This document audits the progress of USAID/Egypt's water and wastewater (W/WW) activities and the Mission's use of the Agency's new planning and performance measurement systems to evaluate its program. Evaluation covers the period 8/29/79-12/31/96. USAID/Egypt's strategic plan and annual plans established a strategic objective for W/WW activities that was consistent with and contributed to the Agency's strategic framework. Also, the Mission established performance indicators that were direct, objective, practical, and one-dimensional. While it has yet to use information collected and reported through the results review and resource request process, USAID/Egypt has used performance information from other sources (e.g., site visits, meetings, and contractor reports) to enhance program effectiveness. However, the Mission has not developed a system for collecting and reporting accurate performance information for its W/WW activities; information reported for 52 of 144 items tested was not accurate. USAID/Egypt's W/WW activities were making satisfactory progress toward achieving the intended benefits in all significant respects. Important benefits included construction of W/WW treatment plants and improved distribution and collection systems, as well as managerial improvements in the organizations that operate these facilities. the audit recommends that USAID/Egypt correct the inaccurate information for those indicators it plans to continue using; assign responsibility for collecting and reporting performance information to specific individuals; provide more specific instruction and definitions to the individuals and organizations responsible for providing information; and arrange for verification of the accuracy of reported information. USAID/Egypt stated that some inaccuracies in reported information were unintentionally caused by trying to fit specific indicators for activities dating back 14 years or more into the newly formulated strategic objective. It also stated its plans to implement the recommendations made by the audit, including verifying and if necessary correcting the information reported in its Results Review and Resource Request (R4) of March 1997. (Author abstract, modified)