AUDIT REPORT, PLANNED PARENTHOOD FEDERATION OF AMERICA

Evaluation covers the period 6/30/71-5/31/73 and is based on an audit review of PPFA and subgrantee files. Audit findings and recommendations are as follows: (1) Of $3,212,300 claimed by PPFA, $284,210 should be disallowed and another $1,621,272 suspended pending further study. The rest should be approved, subject to PPFA"s performance. Reasons for these recommendations are PPFA"s complex and not always documented accounting system and the limited understanding of the system"s operation by PPFA"s staff. The system should be revised so that charges to the cost centers depict actual costs. (2) Due to PPFA"s failure to prepare, as requested, a proposal differentiating direct from indirect costs, all claimed overhead costs are being suspended. Overhead rates should be applied to all direct costs exclusive of commodites, subcontracts, subgrants, leasehold improvements, and U.S. office equipment purchases. (3) Recommendations regarding personnel management included the need for PPFA staff to limit themselves to AID-approved activities. (4) Living expenses of FPIA employees during domestic travel exceed A.I.D."s maximum per diem rates and should be kept to those rates. (5) The grant fails to specify whether A.I.D. or FPIA regulations will govern the types and amounts of overseas allowances and is silent on the title to equipment purchased for overseas use. These issues must be clarified and records of AID-purchased equipment updated. (6) FPIA subgrant audit reports lack basic information, e.g., on expenditures. FPIA should obtain audits from certified or equally qualified accountants and outstanding subgrants must be amended. (7) Financial reports submitted to A.I.D. are not always complete or accurate. FPIA has agreed to correct this situation. (8) FPIA did not release all of the files requested by A.I.D. as specified in the grant agreement. A.I.D."s right to grant-related records must be conveyed. (9) FPIA needs an internal audit of its operations.