., / .--- linitt4 States General Accourlting Office Ikqxrt to CongY-essional Cornrnittees ’ CENTRAL AMERICA Humanitarian Assistance to the Nicaraguan Resistance 142649 (;AO,/NSIAII)-!)I -7 - National Security and International Affairs Division B-237240 November 14,lQQO The Honorable Patrick J. Leahy Chairman, Subcommittee on Foreign Operations Committee on Appropriations United States Senate The Honorable Christopher J. Dodd Chairman, Subcommittee on Western Hemisphere and PeaceCorps Affairs Committee on Foreign Relations United States Senate The Honorable David R. Obey Chairman, Subcommittee on Foreign Operations, Export Financing and Related Programs Committee on Appropriations Houseof Representatives The Honorable GeorgeW, Crockett, Jr. Chairman, Subcommittee on Western Hemisphere Affairs Committee on Foreign Affairs Houseof Representatives In responseto your request, we reviewed the Agency for International Development’s administration of $49.76 million to provide assistanceto the Nicaraguan Resistance.These funds were appropriated under Public Law 101-14 for the period of April 18, 1989, to February 28,lQQO. We are sending copies of this report to other interested congressionalcommittees; the Administrator, Agency for International Development; the Secretary of State; and the Director, Office of Managementand Budget. Pleasecontact me at (202) 276-4128 if you or your staff have questions concerning this report. Major contributors to this report are listed in appendix II. Joseph E. Kelley Director, Security and International Relations Issues liihcutive Summary The Congresshas been concernedthat assistanceprovided to the Purpose Nicaraguan Resistancein Central America be spent according to legisla- tive intent. As a result, four congressionalsubcommitteesasked GAO to examine the Agency for International Development’s (AID) administra- tion of $49.76 million in humanitarian assistanceto this group. GAO'S objectives were to determine whether AID had (1) provided only author- ized assistanceand (2) established adequate procedures to administer procurement and monitor deliveries of goods,services,and payments. /’ Public Law 101-14(Apr. 18, 1989) authorized the transfer of $49.76 mil- Background lion in unobligated Department of Defensefunds to AID to provide humanitarian assistanceto the Nicaraguan Resistancefrom April 18, 1989, to February 28,lQQO.These funds reflected the third phase of humanitarian assistanceadministered by AID to this group. As of July 31,1990, AID had obligated about $42.8 million and, as authorized under Public Law lOl-llQq(Oct. 21, 1989), transferred $6 million to support elections in Nicaragua. AID will return the remaining $900,000 and any unexpended obligated funds to the U.S. Treasury. In August 1989, the presidents of five Central American countries estab- lished the International Commissionfor Support and Verification, con- sisting of the SecretariesGeneral of the United Nations and the Organization of American States,to overseethe demobilization of the Resistanceand to assumeresponsibility for delivering humanitarian assistance.The Commissionbegan operating in May 1990. By June 29, 1990, AID had disbanded the task force responsible for administering its assistanceprogram and, in accordancewith AID disposition regulations, had transferred equipment and other items to the Commission. AID and its contractors generally provided only authorized types of Results in Brief assistanceand established controls to administer procurement and mon- itor deliveries. During the third phase of the assistanceprogram, AID (1) adjusted assistancelevels to reflect changesin the Resistancepopu- lation, (2) established a food reserve, and (3) contracted for additional air support to facilitate deliveries. Also, AID and its medical contractor, the International Medical Corps, improved medical assistance,and AID'S training contractor, Creative AssociatesInternational, Inc., expanded its training program. Page 2 GAO/NSIADW-7 Central America ExeeutIve Summary A few ineligible people received food or medical treatment and the Inter- national Medical Corps did not maintain adequate records during a vac- cination program. Also, AID purchased someinappropriate medicines, and AID and the International Medical Corps’ subcontractor, Kraus Inter- national, Inc., lacked required documentation for a large purchase of medicines and other items. Principal Findings Compliance With In accordancewith the law, AID and its contractors generally provided Legislative Requirements only authorized assistance.Of the estimated 60,000 people fed during the third phase,GAO found that the Resistancedistributed food rations to 18 people that were ineligible for assistance.As a result, AID directed the Resistanceto discontinue these rations and monitored food distribu- tion more closely. Changesin Program AID adjusted the quantities of food distributed to Resistancemembers in Operations Honduras to reflect periodic changesin troop strength resulting from the relocation of units within Honduras and the reentry of units into Nicaragua. To avoid interruptions in deliveries, AID established a l-month reserve supply of food rations in Honduras. Further, AID resumed the use of fixed wing air support to conduct airdrops of food and supplies to remote sites and, to facilitate deliveries to new camp sites, contracted for additional helicopter support. AID and its contractors improved medical facilities and servicesand expanded training, For example, AID made physical improvements to a recuperation center in Costa Rica, and the International Medical Corps managedthe construction of a field clinic and upgraded a rehabilitation center in Honduras. Also, Kraus International, under its subcontract with the International Medical Corps, developed a comprehensivereha- bilitation program for disabled Resistancemembers. Creative Associatesestablished a maternal and child health care pro- gram and expanded its training program to include civic education and other classesdesignedto prepare Resistancecombatants and family membersin Honduras for their return to civilian life. Page 3 GAO/NSIAD-91-7Central America