Audit of USAID/Rwanda management of cash advances and expenditures for projects and programs

Before funds are initially disbursed by USAID/R, the controller"s office conducts an assessment and prepares a report on the recipient"s financial controls and accounting systems, and also conducts periodic visits to recipients" offices to review and update their understanding of the recipients" financial controls and accounting systems. Also, one recipient -- the Rwandan National Office of Population (ONAPO) -- has hired an expatriate financial management advisor to improve financial controls over project funds. The addition of this advisor has significantly improved that recipient office"s financial controls, accounting systems and expenditure reporting. However, the financial controls and accounting systems at many recipients are still weak. Three recent Mission-contracted audits disclosed significant financial control and accounting weaknesses, yet significant improvements have been made at only one of the audited recipient offices -- ONAPO. The other recipient offices -- the Rwanda Policy Reform Initiatives in Manufacturing and Employment Program (PRIME), and the Agricultural Surveys and Policy Analysis Project (ASPAP) -- had weaknesses which included: (1) cash book balances which are not reconciled with bank statements; (2) weak or nonexistent employment records; (3) no fixed asset registers; and (4) no double entry bookkeeping systems. Weaknesses in the three recipients have resulted in the untimely reporting of project expenditures to USAID/R and questioned and unsupported costs of $4,213,825. In addition, USAID/R"s own review of Natural Resource Management Project (NRMP) recipient offices concluded that their accounting systems and financial controls were inadequate. Weaknesses at the NRMP"s recipient offices include: (1) no accounting staff; (2) no general ledger and subsidiary ledgers; (3) accounting entries which do not refer to documentation which supports the entries; and (4) documentation that is not filed in such a way that it can be easily located. (Author abstract)