FAC Explorer

Audit 360330

FY End
2024-12-31
Total Expended
$40.97M
Findings
2
Programs
2
Organization: Technoserve, Inc. (VA)
Year: 2024 Accepted: 2025-06-27
Auditor: Rsm US LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
567989 2024-002 Material Weakness - I
1144431 2024-002 Material Weakness - I

Programs

ALN Program Spent Major Findings
10.606 Food for Progress $518,594 - 0
98.001 Usaid Foreign Assistance for Programs Overseas $328,304 Yes 0

Contacts

Name Title Type
M2MWD2VFJ468 Smitha Allapat Auditee
2027854515 Thomas J. Sneeringer Auditor
No contacts on file

Notes to SEFA

Title: Note 1. Basis of Presentation Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amount shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The entity does not use the 10% rate option as it negotiates a formal indirect rate agreement with its oversight agency for use on all federal grants. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of TechnoServe, Inc. and Affiliates (TechnoServe) under programs of the federal government for the year ended December 31, 2024. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only selected portions of the operations of TechnoServe, it is not intended to and does not present the financial position, changes in net assets or cash flows of TechnoServe.
Title: Note 2. Summary of Significant Accounting Policies Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amount shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The entity does not use the 10% rate option as it negotiates a formal indirect rate agreement with its oversight agency for use on all federal grants. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amount shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years.
Title: Note 3. Indirect Costs Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amount shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The entity does not use the 10% rate option as it negotiates a formal indirect rate agreement with its oversight agency for use on all federal grants. TechnoServe has elected not to use the 10% de minimis cost rate allowed under the Uniform Guidance.
Title: Note 4. Subrecipients Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amount shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The entity does not use the 10% rate option as it negotiates a formal indirect rate agreement with its oversight agency for use on all federal grants. Amounts to subrecipients shown separately in the Schedule are also a component of the federal expenditures selected. With respect to federal awards provided by TechnoServe to subrecipients, the federal awards are deemed to be expended by TechnoServe when the funds are advanced to subrecipients.
Title: Note 5. Monetization Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amount shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: The entity does not use the 10% rate option as it negotiates a formal indirect rate agreement with its oversight agency for use on all federal grants. Under U.S. Public Law 480, Title II, the United States Department of Agriculture (USDA) has provided agricultural commodities to TechnoServe for the purpose of promoting food security and agricultural market development under the Food for Progress Program. During the year ended December 31, 2024, TechnoServe had four USDA Food for Progress awards active in the following countries: Benin, Ecuador, El Salvador, Guatemala, Nicaragua, Peru, Mozambique, Cote d’lvoire, Ghana, Nigeria, Ethiopia, Burundi and Honduras. The commodities granted to TechnoServe are sold as received to local agro-processing firms or other local buyers. The proceeds from the sales of donated commodities are used to finance TechnoServe’s development activities in the above-mentioned countries. At December 31, 2024, TechnoServe had $46,422,417 of funds on hand from such activities.

Finding Details

Finding 2024-002
Finding 2024-002: Procurement Material Weakness Federal Program: Plastics Recycling Program in Southern New Guinea (72062024CA00002) Federal Award Agency: USAID Foreign Assistance for Program Overseas (ALN 98.001) See Finding 2024-001. Questioned costs: None Context: Internal controls around procurement did not identify fraudulent overpayments for seven equipment purchases within the federal program due to collusion amongst several field office employees. These overpayments were identified by TechnoServe’s internal audit team and were subsequently reversed by management prior to December 31, 2024, and therefore, were not allocated to the federal program. Repeat finding? No Finding 2024-001: Field Office Internal Controls Criteria: Under established internal control frameworks, such as the “COSO” model, an organization’s internal controls over financial reporting should include policies and procedures that provide reasonable assurance about the prevention or detection of unauthorized acquisition, use, or disposition of the organization’s assets that could result in unintended losses, including fraud losses. Condition: TechnoServe’s controls failed to prevent overpayments for seven equipment procurements due to a fraud scheme involving local companies who submitted inflated invoices. Cause: Collusion among multiple TechnoServe employees at one field office location to bypass the organization’s standard procurement controls. Effect: This resulted in an estimated loss of $263,256, reflecting the difference between payments made and market prices for the purchased equipment. Recommendation: We recommend that procurement controls at the field office include review and approval by either the Country Director or Regional Procurement Officer. Views of Responsible Officials: Management agrees with the finding. See corrective action plan.
Finding 2024-002
Finding 2024-002: Procurement Material Weakness Federal Program: Plastics Recycling Program in Southern New Guinea (72062024CA00002) Federal Award Agency: USAID Foreign Assistance for Program Overseas (ALN 98.001) See Finding 2024-001. Questioned costs: None Context: Internal controls around procurement did not identify fraudulent overpayments for seven equipment purchases within the federal program due to collusion amongst several field office employees. These overpayments were identified by TechnoServe’s internal audit team and were subsequently reversed by management prior to December 31, 2024, and therefore, were not allocated to the federal program. Repeat finding? No Finding 2024-001: Field Office Internal Controls Criteria: Under established internal control frameworks, such as the “COSO” model, an organization’s internal controls over financial reporting should include policies and procedures that provide reasonable assurance about the prevention or detection of unauthorized acquisition, use, or disposition of the organization’s assets that could result in unintended losses, including fraud losses. Condition: TechnoServe’s controls failed to prevent overpayments for seven equipment procurements due to a fraud scheme involving local companies who submitted inflated invoices. Cause: Collusion among multiple TechnoServe employees at one field office location to bypass the organization’s standard procurement controls. Effect: This resulted in an estimated loss of $263,256, reflecting the difference between payments made and market prices for the purchased equipment. Recommendation: We recommend that procurement controls at the field office include review and approval by either the Country Director or Regional Procurement Officer. Views of Responsible Officials: Management agrees with the finding. See corrective action plan.