Audit of USAID/El Salvador"s closeout practices for expired contracts

Available records show that as of March 1993, USAID/ES had a total of 923 USAID-direct and host-country contracts with commitments of approximately $311 million that needed to be closed out. As a result of not closing out expired contracts, USAID/ES lacked full assurances that: (1) all goods and services were received, (2) USAID-funded property held by contractors was properly accounted for and disposed of, (3) excess funds were promptly de-committed, and (4) required audits were requested and/or performed to assure the propriety of payments to contractors. Furthermore, our sample of 18 expired contracts with commitments totaling $53.9 million showed that USAID/ES: (1) could not provide evidence to substantiate that contracted goods and services were actually provided for one contract costing $557,459 and did not ensure that required final performance reports under six contracts costing $23.4 million were submitted to USAID"s Center for Development Information and Evaluation (CDIE); (2) did not have adequate records to determine how much USAID-funded property was held by contractors or that such property was properly disposed of at the expiration of the contracts, and that two of six contractors identified as having property in their possession failed to submit required final property inventories and had in their possession at least $196,000 in property that had not been properly accounted for; (3) had an additional $119,764 in potential de-commits under four expired contracts, and (4) did not have evidence to show that required audits or desk reviews for 2 of 11 contracts valued at $179,449 had been either requested or performed. The report includes eight recommendations for USAID/ES to take actions for monitoring the contract close-out process and to resolve the specific problems (e.g., property in the possession of contractors was accounted for, excess funds de-committed, and desk reviews or audits are requested or made) identified for the 18 contracts selected for the audit sample. USAID/ES concurred with the report recommendations and had already begun to implement actions to address them. Its comments are appended. (Author abstract)