efforts in Latin America. The suggestion emerged from a comprehensive reappraisal of the Alliance for Progress conducted early in 1969 by the Subcommittee on Inter-American Affairs, as well as from the full Committee's review of the overall framework of U.S. policy toward Latin America. The Committee's recommendation was based on the following three major premises. 1. That, during the prior 8 years, all too little U.S. assistance had reached the masses of the Latin American people or had made a visible impact on their daily lives. 2. That the social development goals of the Act of Bogota, the Charter of Punta del Este, and the Declaration of American Presidents, whose objectives of expanding opportunity for the great majority of people form the very cornerstone of the Alliance for Progress, had not been achieved in any substantial meaningful sense. 3. That, although Alliance for Progress programs operat- The establishment of the Institute was intended to assist in rectifying these shortcomings and in restoring the necessary and proper balance between the economic and social objectives of Inter-American cooperation and development. The intent was to create a pilot project to bring the dynamism of United States and Latin American private groups to bear on development problems through people-to-people programs and to help broaden the participation of persons in the process of development. CHAPTER 2 INITIAL OPERATIONS OF THE INSTITUTE PROGRAM ACTIVITIES By June 30, 1971, the Institute had made no financial commitments for any of its planned program activities. All effort to that time was directed to the development of the Institute's organization and approach. To accomplish its objectives, the Institute is required to place primary emphasis on the enlargement of educational opportunities at all levels; the production of food and the development of agriculture; and the improvement of environmental conditions relating to health, maternal and child care, family planning, housing, free-trade-union development, and other social and economic needs of the people. The Institute is required also to carry out its objectives primarily through and with private organizations, persons, and international organizations by undertaking or sponsoring appropriate research and by planning, initiating, assisting, financing, administering, and executing appropriate programs and proj ects. The Institute is not required to provide financial support of its programs and projects on any particular terms. The stated intent, however, is to provide such support primarily in the form of grants. The nature of the Institute's authorized activities appears to substantially eliminate opportunities for conducting income-producing activities. ADMINISTRATIVE ACTIVITIES Although the Institute commenced operations during fiscal year 1971, it was established as a legal entity during fiscal year 1970, acquiring funds for its initial operations with the transfer on May 28, 1970, of $10 million from funds appropriated by the Congress for Alliance for Progress development loans. This transfer of funds was made to the Institute, in care of the Bureau of the Budget (now Office of Management and Budget), but no operations were possible that year because management of the Institute was vested in a Board of Directors which was not established until October 1970. Between October 1970 and March 1971, the Institute operated with a Board of Directors but with no permanent staff of officers. The Board was assisted during this period by employees of various U.S. Government agencies who were detailed to work for the Institute on a temporary basis. The activities conducted during this period consisted of such administrative activities as locating office space, obtaining consultative and advisory services in connection with the establishment of an organizational structure and the search for an Executive Director, and studying the requirements for administrative and external controls over the operations to be conducted by the Institute. In addition, the Board initiated a study to survey existing programs and needs and to consider the types of programs the Institute should undertake. The Board appointed an Executive Director on March 15, 1971, and this appointment was followed closely by appointments to key staff positions. The Executive Director of the Institute is its chief executive officer. The Board also has approved a plan for implementing the part of the Institute's authorizing legislation which requires the establishment of a council for consultation purposes. The plan provides for periodic meetings with knowledgeable leaders from Latin American countries, to ensure that Latin American points of view will be taken into account in the making of policy decisions. The first such meeting was held in June 1971 with leaders from South American countries. A similar meeting with Carribbean leaders is planned for the future. By June 30, 1971, the Institute was located at its principal office in the Washington, D.C., area. At that time the Institute had a total of 30 officers and employees. 6 CHAPTER 3 OPINION OF FINANCIAL STATEMENTS The accompanying financial statements (schs. 1 through 3) were submitted to us by the Institute. The statements were prepared from financial records maintained for the Institute by Region 3 of the General Services Administration. The Administration performs--on a reimbursable basis--payroll, financial reporting, personnel, and all necessary accounting functions for the Institute. Our examination of the statement of financial condition of the Institute as of June 30, 1971, the related statement of cost of operations and accumulated deficit from operations, and the statement of source and application of funds for the year then ended was made in accordance with generally accepted auditing standards and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. In our opinion, the accompanying financial statements present fairly the financial position of the Institute at June 30, 1971, and the results of its operations and the source and application of its funds for the year then ended, in conformity with generally accepted accounting priciples and with applicable Federal laws. |