Controls Over AID and its contractors generally established controls to monitor pro- Procurement and curement and deliveries; however, GAO found someminor problems. For example, the International Medical Corps paid about $33,000 to provide Deliveries medical care in the United States to 27 Resistancemembers and Resis- tance family memberswho were not eligible for stateside medical care. This number represents a very small portion of the over 60,000 people who received medical care during the assistanceprogram. Thesepeople were ineligible becausethey already lived in the United States and AID permitted only those patients medically evacuated from Honduras and Costa Rica to receive stateside treatment. Further, the International Medical Corps did not maintain adequate patient records during a vacci- nation program that served about 22,000 people at a cost of about $110,000. Thus, many people had to be revaccinated. Further, a pharmacologist’s analysis of Resistancemedical needsand medicine inventories showed that AID had purchased several medicines from US, sources,valued at about $230,000, that were of questionable therapeutic value, inappropriate for Resistanceneeds,or duplicative. As a result, AID eliminated these medicines from a subsequentorder. Fur- ther, AID and the International Medical Corps’ subcontractor purchased medicines and other items, valued at $316,000, in Costa Rica without fully documenting the processfor obtaining price quotations and selecting suppliers, as required by AID procurement guidelines. GAO makes no recommendationsin this report. Recommendations In their oral commentson a draft of this report, AID officials generally Agency Comments agreedwith GAO'S findings and conclusionsand suggestedminor modifi- cations, which GAO has incorporated in the report where appropriate. Page 4 GAO/NSIADSl-7CentralAmerica Page 5 GAO/NSIABBl-‘7 Central America Contents Executive Summary Chapter 1 8 Introduction Elements of Assistance Program Obligations 9 10 Program Completion and Disposition of Equipment 12 Objectives,Scope,and Methodology 13 Chapter 2 16 Changesin Program Adjustments in Assistance Levels Establishment of Food Reserveand Addition of Air 15 16 Operations support Improvements in Medical Facilities and Services 16 Expansion of Training 17 Chapter 3 19 Compliance With Compliance With Public Law 101-14 Establishment of Controls 19 20 Legislative Requirements and Establishment of Controls Appendixes Appendix I: AID’s Obligations for Humanitarian 24 Assistance Appendix II: Major Contributors to This Report 26 Tables Table 1.1: AID’s Obligations for Humanitarian Assistance Provided Under Public Law 101-14 Table 2.1: Training Provided to ResistanceCombatants 18 and Family Members Abbreviations AID Agency for International Development GAO General Accounting Office IMC International Medical Corps Page6 GAO/NSIABBl-7 Central America Page 7 GAO/NSIADBl-7 Central America Chapter 1 Introduction In February 1989, five Central American presidents’ signed an agree- ment calling for, among other things, development of a plan for volun- tary demobilization, repatriation to Nicaragua, or relocation to third countries of membersof the Nicaraguan Resistanceand their families. In exchange,the Nicaraguan government agreedto hold free elections by February 26, 1990. In August 1989, the presidents established the Inter- national Commissionfor Support and Verification, composedof the Sec- retaries General of the United Nations and the Organization of American States,to implement and verify the repatriation process. On March 24,1989, the President and Congresssigned the Bipartisan Accord on Central America, which outlined U.S. policy objectives and called for continued support to the Nicaraguan Resistanceuntil the time of the Nicaraguan elections. Public Law 101-14(Apr. 18, 1989) imple- mented the Accord and authorized the transfer of $49.76 million to the Agency for International Development (AID) from unobligated Depart- ment of Defenseappropriations to provide humanitarian assistanceto the Nicaraguan Resistancefrom April 18,1989, to February 28,199O. The legislation also provided AID with up to $5 million to pay for oper- ating expensesand $7.69 million for transportation expenses.2Further, it stipulated that none of the funds could be spent to provide or trans- port military assistance,and prohibited assistanceto any group that retained in its ranks an individual found to engagein human rights vio- lations, drug smuggling, or significant misuse of public or private funds. The $49.76 million reflected the third phase of humanitarian assistance funding administered by AID. The first phase, authorized under Public Law loo-276 [Apr. 1, 1988), provided $17.7 million from April 1988 to September 1988.,Public Law loo-463 (Oct. 1, 1988) authorized $27.14 million for the secondphase from October 1988 through March 31,1989. We issued reports on our review of expenditures for the two prior phases.3 ‘Includes the presidents of Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua. ‘The legislation also authorized the transfer of $4.17 million to AID for a medical program to be administered by the Catholic Church in Nicaragua. However, the Nicaraguan government did not permit the use of these funds, and, according to AID officials, the funds expired at the end of fiscal year 1989. 