Audit of USAID’s Financial Statements for Fiscal Years 2022 and 2021

Audit Report
Report Number
0-000-23-001-C

Why We Did This Audit

  • The Government Management Reform Act of 1994 requires annual audits of the financial statements for the agencies we oversee.
  • We contracted with the independent certified public accounting firm of GKA P.C. Certified Public Accountants and Consultants (GKA)  to conduct an audit of USAID’s financial statements for fiscal years 2022 and 2021.
  • The audit objectives were to: (1) express an opinion on whether the financial statements as of September 30, 2022 and 2021, were presented fairly, in all material respects; (2) evaluate USAID’s internal control over financial reporting; and (3) determine whether USAID complied with applicable laws, regulations, contracts, and grant agreements.

What We Found

  • GKA concluded that USAID’s financial statements are presented fairly, in all material respects, and in conformity with U.S. generally accepted accounting principles.
  • The audit firm did not identify any material weaknesses in internal control over financial reporting.
  • However, the audit firm reported two significant deficiencies related to USAID’s internal control process for (1) calculating and recording accrued expenses and (2) security management.
  • The audit firm found no reportable noncompliance for fiscal year 2022 with applicable laws, regulations, contracts, and grant agreements. 
  • We made seven recommendations to address the two significant deficiencies. USAID agreed with our recommendations.

Why It Matters

  • These audits help ensure a more effective, efficient, and responsive government, in line with the Act. They provide a window into the financial conditions, internal control over financial reporting, and compliance of federal agencies like USAID. The audits also present an opportunity to recommend improvements, as needed.
0-000-23-001-C.pdf2.73 MB

Recommendations

Recommendation
1

Update the methodology for reporting and posting quarterly accruals to eliminate or mitigate the human factor while increasing automation by developing a system generated accrual estimation amount for financial reporting purpose.

Questioned Cost
0
Funds for Better Use
0
Recommendation
2

Issue written guidance for Agreement Officer Representatives /Contracting Officer Representatives to contact Office of the Chief Financial Officer if they need to post an accrual over and above the amount allowed in the current Phoenix accruals system.

Questioned Cost
0
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0
Close Date
Recommendation
3

Update the Phoenix system security plan to include National Institute of Standards and Technology 800-53 Revision 5 controls.

Questioned Cost
0
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0
Close Date
Recommendation
4

Perform a Security Control Assessment and use the results to update the Phoenix system security plan and create plans of action and milestones for any planned controls.

Questioned Cost
0
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0
Close Date
Recommendation
5

Provide the results of the Phoenix Security Control Assessment and the updated system security plan to the Authorizing Official for review and approval.

Questioned Cost
0
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0
Close Date
Recommendation
6

Review and, if needed, update the Memorandum of Understanding with the Department of State to include changes and obtain approval of the Agency officials.

Questioned Cost
0
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0
Close Date
Recommendation
7

Review and update the Service Level Agreement with the Department of State. Additionally, USAID should implement a process to ensure that the Service Level Agreement is reviewed annually.

Questioned Cost
0
Funds for Better Use
0
Close Date