Plan International, Inc.

Ref 2023-003: Classification, completeness and accuracy of bank accounts (significant deficiency) Federal Agency: All Program: All Assistance Listing: All Award #: All Award year: FY23 Pass-through: All applicable Criteria: Accurate and reliable financial records, including listing of bank accounts and bank reconciliations, are necessary to ensure that testing populations are complete, accurate and bank accounts are correctly classified. Condition: Plan Inc. holds over 550 bank accounts between Global Hub, Plan Ltd and the Country Offices. The following points were noted during the Plan Inc. financial statement audit: 1. From our testing performed over opening and closing bank accounts at the regional hub level, we noted an account which was classified as closed prior to receiving a formal letter from the bank confirming the closure. The account remains open with a balance of €36. 2. In the bank confirmation we independently received from ECO Bank Cameroon we noted two additional bank account balances of €212k (immaterial and below de minimis reporting threshold) which were not included in the general ledger. 3. During our testing, differences in bank account numbers were noted in several instances between either bank confirmations / bank statements / bank reconciliations compared to the bank account listing which reflected the old account numbers. This was the case for accounts at five banks across different Country Offices (‘CO’). 4. During our testing, differences in bank account numbers were noted from three bank reconciliations (GL180090, GL180080, and GL168060) compared to the bank account listing as a result of typos made on the bank reconciliations. The account numbers per Plan Inc. bank account listing for these accounts, however, was correct. 5. During our testing, it was noted that two bank reconciliations (GL168010 and GL168110) had incorrect local currencies input into the bank reconciliation in the currency field. This had no financial impact on the bank reconciliations performed. 6. For two GL accounts (GL168120 and GL168129) differences amounting to €693,984 between the denominated balance in bank reconciliation and the denominated balance per trial balance were noted. Plan confirmed the amount pertains to the revaluation of currency and that the account should not be reevaluated in local currency. This is a system error due to the wrong set up of the monthly revaluation process for these two specific GL accounts. Cause: For the first point, Plan had acted on the request to close the bank account when the request had been acknowledged but before it had been confirmed, and therefore removed the account from the cash listing despite a formal confirmation letter from the bank not being received. For the second, the root cause of this issue is the CO not following the process in relation to opening bank accounts and appropriately informing Regional Hub (‘RH’) and Global Hub (‘GH’). For points three and four, the revised bank account numbers were not updated on the bank account listing which still contained the old account numbers; and for point five the CO had not picked up the incorrect currency field noted or incorrect bank account number following review of the reconciliation. For the sixth point, two GL accounts had an incorrect variant set up causing differences between the bank reconciliation and the trial balance. Effect: Classifying balances as closed creates risks over the completeness of the bank account listing. There is a risk that a large number of accounts are classified as closed despite still being open or an account with a material cash balance could be excluded from the cash listing. Not identifying and reporting bank accounts on a timely basis to GH and bank account numbers inaccurately reflected on the bank account listing or bank reconciliations creates risks over the completeness of the bank account listing. Per the Bank Secrecy Act, Plan is required through FBAR ( Foreign Bank and Financial Accounts, US Federal Government) to report all non-US bank accounts to the US in March each year. FBAR then performs ad hoc checks of various entities and if Plan is found not reporting a full list of active accounts, they will receive penalty fines for not complying with US requirements. Incorrect currencies or account numbers reflected on the bank reconciliations and bank fees not included creates risk over the completeness and accuracy of bank reconciliations. Additionally, the incorrect application of the variants creates the risk of inaccuracies performed on the foreign currency translation of bank accounts. Recommendation: We recommend the following: Bank accounts are not classified as closed until a formal closure letter from the bank is received. The RHs perform timely monthly reviews to ensure the completeness of bank accounts and COs are reminded of the process around opening and closing bank accounts and the required notifications to RH and GH. Management put in place a process whereby appropriate review of bank details is performed at a CO level during the year end FBAR process as reliance is placed by GH on what is reported by the Country Offices. Management update the bank account listing to reflect updated bank account numbers. Management ensure COs review the bank reconciliations for accuracy of financial and non-financial data (such as account numbers). Management ensure the correct set up of the monthly revaluation process for bank related GL accounts. Views of Responsible Officials and Management’s Corrective Action Plan : Views of responsible officials and management’s corrective action plan are included at the end of this report after the summary schedule of prior audit findings and status.

