Audit of USAID/Ecuador"s compliance with fund control laws and regulations

Limited scope financial and compliance audit covers the period 10/83-9/86 and is based on review of selected financial documents and interviews with AID/W and USAID/E officials. While the audit disclosed numerous violations of FCL/R"s by USAID/E, it should be noted that the Mission itself brought several of these violations to the auditor"s attention, and was in the process of strengthening its financial management when the audit began. Nevertheless, the audit disclosed violations of the Antideficiency Act, of A.I.D."s fund control regulation, and of Section 1311 of the Supplemental Appropriations Act of 1955. For example, USAID/E incurred obligations against appropriation No. 72-113/41035 after the appropriation had expired, and incurred obligations in excess of the amount available in allotment No. LFD3-84. It also paid contractors after the funds available in their contracts had been exhausted, made an advance before funds were obligated, and made advances in excess of obligations and commitments. Finally, it recorded amounts as obligations when in fact no obligations existed. While the USAID/E Controller"s Office was ultimately responsible for these violations, other Mission offices shared this responsibility. Controller"s Office staff were poorly trained and supervised and some staff were not qualified to carry out their assigned duties. As a result, funding limitations imposed by the Congress and by A.I.D. management were exceeded. Recommendations are for USAID/E to: (1) obtain a determination whether Section 3679 of the Revised Statutes was violated in the instances identified in the audit and, if so, ensure that the violations are reported to the President and the Congress; (2) take whatever actions deemed necessary by the Agency Controller to correct these violations; and (3) provide its staff with a written guidance which describes the statutory and regulatory requirements for fund control and assigns responsibility for ensuring compliance with these requirements. (Author abstract, modified).