Finding Text
Finding No. 2023-001 – Cash Management and Subrecipient Monitoring Controls
Material Weakness
Federal Agency: United States Agency for International Development (USAID)
Federal Assistance Listing Number: ALN 98.001
Federal Program: USAID Foreign Assistance for Programs Overseas
Award Name: Advancing Food Fortification Opportunities to Reinforce Diets (USAID AFFORD)
Award Number: 7200AA22LE00002
Criteria: Per 2 CFR 200.303, recipients of federal awards must establish and maintain effective
internal control over federal awards to provide reasonable assurance that federal awards are managed
in a way that is compliant with federal statutes, regulations, and the terms and conditions of the federal
award.
Condition: Payments totaling approximately $331,000 intended to a subrecipient were fraudulently diverted by an employee for personal gain.
Cause: Ineffective control procedures allowed for changes in payment instructions.
Effect: Misappropriation of assets of approximately $331,000.
Reportable questioned costs: None
Context: Cash disbursements of federal funds intended for subrecipients of the federal program were
misappropriated due to a man-in-the-middle email scheme perpetrated by a TechnoServe program
manager. The intended subrecipient was paid and TechnoServe was able to recover most of the losses
through the bank and insurance.
Repeat Finding: No
Recommendation: We recommend TechnoServe review and strengthen controls in place around cash
management disbursements and subrecipient monitoring.
Views of Responsible Officials: Management agrees with the finding. See corrective action plan.