Ref 2023-004: Foreign exchange translation methodology (repeat of prior year finding 2022-004, 2021-005, 2020-006, 2019-006) (significant deficiency) Federal Agency: All Program: All Assistance Listing: All Award #: All Award year: FY23, FY22, FY21, FY20 and FY19 Pass-through: All applicable Criteria: Accurate and reliable financial records of many kinds are necessary to meet ongoing financial reporting and operational needs and requirements. The rate of exchange used throughout any given month is the spot rate from the second to last working day of the prior month. This is not therefore the ‘the rate of exchange ruling at the date of the transaction’ in accordance with the Plan Inc. accounting policies as stated in the financial statements. Condition: For all transactions, the impact of exchange rates takes place in the following stages: At a transaction level 1. Translation from document currency (i.e. currency of income/expense per invoice) to local currency at the time of initial recognition 2. Local currency to functional currency (Euro) 3. Translation to actual rate at date of settlement 4. Translation of outstanding amounts within the balance sheet at the period end rate At the consolidation level 5. Functional currency to reporting currency (USD) We note the following: The monthly rate used for consolidation purposes is also the spot rate from the second to last day of the previous month and not an appropriate average rate as required and we have noted an immaterial misstatement relating to the translation of I&E into the reporting currency (USD). As the foreign exchange methodology is unchanged from the prior year, the matter therefore still remains open in FY23. In FY23 management performed a retrospective analysis to assess the misstatement caused by using the incorrect foreign exchange rate. We have assessed this analysis and confirmed the completeness, inputs and mathematical accuracy thereof. We have confirmed there is an immaterial misstatement arising as a result of the effect of using the incorrect foreign exchange rates for income and expenditure. Cause: The rates used, as noted above, are a spot rate from the second to last day of the prior month, not a transaction date rate or suitable weighted average, or another alternative. The current system does not allow for the correct rate to be used. Effect: Foreign exchange translation methodology is currently not in accordance with accounting standards. There are differences within the Plan Inc. financial statements that have been identified but not corrected as a result of the foreign exchange translation methodology issues noted. Recommendation: As management plan, design and configure the new ERP system consideration should be given to the need to input foreign exchange rates into the system on a daily basis to ensure compliance with the accounting standards and Plan’s accounting policies. Views of Responsible Officials and Management’s Corrective Action Plan: Views of responsible officials and management’s corrective action plan are included at the end of this report after the summary schedule of prior audit findings and status.

Ref 2023-006: Documentation needs to be maintained to justify the rationale for sole-source arrangements Federal Agency: United States Agency for International Development (USAID) for Nigeria OTL Program: Nigeria OTL Assistance Listing: 98.001 (Nigeria OTL) Award #: 72062021CA00006 NGA100152 (Nigeria OTL) Award year: FY23 Pass-through: Plan USA, Inc. Criteria: Under 2 CFR 200.320(c) vendors above a micro-purchase threshold (currently $165 for Nigeria OTL, which is more restrictive than the threshold in the Uniform Guidance) require a competitive process that includes soliciting multiple bids/quotes to justify best value. The Uniform Guidance requires purchasing decisions to be documented, including sole source justification, as applicable. Condition : We identified five transactions totalling $6,096 with two vendors where long-term arrangements (LTA) were in place for the two vendors but documentation was not retained to demonstrate that a competitive bid process had been performed prior to entering into the LTA. We identified four transactions totalling $5,183 with one vendor where an LTA was in place, but the LTA was extended with the same vendor without management documenting their rationale for sole sourcing this arrangement. The original LTA dates back to 2018 and multiple vendors were initially considered and documentation retained to demonstrate the initial tender at this point. However, documentation was not retained regarding subsequent considerations around maintaining this supplier under a sole source arrangement. Cause: Plan’s accounting policy is silent on a re-tender process should Plan choose to continue to use the same vendor and as such LTAs were extended without retaining documentation that is required in such instances under the Uniform Guidance. Effect: This could lead to missing out on better prospective vendors that management could do business with. There is also a possibility of management bias to continue using the same vendor. Recommendation: Management should put in place policies and procedures that require retaining documentation to justify the rationale for purchasing decisions consistent with the Uniform Guidance. We suggest that management performs a re-tendering process at the end of any LTA prior to extending the contract or otherwise documents the rationale for maintaining these suppliers under a sole source arrangement. Views of Responsible Officials and Management’s Corrective Action Plan: Views of responsible officials and management’s corrective action plan are included at the end of this report after the summary schedule of prior audit findings and status.

