Caribbeana council

Audit report covers the period 10/79-9/81 and was conducted at CC"s Washington, D.C. headquarters. The CC"s financial and management capabilities continue to be seriously inadequate, as reported in Audit No. 80-4. While the CC"s accounting system is basically adequate, CC"s failure to keep its accounting records current delayed the audit and renders financial accountability impossible. The CC also continues to experience cash flow problems; its current assets to liabilities ratio was 0.56:1 as of 5/81. Under the second A.I.D. grant, effective 12/23/80, the CC received a cash advance of $121,500 based on expected costs through 5/81; actual costs, however, have totalled only $49,158. Also, the CC has yet to submit to A.I.D. any "no-pay vouchers accounting for expenses incurred against advances. (After issuance of the draft audit, the CC refunded excess funds to A.I.D. and submitted expenditure reports.) Finally, assistance from the Pan American Development Foundation (PADF), which agreed to work with the CC in moving the Black Belly sheep project toward economic self-sufficiency, has not materialized. The CC"s management controls were found to be weak or non-existent: CC does not segregate subgrant expenditures; its employees do not submit travel vouchers; its revenues were counted twice. A vehicle procured with A.I.D. money was destroyed and the CC collected $8,750 from its insurance company, but has neither replaced the vehicle nor notified A.I.D. An audit of financial records revealed total questioned costs of $1,268 and a 1980 overhead rate of 57.42%. It was recommended that A.I.D.: (1) terminate its relationship with the CC upon the 12/81 expiration of the current grant and withhold future grants until the CC has demonstrated it can keep its financial records current and generate increased private funding; (2) require the CC to use the PADF in accordance with the grant agreement; (3) notify the CC of proper procedures concerning subgrant costs, travel vouchers, and revenue reports; and (4) settle questioned costs and negotiate final overhead rates for FY80.