Summary report on use of program development and support funds

The audit covers $23 million of the $28.8 million in PD&S obligated during FY"s 1985-87 and is based on reviews conducted at ten overseas sites and at the Bureaus for Private Enterprise, Science and Technology, and Food for Peace and Voluntary Assistance. PD&S funds are being used for purposes not contemplated by A.I.D. Handbook 18 and other Bureau guidance. Rather than being used to provide a conceptual basis for new development activities, the funds are being used to supplement existing project budgets, hire contractors to increase approved staffing levels, and pay for items more appropriately chargeable to project or operating budgets. According to the auditees, the main reason for this problem, which seriously undermines A.I.D."s program objective of providing a pool of money to identify and develop new projects, is the lack of clear Agency guidance. It is recommended that the Bureau for Personnel and Financial Management (PFM) develop policy guidance that will amplify and specify what is already stipulated in Handbook 18 regarding the use of PD&S funds. PFM should also establish accounting controls and procedures to help Bureaus and Missions promptly deobligate, reprogram, or redistribute unneeded PD&S funds. About $1.2 million in such funds were identified in the course of the audit.