Medical Care Development, Inc.

Finding 2020-002 Information on the Federal Program U.S. Agency for International Development (USAID), CFDA 98.001, award period January 1, 2020 - December 31, 2020. Criteria Management is responsible for the design, implementation, and monitoring of internal control to reduce to a relatively low level the risk of material misstatements, caused by fraud or error, that may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Further, as stated in ?200.403 of the Uniform Guidance, in order for expenses to be allowable the must be necessary, reasonable and documented. Condition and Context In February 2021, a misappropriation of funds totaling approximately $7,450 was identified in an international project through a whistleblower report and routine in-country and home office compliance monitoring. Questioned Costs The estimated financial loss is approximately $7,450 with a total possible loss of $17,000 that could be deemed unsubstantiated and unallowable upon further review. Cause Falsified invoices were submitted for reimbursement and were approved for reimbursement due to collusion between the two authorized signatories. Effect and Potential Effect To date, approximately $7,450 was identified as unsubstantiated as part of expense reimbursements submitted. Additionally, Medical Care Development, Inc. has identified a total of approximately $17,000 in additional expenditures which may be overstated or falsified. These additional expenditures are being investigated by a third party investigation team. The investigation is ongoing and additional funds may be identified as a result of the investigation. The effect is noncompliance with requirements of the federal program. Recommendation We recommend Medical Care Development, Inc. continue to provide regular training to all international employees on fraud prevention practices. Additionally, management should continue to monitor the internal controls over the handling of funds held in foreign countries to help ensure full compliance. Further, management should continue to engage third party investigation teams to perform supplementary reviews and investigations if and as required. Views of Responsible Officials and Planned Corrective Action Management agrees with the finding. See attached for Planned Corrective Action Plan.

Management confirms the facts presented above as fully reflecting their declarations during the audit process. The funder and partners were promptly informed of the incident. An external firm has been engaged to review documentation. An internal team has been formed to review, update and retrain our internal controls, policies and procedures. Finding Number 2020-002. Responsible Parties: Edward Aldrich, Director of Operations, (301) 244-6186. Heather Metten, Director of Finance, (207) 622-7566. Anticipated Completion: 8/31/2021