsNdi scuss in tore let i I inl the( culralnent s Ill Part I Intraluit ori wo tsu9(JLsL the l ast tcntetfe in the Li rst

paeigra hvinn i reill

Plhztse 11 ci ts Q vo lunt iry lard sc ts oif Larrl ho IiIi~sii t2Xi-u C-f G05 aIcres

PaKje i i As jicreu i at LWie ~i L coviburei ce we skxjgetst the following1 word ii i for Li(- Li r s L jir 0 iIph

We folon 0i 1~heLt i LI inq )JrSSh gI I(~enl I I or Lh ai 1 ex)XecQ1 IM 1Al i fru t nMfOrniW In 0 HUi0 1-02 bofCAiSKSWi pr0jQCxL v(S011lrCf2I W0I nfiI

1 1 A t ltiIivurI rcen

c-L i vey Iii [(I 1il (lI ljII ill t hnfrriii I W ing lul torefolrm 1Xl2jjnl Ili inl (lep) Yinc tjl-rvices t(-shy

reforml Wnlefikiu Wil w~11I Aol siuwly thus for Lhe Co~ven lilil of N gtu Ivaotu his iuk11 i at u IiVerol rewformlfs hli (Il (I IsIi X1 A 2 i t(W Iji Lransif~ lhingC Hampn tiilin 0of

OPTIONAL FORM NO 10 (REV I1180) GOA FPMR (41 CFR) 101-1 Lb j010-114

USGPO 19B40-121 52N 178

APPENDIlX A (Phil 2 Qf8

Tn May 1(W 01P Covernnent of T FSaivacr pisscyl1pen eIntion si liP1vy-ilh (juJitIv i i HIPlf ra 1syste7m

rc-qistoerina propox -cF-i omiif-ored h I-NTirs rp

Li i I prvvi Iiro et- C fr-s rc1f 1vlii lc ti-e re qiam i rLr a1n0 s-Ollloii 1 ir i rb m tic f-CJect

amf-s (F ill1 r )--il

rpl i(E l1 -v( p1jia( I Tli ~ op r io oteae r woro t-c ncv(ctii - irp 1 hj r Lis nmriaaers in-0 acnlpmtant s 2

arlchvinnal Mcmp~sinn lotor in f-1 ros-c~i io)

RaI~srcm i~C0 ISflh[ e]1atoril inp 1i s respxoiwe We sileqeskt-fheo latiX5iIf flf tIl( t-hirnI icah

arvrciistecv tLerefrmn h-enofid2arios will rief obtain 1eNa 1 tMnure r i(] I n f170 111 it(po jf-(cnltie( an f o

ie ypi nrid-l INba -Ot-le fT55 np M~Tai i pl al(e T-(1 Wimb ViI ace- lli- ItoIth Li f-inmi -cl( ()f 1W proloet(-I

2 ia iiiPor Mi m M n a F bOP oxit c-a rrnc qr-s-f-baf- tb fi rst- Full earii-i him Jlet d i t1e fo cvi nparurp sprt 01 jF OijFFcri-mms Will exisf-t Ww1-e- thr-b Mrshm and

Pll a st 1foTrlt nnl WI li(ilht i ci( it-lo P0 I- 51C~ 1

re iIiat-af t ut in ire I i- Cl iiPt-l 140 Y ai5a acwinit-I rai-i)i- vste Ixil I it 1 9R PnvroroI ~ I Ifpr1~u

ipl(] it jre Ff c Fvli C2fo iro- 15i i iIo -2 a i-v-If ( n il a Ir pnri i t Pin aI AfrIlI t I)nt n 1a4 f- ~ Ijnat i

1a rrl i -r Alt- (i)F J~l Sl~pe ilw-aifi( anfl ( lil it--l I s fshyrminvi sl-lrprnv (-(F 171 inn~ dm- 1-nC~for)T (If oclit- o

s()11vc- I(--yr [rI(-( 1iv ot T ilfpvifhifte ar t -x j F-l i

plr(~-~r ii cl eq ~-ni i c (l ( i- i I 1a oIifr -at - nof t1-j

APPENDIlX A (Phil 2 Qf8

Tn May 1(W 01P Covernnent of T FSaivacr pisscyl1pen eIntion si liP1vy-ilh (juJitIv i i HIPlf ra 1syste7m

rc-qistoerina propox -cF-i omiif-ored h I-NTirs rp

Li i I prvvi Iiro et- C fr-s rc1f 1vlii lc ti-e re qiam i rLr a1n0 s-Ollloii 1 ir i rb m tic f-CJect

amf-s (F ill1 r )--il

rpl i(E l1 -v( p1jia( I Tli ~ op r io oteae r woro t-c ncv(ctii - irp 1 hj r Lis nmriaaers in-0 acnlpmtant s 2

arlchvinnal Mcmp~sinn lotor in f-1 ros-c~i io)

RaI~srcm i~C0 ISflh[ e]1atoril inp 1i s respxoiwe We sileqeskt-fheo latiX5iIf flf tIl( t-hirnI icah

arvrciistecv tLerefrmn h-enofid2arios will rief obtain 1eNa 1 tMnure r i(] I n f170 111 it(po jf-(cnltie( an f o

ie ypi nrid-l INba -Ot-le fT55 np M~Tai i pl al(e T-(1 Wimb ViI ace- lli- ItoIth Li f-inmi -cl( ()f 1W proloet(-I

2 ia iiiPor Mi m M n a F bOP oxit c-a rrnc qr-s-f-baf- tb fi rst- Full earii-i him Jlet d i t1e fo cvi nparurp sprt 01 jF OijFFcri-mms Will exisf-t Ww1-e- thr-b Mrshm and

Pll a st 1foTrlt nnl WI li(ilht i ci( it-lo P0 I- 51C~ 1

re iIiat-af t ut in ire I i- Cl iiPt-l 140 Y ai5a acwinit-I rai-i)i- vste Ixil I it 1 9R PnvroroI ~ I Ifpr1~u

ipl(] it jre Ff c Fvli C2fo iro- 15i i iIo -2 a i-v-If ( n il a Ir pnri i t Pin aI AfrIlI t I)nt n 1a4 f- ~ Ijnat i

1a rrl i -r Alt- (i)F J~l Sl~pe ilw-aifi( anfl ( lil it--l I s fshyrminvi sl-lrprnv (-(F 171 inn~ dm- 1-nC~for)T (If oclit- o

s()11vc- I(--yr [rI(-( 1iv ot T ilfpvifhifte ar t -x j F-l i

plr(~-~r ii cl eq ~-ni i c (l ( i- i I 1a oIifr -at - nof t1-j

APPENDIX A (Page 3 of 8)

As ~~cls it) Ii(OrO WOWa later in ouIr response we sugqesttLIh- final Fol I paraqrapii he dlel oteNI and theo fol own-inci IN-

PTNATA s eonint-er l ras not- 1-een al-le to read te inaqrot ictapesf- 7nt- In RIT conetai linci dlat-a oil I)-perti s for PhaseoIT r hcnofirpi aries Al thool to prcxesri 10of ite Ores not reoujiirc he to) svster he cowngti ble pro jectmaalnwnt- rorcenio IN1 i t tinq prxwVss =10u Iv muk)irie norv of-firC or itif i n rn-)fi or trisfor iot weep [bo tvkshyannvo pro mIit pmaita 1 Wop l miCOllc-l i nsit-tfti nq a nrecr-wiisill 0r i foai rl-y(coji r ti on and esi-t sIllntof a ti ri-t-l o Fo r dOevecilina-ian oFf i rot-it-AAM transfeTr

5 ipl T)-

v Tk-vei erd in- ant-O rlo-n ina -tnt emit- rltl i ntociri t -d nfrmt 5 tvmp1 i piTp--Cist ill i AI ii (Aiii 1X X7n it) a dcvo 1epshy(Otlrt- r -h UirI ir ar lip ted t at-ps llobarne () 1F

t c) F 17 1f v1Ial ko rIi s uIc)r ( i 11 Io1l a t iw I v t-heI proON i 7t515- C c otin (I t-liC lv)l n weini lila 1 S foet j~Y (-1I10niirl I ft i op I i~C d 1c) ro l-ni r e wpaj nri t l0 t I(

mv~riI mt cIf Pt p-1 uil1 - )~ Io 1 1 -im inc- ]io1 -s r~ faiIc ridtii -ter i 1i 1 rofsc1ircos roodVO ife Compl ete the

Niprhoviinal andSOtPC Psllrr5 Ioiann YekoIrx iticl beo

apI-O ra1vai 1l If~

Pr I1vi nc ar rr i qwcif i c (innt- VeviO ly naeno ralders in Part T

Iarn 1 We zilvt 10 fT- IV 0 fol I nti nn I-il i --l flie( I i -cyl j as l-r o c i nforna--n For 1Paia- TI

Tn 1OPO te l-Ni- 1 c) 17qra ian Rpn rn malela all pri vaten hol1yo or 7 ijodi toc 1ise T t f-)IeXprlnpricati es hp F 1mpoif-al and 1e tca 1 roasonsorl facn(T 2l r5 I ~ oiiii nl-rte C-al1ampp TL r I ieie-s 0 i 1ply-) from I WOlfupti 1 Mes row Corsi t Iit iC(1s0 oiat-cY j 1 1 A13 wi 0)i tc~s ri)- mny sorFa prn x-vi o Irilei raps i n El