3Centrsl America: Humanitarian Assistance to the Nicaraguan Democratic Resistance (GAO/ _ 9 _162, June 1,198Q) and Central America: Humanitarian Assistance to the Nicaraguan Democratic Resistance (GAO/NSIAD-90-62, Jan. 23,lQQO). Page 8 GAO/NSIA.BBl-7 Central America chapter 1 Introduction During the first phase of assistance,AID established a Task’Force on Elements of Humanitarian Assistance in Central America, with headquarters in Assistance Washington, D.C., and field offices in Honduras and Costa Rica to imple- ment the assistanceprogram. As in prior phases,auditors from AID’S Office of the Regional Inspector General and the private accounting firm of Price Waterhousemonitored and audited program activities in Hon- duras and Costa Rica during the third phase. Since the assistanceprogram began in April 1988, AID has provided the following types of assistanceto Resistancemembers and their families at camps and other sites in Honduras and a recuperation center in Costa Rica: l Food. AID provided monthly food rations to about 60,000 Resistance members and family members. Resistancemembersreceived a full ration, basedon nutritional requirements, of 29 items including rice, meats, and vegetables.AID provided supplementary rations, consisting of eight items, to family members. l Clothing. AID distributed civilian clothing at the recuperation center in Costa Rica and patient clothing at Resistancemedical facilities in Hon- duras, AID also procured standard military attire for Resistancemem- bers in Honduras, including boots, shirts, trousers, and field packs, and transported these items from the United States on U.S. military aircraft. 9 Shelter. AID provided tents and plastic sheeting to Resistancemembers for shelter at camps in Honduras. l Medical. AID procured medicines for the Resistancemedical corps in Honduras and provided medical servicesto residents of a recuperation center in Costa Rica. During the first phase, AID contracted with the Dooley/INTERMED Foundation to provide technical assistanceto the Resistancemedical corps. During subsequentphases,AID contracted with the International Medical Corps (IMC~to provide technical assis- tance, managemedical evacuation and rehabilitation programs, and pro- cure medicines, equipment, and supplies. IMC also upgraded Resistance medical facilities and managedconstruction of a field clinic. During the third phase, AID’S training contractor, Creative Associates,implemented a maternal and child health care program in Honduras. . Training. Creative Associatesprovided nonmilitary training during the secondand third phases.This training included classesin literacy, ware- housing, health and sanitation practices, and such vocational skills as 41nAugust 1989, AID contracted with Kraus International, Inc., a U.S. consulting firm, to provide technical assistance to IMC. In November 1989, IMC contracted directly with Kraus for continued assistance, but terminated the contract in March 1990 due to illegal activities involving both a Kraus and AID official. Page 9 GAO/NSIAIMl-7 Central America chaptm 1 Introduction computer operation, road maintenance, shoemaking, and carpentry. The contractor estimated that about 9,300 people attended training classes in Honduras and Costa Rica. During the secondand third phases,AID also awarded grants to the Nicaraguan Association for Human Rights and the Resistanceto provide instruction in human rights issuessuch as treatment of civilians and the Resistance’ssystem of military justice. These organizations trained a total of about 19,000 people. Further, during the third phase, AID contracted with a Costa Rican government institute to provide specialized vocational training to disabled Resis- tance membersin Costa Rica. . Cash payments. AID managedtwo cash payment programs. It provided family assistancepayments totaling about $362,000 per month to about 2,700 senior Resistancemembersto defray living expenses.AID also pro- vided periodic cash-for-food payments in Nicaraguan currency, called cordobas,to Resistanceforces inside Nicaragua. This currency, provided to a maximum of 3,600 Resistancemembersper payment, was to be used to purchase essential goods,such as food. During the three phases, AID spent about $3.2 million to purchase cordobas. l Program support. AID funded Resistanceadministrative and support costs, such as office and housing rent, utilities, and office supplies. l Communications. During the first phase, AID provided radios and bat- teries to Resistancecombatant units. During subsequentphases,AID pro- vided only replacement batteries for existing communications equipment. l Road maintenance. AID provided funds to upgrade drainage structures on existing roads to facilitate food deliveries to Resistancecamps in Honduras. . Reintegration and relocation support. During the third phase, AID authorized Creative Associatesto provide civic education and vocational coursesdesignedto prepare Resistancemembers and their families for returning to civilian life in Nicaragua. About 6,700 members attended these courses.AID also transferred about $3.1 million to the Interna- tional Commission for Support and Verification for use in beginning the Commission’sprogram. During the three phases,AIDobligated about $81.6 million for humanita- Program Obligations rian assistance.Appendix I provides a detailed breakdown of obliga- tions over the three phases.As of July 1990, of the $49.76 million authorized for the third phase under Public Law 101-14,AID had obli- ” gated $42.86 million for humanitarian assistanceand transferred $6 mil- lion to support an election assistanceprogram in Nicaragua authorized Page 10 GAO/NSIAD-91-7Central America under Public Law 101-l 19 (Oct. 21, 1989).6According to AID officials, the remaining $900,000 and any obligated funds that remain unexpended after all program debts are liquidated will be returned to the U.S. Treasury. Table 1.1 shows the breakdown of the third phase obligations. Table 1.1: AID’s Obligations for Humanitarian Aasirtance Provided Under Tota, aval,ab,e Public Law 101-14 (As of July 9, 1990) $49,750,000 Less: obligations Food $10,509,133 Clothina 4.604,705 Shelter 97,665 Medical services and supplies 10,476,197 Trainina 1586.963 Cash payments Family assistance 3,491,665 Cash-for-food 1,666,874 Proaram supoort 2,007.981 Communications 56,116 Road maintenance 258,369 Reintegration and relocation support 8,094,1048 Total $42.849.772 Transferred to Nicaraguan elections $6,000,000 Amount not obligated $900,228 aFigure reflects $4,474,599 for training, $3,090,000 transferred to the International Commission for Sup- port and Verification, and $529,505 for program termination costs. As of July 31, 1990, AID had obligated $3.64 million of the $5 million available for operating expensesand $5.82 million of the $7.69 million available for transportation expenses.The respective remaining unobli- gated funds and unexpended obligated funds will be returned to