Evaluates project to procure small value items needed by the Korean Standards Research Institute (KRSI) to develop a national metrology standards system. Audit report covers the period 9/18/75-3/31/81 and is based on document review and interviews with project personnel. Direct Reimbursement Authorization (DRA) No. 06 to establish a fund to procure small items (a term never formally defined) was amended at least 17 times from its original level of $200,000, raising the ceiling to an unknown amount. Although all funds have been accounted for, several issues worthy of notice surfaced during the audit. The fund is technically in overdraft and appears solvent only because of a surplus in the library fund, with which it was commingled. Seven USAID/K checks to replenish the fund exceeded the amount envisioned in Implementation Letter No. 12 ($20,000). While agreements specified that the available bank balance would not drop below $10,000, it was discovered to have once sunk to $1.00 because of the slow replenishment cycle, causing the Korean Liaison Officer to advance personal resources amounting to $9,500; he is still owed $100 for opening the original project account. No procurement arrival system exists for monitoring shipment shortages, breakages, or thefts. Items do, however, appear to have been appropriately priced in billings. There were three disbursements of unknown amounts subsequent to the terminal disbursement date (TDD). It is recommended that the amounts and legality of these disbursements be determined and that required authorizations or reimbursements be obtained.