Audit of management systems and contracting procedures; USAID/Somalia

Financial and compliance audit was based on tests of selected contracts, proposals, and other documentation, and interviews with responsible officials, and covers FY 1984-87. Administrative violations and areas of noncompliance on the part of USAID/S were found in each of the above three areas. (1) At least 17 contracts, 10 leases, and six purchase orders did not comply with regulations in A.I.D. Handbook 19 that require all obligations to be cleared for funds availablility prior to the commitment of funds. (2) Documentation required by the FAR"s for all contract files (e.g., a list of sources solicited, a full record of negotiation justifying contract prices, etc.) was incomplete, so that there was no justification for contract prices or starting salaries for contract personnel. In some cases proper security clearances were not obtained. (3) Another FAR which requires AID/W approval of funding for unsolicited proposals was ignored, possibly due to the excessive involvement of the former Mission Director in these proposals. These problems have persisted for a number of years in USAID/S and still continue. It is recommended that the new Mission Director develop guidance and procedures for ensuring that Federal and A.I.D. regulations are followed. The Mission generally agreed with the audit findings and recommendations. Its comments are appended.