USAID OIG Afghanistan and Pakistan Oversight Report, April-June ...

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delays in implementing the project. Specifically, the project undertook a laborious process toselect and train local partners before work could begin to help owners of microenterprises. Asa result, as of December 2011, only $6.6 million had been allocated to helping microenterpriseowners develop value chains.In addition, the program made little progress in developing one of its target sectors—the honeysector—because the mission took longer than expected to approve the local partner’s grantapplication and then required an additional feasibility study before proceeding. Finally,because USAID/Pakistan had not yet started tracking changes in beneficiaries’ incomes, it wasnot possible to determine whether the program was achieving its overall goal of substantiallyincreasing their incomes. The report made two recommendations to address related issues.The report made two recommendations to address these issues, and management decisionshave reached on both.Review of USAID/Pakistan’s Cost Estimates for Shipping and Storage (Report No. G-391-12-001-S, June 18, 2012). Employees transferring to Pakistan are eligible to ship personaleffects of up to 2,000 pounds by sea and 1,000 pounds by air. They are also entitled to ship onevehicle and to place items in storage. To cover the shipping and storage expenses associatedwith these transfers, USAID/Pakistan obligates an estimated amount, typically $25,000, thoughsometimes more. Mission officials did not know how their predecessors had arrived at thisestimate, so OIG conducted a review to develop a more reasonable estimate for obligatingfunds for the shipping and storage of goods for USAID employees assigned to Pakistan.By reducing the standard obligation conservatively to $15,000, OIG found that the missioncould put approximately $480,000 annually—or $2.4 million over 5 years—to better use. Thereport also recommended that the mission review $860,000 in unliquidated shipping andstorage-related obligations for possible deobligation.In response to the recommendations, the mission reduced the standard shipping and storageobligation to $15,000 and completed its review of unliquidated obligations, resulting in a totaldeobligation of $653,259.As of June 30, 2012, USAID OIG had three performance audits in progress.Audit of USAID/Pakistan’s Reconstruction Activities in Earthquake-Affected Areas. Theobjective of this audit is to determine whether USAID/Pakistan’s reconstruction activities inearthquake-affected areas are being implemented effectively.Audit of USAID/Pakistan’s Assessment and Strengthening Program for LocalOrganizations and Government of Pakistan Entities. This audit will determine whether theUSAID OIG Afghanistan and Pakistan Oversight Report 19
program is improving the capacity of local organizations and Government of Pakistan entitiesto manage USAID funds responsibly.Audit of USAID/Pakistan’s Gomal Zam Multipurpose Dam Project. This audit willdetermine whether USAID/Pakistan’s funding to complete the Gomal Zam Multipurpose Damcontributed to achieving overall project goals related to power generation, irrigation, and floodcontrol.OIG has plans to conduct two other performance audits during FY 2012. They will assessUSAID/Pakistan’s design for sustainability in the Jamshoro Thermal Power Station Repair andMaintenance Activity and its Monitoring and Evaluation Program.Financial AuditsIn addition to organization-wide audits of U.S.-based firms operating in Pakistan, OIG has overseen61 financial audits of Pakistan-based programs and activities since FY 2003. These financial auditshave covered more than $844.2 million in funds and identified approximately $7.8 million inquestioned costs. Of this total, USAID has sustained almost $3.2 million in questioned costs.OIG has developed relationships with local institutions, such as the Auditor General of Pakistan, tohelp strengthen the accountability environment. OIG’s memorandum of understanding with theAuditor General permits that organization’s audits to be accepted as meeting the requirement forannual audits of Pakistani Government entities implementing USAID-funded programs. Beforeaccepting Auditor General audits as meeting this requirement, however, OIG reviews them toverify that they were performed in accordance with OIG guidelines. OIG recently provided afinancial audit training session with a segment on fraud awareness to the Auditor General’s staff.OIG also uses local accounting firms to conduct financial audits in Pakistan. Before using any localfirms for this type of work, OIG assesses their capability to perform the work. As of June 30, 2012,USAID OIG had a roster of 28 eligible audit firms in Pakistan to call on. OIG has nearly doubled thesize of this roster since the start of FY 2010.From April 1 to June 30, 2012, USAID OIG issued six financial audits and two quality controlreviews:Financial Audit of the USAID Resources Managed by the National Rural SupportProgramme (NRSP), for the Period July 1, 2010, to June 30, 2011 (Report No. G-391-12-008-R, April 3, 2012). The audit covered total revenues of $10,200,917 and costs of$9,942,572 under USAID agreements and subagreements managed by NRSP. The auditconcluded that, with the exception of the effects of questioned ineligible costs of $39,745, thefund accountability statement presented fairly, in all material respects, program revenues andcosts incurred under the agreements for the period audited. The questioned costs pertained to20 USAID OIG Afghanistan and Pakistan Oversight Report
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Page 7 and 8: Audit ProgramOIG auditors, certifie
Page 9 and 10: Most OIG investigations are conduct
Page 11 and 12: site visits. In the past, building
Page 13 and 14: In recent years, OIG has covered a
Page 15 and 16: applications. In fact, the former s
Page 17 and 18: Financial Audit of Costs Incurred b
Page 19 and 20: investigation. While the employee h
Page 21 and 22: This field was cultivated under USA
Page 23: eceived payments. OIG’s review of
Page 27 and 28: Under Cooperative Agreement No. 391
Page 29 and 30: Financial Audit of USAID Funds Mana
Page 31 and 32: OIG Investigation Results in Employ
Page 33 and 34: A billboard advertises the Anti-Fra
Page 35 and 36: Other ExclusionsWalker, Scott Antho
Page 37 and 38: ReportDateReport Title*Recommendati
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Page 41 and 42: Date Report Recommendation TargetAc
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Page 45 and 46: DateReport Title and NumberAmountAu
Page 61 and 62: 10/10/11 F-306-12-002-N Financial A
Page 63 and 64: 02/25/10 5-306-10-002-NFinancial Au
Page 65 and 66: 08/10/06 5-306-06-004-D Financial A
Page 67 and 68: 03/26/04 5-306-04-003-N Financial A
Page 69 and 70: 06/23/11 G-391-11-003-Q Quality Con
Page 71 and 72: 04/30/09 5-391-09-008-R Financial A
Page 73 and 74: 09/26/06 5-391-06-003-Q Quality Con
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The project had many successes, inc
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complicated process, and OIG could
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The objective of the audit was to d
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According to information provided b
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OIG’s audit found that the univer
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Audit of USAID/Afghanistan's Altern
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and DOD PSCs in Afghanistan because
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Afghanistan has one of the highest
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contractor estimated that cost over
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Audit of USAID/Pakistan’s Energy
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Audit of USAID/Pakistan’s Road Re
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establishing a distribution policy,
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planned results was hindered by a s
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Although USAID carried out numerous
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AbbreviationsAACCAEDATVIAUAfCERPDAB
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USAID Office of Inspector General13
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