the U.S. Treasury. %blic Law 101-l 19 also authorized AID to transfer $3 million from unexpended funds available from the first phase of assistance. We reported on AID’s administration of funds transferred for the election progr& in our report, Central knerica: Assistance to Promote Democracy and National Rec- onciliation in Nicaragua (GAO/NSIAD-gu-246 - , Sept. 24, 1990). Page 11 GAO/NSIAJI-91-7Central America chapter 1 Introduction In their August 1989 agreement,the five Central American presidents Program Completion established the International Support and Verification Commissionto and Disposition of overseedemobilization of the Resistanceand to assumeresponsibility Equipment for delivering humanitarian assistance.In the fall of 1989, AID began meeting with Commissionofficials to discussarrangements for coordi- nating the transition. AID planned to terminate its program by March 31, 1990; however, the Commissiontook longer than AID expected to develop a plan and did not becomeoperational until May 1, 1990. Thus, AID extended its program until April 30, 1990.6 On April 6,1990, AID transferred $3 million to the Commissionto cover initial costs. On April 30, 1990, AID ceaseddeliveries, and on May 1, 1990, the Commissionbecameoperational in Honduras through the United Nations High Commissionerfor Refugeesand in Nicaragua through the Organization of American States. The High Commissioner’s office used its existing organization to administer assistanceand also contracted with AID’S contractors--1lurcand Creative Associates,to con- tinue their medical programs in Honduras. The Organization of Amer- ican States used its existing organization and the Pan American Health Organization to administer assistancein Nicaragua. To easethe transition, AID contributed a sufficient quantity of food to the High Commissioner’soffice at the end of April 1990 to feed 7,0007 people during May 1990. Further, to provide care for disabled Resis- tance membersuntil arrangements for their return to Nicaragua became final, AID extended its contracts with IMC and Creative Associates.Thus, AID permitted IMC to continue managing the Resistance’srehabilitation center in Honduras through July 31, 1990. It also permitted Creative Associatesto manage a recuperation center in Costa Rica until the residents completed an ongoing training program, up to September30, 1990. During May and June 1990, AID disposedof equipment and other items, and by the end of June 1990, had disbanded its task force. AID estab- lished a disposition policy requiring task force, contractor, and grantee assetsto be used, as appropriate, to support the repatriation process. Any item not neededfor this purpose would be offered to AID missions in %nder Public Law 101-14, AID had to cease obligating humanitarian assistance funds by February 26,1900, but could provide assistance beyond that date. 7This figure reflects AID’s estimate of the number of people remaining in Resistance camps in southern central Honduras as of April 30,lOOO. Page 12 GAO/NSIADQl-7 Central America chaptar 1 lntroiluctlon the region and, if not needed,would be sold with the proceedsreverting to the U.S. Treasury. AID transferred the task force’s assets,consisting primarily of office equipment, to AID missions in Nicaragua and Honduras, and authorized IMC and Creative Associatesto retain equipment, materials, and supplies to use in supporting the High Commissioner’soffice.8 These items included office furniture, computers, medicines, and operating tables. With AID grants, the Resistanceand the Nicaraguan Association for Human Rights had purchased video cameras,television sets, and other equipment for human rights training. AID distributed items purchased by the Resistanceto the AID mission in Nicaragua and authorized the Association to use its assetsfor training programs in Nicaragua. At the Resistance’srequest, AID shipped specialized medical equipment and supplies in the Resistance’spossession,with an estimated value of $1.6 million, to Nicaragua for use in the repatriation effort? At the request of the Chairmen, Subcommitteeson Foreign Operations, Objectives, Scope,and Senateand HouseCommittees on Appropriations; Subcommittee on Methodology Western Hemisphere and PeaceCorps Affairs, SenateCommittee on For- eign Relations; and Subcommittee on Western Hemisphere Affairs, House Committee on Foreign Affairs, we reviewed AID’S managementof funds provided during the third phase of humanitarian assistanceto the Nicaraguan Resistance.Our objectives were to determine whether AID provided only authorized goodsand servicesand established adequate procedures to procure and deliver goods and services. We met with officials from the AID Task Force and the Department of State and reviewed pertinent documentation on the assistanceprogram in Washington, DC., and at the U.S. embassiesin Tegucigalpa, Hon- duras, and San Jose,Costa Rica. We also met with auditors from AID’S Office of the Regional Inspector General and the private accounting firm of Price Waterhouse,and with representatives of the Nicaraguan Resis- tance, IMC, Creative Associates,Kraus International, and the Nicaraguan Human Rights Association at field sites in Tegucigalpa and other loca- tions in Honduras and in San Jose,Costa Rica. Further, we met with 8AID also authorized IMC to donate some medical instruments and equipment to a private voluntary organization that provided medical care to Resistance members in eastern Honduras. ‘This shipment consisted of items such as x-ray machines, crutches, and wheelchairs belonging to the Resistance medical corps. AID shipped these items under the auspices of the U.S. embassy in Nica- ragua to the Nicaraguan govemment agency responsible for overseeing the repatriation process. Page 13 GAO/NSIA.BfJ1-7Central America Chapter 1 Introduction representatives of IMC and the Miami Medical Team in Miami, Florida. At these locations, we reviewed records and observedthe delivery of goods and services. To determine whether AID provided only authorized goods and services and established adequate controls, we made numerous trips to field sites to observe deliveries and inspect