Finding Text
Finding 2024-002 Known Fraud (Significant Deficiency)
Information on the Federal Program: 98.001 USAID Foreign Assistance for Programs Overseas
Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Title 2
U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles,
and Audit Requirements for Federal Awards Part 200.302 Financial Management requires recipients
to adequately safeguard all assets and assure that they are used solely for authorized purposes.
Condition: Management of Global Communities was notified of instances of three instances of fraud
within its country offices as follows:
Democratic Republic of the Congo: Employee misappropriation of assets – approximately
$40,000
Sri Lanka: Employee misappropriation of assets – approximately $18,900
Ukraine: Procurement fraud - approximately $3,100
Cause: Global Communities did not adequately safeguard its assets. However, Global Communities’
monitoring procedures did detect the frauds and they have subsequently enhanced internal controls
in these areas.
Effect or Potential Effect: After investigation, Global Communities did not find any evidence that a
Federal award was affected, but Global Communities notified USAID and coded the amounts in
question to unallowable expenses in the general ledger (management did not charge the Federal
programs for these costs).
Questioned Costs: None
Context: The instances of fraud were identified through the audit fraud inquiry process of
management.
Identification as a Repeat Finding, if Applicable: N/A
Recommendation: We strongly recommend that Global Communities continue to review its current
systems of internal controls, and enhance them where necessary, especially in the higher risk
locations, to ensure they are functioning as designated and to prevent further occurrences of
misappropriation of assets and procurement fraud.