Audit Management
The OIG uses the audit process to help USAID managers improve the efficiency and effectiveness of operations and programs. USAID management and OIG staff work in partnership to ensure timely and appropriate responses to audit recommendations. The OIG contracts with the Defense Contract Audit Agency (DCAA) to audit U.S.-based contractors and relies on non-federal auditors to audit U.S.-based grant recipients. Overseas, local auditing firms or the supreme audit institutions (SAI) of host countries audit foreign-based organizations. OIG staff conduct audits of USAID programs and operations, including the Agency’s financial statements, related systems and procedures, and Agency performance in implementing programs, activities, or functions.
During FY 2007, USAID received 473 audit reports; 408 of these reports covered financial audits of contractors and recipients and 65 covered Agency programs or operations.
During FY 2007, the Agency closed 547 audit recommendations. Of these, 207 were from audits performed by OIG staff and 340 were from financial audits of contractors or grant recipients. USAID took final action on recommendations with $4.8 million in disallowed costs, and $10 million was put to better use during the fiscal year.
At the end of FY 2007, there were 534 open audit recommendations, 105 more than at the end of FY 2006. Of the 534 audit recommendations open at the end of FY 2007, only 36 or 6.7 percent have been open for more than one year.
With regard to the 36 recommendations open for more than one year at the end of FY 2007, USAID must collect funds from contractors or recipients to complete actions on six of these recommendations. USAID’s Contracting Officers final determinations for 13 of these recommendations are currently in litigations or have been appealed before the Armed Forces Court of Appeals or the USAID’s Procurement Executive. One of these recommendations requires a recipient to fully implement an electronic procurement system. The remaining 16 recommendations require improvements in Agency programs and operations. These are tied to USAID’s information systems and development activities; compliance with financial audit requirements regarding foreign recipients, and the development of a specific policy related to USAID’s President’s Emergency Plan for AIDS Relief (PEPFAR) program.
Management Action on Recommendation that Funds be Put to Better Use
| |
Recommendations |
Dollar Value ($000) |
| Beginning balance 10/1/06 |
10 |
$9,778 |
| Management decisions during the fiscal year |
5 |
233 |
| Final action |
8 |
10,005 |
| Recommendations implemented |
8 |
10,005 |
| Recommendations not implemented |
0 |
– |
| Ending Balance 9/30/07 |
7 |
$6 |
Management Action on Audits with Disallowed Costs
| |
Recommendations |
Dollar Value ($000) |
| Beginning balance 10/1/06 |
131 |
$43,386 |
| Management decisions during the fiscal year |
162 |
93,321 |
| Final action |
148 |
4,764 |
| Collections/Offsets/Other |
148 |
4,764 |
| Write-offs |
– |
– |
| Ending Balance 9/30/07 |
145 |
$131,943 |
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