Ref 2023-007: Suspension and debarment checks should be performed prior to doing business with certain vendors Federal Agency: U.S. Department of State for Ethiopia South Sudanese Refugee Assistance V and VI; United States Agency for International Development (USAID) Program: Ethiopia: South Sudanese Refugee Assistance V and VI; Ethiopia: BHA Tigray Child Protection Assistance Listing: 19.517 (Ethiopia); 98.001 (Ethiopia) Award #: SPRMCO21CA3181 ETH102315 (Ethiopia), SPRMCO22CA0199 ETH102389 (Ethiopia); 720BHA21GR00199 ETH102324 Award year: FY23 Pass-through: Plan USA, Inc. Criteria: Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition : Suspension and debarment checks are performed centrally by the compliance team based at Global Hub (‘GH’). The compliance team obtains new vendor data from the finance system SAP on a weekly basis and has a policy to check all vendors regardless of dollar value. Suspension and debarment checks are performed over this list on a weekly basis using a third party ‘Automated Screening Manager’ (‘ASM’) tool. In instances of one-off payments, the Country Office (‘CO’) sends a request via email to the compliance team at GH to perform the suspension and debarment check. The results of the ASM checks are shared with the COs. We identified four samples out of a population of 67 samples where the date of the ASM check was after the date of the transaction with the vendor. Management was therefore unable to evidence that a suspension and debarment check had been performed prior to the transaction taking place. The time period between the transaction dates of our samples and the date of the ASM checks ranged from one day to 11 months. The combined total of the four transactions was $19,108 and they occurred in one region (Ethiopia). Cause: The Global Hub compliance team was not notified on a timely basis of the new vendors by the Ethiopia Country Office and therefore did not perform the suspension and debarment checks prior to the transactions taking place. Effect: Vendors not checked if suspended or debarred prior to doing business with them could lead to non-compliance to Uniform Guidance requirement. Recommendation: Management should ensure that COs are communicating with new vendors on a timely basis to ensure that all vendors are checked for suspension and debarment before they are engaged and transacted with and documentation is maintained demonstrating this check was completed. Views of Responsible Officials and Management’s Corrective Action Plan: Views of responsible officials and management’s corrective action plan are included at the end of this report after the summary schedule of prior audit findings and status.

Ref 2022-004: Foreign exchange translation methodology (repeat of prior year finding 2021-005, 2020-006 and 2019-006) (significant deficiency)Criteria:Accurate and reliable financial records of many kinds are necessary to meet ongoing financial reporting and operational needs and requirements. The rate of exchange used throughout any given month is the spot rate from the second last working day of the prior month. This is not therefore the `the rate of exchange ruling at the date of the transaction? in accordance with the Plan WW and Plan Inc. accounting policies as stated in the respective financial statements.Condition:For all transactions, the impact of exchange rates takes place in the following stages:At a transaction level1. Translation from document currency (i.e. currency of income / expense per invoice) to local currency at the time of initial recognition (Plan WW and Plan Inc.)2. Local currency to functional currency (Euro) (Plan WW and Plan Inc.)3. Translation to actual rate at date of settlement (Plan WW and Plan Inc.)4. Translation of outstanding amounts within the balance sheet at the period end rate (Plan WW and Plan Inc.)At the consolidation level5. Functional currency to reporting currency (USD) (Plan Inc. only)6. Translation of non-Euro NOs to reporting currency (Euro) (Plan WW only)We note the following:In FY22 management performed a retrospective analysis to assess the misstatement caused by using the incorrect foreign exchange rate. We have assessed this analysis and confirmed the completeness, inputs and mathematical accuracy thereof. We have confirmed there is an immaterial misstatement arising as a result of the effect of using the incorrect foreign exchange rates for income and expenditure.The monthly rate used for consolidation purposes is also the spot rate from the second to last day of the previous month and not an appropriate average rate as required and we have noted an immaterial misstatement relating to the translation of I&E into the reporting currency (USD).CauseThe rates used, as noted above, are a spot rate from the second to last day of the prior month, not a transaction date rate or suitable weighted average, or another alternative. The current system does not allow for the correct rate to be used.Whilst the treasury team were aware the rate used was from the previous month, there was not an awareness that this was not in accordance with the requirements of the accounting standards or that this could result in material differences.EffectForeign exchange translation methodology is currently not in accordance with accounting standards.There are differences within the Plan WW and Plan Inc. financial statements that have been identified but not corrected as a result of the foreign exchange translation methodology issues noted.Recommendation:As management plan, design and configure the new ERP system consideration should be given to the need to input foreign exchange rates into the system on a daily basis to ensure compliance with the accounting standards and Plan?s accounting policies.Alternatively, there should be an annual review at GH level to assess the likely difference and adjustments processed if material.Foreign exchange rates should be checked to ensure that the rates being used are appropriate. Areas of political unrest are more likely to see volatile foreign exchange rates, which should be monitored.Views of Responsible Officials and Management?s Corrective Action Plan:Views of responsible officials and management?s corrective action plan are included at the end of this report after the summary schedule of prior audit findings and status.

