Audit of AID"s compliance with special requirements for consulting services

97-258 of 11/82). Audit report is based on a review of 25 contracts reported by A.I.D. during FY85 and other A.I.D. documents and on interviews with officials at A.I.D. and the Federal Procurement Data Center (FPDC). While A.I.D. has established management controls over consulting services in accordance with OMB guidelines, these controls are not fully effective. Three reviews conducted since 1980 on the use and reporting of consulting services have shown that A.I.D. contracting officials experienced problems in correctly identifying consulting service contracts. These problems have not been corrected, and in FY85 A.I.D. overstated its use of consulting services by some 50%. Neither did A.I.D. provide the required financial information on consulting services in its annual congressional presentations for FY83-85. Data processing errors, furthermore, resulted in submission of incomplete contract information to the FPDC, the U.S. government"s contract control organization. (A.I.D. officials have stated that the computer program generating the reports was revised in 12/85 to correct the deficiencies.) In order to fully comply with the OMB guidelines and P.L. 97-258, it is recommended that A.I.D.: (1) provide more definitive guidelines to assist contract officials in correctly classifying consulting service contracts, and periodically review their implementation; and (2) establish procedures for reporting the required financial information on consulting services together with the annual congressional budget justification.