Independent Auditor's Report – Appendix III: Status of Prior Year Findings and Recommendations
OMB Circular A-50 states that a management decision on audit recommendations shall
be made within a maximum of six months after a final report is issued. Corrective action
should proceed as rapidly as possible. Several audit recommendations directed to
USAID from prior audits either have not been corrected or final action has not been
completed as of September 30, 2005. We have also noted where final action was taken
subsequent to fiscal year-end but prior to the date of this report.
Report on USAID's Financial Statements, Internal Controls, and Compliance for Fiscal
Year 1998, Audit Report No. 0-000-99-001-F, March 1, 1999
Recommendation No. 1: Because the Chief Financial Officer lacks the authority
called for in the CFO Act, we recommend that the Chief Financial Officer collaborate with the
Assistant Administrator for Management, Chief Information Officer, and Bureau for Policy and Program Coordination to:
1.1 Determine the specific responsibility, authority,
and resources needed to meet the requirements of the Chief
Financial Officers Act of 1990, which assigns the Chief
Financial Officer responsibility to: (1) develop and maintain
an integrated accounting and financial management system
that meets federal financial system requirements, federal
accounting standards, and the U.S. Standard General Ledger
at the transaction level; (2) approve and manage financial
management system design and enhancement projects; and
(3) develop a financial management system that provides
for systematic measurement of performance.
USAID has completed actions on this recommendation.
Independent Auditor's Report on USAID's Financial Statements for Fiscal Years 2004 and 2003,
Audit Report No. 0-000-05-001-C, November 15, 2004
Recommendation No.2: We recommend that the USAID Chief Financial Officer, in coordination
with the Assistant Administrator of the Policy and Program Coordination Division:
2.1 Ensure that annual certifications of strategic objectives to agency goals, which are
made when information from the Annual Reports Database are finalized, are conducted
consistently by all USAID operating units.
2.2 Include all active strategic objectives expending funds in the Annual Reports Database.
USAID has taken action to resolve these findings in FY 2005, by requiring annual
certifications and by ensuring that its strategic objectives are assigned to performance
goals in its Annual Reports Database.
Recommendation No. 3: We recommend that USAID's Chief Financial Officer require USAID's
Office of Financial Management to develop and implement specific written desk procedures
requiring documenting and reporting processes for the narratives of (1) conditions of
reconciling items and (2) unreconciled conditions of fund balance accounts for the
reconciliation of the Fund Balance with Treasury, that incorporate and enhance existing
USAID and federal guidance.
USAID has completed actions on this recommendation.
Recommendation No. 5: We recommend that USAID's Chief Financial Officer update written
procedures related to the preparation of the 620(q)/Brooke Amendment Violation Report; the
monitoring of non-rescheduled loans for countries under rescheduling; and the receipt of loan
delinquency reports from its loan servicing agent.
USAID has completed actions on this recommendation.
Unresolved Prior Year Findings and Recommendations
Report on USAID's Consolidated Financial Statements, Internal Controls and Compliance for
Fiscal-Year 2002, Audit Report No. 0-000-03-001-C, January 24, 2003
Recommendation No. 2: We recommend that the Chief Financial Officer:
2.2 Reconcile the mission adjustment account in the general ledger to the cumulative
amounts in the mission ledgers and resolve differences between the general ledger and
the mission ledgers.
Independent Auditor's Report on USAID's Financial Statements for Fiscal Years 2004 and 2003,
Audit Report No. 0-000-05-001-C, November 15, 2004
Recommendation No. 1: We recommend that the Chief Financial Officer, in coordination with USAID's
Office of Human Resources, update USAID's Cognizant Technical Officer training course and Financial
Management Overview training course to include sessions on developing and supporting quarterly
accrual estimates. The training should include information on supporting documentation and on
developing estimates in the absence of timely disbursement data necessary to develop accurate accruals.
Recommendation No. 4: We recommend that USAID's Chief Financial Officer direct its Financial
Management Office to conduct quarterly intragovernmental reconciliations of activity and balances
with its trading partners in accordance with the requirements of the Federal Intragovernmental
Transactions Accounting Policies Guide, issued by the Department of Treasury's Financial Management Service.
These recommendations are pending final action by USAID.
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