Audit of USAID/Washington"s management of its photocopying program

On average, USAID/Washington produces over 1 million photocopies each month. Over the course of a year, USAID/Washington spends (not counting staff costs) nearly $1 million to produce these photocopies. The cost of these photocopies is covered predominantly by agreements with three suppliers, who are responsible for the maintenance of the machines as well as all supplies (such as toner) except paper, which USAID purchases separately at about � penny per page. According to the auditors, the OAS did not manage the program economically and efficiently, as its cost per copy was 6 � cents, whereas alternative photocopying management services are available that cost 1 � to 3 � cents per copy. This high cost was incurred because USAID underutilized its copying capacity through inattention to (and application of) actual copying demand. The audit showed that: (1) USAID"s overall average monthly copying demand was only about 7% of copying capacity, as measured against the manufacturers" recommended volumes; and (2) said level of demand represented only about 40% of the volume that its suppliers used in pre-determining lease and maintenance pricing for the type and quantity of machines acquired. Thus, given USAID"s current photocopying demand, it is conservatively estimated that USAID is incurring at least $400,000 per year more than what is reasonable. It is estimated that USAID could save (or put to better use) at least $1.6 million over 4 years, the average useful life cycle for photocopying machines. In addition, the OAS was deficient in critical internal control areas, lacking: (1) a comprehensive inventory control system; (2) documented procedures to guide program management; or (3) adequate administrative controls on processing invoices. It is recommended that the OAS outsource the photocopying program under a cost per copy agreement and implement adequate controls over the operation of that agreement. In response to the draft report, the OAS stated that its goal for the copier program is to provide service when and where needed and in the most economical fashion. However, instead of agreeing to outsource the photocopying program, it intends to maintain its own management out of concern for customer satisfaction and the difficulty posed with early termination charges under one of its major lease agreements. Although the auditors commend USAID"s initial efforts to manage its photocopying program more economically and efficiently, they believe that its corrective actions are neither sufficiently economic nor efficient and thus do not adequately address audit recommendations. Therefore, a management decision has not been reached on either of the audit"s recommendations.