Audit of USAID/Jordan and the Government of Jordan"s programming of the special local currency account

commodities. According to the 1985 grant agreement, the funds were to be used for development projects in Jordan, administrative costs, and other mutually agreed upon activities, including the repayment of host government debt. The audit found that USAID/Jordan and the GOJ had not implemented a number of key systems required to program and monitor the use of the Special Local Currency Account. The auditor"s review of compliance with 22 requirements found that 9 were not being implemented. The mission implemented a number of key requirements, such as establishing a special account and providing written concurrence prior to each host government withdrawal. Periodic audits had not been performed and the auditors were unable to adequately determine whether local currency funds were used for their intended purpose because the auditors did not feel that intended purposes were clearly established for the funds. The auditors also found an unreconciled difference of $1,296,702 between USAID/Washington and participating banks. The report recommends that USAID/Jordan: (1) establish procedures in coordination with the GOJ to (a) designate verifiable intended uses for special account funds allocated for individual projects, and (b) communicate in writing these intended uses to the Ministry of Planning and host government ministries implementing the projects; (2) amend existing agreements to include provisions requiring (a) quarterly host government reporting on local currency use, and (b) periodic audits; (3) develop a plan to verify the accuracy of host government reports; (4) make a management decision on questioned costs totaling $2,648,101 identified in the concurrent financial audit of local currency use; and (5) request USAID/Washington to reconcile its records with participating banks and deobligate up to $1,296,702 in unneeded funds. The Mission agreed with and has implemented the recommendations. (Author abstract)