warehouses.We also reviewed finan- cial records, purchase orders, and audit reports. Further, we reviewed AID and Resistanceprocedures for cash payments and inventorying and distributing goods. We did not obtain written agency commentson this report. However, we did obtain oral comments from AID officials on a draft of this report. They generally agreed with our findings and conclusionsand suggested someminor modifications, which we have incorporated in the report where appropriate. We conducted our review from April 1989 to June 1990 in accordance with generally acceptedgovernment auditing standards. Page 14 GAO/NSIAD-91-7Central America Chapter 2 Changesin Program Operations AID instituted somechangesin program operations during the third phase. Due to the periodic relocation of Resistanceunits, AID adjusted food deliveries. It also established a system for maintaining reserve food supplies and contracted for additional air support to facilitate deliv- eries. Further, AID and its medical contractor improved medical facilities and services,and AID’S training contractor established maternal and child health care centers and expanded its training program to include civic education and additional vocational courses. During the third phase, the Resistancerelocated its troops several times. Adjustments in In August 1989, the Resistanceestablished additional camps in Hon- Assistance Levels duras and dispersed its troops following the meeting of the five Central American presidents. Further, many Resistancemembersreturned to Nicaragua after the meeting and in January and February 1990, prior to the elections held on February 26,199O. As a result of these movements, the location and numbers of Resistancemembersin Honduras fluctuated during the third phase. AID closely monitored changesin the combatant population and adjusted food deliveries in Honduras accordingly. Each month, the Resistance reported the numbers of combatants in Honduras and Nicaragua. Using this information, AID identified increasesor decreasesfrom the prior month and revised subsequentpurchase orders for food to reflect these changes.Although the number of combatants reentering Nicaragua peri- odically increased,AID did not increasethe number or amount of cash- for-food payments provided to Resistanceforces in Nicaragua becauseit had established a limit on these payments, in consultation with congres- sional representatives. During the third phase, AID established procedures for maintaining a Establishment of Food l-month reserve supply of food for Resistancecombatants in Honduras. Reserve ad Addition The food reserve, established in June 1989, supplemented regular of Air Support monthly rations and was stored at Resistancewarehousesin southern and eastern Honduras. It consistedof nine basic items, such as tortillas and dried milk, and was replaced every 1 or 2 months to avoid spoilage. According to AID, the reserve was established to prevent interruptions in the food supply resulting from market shortagesof certain products, delivery problems such as impassableroads or bridges during the rainy season,or unexpected emergencies. Page 15 GAO/NSIAD91-7 Central America ChaDtm 2 changes ill Program opcratIon8. AID also arranged for additional helicopter support and resumed the use of fixed wing aircraft to facilitate deliveries to the Resistance.During the first phase, AID contracted with Air Logistics International, Inc., a U.S. company, to provide two helicopters to transport AID officials, food, and supplies to Resistancecamps. It also contracted with a private Hon- duran cargo company to provide a fixed wing aircraft to airdrop food and supplies to camps located in remote areas. In February 1989, the fixed wing aircraft crashed and, to compensate for the loss, AID increasedthe use of the two helicopters. In July 1989, AID contracted with Fowler Aeronautical Services,a US. company, for a replacement aircraft. The airdrops resumed in August 1989. In November 1989, AID authorized Air Logistics to operate a third heli- copter to meet additional air support needsbecausethe Resistancehad deployed units to several new locations in remote areas within Hon- duras that were inaccessibleby road or airdrop. During the third phase, AID and its contractors improved medical facili- Irnprovements in ties and rehabilitation and health care services.At a recuperation center Medical Facilities and in Costa Rica, AID installed additional wash basins, a new drainage Services system, and partitions for dining and living areas, and purchased phys- ical therapy and other rehabilitation equipment. In Honduras, IMC upgraded facilities at the Resistance’srehabilitation center, referred to as Ranch0 Grande, for disabled Resistancemembers.Improvements included construction of ramps and walkways, improved plumbing, and installation of electricity. IMC also managedthe construction of a clinic that served the medical needsof most Resistancemembers and their families in southern central Honduras This project included construction of four wooden buildings and installation of water, sewage,and electrical systems.The buildings consisted of various facilities such as two operating rooms, two patient wards with a loo-bed capacity, a pharmacy, a warehouse for medicines and medical supplies, and a laboratory. Construction began in July 1989 and by November 1989, the clinic was sufficiently complete for the Resistancemedical corps to begin performing surgeries. The construc- tion project cost a total of about $260,000. At Ranch0 Grande, IMC’S subcontractor,.Kraus International, Inc., estab- lished a rehabilitation program for disabled Resistancecombatants during the third phase. Prior to this time, IMC had hired a physical thera- pist and other professional staff to provide rehabilitative care; however, Page 16 GAO/NSJAD91-7Central Amerka i; chapter 2 Changesin Program Operations the staff had not developed a coordinated plan and left the program in September 1989. In September 1989, a Kraus rehabilitation consultant recommendedseveral improvements, including development of a work plan. By December1989, a secondKraus consultant had developed a