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

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USAID Office of Inspector General OversightEstablished pursuant to the Inspector General Act, as amended, Public Law 95-452 (October 12,1978), the Office of Inspector General (OIG) is an independent oversight organization withinUSAID. Responsible for oversight of approximately $31 billion in foreign assistance funds, OIGreceived $51 million in fiscal year (FY) 2012 appropriations.OIG executes its mission to protect and enhance the integrityof U.S. Government foreign assistance programsthrough audit and investigative efforts. OIG maintains astaff of approximately 195 direct-hire employees and38 other personnel such as Foreign Service Nationalsand reemployed annuitants. OIG staff include auditors,certified public accountants, investigators, and programanalysts, as well as specialists in management, budget,information technology, and personnel operations.Approximately 70 direct-hire OIG positions are basedoverseas, and the remaining workforce is stationed inWashington, D.C. OIG has overseas offices in Baghdad,Cairo, Dakar, Islamabad, Kabul, Manila, Port-au-Prince,Pretoria, San Salvador, and Tel Aviv.Inspector General Act of 1978The Inspector General Act establishesOIGs as independent, objective units responsiblefor conducting and supervisingaudits and investigations of agency programsand activities. It directs OIGs toprovide leadership and coordination andrecommend policies to promote economy,efficiency, and effectiveness andprevent and detect fraud and abuse. Theact also requires Inspectors General tokeep Congress and the head of the agencyfully and currently informed about relatedproblems and deficiencies and theneed for and progress of correctiveactions.Some of OIG’s work is mandated by statute or regulation. Other OIG work is performed afterconsidering risks associated with program activities and assessing internal control vulnerabilities.OIG places a high priority on oversight of foreign assistance efforts in Afghanistan and Pakistan andbalances these oversight requirements with other important responsibilities around the world.Financial Returns on OIG Work inAfghanistan and Pakistan, FYs 2003–2012USAID OIGSavings and Recoveries$12.77OIGCosts$1OIG’s approach to oversight in these settings hasproduced dividends for taxpayers. Whereas wehave expended $28.1 million on oversight activitiesin Afghanistan and Pakistan since FY 2003, ouraudit and investigative work has yielded$359.3 million in returns to the U.S. Government inthe form of audit and investigative savings and recoveries.This amounts to a $12.77 return on eachdollar spent on USAID OIG oversight in these countries.In addition to these direct savings and recoveries,USAID OIG prevents a significant amountof waste, fraud, and abuse, and contributes to futureeconomies and efficiencies through investigativeand audit work.USAID OIG Afghanistan and Pakistan Oversight Report 1
Audit ProgramOIG auditors, certified public accountants, and program analysts design and conduct audits andreviews to determine whether USAID programs and operations are working as envisioned. Auditactivities include performance audits of programs, financial statement audits, audits related tofinancial accountability of grantees and contractors, and audits of information technology systems.Performance Audits and ReviewsOIG performance audits and reviews provide an independent assessment of the performance andmanagement of USAID systems, programs, activities, and functions against objective criteria, bestpractices, and other information. Performance audits and reviews address a wide variety ofobjectives, including those related to program effectiveness and results; economy and efficiency;internal controls; and adherence to legal and other requirements and standards.OIG engages in an extensive planning process to determine where to focus performance audit andreview work. This planning process accounts for program risks and is intended to identify topicsof interest to OIG customers and stakeholders. OIG provides particularly intensive oversight ofprograms in high-risk settings such as Afghanistan and Pakistan, where program success or failurecan have national security implications. OIG’s annual plan, which represents the culmination of theyearly planning cycle, provides information on audits and reviews scheduled for the followingfiscal year. OIG adjusts these plans throughout the year as circumstances warrant.Financial AuditsUSAID OIG uses different approaches to audit USAID funds expended by different types oforganizations.USAID requires foreign nonprofit organizations that receive USAID awards and expend $300,000per year or more in USAID funds to undergo an annual financial audit. The organizations contractwith public accounting firms vetted by OIG to conduct the audits, which focus specifically on USAIDfunds and follow OIG’s Guidelines for Financial Audits Contracted by Foreign Recipients. Forroutine audits, the organization awards the audit contract using a standard statement of workdeveloped by OIG. OIG reviews final audit reports and transmits them to USAID for action. Theseaudits are called recipient-contracted audits. For a subset of these audits, OIG performs qualitycontrol reviews that include visits the audit firms, an examination of audit documentation, andinterviews the auditors responsible for the work.USAID may also award audit contracts directly. For Agency-contracted audits, OIG is involved inthe audit from the outset, approving the audit program, attending entrance and exit briefings, andapproving draft and final audit reports. OIG is responsible for the quality of all recipientcontractedand Agency-contracted audits.2 USAID OIG Afghanistan and Pakistan Oversight Report
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10/10/11 F-306-12-002-N Financial A
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02/25/10 5-306-10-002-NFinancial Au
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08/10/06 5-306-06-004-D Financial A
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03/26/04 5-306-04-003-N Financial A
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06/23/11 G-391-11-003-Q Quality Con
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04/30/09 5-391-09-008-R Financial A
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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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