Finding Text
Allegations of Fraud
See Schedule of Findings and Questioned Costs for chart/table.
Criteria: §200.516(a) Audit findings requires known or suspected fraud be reported by the auditor.
Condition: During 2024, PSI identified multiple fraud incidents through its internal reporting
mechanisms that impacted its federally funded programs. These fraud incidents have been reported
to the appropriate U.S. Office of the Inspector General by PSI.
• In Sierra Leone, records for mobile money batch payments to Community Health Workers
were manipulated to divert payments to the wrong phone numbers. The total loss to award
7200AA18C00014 was $244 and to award 7200AA19CA00002 was $365.
• In Cote d’Ivoire, a fraudulent invoicing system involving fraudulent service providers,
suspicious use of billers and potential conflict of interests resulting in $8,221 of questioned
costs to award 7206242CA00003.
• In Angola, allegations regarding the improper receipt of per diem was substantiated. The
total loss to award AID-654-A-17-00003 was $129.
• In Mozambique, a whistleblower report revealed that a staff member had defrauded the
Organization through the theft of cash payments made by staff remitting their federal sick
leave salary refunds from the government. The total financial loss to award
72065622CA00009 was $174 and to award 7200AA20CA00007 was $102.
• In Sierra Leone, a driver exaggerated mileage to cover for fuel payments that could not be
accounted for and submitted falsified accommodation payment receipts. The total financial
loss to award 7200AA19CA000032 was $106.
• In Mali, an internal audit conducted on a subrecipient noted that there were differences in
salaries charged to donor funds and actual salary received by the employees as well as
fictitious competition and manipulation of expenses vouchers on behalf of the subrecipieint.
The total financial loss to award 7200AA20CA00007 was $63,660. • In Zimbabwe, medical records were doctored and members of the public were bribed to
misrepresent circumcision information. The total financial loss to award 72061318CA0009
was $41,307.50.
PSI has ongoing investigations involving U.S. Federal funding pending in multiple countries for which
the facts and circumstances and full effect of the fraud investigations have not been determined.
Where investigations are still pending and conclusions of the matters identified through
whistleblower or other communications have not been reached, PSI has reported such matters to
the appropriate U.S. agency.
Questioned Costs: There are no questioned costs as the questioned amounts have been, or are in the process of, being reimbursed to the respective Federal agency.
Context: These conditions were identified through PSI’s internal review and audit processes and were reported to us during our internal control assessment for the year ended December 31, 2024.
Cause: Individuals intentionally circumvented PSI’s established internal controls.
Effect: These conditions could result in unallowable expenses being charged to U.S. Government awards if controls in place had not identified the conditions.
Repeat Finding: The specific items identified above were not reported in the prior year; however, findings related to fraud were included for the prior year as findings 2023-004 in the December 31, 2023 schedule of findings and questioned costs.
Recommendation: Because of the international environment in which PSI operates, the potential for fraud is heightened. Given this, we recommend management continue to utilize its global internal audit team and fraud reporting hotline, as well as other policies and procedures around fraud identification to mitigate the fraud risk.
Views of Responsible Officials: PSI management agrees with the finding and recommendations set forth within and will proactively report and investigate allegations of fraud and to raise awareness of the actions to be taken when there is a suspicion of fraud. Refer to management’s correction action plan for additional information.