Audits of Costs Incurred by Selected USAID Awardees Implementing COVID-19 Activities for the Period March 1, 2020, to March 31, 2022

Audit Report

Why We Did These Audits

  • The Coronavirus Disease 2019 (COVID-19) pandemic created unprecedented challenges to USAID’s ability to provide U.S. foreign assistance worldwide. USAID responded to the pandemic by launching programs to promote delivery of safe and effective COVID-19 vaccines; strengthen health systems to mitigate transmission and reduce morbidity and mortality; provide rapid assistance to combat the pandemic in low- and middle-income countries; mitigate the impact of COVID-19 on HIV programs funded by the President’s Emergency Plan for AIDS Relief; and develop infrastructure to support the use of liquid oxygen in treating COVID-19.
  • Congress provided OIG with funds to oversee USAID’s implementation of its COVID-19-related activities under the American Rescue Plan Act of 2021.
  • OIG contracted with independent public accounting firm Kearney & Company P.C. (Kearney) to conduct a series of performance audits on incurred costs related to COVID‑19 activities under multiple awards USAID issued from March 1, 2020, to March 31, 2022. Kearney conducted the 12 audits in accordance with generally accepted government auditing standards. The objective of the audits was to determine whether specific costs incurred for COVID-19 activities were allowable, allocable, and reasonable under regulatory requirements and award provisions.

What We Found

  • Of the $556,907,108 in total auditable costs for the 12 implementers, Kearney found $3,243,268 in questioned direct costs that were potentially unallowable. The audit firm also identified ten internal control deficiencies, including not meeting deadlines for reports, not including required information in reports, using incorrect indirect cost rates, and not having detailed policies and procedures.
  • Kearney had no findings for eight implementers: Abt Associates, Inc., CARE USA, Chemonics International, Catholic Relief Services, Save the Children, International Rescue Committee, Right to Care, and JSI Research & Training Institute. However, the audit firm identified findings for four implementers.
  1. World Vision did not:
    • Have a sufficient process to accurately allocate labor costs to the cost objectives, which resulted in questioned direct labor costs of $3,098,895. 
    • Have adequate supporting documentation for one cost allocation sampled, resulting in questioned costs of $144,372. 
    • Meet deadlines for three value-added tax reports as required in the award terms.
    • Meet the deadline for an annual report as required in the award terms. 
  2. International Rescue Committee did not include the environmental information required by the award in one selected annual report and in one selected final report submitted to USAID. 
  3. FHI 360 billed a Compensated Personal Absence rate in its invoices that was not included in its Negotiated Indirect Cost Rate Agreement.
  4. Jhpiego Corporation did not develop its policies and procedures to a level of detail to include the approval requirements associated with its access revocation process, new hire orientation checklist, initial salary determinations, international travel, travel expense report, invoices, and financial reports.

What We Recommend          

  • As a result of Kearney’s audit findings, OIG issued 12 recommendations to USAID for the four implementers, consisting of 2 recommendations for questioned direct costs and 10 recommendations for internal control deficiencies.

 What Happens Next

  • USAID will address the audit findings with its implementers and issue management decisions on the 12 OIG recommendations.

Click the links below to view the PDF documents for the 12 audit reports:

Recommendations