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Highlights

Pursuant to a congressional request, GAO reviewed the Agency for International Development's (AID) contracting and procurement system, focusing on AID procedures for: (1) maintaining accountability for both AID-owned and cooperating-country-titled nonexpendable property in the possession of contractors; and (2) closing out and auditing expired contracts in conformance with federal and AID contracting policies and regulations.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
United States Agency for International Development 1. To correct areas of vulnerability, the Administrator, AID, should develop an inventory of AID-owned and cooperating-country-titled nonexpendable property in the possession of contractors and, based on the significance of this inventory, develop and implement an appropriate system for the proper accountability and control of such property.
Closed - Not Implemented
Prior action on this recommendation has been overtaken by events at AID. While AID began developing a system to address this recommendation under the previous Administrator, the current Administrator's overarching "Results-Oriented Operations Reengineering" initiative made this work obsolete. As part of this agencywide reform effort, AID's staff are conducting assessments of each business area before overhauling agency procedures and operations. The next business area assessment will cover AID's management of nonexpendable property and will result in improved processes to ensure accountability and control of such property.
United States Agency for International Development 2. To correct areas of vulnerability, the Administrator, AID, should ensure that specific requirements for contract close-outs are established for the overseas missions, including standard requirements or thresholds for final contract audits.
Closed - Implemented
AID has issued policy and procedures for mission contract closeouts. The policy provides: (1) requirements for contract closeout; (2) thresholds for final contract audits; and (3) standard forms.
United States Agency for International Development 3. To correct areas of vulnerability, the Administrator, AID, should ensure that its new contract information system is used to keep track of the extent that expired contracts are being closed out and audited for both AID/Washington and the overseas missions.
Closed - Implemented
The new AID Contract Management Information System (CIMS) tracks the extent that expired contracts are being closed out. However, a different system is being developed to track audits, including contract closeout audits. The system developed to track audits, including contract close outs, is now fully operational.
United States Agency for International Development 4. To correct areas of vulnerability, the Administrator, AID, should develop a plan for eliminating the backlog of completed but unaudited contracts.
Closed - Implemented
The Regional Inspector General for Audit/Washington has developed a plan for eliminating the backlog of requested contract closeout audits.

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