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Audit (A-04-13-04016)

10-20-2014
The Ethiopian Public Health Association Generally Managed the President's Emergency Plan for AIDS Relief Funds but Did Not Always Meet Program Goals in Accordance With Award Requirements

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Summary

Through its Global HIV/AIDS Program, the Centers for Disease Control and Prevention (CDC) implemented the President's Emergency Plan for AIDS Relief (PEPFAR), working with ministries of health and other public health partners to combat HIV/AIDS by strengthening health systems and building sustainable HIV/AIDS programs in more than 75 countries. Through a 5-year cooperative agreement, CDC awarded PEPFAR funds totaling $1.7 million to the Ethiopian Public Health Association (EPHA) for the budget period September 30, 2011, through September 29, 2012.

EPHA generally managed PEPFAR funds but did not always meet program goals in accordance with award requirements. Our financial management review showed that the 48 transactions tested, totaling $1.2 million, were allowable. However, although allowable, 8 of the 48 transactions, totaling $23,000, were recorded to incorrect expense accounts in the general ledger.

Additionally, EPHA (1) used $68,000 of PEPFAR funds to pay potentially unallowable value-added taxes (VAT) on purchases and (2) did not submit its annual financial audit report to the National External Audit Review Center in accordance with the award requirements.

Our program management review showed that, of the 121 goals from its cooperative agreement, EPHA reported accomplishments for 82 in its annual progress report. However, it did not report accomplishments for the remaining 39 goals. Our judgmental sample review of 32 reported accomplishments showed that 24 were fully supported by documentation, 5 were partially supported, and 3 were not supported. Also, EPHA submitted its annual progress report to CDC 6 months late.

These errors occurred because EPHA did not have adequate policies and procedures.

We recommended that EPHA (1) work with CDC to resolve whether VAT was an allowable expenditure under the cooperative agreement and to seek reimbursement from the Ethiopian Government for the $68,000 of VAT paid and (2) develop and implement adequate policies and procedures. EPHA officials generally concurred with our recommendations.

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