Audit of cost-sharing by American private voluntary organizations receiving assistance from USAID/Egypt

PVO"s receiving a total of 14 grants for development activities in Egypt. The audit covers USAID/E"s portfolio as of May 1989. Contrary to A.I.D. policy, in two cases USAID/E had not required the PVO"s to contribute 25% to the activity budget. USAID/E had agreed to fund 100% of the budget for activities by the International Executive Service Corps (IESC) and 87% of budget for those by American-Mideast Educational and Training Services, Inc. (AMIDEAST). In the case of AMIDEAST, neither the Mission PVO officer, the grant officer, nor the project officer had raised the issue of compliance with the cost-sharing requirements. AMIDEAST also charged certain general operating expenses that should have been allocated among donors solely to USAID/E. Another grantee, the Coptic Evangelical Organization for Social Services (CEOSS), was unable to readily demonstrate exactly how it had arrived at its claimed indirect salary costs or to identify all grant revenues received, retained, and spent, although it agreed to provide USAID/E with an accounting for such items. CEOSS also claimed overhead and contingency costs per rates established in the grant agreement without reference to actual overhead or contingency costs. While the 10% overhead rate appeared reasonable, CEOSS" 5% contingency costs could not be supported. Problems and delays were encountered by Catholic Relief Services (CRS) and Save the Children (SAVE) because of unforeseen difficulties in obtaining Government of Egypt (GOE) approvals and action. As a result, LE 300,000 in CRS grant funds for an aquaculture project remained idle for more than two years and it was unclear whether the GOE would provide additional funds needed to complete the project. SAVE experienced difficulty because the GOE delayed giving SAVE approval to collect necessary activity data. The Mission disagreed with some of the specific findings of the draft audit, but generally accepted its recommendations.