Ref 2022-007: Insufficient documentation to show journals had been reviewed ahead of the payment being made (repeat of prior year finding 2021-009) (deficiency)Federal Agency: United States Department of StateProgram: Ethiopia: South Sudanese Refugee Assistance V (PRM5) and Ethiopia: South Sudanese Refugee Assistance IV Y2 (PRM4)Assistance Listing: 19.517 (Ethiopia)Award #: SPRMCO21CA3181 and S-PRMCO-20-CA-0047 respectively for EthiopiaAward year: FY22Pass-through: From Plan International USA, Inc.Criteria:Plan?s control procedures require that a journal is signed off and approved ahead of the payment being made.Condition:Plan Ethiopia were unable to provide evidence of journal review within SAP where the transaction is recorded. This is the case for 29 out of 60 of the samples tested across grants PRM4 and PRM5 and the total dollar value impacted is $114,954.This is a control finding relating to segregation of duties not followed when recording transactions in SAP, however, we noted no questioned costs in any of the items above.Cause:Plan Ethiopia is inconsistent with evidencing a reviewer sign off in SAP as they do not have any set guidelines to do this at the country office. The country office should follow the control framework set out in the control matrix by USNO which is for journals to be approved appropriately before being paid. This is unless the country office has their own journal approval process which they follow. These transactions highlighted were approved on payment request form before payment was made to employees/suppliers, however per the policy, the journal should be reviewed before it is posted. Plan Ethiopia explained that due to the nature of the grant being an emergency grant, this is what has caused this control not to be followed on a few occasions.Effect:The control weaknesses could lead to future questioned costs or inaccurate reporting.Recommendation:Plan Ethiopia should ensure that their processes are followed at all times ahead of payments being made, and that a clear audit trail is retained to evidence segregation of duties when recording transactions in their system.Views of Responsible Officials and Management?s Corrective Action Plan:Views of responsible officials and management?s corrective action plan are included at the end of this report after the summary schedule of prior audit findings and status.

Ref 2021-003: Controls over unliquidated partner advances (repeat of prior year finding 2020-004, 2019-004, 2018-003 and 2017-002) (deficiency)Federal Agency: AllProgram: AllCFDA #: AllAward #: AllAward year: FY21Pass-through: All applicableCriteria:Accurate and reliable financial records are necessary to meet ongoing financial reporting and operational needs and requirements.Condition:Our testing noted a number of issues regarding the unliquidated advances adjustment to unspent grant funds. These can be summarised as follows:Manual exclusion of balances from the SAP advances module report to monitor unliquidated advances? During the financial year, management has taken remedial action with the field to improve the accuracy and completeness of the input data on unliquidated advances. However, for the purposes of the year end, management is still unable to place full reliance on information and has had to manually exclude balances. This impacts the accuracy of the reporting outputs.Non-monitoring of partner advance balances.? Due to the remedial actions taken by GH management on the underlying data (as mentioned above), management have not had the capacity to regularly monitor and review partner advances.Delay in Country Office liquidation of Partner Advances.? We noted a number of instances where partner certificates obtained by management to support the unliquidated advances balance at year end did not agree to the figure in SAP. This resulted in management making a number of assumptions over the year-end balance and booking extrapolated adjustments in all three financial years.In FY20 and FY19 we noted that fewer manual exclusions from the data produced from SAP were required compared to previous years, but system information was still wrong in some cases and a large adjustment was required based on the certificates, however this was identified by management.Cause:Issues have been caused by a number of interrelated factors:? In March 2017, the format of the data which is uploaded into the Business Intelligence programme which provides the report on partner advances was amended. This led to some transactions not being fully uploaded and has led to differences in EUR values included on the General Ledger and the reports used by management to monitor partner advances.? Country Offices (COs) have not been following the correct process for payment and liquidation of partner advances.? Underlying reporting issues within SAP and data quality issues.Effect:Issues noted have a number of implications for Plan:? Inaccurate reports/other reporting issues may mean management is unable to adequately monitor and review partner advance balances during the year or at the year-end.? Improper use of SAP by COs affects the quality of information available at GH and leads to manual intervention in system generated reports to correct for