7nI wair f jaorfos Tr i1 i t i or it I po ln t t -I 1arnonrs eplI o-f- F Ia rls (il tbe ol-e1 marnt in xnsof w0 nsor Valor mrll i~~ coppitI 1pu dor WelnpPI

NOI~l-250 if0 PC

APPENIIX A (Page 4 of 8)

-

7hosece sales colnstituto [he irplementation of Phase IT arshylave I)en talinq place since ]QR3 A survey made inearly 1905 of fhe 389 ]anloiners identified( as holdr qinoro than 605 acres in VI3 reveale- flat all -lit PO ofllom bad sonl their xcess land eornplvnq wih PhaseTIs i mplementi x roqul at-ions Cf the Fl who sti1l heil

more thrln 60r acres al-]-1 1t 22 were t-yinq -o sell thoir0xOSS (imnicl of wlhich - locat-(c1 queri 11ain controlled arras) Ti cal-ions are t-at l tm Decp-lt-r 20 laC(load 1 e enlv proeperttios whic]h are nol vd in ]itioat ion will not -- in

1 compliance nhae TT is For

all intent-s ar pi lrx-seo cemplet-

srcripti n of Phoso T s ot ld olot(-n 1(l -i el 1Followinqinsrt in itfs p1l c

Phase TT 1nlorl for Ihe volinnt-arv sale oF land h-Ioldingsinexress ef C acres v December 1 nn6 andn poysi ibloexpronri at ion of any ncesn boldings toreafter Th sprrx-esFs own in 1 0M2 ny n avdind sulh 1 lae boon t--ranscferod hy alo

Ptl 1nin are ncr cemnts ley 1 pIqn inilber in Part II Pesul ofs

anate l Per el( in(nrlent-s -Ower M ir- report- we oest- [at- tlhesogi lastshyplaraor-Jph itein o(2) clalhqq(11()road

ad(inot lroe succesfn I in placinq and Inaintaini nqslFci ent- t-)nal in-] nd i n enan-rrs accountant s t ara rian roron-mper- iV(5

Pae r i(scl t- the flol I C-io l-K l-i asO ockq-rnund i nfn[-tion for 11hiai Fe T

Tin order t-o anpreiro-t h-fle nidl-i fintirlqs i t i Fnecessarytol-i t-rpill tlhe I)1o-j(rss of tle orm inato p rs x-Lt-J i I acIari v toiiimpl erenta-ion of tho three plaros A l rix-l-t i to pha - I haqs -oenxpr prilat-q AlIirs- (10 0 former]i y 1id tm els personsorlanizo- ntki 317 -(N-it- iwv en iov at l-eaQuf1ifrr t-eri i(lit t5 s n-ai-oflrs(eienl fflue test eFi I l imit land r-4e)ourc- De Finitivze itels Wae Weeni issn to 140 of tlbe xy rlte--i (SO]) pJe-r0nt I-i le lis mc a in nllct-Tin har doereaso river 3Me eq)rs ot-he reform poase IF prc-ti ( tion of muclh- nel rl ()7pxArt crops has incroei and ha-r I fj l (Xcco 1 natjional averapc- s in almost cropover

APPEND[IX A

T~~~e Tn lastC th~e sen~tence of the f i rsli paragrapl - eha1 nqo scr 1to 1 cqa1 an )Ac --lftor ricilt-s to tHl 1an9 Prior to the

Ille-4o- assi stlnce onpl etion clat-u Ve hbivo no reoaren to 1vlin eo thle rr~of t it-li nc IW 1ha 1 at thec oni (-)T our

1ve rec enrI t I) fCj 1I j] 7a Iavj0 r ol I) v rejn the a ((lhnv t I I 1V)r - 1 Vifl - 7i F ) 1p rT1a)vi~t w i t if cm I-Mirl wil1l i innto [ilC -j sC th 5ano ruserc noco to~ssa ryaecoripl i Ah I Wtt I1m Itnirt rt Is bytb pru LLsfui FA1

pro-i et nvK (ncf ce i n liflo

eO P Insert a ft-m the f)rl ff)) foir~Iii th r piraqriapji tho foll1owi ncl

[fPA va rcv~rTlW V( n1to 1 CQ to foCus pr nci pall y OnaNd acewiri- iri nN-I

7001 l ast- olt oi co h-i oN1 to to eornlstont Wi th

7Panecl C) eshi rus t fo C r itf-iw~11n q- for)Y 1viclqrund i ifomratAin

~irrPtvaai rrrrtr-ri icfiirt o- tHf 1irrru oxpe)rat i-f farm- ] jL uj r iprcO m-ic x) onMe t j ra 1 -lvlqnp-en f 1- tl e

mile-no -o IlIr s1rea r i Us i f- O tlr( Fpr iFoess i oni 1 Iivclevvientm hlan i1 iio ov1 - I( 7 it S )roF i t )Irx i i Tx I ol 1( i v s s-njme i pr

nflJ1tr~I i h ioc i Von 0f 1il )Pur Tr1 veeIu- jnairv

en t rmr ies W 1IN fo f Tie fj rsh imo a movsur-l prion(if Phapi T 1enefini am irc r (t-r ip 2tcif ) v1i 1 -ivo f O Soh AMi r ionjofp prari M-c Almoiqht 71 penwnt nf GoiHAS

1

(YY-iPerzr t iv flebft iN)f t-F ifo( i 1 F-f (1 1 iiM( 0 ill

eas (~(forrrniff- j fn-gtr-ect-j P in IOPT 0]lv 0 7

1) More Cxr It i yr T-opocers -ird Aeit Ir art T(Ylmr to

Pi rst -i rarp i rst sot 110-[iper t r to~ lPOY on1 ac(iint~iota

APPENIX A (Page 6 of 8)

First piaraqrayn foul-rth sorit-ence should1-beeletEy-l arcl tbe fol IOti rq suhqf f tnt-cl i n 1 i et here)f

1Tin it i of OiQ t0 cl oF cyyorcj nat-ion ariong rctsponsilbi (-OFF e agencios ar of Vt- rcv~eratiVn

aina -r 1

1( Ilnfian v~ not roco i ved an a~loquate or i 0ntat in nto nabli fbefi t-o elaFt( Pf FertijVol v withb the

coe ai 7 rii rlIr I-1 v-a aI Id inombeWr inhp

Taist sonfencr 0=41 ly WNW vt-an the fol owli s unsti tuvt-amp

Wi thoni t cNVI ot-i Va lcept-are -Int- cont-i nli ty in [he

rc-irco- for wiary or [ho atrari an rpform crooperatives to

Remmnlna tion a ) Q~Nxib3v 1 cOii ic to road ar fol1lows

x [Hv mpl mont-at irn plan wb I i ndiumIos kho Mtyp amshy

1~ c h0( prvA xt- in or ientation for

a ) 01 to ir c 1 Cay rnmeint of Fl Fgt ] vaior arevi so

ry ~mun(0

71anov 10 PecoyojJ(n-1t i on W1) on 1Ii o3] oh1O- it-i -can t0frac1--ic system1105Vnii~ TheI 1 T7-act ion plans willhas ~ containp prov i -ions for its riplo n Ition

Pcinriio li tfio~(1 1v 1icurr H it Ilb is ineccnmony i t~ onm be 1rewor3-l to roa

()Pov i ew a r a n1i 1vzo Ibe (on tr- i it s 1-o pl a i no andTbppim rrlPVviqampF5 arp3 v clnt-ants empi yoe3 by tli

(x~portit(s oW xp1Or op)t ions for i ncont-v7 wiche~VOS wou1t3 corroci-- tim r n umnrat 1s Acrt per orrmncin

Pano 11i WO sciiqceo t p0( 11 1-4- roti- ift to I-c - 0 s

71on [ISII (-himi [( i(tfil en ( in[f inipnnt 3nr ti tV0 ini I mlSlaCi Piir I- h rio~sfxms lV it I For rt(F ii rq 13i11 r rii 1iT1 11a1aclo rs- I I l 7i-()11-1fri Iit -~ t I- il sfo r-rot IF t-10ifrnin alvalnuan 111s-it il FiT Atqrrion i Ormurtion ( [STA) to thle Fliisb ry Eof Pqvr ci I 1lre (WC) 1 noof 1I71fc lac(k o)f capic anf- toc i fill olnon 1~ n) t 1I t Fi t1-1(

I-rany for act i vi t-y F)iniinc t1bi t~ritni f in poriccl wicI)

placoeinrit mr 1 n

APPENDIX A (Page 7 of 8)

-7-

Socnofl I-he proje)jct c1csi underes[ iiiaterl tho WHf- iiI-M rinvColVnlt wi t-]1 tho nlinlomont ofa

cxprt i Vo Trlnf_~Ors2orl ivis [be hiiqh turnovrlr (IFrlIi~or oniv wnx-)i it - (Itir to xerol caii-p such as

cy-oflira[ iveo re-Jictanor( to( cnverr tho unag~ors sflacr Weo wi th a suh-s it vrri rh-1ly lllo pgteorct iluril7 ll[1w

Phi r1 i- oro ii v it t Ylert nAri th Cont or for

inna 1 arano 1 mtcon RIMF Awir ii [ra I Trai ni ii (lY~P) to

fircAidl -I lk-cl i lt~ F11v itih nIilli nc1 i to norioit[thfm lo I(- - ltem [aanuiio I 11Wclue Vri t-a-peYrt it v in

r Frr ~ to) pnict1oir at foej7C r~O tlgtO(CSe - - nlljolpnt S

wo-re tvovreri niJ-o no to a lagtof eYni ia1V0wooln t-11 ro [fii ra b a [h -P Ppx j n1 ll Wice- m[o)[lo providC [ lra ini xT toe

yxA t 1v 11in v -(r nSsO I 1I i (coi1)iitint- sI o0n 111ha s -bisj initIiativ0houl Clos arqross ivolo imi ie and i f Su c055 fiil ir it 1 t i ra ii 7( int-o a fnri1 [ noin i nc

