Audit of USAID/Nepal"s management of direct AID contracts for technical assistance

The audit covers the period through 3/91. USAID/Nepal planned and monitored direct A.I.D. technical assistance contracts successfully. However, improvements could still be made in developing work statements, securing bids, complying with contract award requirements, closing out completed contracts, and resolving $1.5 million in questionable obligations. The Mission has not always properly developed statements of work prior to including these in a contract. The statements lack detail and do not provide specific progress indicators or benchmarks. This occurs because some project officers do not know how to write effective statements of work, or do not appreciate their importance. The Mission has not followed all of the procedures for selecting winning contractors, securing bids, determining contractor responsibility, and documenting cost analysis. Cost factors established in contract solicitations were not fully considered when determining winning contractors and cost evaluations were not always documented. This occurred because personnel were not fully aware of all the requirements of the Federal Acquisition Regulations. Expired contracts have not been properly closed out, resulting in poor controls over $1.7 million in nonexpendable property and $1.5 million in potentially excess funds available for de- obligation. In addition, close-out audits were not always performed. The Mission has had insufficient controls over disbursements made by others on the Mission"s behalf. As a result, the Mission cannot ensure the $360,000 in such transactions were charged to the proper appropriation and allotment.