SIGAR 23-32-FA USAID’s Afghan Children Read Program: Audit of Costs Incurred by Creative Associates International Inc.
20 September 2023
Management's Responsibility for the Special Purpose Financial Statement Management is responsible for the preparation and fair presentation of the Specia l Purpose Financial Statement in accordance with the methods of preparation described in Note 2; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statemen. [...] Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and the result of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control. [...] Creative had insufficient controls surrounding the basis of accounting used in the preparation of its financial documents, including the SPFS and the corresponding notes to the SPFS, as well as a lack of adequate management review to ensure the basis of accounting used in the preparation of the SPFS was consistent with its notes to the SPFS. [...] Management’s inconsistency regarding the organization’s use of the basis of accounting and identification of when costs are incurred under the task order increases the likelihood that costs are submitted for reimbursement in the incorrect period. [...] The costs prior to the current audit period were accrued in FY2019 per the GL submitted to the auditor and the revenue recognized in the same period.