Audit of the Millennium Challenge Corporation's Financial Statements, Internal Controls, and Compliance for the Period Ending September 30, 2011 and 2010

Recommendations

Recommendation 1

We recommend that MCC's Administration and Finance (A& F) Division:
Develop and document a financial reporting process that reduces the likelihood of errors, inconsistencies, and inaccuracies and results in efficiencies and effectiveness, consistency, and accuracy of financial data.

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Recommendation 2

Enhance the quality control process to detect errors or improper closeout of accounts through additional check totals, training and involvement of additional A&F staff members.

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Recommendation 3

Develop an appropriate MCC data store of MCA expense information as required by TR-12.

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Recommendation 4

In the interim, perform similar data validation employed at year end for each quarter going forward.

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Recommendation 5

Prepare a MCC developed estimate for accrued expenses based upon statistical modeling or an alternative that is based on MCC obtained data.

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Recommendation 6

Record advances in accordance with generally accepted accounting principles.

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Recommendation 7

Develop and implement a periodic reconciliation process for advances.

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Recommendation 8

Develop and implement a quarterly certification for advance transactions processed by the MCAs as part of the quarterly data call submission.

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Recommendation 9

Modify MCA audit requirements to include testing and reporting of advances transactions.

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Recommendation 10

We recommend that MCC's Administration & Finance Division and Department of Compact Operations: Collaborate with the OIG and provide the MCA auditors with a document discussing the issues/errors that have led to delays in processing and clearing audit plans and audit reports in a timely manner.

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Recommendation 11

Provide comprehensive guidance to MCAs regarding the procurement of firms to perform the Fund Accountability Statement audits with a focus on timeliness and completeness of the audit deliverables and potential penalties.

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Recommendation 12

Continue to collaborate with the OIG to improve communications regarding audit status and solutions to moving individual audits to completion on a timely basis

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Recommendation 13

Reiterate the program requirements that Quarterly Disbursement Requests are to be accurate and complete and submitted within the required timelines and provide them with information about issues/things that cause delays.

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Recommendation 14

Review the current guidelines for submission of Compact Closure Plans to determine if the timeline is reasonable and realistic. In addition, the Department of Compact Operations should work closely with MCAs to develop and compile a compact closure plan and resolve any outstanding items in advance of compact closure.

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Recommendation 15

Continue to follow USAID's progress toward elimination of cash balance differences between USAID and Treasury and timely clearing suspense account items in order to monitor MCC's risk of potential misstatements.

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