errors. This increases the risk of poor quality financial information and reporting.? There is an increased risk that management do not identify unusual or long outstanding advances given to partners, meaning there is a greater risk of issues not being identified and resolved.? Ultimately, the issues we have identified can impact the material accuracy of expenditure and prepaid expenses FSLIs and the final classification of net assets between unrestricted and temporarily restricted within the Plan International, Inc. accounts.However, given the variances noted in the FY21 audit were immaterial we have reduced the control recommendation from a significant deficiency to deficiency.Recommendation:Country Offices (COs) should continue to be trained in the use of SAP, with the importance of using correct transaction types for processing advances and liquidations stressed.Management should ensure that any new reports are written to allow all information to be captured.Management should put in place a system/report which allows timely monitoring of partner advances, for example quarterly meetings with COs.COs should put in place procedures to ensure advances can be liquidated on a timely basis following receipt of details on liquidation from partners.Management should periodically review and investigate differences between the two reports and should ensure that transactions posted by the Country Offices to SAP are reflected within both the G2 and F6 report. At year end, it is recommended that the F6 report is reconciled to the G2 report prior to initiating the partner certification process to ensure completeness and accuracy.Views of Responsible Officials and Management?s Corrective Action Plan:View of responsible officials and management?s corrective action plan are included at the end of this report after the summary schedule of prior audit findings and status.

Ref 2021-005: Foreign exchange translation methodology (repeat of prior year finding 2020-006, 2019-006) (significant deficiency)Federal Agency: AllProgram: AllCFDA #: AllAward #: AllAward year: FY21Pass-through: All applicableCriteria:Accurate and reliable financial records are necessary to meet ongoing financial reporting and operational needs and requirements.Condition:For all transactions, the impact of exchange rates takes place in the following stages:1) Transaction level? Translation from document currency (ie currency of income/expense per invoice) to local currency at the time of initial recognition? Local currency to functional currency (Euro)? Translation to actual rate at date of settlement? Translation of outstanding amounts within the balance sheet at the period end rate2) Consolidation level? Functional currency to reporting currency (USD)Our testing over exchange rates is initially to compare the average and closing rates used within the financial statements to the rates provided by our independent internal research team. The closing rates, although showing some minor differences are within an acceptable range, however the average rates, due to the volatility in rates during the year and how rates are set up in SAP have resulted in a number of issues/differences as follows:? The rate of exchange used throughout a month, is the spot rate from the penultimate working day of the prior month. This is not therefore `the rate of exchange ruling at the date of the transaction? in accordance with the PII accounting policies as stated in the financial statements. US GAAP permits the use of `an appropriately weighted? average exchange rate. Unless system driven and automated, rates at the date of the transaction are usually considered too burdensome and it is common practice to use a monthly average exchange rate. Plan?s income and more so expenditure, is heavily weighted towards the end of the month due to grant reporting cycles therefore an appropriately weighted average exchange rate used for a month should take this into account. We have recalculated the rates and the exchange difference impact under US accounting standards and included the differences arising within our statement of uncorrected misstatements, detailed in the effect section below.? The monthly rate used for consolidation purposes is again the spot rate from the penultimate day of the previous month and not an appropriate average rate as required. We have recalculated the exchange difference arising on translation of PII?s financial statements into the reporting currency (USD) and again included this within our statement of uncorrected misstatements.There has been no significant change to the details of the control point raised in FY20. The foreign exchange methodology remains inappropriate in both Plan PWW and Plan Inc. The implementation of the new ERP system in FY22/23 may address this deficiency by using daily exchange rates.In the current year, management performed a retrospective analysis to quantify the impact of using the incorrect foreign exchange methodology, helping to mitigate the risk of a material misstatement. We have completed our testing and noted no other (nothing in additional to the uncorrected misstatements identified in managements calculation) specific FX errors in the current year in relation to the