Foreign Assistance: African Development Foundation's Grant Funds Are Not Routinely Audited

Highlights

Pursuant to a congressional request, GAO reviewed the African Development Foundation's (ADF) grant audit practices, focusing on whether ADF: (1) ensures that its grantees have the ability to keep track of grant funds; (2) performed required grant funds audits; and (3) has resolved problems found during grant fund audits.

Recommendations

Recommendations for Executive Action

Agency Affected	Recommendation	Status
African Development Foundation	To provide greater accountability over ADF grant funds, the President, ADF, should ensure that evidence of the grantee's accounting and recordkeeping capabilities are documented by bookkeeping reviews, written waivers for bookkeeping reviews, or assessments by ADF regional managers.	Closed – Implemented ADF has revised its audit guidelines and has replaced bookkeeping reviews with mandatory simplified checklists to evaluate applicant accounting and recordkeeping capability. A basic bookkeeping instruction has been developed for grantees. A standardized memo has been developed that must be signed by the regional managers stating that a bookkeeping review has been performed.
African Development Foundation	To provide greater accountability over ADF grant funds, the President, ADF, should ensure that waivers for financial audits are documented.	Closed – Implemented ADF has revised its audit guidelines. Only the President of the Foundation can waive a financial audit in response to a written recommendation by a regional manager.
African Development Foundation	To provide greater accountability over ADF grant funds, the President, ADF, should ensure that followup and resolution of findings from bookkeeping reviews, regional manager assessments, and financial audits are documented in a systematic manner.	Closed – Implemented Budget constraints have limited ADF to one full-time auditor in the Office of Financial Audit. However, the auditor prepares a summary report based on his review of bookkeeping and financial audits. This report is used by regional managers in comparing action taken by the grantee and documenting the status of the findings.

Full Report

Full Report (16 pages)

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Topics

International Affairs

AccountingCorporate auditsFinancial recordsFunds managementGrant administrationGrants-in-aidInternal controlsManagement information systemsNonprofit organizationsGrant programs