Audit of the Millennium Challenge Corporation's Financial Statements, Internal Controls, and Compliance for the Period Ending September 30, 2013 and 2012

Recommendations

Recommendation 3

In collaboration with the SSP, formalize in writing the system's issues and resolution process. This will include developing a standardized remedy ticket listing with relevant and historical information. (New recommendation)

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Recommendation 6

Further review SSP data entries relating to MCA payment processing and related
adjustments. Perform reconciliation of AP on a monthly basis and proactively resolve all differences.

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Recommendation 9

Develop audit procedures for the MCA audit to compare spending authority amount
granted against actual MCA expenses, and investigate and document significant
variances. MCC should maintain a library of historical MCA financial data. This
information may be used by MCC to validate or enhance its current methodology.

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Recommendation 10

Continue to enhance the accrual methodology by: a. stratifying the MCAs based on variances in their spending rates and/or stages in the compact's life cycle; b. developing and implementing a process to ensure that compacts that are partially managed by MCC are fully addressed within the grant accrual process.
c. addressing situations where the MCA exceeds its quarterly spending authority;
d. addressing situations where the compact has expired and there is no spending
authority and disbursements are still occurring; e. obtaining detailed document level breakdown of expenses to be used to compare against the accrual estimates;
f. reviewing the disbursement patterns by compact to identify those with large
fluctuations to determine the cause so that adjustments can be made in developing the spending plan or in how the grant accrual is calculated to improve the accuracy of the grant accrual estimate; and g. other factors as deemed necessary to achieve an acceptable precision of the accrual
estimate.

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Recommendation 11

Continue the collaboration between the USAID OIG and the MCC management to improve timeliness of the MCA audits; adequacy of the MCA audit procedures; monitoring and reviewing the quality and performance of the MCA audits; and tracking and conducting follow-up of corrective action plans with the MCAs timely.

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