detailed plan and identified staffing needs,and IMC hired new staff. During the remainder of the phase, this consultant and the staff pro- vided rehabilitative care and developed a profile of each patient that identified their capabilities and rehabilitative needs. Creative Associatesimplemented a health care program to addressthe medical needsof Resistancewomen and children. In December1989, the contractor established four maternal and child health care centers in southern central Honduras and assignedtwo full-time physicians to pro- vide medical care and vaccinations. In addition, four social workers and several Resistancehealth promoters circulated among the population to monitor health conditions, refer patients to the centers for treatment, and provide health and sanitation education. As of April 1990, the center staff had treated about 7,660 patients and vaccinated about 80 percent of the Resistancechildren under the age of five. Creative Asso- ciates officials believe that this health care program contributed signifi- cantly to improving the health of the Resistancecommunity. Creative Associatesexpanded its training program to include classes Expansion of Training designedto prepare Resistancemembers and their families for eventual return to civilian life. During the secondphase, the contractor focused its training program in Honduras primarily on improving Resistance members’ administrative skills used in distributing assistanceand pro- vided training in such subjects as accounting, computer operations, and inventory control. Classesin literacy, environmental sanitation, and vocational skills, such as equipment operation and radio maintenance, were also provided. In Costa Rica, Creative Associatesprimarily pro- vided health and rehabilitation training, including first aid and occupa- tional therapy classes. BecausePublic Law 101-14 authorized reintegration and relocation sup- port, Creative Associates,at AID’s request, expanded its program in Hon- duras during the third phase to include Resistancefamily members and offered civic education and additional vocational classes.To reach as many people as possible, the contractor trained Resistancecommanders in civic principles and teaching methodologies.These commandersacted as trainers and conducted civic awarenesscampaigns in their own units Page 17 GAO/NSIADBl-7 Central America chapter 2 cbangealnRogramoperations and in the community. Creative Associatesstaff and the trained com- manders also conducted seminars for Resistancetroops that included instruction in such topics as democratic values, the function of munic- ipal and national government, the Nicaraguan constitution, the right to vote in free elections, and the rights and responsibilities of individuals in a democratic society. Creative Associatesalso expanded vocational training to include courses in carpentry, leather working, road maintenance, sewing and home eco- nomics, and provided classesin literacy, health and sanitation practices, and rural skills such as farming and animal husbandry. To maximize training benefits, the contractor trained selectedResistanceand family membersin teaching methodologies so that they could train others in the Resistancecommunity. For example, those trained in basic first aid and diseasecontrol conducted educational seminars for others on these sub- jects. According to Creative officials, trainees also used their skills to repair roads, build latrines, and make other improvements in living conditions. During the third phase, 8,272 Resistancecombatants and family mem- bers, including 7,643 in Honduras and 729 in Costa Rica, attended training classesas shown in table 2.1. Table 2.1: Training Provided to Resistance Combatants and Family Type of class Number trained Members Civic education 3,335 Vocational skills 2,409 Rural skills 262 Literacv 592 Health and sanitation 1,674 Total 8,272 According to Creative Associates,its training program in Honduras benefitted a significant number of people other than those that attended training classes.Thesebeneficiaries included about 7 1,000 people who had received training from class graduates and about 72,000 people who had experienced improvements in living conditions.’ 1According to Creative Associates, the numbers shown in thii paragraph reflect the number of training instances and not the actual number of people because one person may have benefitted from several activities. Page 18 GAO/NSIAD-91-7Central America Compliance With Legislative Requirements and Establishment of Controls AID and its contractors provided only authorized types of assistanceand established adequate controls to administer procurement and monitor deliveries; however, we noted a few minor problems. Of the estimated 60,000 people fed during the third phase, the Resistancedistributed food rations to 18 ineligible people working at food distribution sites in Honduras. IMC funded unauthorized medical treatment for 27 Resistance membersliving in the United States; this represents a very small frac- tion of the over 60,000 people who received medical care during the assistanceprogram. Further, IMC did not maintain adequate records during a vaccination program. Also, AID procured someinappropriate medicines from U.S. sources,and AID and IMC'S subcontractor lacked required documentation for medicines and other items purchased in Costa Rica. Public Law 101-14 authorized AID to provide only certain types of Compliance With humanitarian assistanceto the Resistanceand specifically prohibited Public Law 101-14 the delivery or transportation of any military assistance.Further, the legislation prohibited AID from providing assistanceto any group retaining in its rank any individual convicted of human rights violations, drug smuggling, or significant misuse of public or private funds. AID and its contractors provided only authorized types of assistance except that 18 ineligible people received food rations. These people worked at various sites in Honduras and assistedin distributing food each month to Resistancefamily members.Although employed by the Resistance,these workers were not Resistancemembersor Resistance