T- ran

1 P -4- (-In pot t1T I t r nifori I- (I i a of r i via ce i t-or 1of~woofl T(71 all) PTI3ATA iqs i---i rvvibl(e Ofl 101-01 )4spoo~) up0

il1n onl 5I o ac-r-i 1 1ci of t-)r

T(r rnmrv p 1(Th5 11oxv-r [he bi str i ca1 criT -1 iis 07 Ti it I [I)( prrolm if- ) i)t a 13t of px-x~ pli arn inq arn)

1ac) of o-nd niat ion 90-h W1 fSV[ pils WO o ot up r~~ a[lVat WI H owampr dwis fanr~df feronI piirparos in [ ernal f1- [h[aornani sit i =r Ohi 10 (l1 iv all Pssemvs loKnhei 1ve YIoen inta llb at- [-In rame t i me aii 1 ccmp[i ilo Upi~ rp 1 [or of

technlcal (ICi1~a n~vs inli ir a j0071 1 i0an j JTiS

PV-Ino 1rC lhe Si4worp rraiq bl~ t1escod ~ Nn tc i1i (1shyh

followV S UnTt il MirAN~ a xl T(44 -mprrve tI--e( enrrcrit in formt-ini1 trrwsf- )inv(5 M1idi

WNW Wt foilncciiyroqsntonc( sI culil )-lt r wrd(I aFtl

i - t 1flo-(oi 51 irn and or rn--r(-iv i1-v i 11 n t to wIi n ton u t jl 7 fui I i t s (Oifp ilt4r oy sI[ar( w o- t fiirt bIvIr reliIce gta i n m i PCI t i til es to

so ir t-orF i an as isiow-ir~lr Iir is i-ro cons i stentshy

t-11 pa (CiillpllI i nr

Pan1IPcai[be FhVI(oI ai hn1 tllrtW - r[ A s -a Pr ior pa -irs of he oVrirapli shloul ci IV

(no r Tr to I-hi rd seflt-Cn( of [110 fi r5-t pvaripl do] oth

APPENDSi A

Pe (iscussicon o-arlier it- our r jxne -isunost tile recoul-nneration hI-ex- o ars Follows

WrpcnojjoI i-hat- IfArP17a1 ivataor 6-ta in cviclepu fiha 1I [b TP1 v-1i-SIs P op )~plVan whi c-b(evr~~n-of riol~ b 21-es =n1 omi rces rom i ro(1 to Iorvje1op a)nv

jr~~ ~-[j n i o 1infcmril Jcm te to fac ili ia ishythe w~rI of Omr- Sa1 vaThrn Agrarian TRoform

rr PP hnii-n flp)TTJ

K1j I PMO

FBov1 P91

APPFNIIX B (Page I of 2)

List of Recommendations

Page Recommenddtion No 1 4

We recommend that IFDAI)Fl Salvador obtain from the Government of El Salwador a revised implementation plan indicatingsteps anti resolurccs necessary to accomplish the titling

the targets

IW the lrwO1(WIk completio(n date

Recommendation No 2 6

We recommend that IUSAI)D-[ Salvador

a) obtain From the Government of Ii Salvador a rev isedimplemen tation plan which states the steps and resources necessary to provide adequate orientation for cooperative managers ia[ndIaccounltaLnts

) obtain evidence that an effective tracking system has beendeveloped to ascertain the number and location of- managersand accountants received and

and the type of training they have

c) review and analyze the constraints to placing and keepingmanagers and accountants employed by the cooperatives andexplore options for incentives which would correct their currently tunsat i sfac tory performance

Recommendation No 3

We recommend that IJSAII)El Salvador obtain evidence that theNational Finance Office for iNgrarian Reform Lands

a) has implemented internal control procedures for both vehicle use and fuel purchases and

b) has imp lemwa ted maintenance control procedures and instituted a system to obtain the best prices for vehicle repair work

8

APPENDIX B (Page 2 of 2)

PageRecommenlation No 1 toeWe recommend that 1TJAI)HI Salvador

a) obtain documen ted assurance from the Government of ElSal va( that the National Finance OL[ice for AgrarianRef orm Liands and N ti ona t Geog raphi c Ins t i tu te wi ll inWreatse tleir love I ol commI ication and wil I join ef forts to determin the best wav to succe sIu11y transfe) da ta Ietwen the two cobi tr sysLemis and

b) obtain an acceptable timtahle for establishing a procedurtfor transferring dtia via conntr magnetic tbe between the National Meographic Institute and the National FinaceOffice for Agrarian Reforll Lands

ReconHdenlation No

We recommend tlat USAIA)- Salvador obtain evidence1 that theGovernmuet of El Salvador has developed a plan which includes the stenps and resolnces reapidred to develop and imlplemit anintegrated information system to facilitate the work of the Salvadoran Agrarian Reform

12

APPENDIX C

REPORT DISThllBUTION

No of Copies

Iirector USAII)El Salvador 5 AALAC 2 [ACCAI)EN 1 LAWR 1

[ACCONT 1

LACR IAs 1 AAI

2 C 1 ILt- Sr1 r

I 1

Ij1VilS[

PPCCI) I- 3 AAXA 2 XAi R I I( 1 AIA ICIPII 1

2

I(IP10 R 2

1I I 1

RI([I T I Other RIAs l

APPENIIX A (Page 4 of 8)

-

7hosece sales colnstituto [he irplementation of Phase IT arshylave I)en talinq place since ]QR3 A survey made inearly 1905 of fhe 389 ]anloiners identified( as holdr qinoro than 605 acres in VI3 reveale- flat all -lit PO ofllom bad sonl their xcess land eornplvnq wih PhaseTIs i mplementi x roqul at-ions Cf the Fl who sti1l heil

more thrln 60r acres al-]-1 1t 22 were t-yinq -o sell thoir0xOSS (imnicl of wlhich - locat-(c1 queri 11ain controlled arras) Ti cal-ions are t-at l tm Decp-lt-r 20 laC(load 1 e enlv proeperttios whic]h are nol vd in ]itioat ion will not -- in

1 compliance nhae TT is For

all intent-s ar pi lrx-seo cemplet-

srcripti n of Phoso T s ot ld olot(-n 1(l -i el 1Followinqinsrt in itfs p1l c

Phase TT 1nlorl for Ihe volinnt-arv sale oF land h-Ioldingsinexress ef C acres v December 1 nn6 andn poysi ibloexpronri at ion of any ncesn boldings toreafter Th sprrx-esFs own in 1 0M2 ny n avdind sulh 1 lae boon t--ranscferod hy alo

Ptl 1nin are ncr cemnts ley 1 pIqn inilber in Part II Pesul ofs

anate l Per el( in(nrlent-s -Ower M ir- report- we oest- [at- tlhesogi lastshyplaraor-Jph itein o(2) clalhqq(11()road

ad(inot lroe succesfn I in placinq and Inaintaini nqslFci ent- t-)nal in-] nd i n enan-rrs accountant s t ara rian roron-mper- iV(5

Pae r i(scl t- the flol I C-io l-K l-i asO ockq-rnund i nfn[-tion for 11hiai Fe T

Tin order t-o anpreiro-t h-fle nidl-i fintirlqs i t i Fnecessarytol-i t-rpill tlhe I)1o-j(rss of tle orm inato p rs x-Lt-J i I acIari v toiiimpl erenta-ion of tho three plaros A l rix-l-t i to pha - I haqs -oenxpr prilat-q AlIirs- (10 0 former]i y 1id tm els personsorlanizo- ntki 317 -(N-it- iwv en iov at l-eaQuf1ifrr t-eri i(lit t5 s n-ai-oflrs(eienl fflue test eFi I l imit land r-4e)ourc- De Finitivze itels Wae Weeni issn to 140 of tlbe xy rlte--i (SO]) pJe-r0nt I-i le lis mc a in nllct-Tin har doereaso river 3Me eq)rs ot-he reform poase IF prc-ti ( tion of muclh- nel rl ()7pxArt crops has incroei and ha-r I fj l (Xcco 1 natjional averapc- s in almost cropover

APPEND[IX A

T~~~e Tn lastC th~e sen~tence of the f i rsli paragrapl - eha1 nqo scr 1to 1 cqa1 an )Ac --lftor ricilt-s to tHl 1an9 Prior to the

Ille-4o- assi stlnce onpl etion clat-u Ve hbivo no reoaren to 1vlin eo thle rr~of t it-li nc IW 1ha 1 at thec oni (-)T our

