USAID Recipient Contracted Audit Process

The process involves several key steps, commencing with the recipient preparing an audit Statement of Work (SOW) and submitting it to the USAID Mission for approval. The SOW must contain all the requirements of the Guidelines for Financial Audits Contracted by Foreign Recipient. If the SOW is unacceptable, the Mission must request the recipient to make the required changes and re-submit it for approval. Once approved, the SOW is provided to the recipient, who then solicits quotations from a selection of audit firms from the Regional Inspector General's (RIG) list of approved firms. The recipient selects an audit firm and notifies the USAID Mission of the choice. The Mission approves or disapproves the recipient's choice of a "Regular" firm, while the RIG must approve the recipient's choice of a "Conditional" firm. If the choice is disapproved, the recipient must select another firm. The recipient uses the approved SOW as the basis of the audit contract between them and the audit firm. The audit contract is accepted and signed by the selected audit firm, and the auditors schedule an Entrance Conference with the recipient. The Entrance Conference is held to discuss the audit process, anticipated dates of fieldwork, and information needed by the auditors. The auditors begin their fieldwork, discussing matters or issues identified with management and staff of the recipient, and providing missing support and documentation. Upon completion of fieldwork, the auditors schedule an Exit Conference to discuss the findings from the audit and the RCA process. The Exit Conference is held to discuss any findings not resolved during the conference, which must be included in the audit report. The auditors draft the audit report, distribute it to the recipient for comments, and evaluate and incorporate the recipient's management comments or responses verbatim in the draft report. The auditors finalize the report, sign and date it, and submit copies to the USAID Mission. The Mission submits signed electronic or hard copies of the finalized report to RIG/Pretoria for issuance. RIG/Pretoria reviews and issues the final report, which must be received no later than nine months after the end of the audited period.