ADS section 596.3.1 states that USAID “must develop and implement appropriate, cost-effective internal controls” to help ensure that costs comply with applicable laws and regulations and that assets are not wasted.
One applicable regulation is that eligible uses for funding under the Food for Peace Act must be reasonable, allowable, and allocable and must support costs associated with the provision of Title II commodities to the final distribution point, including household or local warehouse.
Office of Management and Budget Circular A-122, “Cost Principles for Non-Profit Organizations,” Attachment A, states: “A cost is reasonable if, in its nature or amount, it does not exceed that which would have been incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur costs.”
- Coordinate an independent cost analysis to determine whether internal transport, storage, and handling costs have been correctly classified and to ascertain the most cost-effective method of transporting and distributing commodities.
SOURCE: AUDIT REPORT NO. 4-611-10-007-P SEPTEMBER 1, 2010
The recommendations are 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 recommendations.
|←Previous Financial Audits of Subrecipients Were Not Completed - ADS 518.104.22.168||Unreasonable Costs Charged to USAID - Office of Management and Budget Circular A-122 Next→|
- Obligated Program Funds - ADS 202.3 - ADS 602.3
- Program Funding Plans - ADS 202.3.7 - FAR 16.306 (d)(1)
- Ensure That Costs Are Appropriate - ADS 596.3.1 - 634.3.2
- Financial Audits of Subrecipients Were Not Completed - ADS 522.214.171.124
- Unreasonable Costs Charged to USAID - Office of Management and Budget Circular A-122
- Contract Budgeting Did Not Align With Program Areas - ADS 200.3.2
- Project Funding Was Not Authorized - Title 22 Code of Federal Regulations (CFR) Part 226, Administration of Assistance Awards to U.S. Non-Governmental Organizations, section 226.25, Revision of Budget and Program Plans - (ADS) 303.3.18(a) - ADS 601.3.1