1ve rec enrI t I) fCj 1I j] 7a Iavj0 r ol I) v rejn the a ((lhnv t I I 1V)r - 1 Vifl - 7i F ) 1p rT1a)vi~t w i t if cm I-Mirl wil1l i innto [ilC -j sC th 5ano ruserc noco to~ssa ryaecoripl i Ah I Wtt I1m Itnirt rt Is bytb pru LLsfui FA1

pro-i et nvK (ncf ce i n liflo

eO P Insert a ft-m the f)rl ff)) foir~Iii th r piraqriapji tho foll1owi ncl

[fPA va rcv~rTlW V( n1to 1 CQ to foCus pr nci pall y OnaNd acewiri- iri nN-I

7001 l ast- olt oi co h-i oN1 to to eornlstont Wi th

7Panecl C) eshi rus t fo C r itf-iw~11n q- for)Y 1viclqrund i ifomratAin

~irrPtvaai rrrrtr-ri icfiirt o- tHf 1irrru oxpe)rat i-f farm- ] jL uj r iprcO m-ic x) onMe t j ra 1 -lvlqnp-en f 1- tl e

mile-no -o IlIr s1rea r i Us i f- O tlr( Fpr iFoess i oni 1 Iivclevvientm hlan i1 iio ov1 - I( 7 it S )roF i t )Irx i i Tx I ol 1( i v s s-njme i pr

nflJ1tr~I i h ioc i Von 0f 1il )Pur Tr1 veeIu- jnairv

en t rmr ies W 1IN fo f Tie fj rsh imo a movsur-l prion(if Phapi T 1enefini am irc r (t-r ip 2tcif ) v1i 1 -ivo f O Soh AMi r ionjofp prari M-c Almoiqht 71 penwnt nf GoiHAS

1

(YY-iPerzr t iv flebft iN)f t-F ifo( i 1 F-f (1 1 iiM( 0 ill

eas (~(forrrniff- j fn-gtr-ect-j P in IOPT 0]lv 0 7

1) More Cxr It i yr T-opocers -ird Aeit Ir art T(Ylmr to

Pi rst -i rarp i rst sot 110-[iper t r to~ lPOY on1 ac(iint~iota

APPENIX A (Page 6 of 8)

First piaraqrayn foul-rth sorit-ence should1-beeletEy-l arcl tbe fol IOti rq suhqf f tnt-cl i n 1 i et here)f

1Tin it i of OiQ t0 cl oF cyyorcj nat-ion ariong rctsponsilbi (-OFF e agencios ar of Vt- rcv~eratiVn

aina -r 1

1( Ilnfian v~ not roco i ved an a~loquate or i 0ntat in nto nabli fbefi t-o elaFt( Pf FertijVol v withb the

coe ai 7 rii rlIr I-1 v-a aI Id inombeWr inhp

Taist sonfencr 0=41 ly WNW vt-an the fol owli s unsti tuvt-amp

Wi thoni t cNVI ot-i Va lcept-are -Int- cont-i nli ty in [he

rc-irco- for wiary or [ho atrari an rpform crooperatives to

Remmnlna tion a ) Q~Nxib3v 1 cOii ic to road ar fol1lows

x [Hv mpl mont-at irn plan wb I i ndiumIos kho Mtyp amshy

1~ c h0( prvA xt- in or ientation for

a ) 01 to ir c 1 Cay rnmeint of Fl Fgt ] vaior arevi so

ry ~mun(0

71anov 10 PecoyojJ(n-1t i on W1) on 1Ii o3] oh1O- it-i -can t0frac1--ic system1105Vnii~ TheI 1 T7-act ion plans willhas ~ containp prov i -ions for its riplo n Ition

Pcinriio li tfio~(1 1v 1icurr H it Ilb is ineccnmony i t~ onm be 1rewor3-l to roa

()Pov i ew a r a n1i 1vzo Ibe (on tr- i it s 1-o pl a i no andTbppim rrlPVviqampF5 arp3 v clnt-ants empi yoe3 by tli

(x~portit(s oW xp1Or op)t ions for i ncont-v7 wiche~VOS wou1t3 corroci-- tim r n umnrat 1s Acrt per orrmncin

Pano 11i WO sciiqceo t p0( 11 1-4- roti- ift to I-c - 0 s

71on [ISII (-himi [( i(tfil en ( in[f inipnnt 3nr ti tV0 ini I mlSlaCi Piir I- h rio~sfxms lV it I For rt(F ii rq 13i11 r rii 1iT1 11a1aclo rs- I I l 7i-()11-1fri Iit -~ t I- il sfo r-rot IF t-10ifrnin alvalnuan 111s-it il FiT Atqrrion i Ormurtion ( [STA) to thle Fliisb ry Eof Pqvr ci I 1lre (WC) 1 noof 1I71fc lac(k o)f capic anf- toc i fill olnon 1~ n) t 1I t Fi t1-1(

I-rany for act i vi t-y F)iniinc t1bi t~ritni f in poriccl wicI)

placoeinrit mr 1 n

APPENDIX A (Page 7 of 8)

-7-

Socnofl I-he proje)jct c1csi underes[ iiiaterl tho WHf- iiI-M rinvColVnlt wi t-]1 tho nlinlomont ofa

cxprt i Vo Trlnf_~Ors2orl ivis [be hiiqh turnovrlr (IFrlIi~or oniv wnx-)i it - (Itir to xerol caii-p such as

cy-oflira[ iveo re-Jictanor( to( cnverr tho unag~ors sflacr Weo wi th a suh-s it vrri rh-1ly lllo pgteorct iluril7 ll[1w

Phi r1 i- oro ii v it t Ylert nAri th Cont or for

inna 1 arano 1 mtcon RIMF Awir ii [ra I Trai ni ii (lY~P) to

fircAidl -I lk-cl i lt~ F11v itih nIilli nc1 i to norioit[thfm lo I(- - ltem [aanuiio I 11Wclue Vri t-a-peYrt it v in

r Frr ~ to) pnict1oir at foej7C r~O tlgtO(CSe - - nlljolpnt S

wo-re tvovreri niJ-o no to a lagtof eYni ia1V0wooln t-11 ro [fii ra b a [h -P Ppx j n1 ll Wice- m[o)[lo providC [ lra ini xT toe

yxA t 1v 11in v -(r nSsO I 1I i (coi1)iitint- sI o0n 111ha s -bisj initIiativ0houl Clos arqross ivolo imi ie and i f Su c055 fiil ir it 1 t i ra ii 7( int-o a fnri1 [ noin i nc

T- ran

1 P -4- (-In pot t1T I t r nifori I- (I i a of r i via ce i t-or 1of~woofl T(71 all) PTI3ATA iqs i---i rvvibl(e Ofl 101-01 )4spoo~) up0

il1n onl 5I o ac-r-i 1 1ci of t-)r

T(r rnmrv p 1(Th5 11oxv-r [he bi str i ca1 criT -1 iis 07 Ti it I [I)( prrolm if- ) i)t a 13t of px-x~ pli arn inq arn)

1ac) of o-nd niat ion 90-h W1 fSV[ pils WO o ot up r~~ a[lVat WI H owampr dwis fanr~df feronI piirparos in [ ernal f1- [h[aornani sit i =r Ohi 10 (l1 iv all Pssemvs loKnhei 1ve YIoen inta llb at- [-In rame t i me aii 1 ccmp[i ilo Upi~ rp 1 [or of

technlcal (ICi1~a n~vs inli ir a j0071 1 i0an j JTiS

PV-Ino 1rC lhe Si4worp rraiq bl~ t1escod ~ Nn tc i1i (1shyh

followV S UnTt il MirAN~ a xl T(44 -mprrve tI--e( enrrcrit in formt-ini1 trrwsf- )inv(5 M1idi

WNW Wt foilncciiyroqsntonc( sI culil )-lt r wrd(I aFtl

i - t 1flo-(oi 51 irn and or rn--r(-iv i1-v i 11 n t to wIi n ton u t jl 7 fui I i t s (Oifp ilt4r oy sI[ar( w o- t fiirt bIvIr reliIce gta i n m i PCI t i til es to

so ir t-orF i an as isiow-ir~lr Iir is i-ro cons i stentshy

t-11 pa (CiillpllI i nr

Pan1IPcai[be FhVI(oI ai hn1 tllrtW - r[ A s -a Pr ior pa -irs of he oVrirapli shloul ci IV

(no r Tr to I-hi rd seflt-Cn( of [110 fi r5-t pvaripl do] oth

APPENDSi A

Pe (iscussicon o-arlier it- our r jxne -isunost tile recoul-nneration hI-ex- o ars Follows

WrpcnojjoI i-hat- IfArP17a1 ivataor 6-ta in cviclepu fiha 1I [b TP1 v-1i-SIs P op )~plVan whi c-b(evr~~n-of riol~ b 21-es =n1 omi rces rom i ro(1 to Iorvje1op a)nv

jr~~ ~-[j n i o 1infcmril Jcm te to fac ili ia ishythe w~rI of Omr- Sa1 vaThrn Agrarian TRoform

rr PP hnii-n flp)TTJ

K1j I PMO

FBov1 P91

APPFNIIX B (Page I of 2)

List of Recommendations

Page Recommenddtion No 1 4

We recommend that IFDAI)Fl Salvador obtain from the Government of El Salwador a revised implementation plan indicatingsteps anti resolurccs necessary to accomplish the titling

the targets

IW the lrwO1(WIk completio(n date

Recommendation No 2 6

We recommend that IUSAI)D-[ Salvador

a) obtain From the Government of Ii Salvador a rev isedimplemen tation plan which states the steps and resources necessary to provide adequate orientation for cooperative managers ia[ndIaccounltaLnts

) obtain evidence that an effective tracking system has beendeveloped to ascertain the number and location of- managersand accountants received and

and the type of training they have

c) review and analyze the constraints to placing and keepingmanagers and accountants employed by the cooperatives andexplore options for incentives which would correct their currently tunsat i sfac tory performance

