Audit of the urban health and community development project managed by the Socio-Medical Complex of the Cite Soleil (CMSCS) in Haiti

Audit covers the period 5/84-8/89. While CMSCS has generally complied with the project agreement and applicable regulations, it has reported questionable costs in the amount of $118,262 (of total project funding of $4,300,000) and has certain problems in internal control. Deficiencies include: (1) an accounting system inadequate for identifying sources of funds received and the related use of such funds; (2) lack of adequate documentation to support certain expenditures; (3) inadequate personnel files and inadequate controls over the distribution of payroll checks; (4) the absence of subsidiary records for A.I.D.-funded fixed assets and an adequate supply inventory system; (5) failure to maintain a separate bank account for A.I.D. funds received; and (6) the absence of procedures for bank reconciliation review and the preparation of reimbursement requests to A.I.D. CMSCS also failed to obtain written A.I.D. approval for air travel and transportation, participant training, and contingency fund use. Also, expenditures in some cases exceeded budget. Neither did CMSCS establish adequate procurement procedures or pay Haitian payroll taxes. It is recommended that USAID/H negotiate a settlement with CMSCS for the $118,262 in questionable costs and require CMSCS to improve its internal controls.