Memorandum audit report on year-end obligations

Audit report covers the period FY84 and is based on review of nine A.I.D. Offices/Bureaus. Despite OMB"s requirement that fourth-quarter obligations not exceed the average of the first three quarters except in unusual circumstances, A.I.D."s obligations in fourth-quarter FY84 exceeded $2 billion, nearly twice the average for the first 3 quarters and 39% of its total FY84 obligations of $5.7 billion in project funds and $375 million for operating expenses. Notable differences were found in project-related obligations by individual Bureaus. The Africa Bureau, for example, made 54% of its obligations in the fourth quarter, an improvement over last year"s 59%, while the figure for the Near East Bureau was only 37%. However, the Near East figure rises to 72% if a 12/83 cash transfer of $910,000 to Israel is not counted. Obligations for operating expenses - with a 32% fourth-quarter rate - were much more uniformly distributed over the year. It is noted that many factors such as supplemental appropriations and Congressional notification procedures beyond A.I.D."s control contribute to this pattern of high fourth-quarter obligations. Nevertheless, A.I.D."s FY84 performance did improve slightly over that of FY83, in which year-end obligations totaled 41% of total FY83 obligations, and A.I.D."s progess in implementing recommendations of a 9/84 audit should impact favorably on FY85 year-end obligations. Consequently, no recommendation is made.