Recommendation No 3

We recommend that IJSAII)El Salvador obtain evidence that theNational Finance Office for iNgrarian Reform Lands

a) has implemented internal control procedures for both vehicle use and fuel purchases and

b) has imp lemwa ted maintenance control procedures and instituted a system to obtain the best prices for vehicle repair work

8

APPENDIX B (Page 2 of 2)

PageRecommenlation No 1 toeWe recommend that 1TJAI)HI Salvador

a) obtain documen ted assurance from the Government of ElSal va( that the National Finance OL[ice for AgrarianRef orm Liands and N ti ona t Geog raphi c Ins t i tu te wi ll inWreatse tleir love I ol commI ication and wil I join ef forts to determin the best wav to succe sIu11y transfe) da ta Ietwen the two cobi tr sysLemis and

b) obtain an acceptable timtahle for establishing a procedurtfor transferring dtia via conntr magnetic tbe between the National Meographic Institute and the National FinaceOffice for Agrarian Reforll Lands

ReconHdenlation No

We recommend tlat USAIA)- Salvador obtain evidence1 that theGovernmuet of El Salvador has developed a plan which includes the stenps and resolnces reapidred to develop and imlplemit anintegrated information system to facilitate the work of the Salvadoran Agrarian Reform

12

APPENDIX C

REPORT DISThllBUTION

No of Copies

Iirector USAII)El Salvador 5 AALAC 2 [ACCAI)EN 1 LAWR 1

[ACCONT 1

LACR IAs 1 AAI

2 C 1 ILt- Sr1 r

I 1

Ij1VilS[

PPCCI) I- 3 AAXA 2 XAi R I I( 1 AIA ICIPII 1

2

I(IP10 R 2

1I I 1

RI([I T I Other RIAs l

APPEND[IX A

T~~~e Tn lastC th~e sen~tence of the f i rsli paragrapl - eha1 nqo scr 1to 1 cqa1 an )Ac --lftor ricilt-s to tHl 1an9 Prior to the

Ille-4o- assi stlnce onpl etion clat-u Ve hbivo no reoaren to 1vlin eo thle rr~of t it-li nc IW 1ha 1 at thec oni (-)T our

1ve rec enrI t I) fCj 1I j] 7a Iavj0 r ol I) v rejn the a ((lhnv t I I 1V)r - 1 Vifl - 7i F ) 1p rT1a)vi~t w i t if cm I-Mirl wil1l i innto [ilC -j sC th 5ano ruserc noco to~ssa ryaecoripl i Ah I Wtt I1m Itnirt rt Is bytb pru LLsfui FA1

pro-i et nvK (ncf ce i n liflo

eO P Insert a ft-m the f)rl ff)) foir~Iii th r piraqriapji tho foll1owi ncl

[fPA va rcv~rTlW V( n1to 1 CQ to foCus pr nci pall y OnaNd acewiri- iri nN-I

7001 l ast- olt oi co h-i oN1 to to eornlstont Wi th

7Panecl C) eshi rus t fo C r itf-iw~11n q- for)Y 1viclqrund i ifomratAin

~irrPtvaai rrrrtr-ri icfiirt o- tHf 1irrru oxpe)rat i-f farm- ] jL uj r iprcO m-ic x) onMe t j ra 1 -lvlqnp-en f 1- tl e

mile-no -o IlIr s1rea r i Us i f- O tlr( Fpr iFoess i oni 1 Iivclevvientm hlan i1 iio ov1 - I( 7 it S )roF i t )Irx i i Tx I ol 1( i v s s-njme i pr

nflJ1tr~I i h ioc i Von 0f 1il )Pur Tr1 veeIu- jnairv

en t rmr ies W 1IN fo f Tie fj rsh imo a movsur-l prion(if Phapi T 1enefini am irc r (t-r ip 2tcif ) v1i 1 -ivo f O Soh AMi r ionjofp prari M-c Almoiqht 71 penwnt nf GoiHAS

1

(YY-iPerzr t iv flebft iN)f t-F ifo( i 1 F-f (1 1 iiM( 0 ill

eas (~(forrrniff- j fn-gtr-ect-j P in IOPT 0]lv 0 7

1) More Cxr It i yr T-opocers -ird Aeit Ir art T(Ylmr to

Pi rst -i rarp i rst sot 110-[iper t r to~ lPOY on1 ac(iint~iota

APPENIX A (Page 6 of 8)

First piaraqrayn foul-rth sorit-ence should1-beeletEy-l arcl tbe fol IOti rq suhqf f tnt-cl i n 1 i et here)f

1Tin it i of OiQ t0 cl oF cyyorcj nat-ion ariong rctsponsilbi (-OFF e agencios ar of Vt- rcv~eratiVn

aina -r 1

1( Ilnfian v~ not roco i ved an a~loquate or i 0ntat in nto nabli fbefi t-o elaFt( Pf FertijVol v withb the

coe ai 7 rii rlIr I-1 v-a aI Id inombeWr inhp

Taist sonfencr 0=41 ly WNW vt-an the fol owli s unsti tuvt-amp

Wi thoni t cNVI ot-i Va lcept-are -Int- cont-i nli ty in [he

rc-irco- for wiary or [ho atrari an rpform crooperatives to

Remmnlna tion a ) Q~Nxib3v 1 cOii ic to road ar fol1lows

x [Hv mpl mont-at irn plan wb I i ndiumIos kho Mtyp amshy

1~ c h0( prvA xt- in or ientation for

a ) 01 to ir c 1 Cay rnmeint of Fl Fgt ] vaior arevi so

ry ~mun(0

71anov 10 PecoyojJ(n-1t i on W1) on 1Ii o3] oh1O- it-i -can t0frac1--ic system1105Vnii~ TheI 1 T7-act ion plans willhas ~ containp prov i -ions for its riplo n Ition

Pcinriio li tfio~(1 1v 1icurr H it Ilb is ineccnmony i t~ onm be 1rewor3-l to roa

()Pov i ew a r a n1i 1vzo Ibe (on tr- i it s 1-o pl a i no andTbppim rrlPVviqampF5 arp3 v clnt-ants empi yoe3 by tli

(x~portit(s oW xp1Or op)t ions for i ncont-v7 wiche~VOS wou1t3 corroci-- tim r n umnrat 1s Acrt per orrmncin

Pano 11i WO sciiqceo t p0( 11 1-4- roti- ift to I-c - 0 s

71on [ISII (-himi [( i(tfil en ( in[f inipnnt 3nr ti tV0 ini I mlSlaCi Piir I- h rio~sfxms lV it I For rt(F ii rq 13i11 r rii 1iT1 11a1aclo rs- I I l 7i-()11-1fri Iit -~ t I- il sfo r-rot IF t-10ifrnin alvalnuan 111s-it il FiT Atqrrion i Ormurtion ( [STA) to thle Fliisb ry Eof Pqvr ci I 1lre (WC) 1 noof 1I71fc lac(k o)f capic anf- toc i fill olnon 1~ n) t 1I t Fi t1-1(

I-rany for act i vi t-y F)iniinc t1bi t~ritni f in poriccl wicI)

placoeinrit mr 1 n

APPENDIX A (Page 7 of 8)

-7-

Socnofl I-he proje)jct c1csi underes[ iiiaterl tho WHf- iiI-M rinvColVnlt wi t-]1 tho nlinlomont ofa

cxprt i Vo Trlnf_~Ors2orl ivis [be hiiqh turnovrlr (IFrlIi~or oniv wnx-)i it - (Itir to xerol caii-p such as

cy-oflira[ iveo re-Jictanor( to( cnverr tho unag~ors sflacr Weo wi th a suh-s it vrri rh-1ly lllo pgteorct iluril7 ll[1w

Phi r1 i- oro ii v it t Ylert nAri th Cont or for

inna 1 arano 1 mtcon RIMF Awir ii [ra I Trai ni ii (lY~P) to

fircAidl -I lk-cl i lt~ F11v itih nIilli nc1 i to norioit[thfm lo I(- - ltem [aanuiio I 11Wclue Vri t-a-peYrt it v in

r Frr ~ to) pnict1oir at foej7C r~O tlgtO(CSe - - nlljolpnt S

wo-re tvovreri niJ-o no to a lagtof eYni ia1V0wooln t-11 ro [fii ra b a [h -P Ppx j n1 ll Wice- m[o)[lo providC [ lra ini xT toe

yxA t 1v 11in v -(r nSsO I 1I i (coi1)iitint- sI o0n 111ha s -bisj initIiativ0houl Clos arqross ivolo imi ie and i f Su c055 fiil ir it 1 t i ra ii 7( int-o a fnri1 [ noin i nc

T- ran

1 P -4- (-In pot t1T I t r nifori I- (I i a of r i via ce i t-or 1of~woofl T(71 all) PTI3ATA iqs i---i rvvibl(e Ofl 101-01 )4spoo~) up0

il1n onl 5I o ac-r-i 1 1ci of t-)r

T(r rnmrv p 1(Th5 11oxv-r [he bi str i ca1 criT -1 iis 07 Ti it I [I)( prrolm if- ) i)t a 13t of px-x~ pli arn inq arn)

1ac) of o-nd niat ion 90-h W1 fSV[ pils WO o ot up r~~ a[lVat WI H owampr dwis fanr~df feronI piirparos in [ ernal f1- [h[aornani sit i =r Ohi 10 (l1 iv all Pssemvs loKnhei 1ve YIoen inta llb at- [-In rame t i me aii 1 ccmp[i ilo Upi~ rp 1 [or of

technlcal (ICi1~a n~vs inli ir a j0071 1 i0an j JTiS

PV-Ino 1rC lhe Si4worp rraiq bl~ t1escod ~ Nn tc i1i (1shyh

followV S UnTt il MirAN~ a xl T(44 -mprrve tI--e( enrrcrit in formt-ini1 trrwsf- )inv(5 M1idi

