U. S. INFORMATION AGENCY MEMORANDUM ΤΟ FROM SUBJECT Mr. Bouchard USIS Uruguay USIS Uruguay (For Administrative Officer of the Embassy) : Report on Status of Recommendations, Contained in Audit Report, Financial and Management Operations, USIS Uruguay. Covering Period: October 1, 1978 - October 31, 1982. Issued: February 7, 1983. Telegram from USIS Uruguay, dated April 7, 1983 covering Recommendations 1-5, 7-9 and memorandum from E/X, dated February 28, 1983 covering Recommendation #6 state. Recommendation #1 USIS and the Contracting Officer review the master workforce contract with AEC and, guided by MOA IX-B, amend the contract with deliberate haste to correct deficiencies noted in (a) the contract itself; (b) payment of hourly rates; (c) workload statistics; (d) supervisory relationships; (e) contract administration and (f) the illegal payment of a cost-plus-a-percentage-of-cost Master Work Force Contract IA-138-22 amended as per recommendations and submitted to Agency February 1, 1983. Recommendation #2 A Statement and Certificate of Award, SF-1036, be prepared and distributed as required by MOA IX-B 133.3c and Exhibit IX-B 130G. Action PAO Statement and Certificate of Award executed January 1, 1983 and duly submitted to Agency. Recommendation #3 The Post withdraw the $6,500 granted to the Binational Center on September 10, 1982, because the funds are being used to pay the salary of a recently RIFed USIS employee. Action- PAO As explained to Auditor, Post cannot renege on agreement with BNC entered into with Agency approval a year ago whereby excellent FSN who was RIFed was hired by BNC. The Agreement is clearly in the interest of the government which realized long-term saving, indirectly retains the services of an experienced, highly talented person, and reassures employees that USIS is compassionate and equitable employer, thereby maintaining the morale and confidence of its most valuable resource, the employees. Auditor's Comment to #3 The Office of Audits is concerned with the Post's response that the Agreement was "clearly in the interest of the government". As stated in the audit report, the purpose of a RIF is to reduce operating costs by eliminating employees. The payment of this employee's first three month's salary by the BNC was in effect an indirect funding by the Post through grant number IA-138-27-G. Therefore, in this case, the RIF by the Post did not initially reduce operating costs. Recommendation #4 USIS Uruguay cancel Grant No. 138-28-G and deobligate the $6,000 that are to be granted to the Binational Center to help purchase a computer. Action PAO The Post's library, which is located in the BNC building, several miles from the Embassy, needs computor service, as does the BNC's large english teaching program. As the Auditor was told, using the Embassy computor is impractical both because of the distance and because the Embassy computor's capacity is much too small to take the library. The grant to the BNC was effective "bait" to get the Ultra-Conservative BNC Board to commit $20 - 30,000 to the purchase of a basic computor. The $6,000 grant is a way to provide the USIS library with excellent computor service at little cost to the government. Recommendation #5 The Fulbright Commission remit to the US Treasury a total of $3,386, which represents interest earned on US Government funding, or reduce their next year's funding allocation by an equal amount. Fulbright Commission received Agency approval to apply interest to FY-83 programs. (See Montevideo 4391-82, USIA 57562-82, Montevideo 345). Auditor's Comment to #5 The Auditor reviewed the telegrams at the Fulbright Commission. The Post is correct when it states that the Commission had Agency approval to apply the interest to FY-83 programs. The telegrams however were not specific as to whether the Commission should or should not reduce their 1983 funding level by the interest earned during 1982. The Office of Audits has been consistent in its holding, which is supported by General Counsel, that funding allocations must be reduced by prior year's interest earned (or the interest must be submitted to the U.S. Treasury). Recommendation #6 ECA refrain from making lump sum payments to the Fulbright Commission; payments should correlate to the quarterly Commission's funding requests. Action - ECA Our records indicate that E did not make a lump sum payment in FY 82 of the U.S. contribution to the Fulbright Commission in Uruguay. We transmitted three telegrams to Montevideo which authorized four fund transfers to the Commission: (1) USICA 60186 dated December 3, 1981 authorized the transfer of $5,800 for administrative purposes; (2) USICA 14370, dated March 22, 1982, authorized the immediate transfer of $18,950 for administrative purposes and $30,627 for program purposes and also authorized the transfer on July 1, 1982 of an additional $8,250 for administrative purposes; (3) USICA 42049, dated August 14, 1982, authorized the transfer of $45,976 for program purposes. The draft "Manual for Binational Commissions" indicates that transfer of the U.S. contribution to commissions will be made in the following manner: "Unless specifically excepted, transfers of funds will be authorized quarterly following receipt of the Commission's quarterly Status of Funds Report, in an amount determined as follows: (a) one quarter of the U.S. portion of the Commission's approved administrative budget; (b) The Commission's estimate of the next quarter's net cash (c) An amount to meet approximately two additional months of the net funding requirement to provide a reserve to cover the time lag between submission of reports to USIA and Commission receipt of funds." Although the Manual is not yet official guidance, E did follow this transfer procedure during FY 82. It is also the basis for transfers to Binational Commissions in FY 83. The audit report, therefore, recommends a course of action which E had already adopted. Recommendation #7 The Fulbright Commission solicit bids for accounting firms every few years when having the required annual audit performed. Action PAO Fulbright Commission's next audit will be put out for bids. Recommendation #8 USIS Uruguay make semi-annual reviews of the Fulbright Commission operations. Action PAO USIS has reviewed Fulbright Commission actions and will continue this practice. Recommendation #9 Persons who sign checks for the Fulbright Commission write or stamp "PAID" on invoices supporting disbursements at the time checks are signed. Action PAO Invoices are being stamped "Paid" when checks are signed. Auditor's Comment Replies from the Post indicate satisfactory compliance with the 12 minor findings listed in Exhibit "A" Memorandum of Administrative Findings. |