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NOTE 15. Commitments and Contingencies

USAID is involved in certain claims and suits, and complaints that have been filed or are pending. These matters are in the ordinary course of the Agency's operations and are not expected to have a material adverse effect on the Agency's financial operations.

As of September 30, 2005 a total of nine cases were pending. One case has been designated as reasonably possible. This case is a contract claim over the payment of Peruvian taxes on a building leased by USAID/Peru as mission offices. The estimated loss is over $1million. The status of the remaining litigation cases are at a remote designation.

The group of cases disclosed at the end of FY 2004, involving Negotiated Indirect Cost Rate Agreement (NICRA) rates have been dismissed in USAID's favor.

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