Cost Sharing: USAID’s Asia Bureau Should Enhance Guidance and Training to Ensure Missions Verify Awardees’ Contributions

Audit Report
Report Number
5-000-22-002-P

Why We Did This Audit

USAID identifies commitment from host governments, the private sector, and other partners as fundamental to enabling host-country ownership and sustaining gains made through the Agency’s investments in international development. Cost sharing—a key tool that supports local commitment—is significant in the Asia region, where it makes up over 10 percent of the total cost of all USAID awards.

The objective of this audit was to determine to what extent USAID has monitored selected awards in Asia to ensure cost-sharing contributions meet Federal regulations and Agency directives.

Key Findings

Not all selected missions in Asia fully ensured that cost-sharing contributions made by the recipients were verified. We identified gaps in missions’ monitoring of cost sharing in four of the six selected missions. These gaps in USAID’s oversight of cost sharing were caused by insufficient Agency guidance and training for staff on how to monitor to ensure compliance with Federal regulations and Agency directives.

We made three recommendations for the Asia Bureau to determine the course of action regarding questioned cost-sharing contributions, improve guidance on monitoring cost sharing, and provide training to mission staff and external auditors to ensure cost-sharing contributions meet Federal regulations and Agency directives. The Asia Bureau agreed with all three recommendations.

Recommendations

Recommendation
1

Coordinate with USAID/Nepal to determine the course of action to address the $25.4 million in ineligible questioned costs relating to cost-sharing contributions of the National Early Grade Reading Program.

Questioned Cost
25400000
Funds for Better Use
0
Close Date
Recommendation
2

Coordinate with the Bureau for Policy, Planning, and Learning to develop and issue additional guidance to missions in the region on how to monitor cost sharing to ensure compliance with Federal regulations and Agency directives.

Questioned Cost
0
Funds for Better Use
0
Recommendation
3

Coordinate with all missions in the region to develop a plan to provide training to (i) mission staff on how to monitor cost sharing to ensure compliance with Federal regulations and Agency directives and (ii) external auditors on reviewing cost sharing in accordance with the relevant statements of work.

Questioned Cost
0
Funds for Better Use
0