WNW Wt foilncciiyroqsntonc( sI culil )-lt r wrd(I aFtl

i - t 1flo-(oi 51 irn and or rn--r(-iv i1-v i 11 n t to wIi n ton u t jl 7 fui I i t s (Oifp ilt4r oy sI[ar( w o- t fiirt bIvIr reliIce gta i n m i PCI t i til es to

so ir t-orF i an as isiow-ir~lr Iir is i-ro cons i stentshy

t-11 pa (CiillpllI i nr

Pan1IPcai[be FhVI(oI ai hn1 tllrtW - r[ A s -a Pr ior pa -irs of he oVrirapli shloul ci IV

(no r Tr to I-hi rd seflt-Cn( of [110 fi r5-t pvaripl do] oth

APPENDSi A

Pe (iscussicon o-arlier it- our r jxne -isunost tile recoul-nneration hI-ex- o ars Follows

WrpcnojjoI i-hat- IfArP17a1 ivataor 6-ta in cviclepu fiha 1I [b TP1 v-1i-SIs P op )~plVan whi c-b(evr~~n-of riol~ b 21-es =n1 omi rces rom i ro(1 to Iorvje1op a)nv

jr~~ ~-[j n i o 1infcmril Jcm te to fac ili ia ishythe w~rI of Omr- Sa1 vaThrn Agrarian TRoform

rr PP hnii-n flp)TTJ

K1j I PMO

FBov1 P91

APPFNIIX B (Page I of 2)

List of Recommendations

Page Recommenddtion No 1 4

We recommend that IFDAI)Fl Salvador obtain from the Government of El Salwador a revised implementation plan indicatingsteps anti resolurccs necessary to accomplish the titling

the targets

IW the lrwO1(WIk completio(n date

Recommendation No 2 6

We recommend that IUSAI)D-[ Salvador

a) obtain From the Government of Ii Salvador a rev isedimplemen tation plan which states the steps and resources necessary to provide adequate orientation for cooperative managers ia[ndIaccounltaLnts

) obtain evidence that an effective tracking system has beendeveloped to ascertain the number and location of- managersand accountants received and

and the type of training they have

c) review and analyze the constraints to placing and keepingmanagers and accountants employed by the cooperatives andexplore options for incentives which would correct their currently tunsat i sfac tory performance

Recommendation No 3

We recommend that IJSAII)El Salvador obtain evidence that theNational Finance Office for iNgrarian Reform Lands

a) has implemented internal control procedures for both vehicle use and fuel purchases and

b) has imp lemwa ted maintenance control procedures and instituted a system to obtain the best prices for vehicle repair work

8

APPENDIX B (Page 2 of 2)

PageRecommenlation No 1 toeWe recommend that 1TJAI)HI Salvador

a) obtain documen ted assurance from the Government of ElSal va( that the National Finance OL[ice for AgrarianRef orm Liands and N ti ona t Geog raphi c Ins t i tu te wi ll inWreatse tleir love I ol commI ication and wil I join ef forts to determin the best wav to succe sIu11y transfe) da ta Ietwen the two cobi tr sysLemis and

b) obtain an acceptable timtahle for establishing a procedurtfor transferring dtia via conntr magnetic tbe between the National Meographic Institute and the National FinaceOffice for Agrarian Reforll Lands

ReconHdenlation No

We recommend tlat USAIA)- Salvador obtain evidence1 that theGovernmuet of El Salvador has developed a plan which includes the stenps and resolnces reapidred to develop and imlplemit anintegrated information system to facilitate the work of the Salvadoran Agrarian Reform

12

APPENDIX C

REPORT DISThllBUTION

No of Copies

Iirector USAII)El Salvador 5 AALAC 2 [ACCAI)EN 1 LAWR 1

[ACCONT 1

LACR IAs 1 AAI

2 C 1 ILt- Sr1 r

I 1

Ij1VilS[

PPCCI) I- 3 AAXA 2 XAi R I I( 1 AIA ICIPII 1

2

I(IP10 R 2

1I I 1

RI([I T I Other RIAs l

APPENIX A (Page 6 of 8)

First piaraqrayn foul-rth sorit-ence should1-beeletEy-l arcl tbe fol IOti rq suhqf f tnt-cl i n 1 i et here)f

1Tin it i of OiQ t0 cl oF cyyorcj nat-ion ariong rctsponsilbi (-OFF e agencios ar of Vt- rcv~eratiVn

aina -r 1

1( Ilnfian v~ not roco i ved an a~loquate or i 0ntat in nto nabli fbefi t-o elaFt( Pf FertijVol v withb the

coe ai 7 rii rlIr I-1 v-a aI Id inombeWr inhp

Taist sonfencr 0=41 ly WNW vt-an the fol owli s unsti tuvt-amp

Wi thoni t cNVI ot-i Va lcept-are -Int- cont-i nli ty in [he

rc-irco- for wiary or [ho atrari an rpform crooperatives to

Remmnlna tion a ) Q~Nxib3v 1 cOii ic to road ar fol1lows

x [Hv mpl mont-at irn plan wb I i ndiumIos kho Mtyp amshy

1~ c h0( prvA xt- in or ientation for

a ) 01 to ir c 1 Cay rnmeint of Fl Fgt ] vaior arevi so

ry ~mun(0

71anov 10 PecoyojJ(n-1t i on W1) on 1Ii o3] oh1O- it-i -can t0frac1--ic system1105Vnii~ TheI 1 T7-act ion plans willhas ~ containp prov i -ions for its riplo n Ition

Pcinriio li tfio~(1 1v 1icurr H it Ilb is ineccnmony i t~ onm be 1rewor3-l to roa

()Pov i ew a r a n1i 1vzo Ibe (on tr- i it s 1-o pl a i no andTbppim rrlPVviqampF5 arp3 v clnt-ants empi yoe3 by tli

(x~portit(s oW xp1Or op)t ions for i ncont-v7 wiche~VOS wou1t3 corroci-- tim r n umnrat 1s Acrt per orrmncin

Pano 11i WO sciiqceo t p0( 11 1-4- roti- ift to I-c - 0 s

71on [ISII (-himi [( i(tfil en ( in[f inipnnt 3nr ti tV0 ini I mlSlaCi Piir I- h rio~sfxms lV it I For rt(F ii rq 13i11 r rii 1iT1 11a1aclo rs- I I l 7i-()11-1fri Iit -~ t I- il sfo r-rot IF t-10ifrnin alvalnuan 111s-it il FiT Atqrrion i Ormurtion ( [STA) to thle Fliisb ry Eof Pqvr ci I 1lre (WC) 1 noof 1I71fc lac(k o)f capic anf- toc i fill olnon 1~ n) t 1I t Fi t1-1(

I-rany for act i vi t-y F)iniinc t1bi t~ritni f in poriccl wicI)

placoeinrit mr 1 n

APPENDIX A (Page 7 of 8)

-7-

Socnofl I-he proje)jct c1csi underes[ iiiaterl tho WHf- iiI-M rinvColVnlt wi t-]1 tho nlinlomont ofa

cxprt i Vo Trlnf_~Ors2orl ivis [be hiiqh turnovrlr (IFrlIi~or oniv wnx-)i it - (Itir to xerol caii-p such as

cy-oflira[ iveo re-Jictanor( to( cnverr tho unag~ors sflacr Weo wi th a suh-s it vrri rh-1ly lllo pgteorct iluril7 ll[1w

Phi r1 i- oro ii v it t Ylert nAri th Cont or for

inna 1 arano 1 mtcon RIMF Awir ii [ra I Trai ni ii (lY~P) to

fircAidl -I lk-cl i lt~ F11v itih nIilli nc1 i to norioit[thfm lo I(- - ltem [aanuiio I 11Wclue Vri t-a-peYrt it v in

r Frr ~ to) pnict1oir at foej7C r~O tlgtO(CSe - - nlljolpnt S

wo-re tvovreri niJ-o no to a lagtof eYni ia1V0wooln t-11 ro [fii ra b a [h -P Ppx j n1 ll Wice- m[o)[lo providC [ lra ini xT toe

yxA t 1v 11in v -(r nSsO I 1I i (coi1)iitint- sI o0n 111ha s -bisj initIiativ0houl Clos arqross ivolo imi ie and i f Su c055 fiil ir it 1 t i ra ii 7( int-o a fnri1 [ noin i nc

T- ran

1 P -4- (-In pot t1T I t r nifori I- (I i a of r i via ce i t-or 1of~woofl T(71 all) PTI3ATA iqs i---i rvvibl(e Ofl 101-01 )4spoo~) up0

il1n onl 5I o ac-r-i 1 1ci of t-)r

T(r rnmrv p 1(Th5 11oxv-r [he bi str i ca1 criT -1 iis 07 Ti it I [I)( prrolm if- ) i)t a 13t of px-x~ pli arn inq arn)

