Audit of USAID/Guatemala"s small farmer diversification systems project managed by the Institute of Agricultural Science and Technology, July 1, 1987 to March 31, 1989

Financial close-out audit covers the period 7/87-3/89. ICTA"s internal control structure is marked by four weaknesses. These include a failure to: (1) prepare periodic fund accountability statements, (2) maintain adequate control over loans made to the project by ICTA, (3) perform periodic reconciliations of fixed asset subsidiary records to ICTA"s general ledger, and (4) perform monthly bank reconciliations. ICTA also failed to comply with A.I.D. regulations in three areas: (1) maintaining separate accounting records for project transactions and performing periodic external audits and technical reports of technology transfer; (2) maintaining adequate accounting records supporting the amount of counterpart funds contributed to the project; and (3) establishing a control system to assure project funds are used only for approved project activities. The audit also found that ICTA had incurred project expenditures totalling more than $30,000 which have not been reimbursed by USAID/G. ICTA disagreed with all findings; their comments (in Spanish) and the auditors" response are appended.