family members. In August 1989, we found that the Resistancehad been distributing food rations to the workers during AID'S monthly distribu- tions to Resistancefamilies. AID officials agreedthat the 18 people were ineligible. They stated that they were unaware that these ineligible people were receiving rations and did not know how long this practice had occurred. To addressthe problem, AID issued a policy statement to the Resistance reemphasizing eligibility guidelines and began more closely monitoring food distributions. According to AID officials, as of September 1989, the Resistancehad removed the names of the 18 ineligible people from dis- tribution lists and ceaseddistributing rations to these people. Page 19 GAO/NSIAD-91-7Central America Chapter 8 timpliance With LegMative Requirement-m and Eatablihnent of controle and its contractors established various controls to administer pro- Establishment of AID curement and monitor deliveries of commodities to the Resistance.AID Controls officials reviewed and approved contractor budgets and major purchases,and routinely visited field sites to observe contractor activi- ties. Further, AID established procedures requiring full documentation of each procurement action, such as information on price quotations obtained and the basis for selecting suppliers. In addition, auditors from AID’S Office of the Regional Inspector General and the private accounting firm of Price Waterhouseclosely monitored program activities and expenditures, including accompanying deliveries, observing cash payments, and verifying inventory records. During the third phase, Price Waterhousereported no significant problems with AID or contractor procedures. We also found procedures to be adequate, but noted someproblems in the delivery of medical servicesand procure- ment of medicines. SomeResistanceMembers Under its contract with AID, IMC assumedresponsibility, in November ReceivedUnauthorized 1988, for funding a program to evacuate Resistanceand family members who had medical conditions that could not be treated in Honduras or Medical Treatment Costa Rica to the United States for treatment. People already living in the United States were not eligible for treatment. A team of doctors, nurses, and other medical personnel in Miami, Florida, referred to as the Miami Medical Team, provided medical treatment and arranged for hos- pital care. The team selectedpatients for evacuation during periodic visits to Resistanceclinics in Honduras and based on referrals from Resistancedoctors in Honduras and AID’S field director in Costa Rica. The program ceasedin February 1990 and, as of that time, IMC had spent about $401,400 and 64 people had received medical care. We found that IMC paid about $33,400 from November 1988 to November 1989 for medical expensesof 27 Resistancemembersand Resistancefamily memberswho already lived in the United States. At the request of the Resistance,the Miami Medical Team arranged for medical care; however, these individuals were not eligible for stateside medical treatment becausethey had not been medically evacuated. Over 60,000 people received medical care during the assistanceprogram. The expensesincurred for the ineligible recipients represented 8.3 percent of IMC’S total expenditures for the medical evacuation program. According to AID and IMC officials, they were not aware that the Miami Medical Team had been treating these Resistancemembers and family members. Page 20 GAO/NSIAB91-7 Central America Chapter 8 Compliance With Legielative Requlrementa and Eaablbhment of Controls Until December1989, AID and IMC exercised only limited oversight of the evacuation program and thus, in most cases,the Miami Medical Team and Resistanceselectedpatients for treatment without consulting with AID and 1MC.l Further, IMC did not closely monitor the eligibility of patients treated in Miami prior to paying medical bills. In December 1989, concernedabout the evacuation program costs,AID and IMC began to more closely monitor the program. In January 1990, IMC implemented procedures that required the Miami Medical Team and the Resistanceto obtain IMC approval on all medical bills and AID approval before Resis- tance and family members already living in the United States could be treated. Lack of Adequate Record- During the secondand third phases,IMC conducted an 8-month vaccina- Keeping Results in tion program for Resistancemembers and their families in Honduras. In September 1989, during the third phase, AID requested Creative Associ- Duplication of Effort ates to survey the health status of the Resistancepopulation in central Honduras. The contractor’s staff interviewed Resistancecombatants and family members and reviewed medical records, including vaccina- tion data compiled by the IMC doctor. Basedon survey results, AID authorized Creative Associatesto implement a maternal child health care program, including a vaccination component. IMC contracted with a doctor to administer its vaccination program and spent about $110,000, including $16,000 for the doctor’s salary and the remainder for vaccinesand supplies. From February 1989 to September 1989, the doctor had vaccinated about 22,000 people. However, the doctor did not sufficiently document who had received vaccinations and the number of injections administered. For example, in many cases,the records did not reflect the full name of patients or whether an entire series2of vaccinations had been completed. Somerecords showed that a patient had received a seconddosage,but did not reflect whether a first or third dose had been administered. From December1989 to April 1990, Creative Associatesvaccinated about 1,600 children under 6 years old and 10,000older children and adults at an estimated cost of about $12,000. According to a Creative 1We found that the team and Resistance obtained approval from AID’s field diiector in Costa Rica and AID headquarters officials prior to evacuating patients from Costa Rica. %ecause some vaccines, such as polio, must be administered in a series of wections at specific time intervals, detailed records are necessary to emmre individuals have received complete