Audit of the Salvadoran court of accounts" review and implementation of local currency - financed activities

The audit of the first activity was based on a review of 38 expenditure transactions for 11 implementing agencies totaling $1.7 million in local currency; that of the second on a detailed review of selected vehicle and radio equipment procurements. The audit contains three major findings. (1) The Court of Accounts may not be an independent observer. The Courts" review of extraordinary budget expenditures included a review of the budgetary support provided to it by the Technical Secretariat for External Financing, on which the Court financially depends. This dependence may have impaired the objectivity of the Court"s review. (2) The Court"s budget review procedures could be improved. Court examiners did not always review appropriate documentation in support of local currency-financed transactions. (3) The Court did not comply with program criteria in implementing its modernization project, i.e., that the Court use a separate Central Bank account, maintain adequate financial and expenditure records, liquidate advances properly, make procurements in accordance with approved action plans and government regulations, and control assets adequately. Nevertheless, the Court has made progress in its transition from being largely a "voucher examining" organization to an organization capable of performing audits. More than 1,026 Court employees have received some sort of training since 7/87 and 79 employees have been graduated to the auditor level. A major recommendation is that USAID/ES not approve any new local currency projects with the Court until reported compliance deficiencies have been corrected.