According to USAID’s Automated Directives System (ADS) 303.3.9.2, if, after conducting a comprehensive review of a potential recipient, USAID is unable to affirm that the recipient has the capacity to responsibly manage USAID funds, USAID can deny the award or make the award with “special award conditions.” USAID may consider making this choice only if it appears likely that the potential recipient can correct its deficiencies within a reasonable amount of time. These conditions are intended to be for a limited time, not for the life of the award.
To minimize the risk in making awards to [...] governmental and local organizations, local accounting firms [can be contracted] to conduct preaward assessments.
The assessments [could] identify weaknesses in the recipients’ financial management operations and make corresponding recommendations to resolve the weaknesses. The results of the assessments [can be] discussed and determinations [can be] made as to which of the recommendations should be included in the award agreement as:
- Predisbursement requirements, or “special award conditions,” or
- Postdisbursement recommendations.
Source: AUDIT REPORT NO. G-391-11-004-P MAY 6, 2011
This information is derived from audit reports of the Office of the Inspector General. The source refers to the audit report, which is available on this site as part of the Audit Database Project: an educational tool for compliance with USAID regulations. Please see the disclaimer of this site before using this information.
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