sets of vaccinations. Page 21 GAO/NSlAB91-7 CentraI America chaptma Compllmcs With LeEprlative lUquirement8 and Eetabliehment of Controla Associatesphysician, these people likely included many who had received vaccinations during the IMC program becauseCreative Associ- ates could not fully rely on IMC records. If any question existed as to whether a person had been properly vaccinated, the physician stated that the person was revaccinated. We also found that, in April 1989, IMC destroyed about 1,100 vials of vaccine used to prevent tetanus and hepatitis. These items, valued at about $8,200, were unusable becausethey had not been properly refrigerated. Analysis of Medicine In August 1989, a pharmacologist, employed by Kraus International, Procurement Reveals Some which had contracts with AID and IMC,began evaluating Resistancemed- ical needsand reviewing prior AID and IMC purchasesof medicines and Inappropriate Purchases medical supplies. By November 1989, the pharmacologist, using World Health Organization standards, had determined the types of illnesses likely to afflict the Resistanceand developed a list of essential medicines and supplies. The pharmacologist reported that AID had purchased someinappro- priate medicines.Specifically, of 187 medicines purchased by AID in two orders through the U.S. Veterans Administration during 1989, the Kraus official found that 37 items, or 20 percent, were of questionable thera- peutic value, inappropriate for Resistanceneedsor duplicative, and rec- ommendedchangesto AID'S final order. The items were valued at about $230,000 and represented about 10 percent of the total $2.3 million spent for medicines during the third phase. AID subsequently revised its final order to eliminate these medicines. During the prior phases,AID and IMC officials focused on screeningResis- tance requests for medicines to eliminate duplication. By the end of the secondphase,they had significantly reduced the number of medicine types requested. During the third phase, the pharmacologist analyzed the appropriateness of the medicines requested. If this type of analysis had been performed earlier in the program, AID could have avoided purchasing inappropriate medicines.AID officials agreedthat further analysis during the prior phaseswould have been appropriate. Lack of Dochentation for During January and February 1990, AID purchased medicines and med- Purchase of Medical Items ical and dental supplies in Costa Rica valued at about $315,000. Because the Kraus pharmacologist was familiar with the market, AID relied on Page 22 GAO/NSIAD-91-7 Central America chnpt.4~ a Compllanee With I.q#elative Requirements and Establishment of Controls this official to identify potential suppliers and obtain price quotations and to assist its project and procurement officers in finalizing purchasing and shipment arrangements. By mid January 1990, the pharmacologist and AID officials had obtained price information and selecteda Costa Rican firm to act as a consolidating agent. This firm purchased items from several suppliers and prepared consolidated shipments. Although AID guidelines required full documentation of procurement actions, we found no formal price analysis or record documenting the basis for selecting the consolidating agent and suppliers. AID officials and the Kraus pharmacologist maintained notes regarding the purchase of medicines and medical and dental supplies, but did not have a com- plete record of actions taken. The pharmacologist had prepared a partial analysis of quotations obtained for dental supplies; however, the anal- ysis did not specifically identify the suppliers contacted or basis for pricing. As a result, sufficient information is not available to determine whether AID obtained the best prices. AID officials agreedthat more com- plete documentation should have been maintained. Page 23 GAO/NSLAD-91-7 Central America Appendix I AID’s Obligations for HumtiMm Assistance (As of July 1990) Phase 1 Phase 2 Phase 3 Total (A r. 1988 to (Oct. 1988 to (Apr. 1989 to (Apr. 1988 to Pept. 1988) Mar. 1989) June 1990) June 1990) Funds available $17,700,000 $27.140,000 $49,750,000 $94,590,000 Obligatlons Food 5,187,714 5539,106 10,509,133 21,235,953 Clothina 33.724.168 4.209.654 4.604.705 12.538.527 Shelter 80,856 389,155 97,665 567,676 Medical services and supplies 2,911,242 6,119,llO 10,476,197 19,506,549 Trainina 0 2.168.020 1.586.963 3.754.983 Cash payments Family assistance 1,831,559 2,198,077 3,491,665 7,521,301 Cash-for-food 615,863 913,395 1,666,874 3,196,132 Proaram support 388.218 413,241 2.007.981 2.809,440 Communications 1,495,765 55,289 56,116 1,607,170 Road maintenance 0 504,779 258,369 763,148 Reintegration and relocation support 0 0 8,094,104 8,094,104 Total $18,235,385 $22,509,826 $42,849,772 $81,594,983 Funds transferred to election assistance 0 0 $6.000,000 $6.000,000 Funds returned to U.S. Treasury $1,464,615 $4,630,174 0 $6,094,789 Funds remainina 0 0 $900.228” $900.228 BAccording to AID officials, these funds and any unexpended obligated funds will be returned to the U.S. Treasury after all program debts are liquidated. Page 24 GAO/NSIAD91-7 Central America Appendix II Major Contributors to This &port Stewart L. Tomlinson, Assistant Director National Security and Sharon L. Pickup, Evaluator-in-Charge International Affairs Jose M. Pena, Evaluator Division, Kellie 0, Schachle,Evaluator Washington, D.C. (468786) Page 26 GAO/NSIAD-91-7 Central America Ord~+g Information ._ The first five copies of each GAO report are free. Additional copies are $2 each. Orders should be sent to the following address, accom- panied by a check or money order made out to the Superintendent of Documents, when necessary. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. IJ.S. Genc~ral Accounting Office I’.(). 130x 6015 Gait,hersburg, MD 20877 Orders may also br placed by calling (202) 275-6241. First-Class Mail Post,age 82 Fees Paid GAO Permit No. GlOO
Central America: Humanitarian Assistance to the Nicaraguan Resistance
Published by the Government Accountability Office on 1990-11-14.
Below is a raw (and likely hideous) rendition of the original report. (PDF)