Independent Auditor's Report on USAID's Compliance with Laws and Regulations
We have audited the consolidated balance sheets of USAID as of September 30, 2005
and 2004. We have also audited the consolidated statements of changes in net position,
consolidated statements of net cost, combined statements of budgetary resources, and
consolidated statements of financing for the fiscal years ended September 30, 2005 and
2004, and have issued our report thereon. We conducted the audit in accordance with
generally accepted auditing standards. Government Auditing Standards, (issued by the
Comptroller General of the United States) and Office of Management and Budget (OMB)
Bulletin No. 01-02, Audit Requirements for Federal Financial Statements.
The management of USAID is responsible for complying with laws and regulations
applicable to USAID. As part of obtaining reasonable assurance about whether USAID's
financial statements are free of material misstatement, we performed tests of its
compliance with certain provisions of laws and regulations- noncompliance with which
could have a direct and material effect on the determination of financial statement
amounts and with certain other laws and regulations specified in OMB Bulletin 01-02,
including the requirements referred to in the Federal Financial Management
Improvement Act (FFMIA) of 1996. We limited our tests of compliance to these
provisions and did not test compliance with all laws and regulations applicable to USAID.
Under FFMIA, we are required to report whether USAID's financial management
systems substantially comply with Federal financial management systems requirements,
applicable Federal accounting standards, and the United States Government Standard
General Ledger at the transaction level. To meet this requirement, we performed tests
of compliance with FFMIA section 803(a) requirements. The results of our tests
disclosed four instances in which USAID's financial management systems did not
substantially comply with FFMIA requirements.
Our tests of compliance with selected provisions of laws and regulations disclosed
instances of noncompliance considered to be reportable under Government Auditing
Standards. However, our objective was not to provide an opinion on overall compliance
with laws and regulations. Accordingly, we do not express such an opinion.
Federal Financial Management Improvement Act of 1996
Under FFMIA, we are required to report whether the Agency's financial management
systems substantially comply with Federal financial management systems requirements,
applicable Federal accounting standards, and the United States Government Standard
General Ledger at the transaction level. To meet this requirement, we performed tests
of compliance with FFMIA section 803(a).
The results of our tests disclosed three continuing instances, described below, where the Agency's financial management systems did not substantially comply with Federal
financial management systems requirements and the U.S. Government Standard
General Ledger at the transaction level.
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