TPCSA • International donor funding

USAID and CDC Audit Preparation for South African NPOs

Establish which requirements apply to your award before planning the audit or close-out report.

USAID and CDC audits require careful attention to the funding documents and the reporting rules that apply to the recipient. For a South African NPO, the useful starting point is the actual award, its amendments and the instructions from the responsible grant contact. A threshold or checklist copied from another organisation may not apply to yours.

This guide focuses on preparing for that assessment and organising the evidence. It also applies to teams resolving earlier-period reporting, handling a subaward or planning grant close-out.

Confirm the award before applying a rule

Create a short award profile: funding agency, prime recipient, subrecipient status, award number, period, amendments and responsible grant contact. Record which version of the terms applies and retain the correspondence used to clarify any uncertainty.

Different rules can apply to domestic U.S. organisations and foreign recipients. Do not apply a general U.S. single-audit threshold automatically to a South African entity. Confirm the relevant expenditure basis, period, engagement type, reporting deadline and submission route for the award concerned.

Resolve unclear requirements in writing. Send the audit clause and your proposed interpretation to the designated grant contact. Ask for confirmation before appointment if the documents do not clearly specify the required engagement or report.

The HHS OIG foreign-organisation audit FAQs point recipients to award terms and the Grants Management Specialist for clarification. Record the answer in your grant file.

Preparing for a USAID-related audit

Start with the signed award or subaward, the audit provisions incorporated into it and any later instructions affecting the engagement. Confirm the reporting period and the appropriate authority for questions about outstanding obligations, including legacy awards and close-out work.

The USAID OIG information brief on non-federal audits provides background on audit findings involving U.S. foreign assistance. Use it as context, alongside the documents governing your particular award.

Questions to settle before fieldwork

Is the audit for the recipient, a programme, a project statement or a specified expenditure schedule?
Must the donor approve the practitioner or the terms of reference?
What financial reporting basis, compliance criteria and report format apply?
Are prior-period findings or close-out adjustments still unresolved?
Who accepts the final report, and how will submission be evidenced?

Keep decisions on scope separate from day-to-day preparation. A well-organised file helps the engagement, but it does not determine which standard or reporting requirement applies.

Preparing for a CDC-funded award

Read the Notice of Award and the terms incorporated into it. Confirm which provisions apply to the foreign recipient and whether your organisation receives funding directly or through another recipient. Keep amendments and reporting correspondence with the original award.

Use CDC’s recipient audit guidance as a reference, then confirm the applicable requirements against your award. Where official pages or older instructions differ, ask the designated grant contact to confirm the current award-specific position.

Maintain a reporting calendar

List each financial report, audit deliverable and close-out requirement with its period, internal preparation date and external deadline. Allocate time for management responses and any required approval before submission. Update the calendar when the award changes.

If your organisation makes subawards, identify the monitoring and reporting responsibilities in those agreements. Retain records of follow-up rather than assuming the subrecipient’s annual accounts answer every question.

Build an evidence file that supports the reported costs

Award documents: signed agreements, budgets, amendments and scope confirmations.
Accounting records: project ledger, expenditure schedules, bank reconciliations and a bridge to the organisation’s accounts.
Personnel costs: authorised payroll records and allocation support required by the award.
Procurement: purchase approvals, supplier selection evidence, contracts and invoices relevant to the grant conditions.
Shared costs: allocation calculations, the chosen basis and any necessary approval.
Follow-up: prior findings, management responses and evidence of corrective action.

For example, when a salary is split between an award and unrestricted activities, retain the calculation and supporting records behind the allocation. A payroll total alone does not explain the charge to that award. Identify gaps honestly; do not create retrospective evidence that misrepresents what happened.

Our donor-funded project audit guide covers the general preparation workflow. Use the audit readiness checklist and donor reporting guide to organise the supporting work.

Experience relevant to international funding

Farida Lavangee CA(SA), TPCSA’s Director of Audit, has experience in NPO audits and USAID-, CDC- and EU-funded audit assignments. Her background includes audit management and pre-issuance review work for the Auditor-General of South Africa.

Provide the award documents and required reporting scope when approaching TPCSA. The team can discuss the proposed engagement and the information needed for an appropriate assessment.