1ac) of o-nd niat ion 90-h W1 fSV[ pils WO o ot up r~~ a[lVat WI H owampr dwis fanr~df feronI piirparos in [ ernal f1- [h[aornani sit i =r Ohi 10 (l1 iv all Pssemvs loKnhei 1ve YIoen inta llb at- [-In rame t i me aii 1 ccmp[i ilo Upi~ rp 1 [or of

technlcal (ICi1~a n~vs inli ir a j0071 1 i0an j JTiS

PV-Ino 1rC lhe Si4worp rraiq bl~ t1escod ~ Nn tc i1i (1shyh

followV S UnTt il MirAN~ a xl T(44 -mprrve tI--e( enrrcrit in formt-ini1 trrwsf- )inv(5 M1idi

WNW Wt foilncciiyroqsntonc( sI culil )-lt r wrd(I aFtl

i - t 1flo-(oi 51 irn and or rn--r(-iv i1-v i 11 n t to wIi n ton u t jl 7 fui I i t s (Oifp ilt4r oy sI[ar( w o- t fiirt bIvIr reliIce gta i n m i PCI t i til es to

so ir t-orF i an as isiow-ir~lr Iir is i-ro cons i stentshy

t-11 pa (CiillpllI i nr

Pan1IPcai[be FhVI(oI ai hn1 tllrtW - r[ A s -a Pr ior pa -irs of he oVrirapli shloul ci IV

(no r Tr to I-hi rd seflt-Cn( of [110 fi r5-t pvaripl do] oth

APPENDSi A

Pe (iscussicon o-arlier it- our r jxne -isunost tile recoul-nneration hI-ex- o ars Follows

WrpcnojjoI i-hat- IfArP17a1 ivataor 6-ta in cviclepu fiha 1I [b TP1 v-1i-SIs P op )~plVan whi c-b(evr~~n-of riol~ b 21-es =n1 omi rces rom i ro(1 to Iorvje1op a)nv

jr~~ ~-[j n i o 1infcmril Jcm te to fac ili ia ishythe w~rI of Omr- Sa1 vaThrn Agrarian TRoform

rr PP hnii-n flp)TTJ

K1j I PMO

FBov1 P91

APPFNIIX B (Page I of 2)

List of Recommendations

Page Recommenddtion No 1 4

We recommend that IFDAI)Fl Salvador obtain from the Government of El Salwador a revised implementation plan indicatingsteps anti resolurccs necessary to accomplish the titling

the targets

IW the lrwO1(WIk completio(n date

Recommendation No 2 6

We recommend that IUSAI)D-[ Salvador

a) obtain From the Government of Ii Salvador a rev isedimplemen tation plan which states the steps and resources necessary to provide adequate orientation for cooperative managers ia[ndIaccounltaLnts

) obtain evidence that an effective tracking system has beendeveloped to ascertain the number and location of- managersand accountants received and

and the type of training they have

c) review and analyze the constraints to placing and keepingmanagers and accountants employed by the cooperatives andexplore options for incentives which would correct their currently tunsat i sfac tory performance

Recommendation No 3

We recommend that IJSAII)El Salvador obtain evidence that theNational Finance Office for iNgrarian Reform Lands

a) has implemented internal control procedures for both vehicle use and fuel purchases and

b) has imp lemwa ted maintenance control procedures and instituted a system to obtain the best prices for vehicle repair work

8

APPENDIX B (Page 2 of 2)

PageRecommenlation No 1 toeWe recommend that 1TJAI)HI Salvador

a) obtain documen ted assurance from the Government of ElSal va( that the National Finance OL[ice for AgrarianRef orm Liands and N ti ona t Geog raphi c Ins t i tu te wi ll inWreatse tleir love I ol commI ication and wil I join ef forts to determin the best wav to succe sIu11y transfe) da ta Ietwen the two cobi tr sysLemis and

b) obtain an acceptable timtahle for establishing a procedurtfor transferring dtia via conntr magnetic tbe between the National Meographic Institute and the National FinaceOffice for Agrarian Reforll Lands

ReconHdenlation No

We recommend tlat USAIA)- Salvador obtain evidence1 that theGovernmuet of El Salvador has developed a plan which includes the stenps and resolnces reapidred to develop and imlplemit anintegrated information system to facilitate the work of the Salvadoran Agrarian Reform

12

APPENDIX C

REPORT DISThllBUTION

No of Copies

Iirector USAII)El Salvador 5 AALAC 2 [ACCAI)EN 1 LAWR 1

[ACCONT 1

LACR IAs 1 AAI

2 C 1 ILt- Sr1 r

I 1

Ij1VilS[

PPCCI) I- 3 AAXA 2 XAi R I I( 1 AIA ICIPII 1

2

I(IP10 R 2

1I I 1

RI([I T I Other RIAs l

APPENDIX A (Page 7 of 8)

-7-

Socnofl I-he proje)jct c1csi underes[ iiiaterl tho WHf- iiI-M rinvColVnlt wi t-]1 tho nlinlomont ofa

cxprt i Vo Trlnf_~Ors2orl ivis [be hiiqh turnovrlr (IFrlIi~or oniv wnx-)i it - (Itir to xerol caii-p such as

cy-oflira[ iveo re-Jictanor( to( cnverr tho unag~ors sflacr Weo wi th a suh-s it vrri rh-1ly lllo pgteorct iluril7 ll[1w

Phi r1 i- oro ii v it t Ylert nAri th Cont or for

inna 1 arano 1 mtcon RIMF Awir ii [ra I Trai ni ii (lY~P) to

fircAidl -I lk-cl i lt~ F11v itih nIilli nc1 i to norioit[thfm lo I(- - ltem [aanuiio I 11Wclue Vri t-a-peYrt it v in

r Frr ~ to) pnict1oir at foej7C r~O tlgtO(CSe - - nlljolpnt S

wo-re tvovreri niJ-o no to a lagtof eYni ia1V0wooln t-11 ro [fii ra b a [h -P Ppx j n1 ll Wice- m[o)[lo providC [ lra ini xT toe

yxA t 1v 11in v -(r nSsO I 1I i (coi1)iitint- sI o0n 111ha s -bisj initIiativ0houl Clos arqross ivolo imi ie and i f Su c055 fiil ir it 1 t i ra ii 7( int-o a fnri1 [ noin i nc

T- ran

1 P -4- (-In pot t1T I t r nifori I- (I i a of r i via ce i t-or 1of~woofl T(71 all) PTI3ATA iqs i---i rvvibl(e Ofl 101-01 )4spoo~) up0

il1n onl 5I o ac-r-i 1 1ci of t-)r

T(r rnmrv p 1(Th5 11oxv-r [he bi str i ca1 criT -1 iis 07 Ti it I [I)( prrolm if- ) i)t a 13t of px-x~ pli arn inq arn)

1ac) of o-nd niat ion 90-h W1 fSV[ pils WO o ot up r~~ a[lVat WI H owampr dwis fanr~df feronI piirparos in [ ernal f1- [h[aornani sit i =r Ohi 10 (l1 iv all Pssemvs loKnhei 1ve YIoen inta llb at- [-In rame t i me aii 1 ccmp[i ilo Upi~ rp 1 [or of

technlcal (ICi1~a n~vs inli ir a j0071 1 i0an j JTiS

PV-Ino 1rC lhe Si4worp rraiq bl~ t1escod ~ Nn tc i1i (1shyh

followV S UnTt il MirAN~ a xl T(44 -mprrve tI--e( enrrcrit in formt-ini1 trrwsf- )inv(5 M1idi

WNW Wt foilncciiyroqsntonc( sI culil )-lt r wrd(I aFtl

i - t 1flo-(oi 51 irn and or rn--r(-iv i1-v i 11 n t to wIi n ton u t jl 7 fui I i t s (Oifp ilt4r oy sI[ar( w o- t fiirt bIvIr reliIce gta i n m i PCI t i til es to

so ir t-orF i an as isiow-ir~lr Iir is i-ro cons i stentshy

t-11 pa (CiillpllI i nr

Pan1IPcai[be FhVI(oI ai hn1 tllrtW - r[ A s -a Pr ior pa -irs of he oVrirapli shloul ci IV

(no r Tr to I-hi rd seflt-Cn( of [110 fi r5-t pvaripl do] oth

APPENDSi A

Pe (iscussicon o-arlier it- our r jxne -isunost tile recoul-nneration hI-ex- o ars Follows

WrpcnojjoI i-hat- IfArP17a1 ivataor 6-ta in cviclepu fiha 1I [b TP1 v-1i-SIs P op )~plVan whi c-b(evr~~n-of riol~ b 21-es =n1 omi rces rom i ro(1 to Iorvje1op a)nv

jr~~ ~-[j n i o 1infcmril Jcm te to fac ili ia ishythe w~rI of Omr- Sa1 vaThrn Agrarian TRoform

rr PP hnii-n flp)TTJ

K1j I PMO

FBov1 P91

APPFNIIX B (Page I of 2)

List of Recommendations

Page Recommenddtion No 1 4

We recommend that IFDAI)Fl Salvador obtain from the Government of El Salwador a revised implementation plan indicatingsteps anti resolurccs necessary to accomplish the titling

the targets

IW the lrwO1(WIk completio(n date

Recommendation No 2 6

We recommend that IUSAI)D-[ Salvador

a) obtain From the Government of Ii Salvador a rev isedimplemen tation plan which states the steps and resources necessary to provide adequate orientation for cooperative managers ia[ndIaccounltaLnts

) obtain evidence that an effective tracking system has beendeveloped to ascertain the number and location of- managersand accountants received and

and the type of training they have

c) review and analyze the constraints to placing and keepingmanagers and accountants employed by the cooperatives andexplore options for incentives which would correct their currently tunsat i sfac tory performance

