Summary
In early 2001, two major earthquakes struck El Salvador, causing more than 1,100 deaths and $1.7 billion in damage to property and infrastructure. GAO has been periodically monitoring the recovery program being implemented by the U.S. Agency for International Development (USAID), the lead U.S. agency. The House Appropriations Committee's Subcommittee on Foreign Operations, Export Financing, and Related Programs asked GAO to review USAID's (1) oversight and accountability measures, (2) progress and factors affecting progress, and (3) coordination with other donors and the government of El Salvador.
USAID is implementing a $159 million recovery program to assist El Salvador in recovering from two earthquakes in 2001. Nearly two-thirds of the funding is allocated for the construction of approximately 26,000 houses for low-income families who lost homes in the earthquakes. Because of concern that recovery funding could be susceptible to misuse or corruption, USAID established oversight measures, such as conducting concurrent audits of host country expenditures. USAID also applied lessons learned from its recovery program in Central America following Hurricane Mitch in 1998, including using implementing organizations with a proven record in accounting for funds and implementing disaster recovery activities. USAID has made progress in implementing the recovery program but some activities are behind schedule or did not meet original target dates. As of March 31, 2003, USAID had expended $58 million (36 percent) of its $159 million in program funding and is making progress in implementing some activities. For example, USAID-funded private voluntary organizations had completed all of the houses scheduled during the first phase of the program. Other implementers had installed potable water systems for more than 70,000 recipients in rural areas and assisted micro- and small businesses that were damaged or destroyed. Due to a number of factors, however, some USAID construction activities, such as repairing and rebuilding schools, health facilities, municipal buildings, and local markets, are behind schedule. Also, as of March 31, 2003, El Salvador's housing agency (FONAVIPO) had completed less than two-thirds of the nearly 3,000 houses it was originally scheduled to complete by September 2002. USAID revised its agreement with FONAVIPO but the new agreement does not establish milestones to benchmark progress and determine whether housing construction will be completed as scheduled. At its current pace, it may be difficult for USAID to complete the recovery program by the end of September 2004, as planned. USAID coordinated its earthquake recovery efforts with other donors at the international, national, and local levels; the government of El Salvador; and community members. During our review, we found no evidence that USAID was duplicating other donors' recovery efforts.
Recommendations
Our recommendations from this work are listed below with a Contact for more information. Status will change
from "In process" to "Implemented" or "Not implemented" based on our follow up work.
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Recommendations for Executive Action
Recommendation: To ensure that USAID achieves its goal of constructing over 26,000 houses by September 30, 2004, the USAID Administrator should take action to accelerate construction activities and establish interim milestones to benchmark its progress and determine whether program goals will be met.
Agency Affected: Department of State: Agency for International Development
Status: Implemented
Comments: USAID has taken action responsive to GAO's recommendation by taking action to accelerate construction activities and establishing interim milestones to benchmark its progress and determine whether program goals will be met. Actions taken by USAID include (1) conducting numerous training sessions to increase housing implementers' awareness and understanding of the criteria needed for houses to pass inspections, and (2) identifying the specific number of houses that will be completed each month until the end of the program, slated for September 2004. In specifying monthly targets, it will be easier to assess whether USAID is making progress and meeting its interim milestones.
Recommendation: Also, if warranted and to the extent possible under existing agreements, USAID should consider reducing the number of houses to be built by the government of El Salvador's housing agency (FONAVIPO) and increasing the number of houses to be built by private voluntary organizations with a proven record of meeting construction goals.
Agency Affected: Department of State: Agency for International Development
Status: Implemented
Comments: Based on a team trip to El Salvador in February 2004, GAO determined that USAID was on target to achieve its housing construction goals. Accordingly, GAO considers this part of the recommendation to be closed because USAID was able to get the Salvadoran housing agency to increase the pace of its construction.