Recommendation No 3

We recommend that IJSAII)El Salvador obtain evidence that theNational Finance Office for iNgrarian Reform Lands

a) has implemented internal control procedures for both vehicle use and fuel purchases and

b) has imp lemwa ted maintenance control procedures and instituted a system to obtain the best prices for vehicle repair work

8

APPENDIX B (Page 2 of 2)

PageRecommenlation No 1 toeWe recommend that 1TJAI)HI Salvador

a) obtain documen ted assurance from the Government of ElSal va( that the National Finance OL[ice for AgrarianRef orm Liands and N ti ona t Geog raphi c Ins t i tu te wi ll inWreatse tleir love I ol commI ication and wil I join ef forts to determin the best wav to succe sIu11y transfe) da ta Ietwen the two cobi tr sysLemis and

b) obtain an acceptable timtahle for establishing a procedurtfor transferring dtia via conntr magnetic tbe between the National Meographic Institute and the National FinaceOffice for Agrarian Reforll Lands

ReconHdenlation No

We recommend tlat USAIA)- Salvador obtain evidence1 that theGovernmuet of El Salvador has developed a plan which includes the stenps and resolnces reapidred to develop and imlplemit anintegrated information system to facilitate the work of the Salvadoran Agrarian Reform

12

APPENDIX C

REPORT DISThllBUTION

No of Copies

Iirector USAII)El Salvador 5 AALAC 2 [ACCAI)EN 1 LAWR 1

[ACCONT 1

LACR IAs 1 AAI

2 C 1 ILt- Sr1 r

I 1

Ij1VilS[

PPCCI) I- 3 AAXA 2 XAi R I I( 1 AIA ICIPII 1

2

I(IP10 R 2

1I I 1

RI([I T I Other RIAs l

APPENDSi A

Pe (iscussicon o-arlier it- our r jxne -isunost tile recoul-nneration hI-ex- o ars Follows

WrpcnojjoI i-hat- IfArP17a1 ivataor 6-ta in cviclepu fiha 1I [b TP1 v-1i-SIs P op )~plVan whi c-b(evr~~n-of riol~ b 21-es =n1 omi rces rom i ro(1 to Iorvje1op a)nv

jr~~ ~-[j n i o 1infcmril Jcm te to fac ili ia ishythe w~rI of Omr- Sa1 vaThrn Agrarian TRoform

rr PP hnii-n flp)TTJ

K1j I PMO

FBov1 P91

APPFNIIX B (Page I of 2)

List of Recommendations

Page Recommenddtion No 1 4

We recommend that IFDAI)Fl Salvador obtain from the Government of El Salwador a revised implementation plan indicatingsteps anti resolurccs necessary to accomplish the titling

the targets

IW the lrwO1(WIk completio(n date

Recommendation No 2 6

We recommend that IUSAI)D-[ Salvador

a) obtain From the Government of Ii Salvador a rev isedimplemen tation plan which states the steps and resources necessary to provide adequate orientation for cooperative managers ia[ndIaccounltaLnts

) obtain evidence that an effective tracking system has beendeveloped to ascertain the number and location of- managersand accountants received and

and the type of training they have

c) review and analyze the constraints to placing and keepingmanagers and accountants employed by the cooperatives andexplore options for incentives which would correct their currently tunsat i sfac tory performance

Recommendation No 3

We recommend that IJSAII)El Salvador obtain evidence that theNational Finance Office for iNgrarian Reform Lands

a) has implemented internal control procedures for both vehicle use and fuel purchases and

b) has imp lemwa ted maintenance control procedures and instituted a system to obtain the best prices for vehicle repair work

8

APPENDIX B (Page 2 of 2)

PageRecommenlation No 1 toeWe recommend that 1TJAI)HI Salvador

a) obtain documen ted assurance from the Government of ElSal va( that the National Finance OL[ice for AgrarianRef orm Liands and N ti ona t Geog raphi c Ins t i tu te wi ll inWreatse tleir love I ol commI ication and wil I join ef forts to determin the best wav to succe sIu11y transfe) da ta Ietwen the two cobi tr sysLemis and

b) obtain an acceptable timtahle for establishing a procedurtfor transferring dtia via conntr magnetic tbe between the National Meographic Institute and the National FinaceOffice for Agrarian Reforll Lands

ReconHdenlation No

We recommend tlat USAIA)- Salvador obtain evidence1 that theGovernmuet of El Salvador has developed a plan which includes the stenps and resolnces reapidred to develop and imlplemit anintegrated information system to facilitate the work of the Salvadoran Agrarian Reform

12

APPENDIX C

REPORT DISThllBUTION

No of Copies

Iirector USAII)El Salvador 5 AALAC 2 [ACCAI)EN 1 LAWR 1

[ACCONT 1

LACR IAs 1 AAI

2 C 1 ILt- Sr1 r

I 1

Ij1VilS[

PPCCI) I- 3 AAXA 2 XAi R I I( 1 AIA ICIPII 1

2

I(IP10 R 2

1I I 1

RI([I T I Other RIAs l

APPFNIIX B (Page I of 2)

List of Recommendations

Page Recommenddtion No 1 4

We recommend that IFDAI)Fl Salvador obtain from the Government of El Salwador a revised implementation plan indicatingsteps anti resolurccs necessary to accomplish the titling

the targets

IW the lrwO1(WIk completio(n date

Recommendation No 2 6

We recommend that IUSAI)D-[ Salvador

a) obtain From the Government of Ii Salvador a rev isedimplemen tation plan which states the steps and resources necessary to provide adequate orientation for cooperative managers ia[ndIaccounltaLnts

) obtain evidence that an effective tracking system has beendeveloped to ascertain the number and location of- managersand accountants received and

and the type of training they have

c) review and analyze the constraints to placing and keepingmanagers and accountants employed by the cooperatives andexplore options for incentives which would correct their currently tunsat i sfac tory performance

Recommendation No 3

We recommend that IJSAII)El Salvador obtain evidence that theNational Finance Office for iNgrarian Reform Lands

a) has implemented internal control procedures for both vehicle use and fuel purchases and

b) has imp lemwa ted maintenance control procedures and instituted a system to obtain the best prices for vehicle repair work

8

APPENDIX B (Page 2 of 2)

PageRecommenlation No 1 toeWe recommend that 1TJAI)HI Salvador

a) obtain documen ted assurance from the Government of ElSal va( that the National Finance OL[ice for AgrarianRef orm Liands and N ti ona t Geog raphi c Ins t i tu te wi ll inWreatse tleir love I ol commI ication and wil I join ef forts to determin the best wav to succe sIu11y transfe) da ta Ietwen the two cobi tr sysLemis and

b) obtain an acceptable timtahle for establishing a procedurtfor transferring dtia via conntr magnetic tbe between the National Meographic Institute and the National FinaceOffice for Agrarian Reforll Lands

ReconHdenlation No

We recommend tlat USAIA)- Salvador obtain evidence1 that theGovernmuet of El Salvador has developed a plan which includes the stenps and resolnces reapidred to develop and imlplemit anintegrated information system to facilitate the work of the Salvadoran Agrarian Reform

12

APPENDIX C

REPORT DISThllBUTION

No of Copies

Iirector USAII)El Salvador 5 AALAC 2 [ACCAI)EN 1 LAWR 1

[ACCONT 1

LACR IAs 1 AAI

2 C 1 ILt- Sr1 r

I 1

Ij1VilS[

PPCCI) I- 3 AAXA 2 XAi R I I( 1 AIA ICIPII 1

2

I(IP10 R 2

1I I 1

RI([I T I Other RIAs l

APPENDIX B (Page 2 of 2)

PageRecommenlation No 1 toeWe recommend that 1TJAI)HI Salvador

a) obtain documen ted assurance from the Government of ElSal va( that the National Finance OL[ice for AgrarianRef orm Liands and N ti ona t Geog raphi c Ins t i tu te wi ll inWreatse tleir love I ol commI ication and wil I join ef forts to determin the best wav to succe sIu11y transfe) da ta Ietwen the two cobi tr sysLemis and

b) obtain an acceptable timtahle for establishing a procedurtfor transferring dtia via conntr magnetic tbe between the National Meographic Institute and the National FinaceOffice for Agrarian Reforll Lands

ReconHdenlation No

We recommend tlat USAIA)- Salvador obtain evidence1 that theGovernmuet of El Salvador has developed a plan which includes the stenps and resolnces reapidred to develop and imlplemit anintegrated information system to facilitate the work of the Salvadoran Agrarian Reform

12

APPENDIX C

REPORT DISThllBUTION

No of Copies

Iirector USAII)El Salvador 5 AALAC 2 [ACCAI)EN 1 LAWR 1

[ACCONT 1

LACR IAs 1 AAI

2 C 1 ILt- Sr1 r

I 1

Ij1VilS[

PPCCI) I- 3 AAXA 2 XAi R I I( 1 AIA ICIPII 1

2

I(IP10 R 2

1I I 1

RI([I T I Other RIAs l

APPENDIX C

REPORT DISThllBUTION

No of Copies

Iirector USAII)El Salvador 5 AALAC 2 [ACCAI)EN 1 LAWR 1

[ACCONT 1

LACR IAs 1 AAI

2 C 1 ILt- Sr1 r

I 1

Ij1VilS[

PPCCI) I- 3 AAXA 2 XAi R I I( 1 AIA ICIPII 1

2

I(IP10 R 2

1I I 1

RI([I T I Other RIAs l