exchange rates used. On this basis we are proposing to reduce the control recommendation from a material weakness to a significant deficiency. The control finding will now remain as significant until the new ERP system is fully implemented.Cause? The rates used, as noted above, are a spot rate from the penultimate day of the prior month, not a transaction date rate or suitable weighted average, or another alternative.? Whilst the treasury team was aware the rate used was from the previous month, there was not an awareness that this was not in accordance with the requirements of the accounting standards or that this would result in material differences.? Resolving legacy issues from merging ledgers have not been a priority for management. Review of the variant schedule has not been undertaken with sufficient regularity.EffectForeign exchange translation methodology is currently not in accordance with accounting standards.There are differences within the PII financial statements that have been identified but not corrected as a result of the foreign exchange translation methodology issues noted.Document currency to functional currency (Euro) translation errorThis represents the estimated effect of the foreign currency translation of income statement items to the functional currency at an appropriately weighted average exchange rate as required by US GAAP compared to the exchange rate used within the general ledger (a spot rate from the second last working day of the previous month). This adjustment was calculated by management and audited by PwC: DR Income $1,353K, DR Expenditure $433K, CR Net losses on foreign exchange $1,786K.Translation of PII from EUR to Dollars for PII accountsAn adjustment has been proposed for the translation of the I&E into USD: DR Expenditure 77K, DR Net losses on foreign exchange $2,137K, CR Income 2,214K.Recommendation:We recommend the following:? As management plans, designs and configures the new ERP system, consideration should be given to the need to input foreign exchange rates into the system on a daily basis to ensure compliance with the accounting standards and Plan?s accounting policies.? Legacy issues resulting from the merging of ledgers in prior years should be cleared up within SAP before data is migrated to the new ERP system.? Foreign exchange rates should be checked to ensure that the rates being used are appropriate. Areas of political unrest are more likely to see volatile foreign exchanges rates, which should be monitored.? The variant schedule should be reviewed on a regular basis to ensure that all monetary assets and liabilities are correctly retranslated at the period end / balance sheet date.Views of Responsible Officials and Management?s Corrective Action Plan:View of responsible officials and management?s corrective action plan are included at the end of this report after the summary schedule of prior audit findings and status.

Ref 2021-009: Insufficient documentation to show journals had been reviewed ahead of the payment being made (deficiency)Federal Agency: United States Department of StateProgram: Philippines: Marawi Response, Senegal: All Children Reading Senegal ACRCFDA #: 19.517Award #: 72049218CA00007, AID-OAA-0-14-00055Award year: FY21Pass-through: From Plan International USA, Inc.Criteria:Plan?s control procedures require that a journal is signed off and approved ahead of the payment being made.Condition:Plan are unable to provide evidence of this process being followed for a number of samples audited during the year. This is the case for 7 out of 60 of the samples tested in Senegal and 3 out of 60 of the samples tested in the Philippines.We noted no questioned costs in any of the items above.Cause:These transactions were recorded during the COVID-19 pandemic and therefore the approvals process was impacted by location and personnel changes.Effect:The control weaknesses could lead to future questioned costs or inaccurate reporting.Recommendation:Plan should ensure that their processes are followed at all time ahead of payments being made, and that a clear audit trail is retained to evidence approval of payments.Views of Responsible Officials and Management?s Corrective Action Plan:View of responsible officials and management?s corrective action plan are included at the end of this report after the summary schedule of prior audit findings and status.

Federal Agency: AllProgram: AllCFDA #: AllAward #: AllAward year: FY20Pass-through: All applicableCriteriaAccurate and reliable financial records are necessary to meet ongoing financial reporting and operational needs and requirements.Condition:This finding is relevant to our audit of grants to provide assurance over the split between net assets with and without donor restrictions. Our sample testing required management to provide us with standard pieces of documentation which are produced in relation to each grant. We recognise that the supporting information in relation to our grants testing was made available to us sooner than in the prior year (a delay of up to 8 weeks in the prior year, with a maximum delay of 3 weeks in the current year). Whilst this is an improvement on the prior year, this is still not deemed to be timely enough to assist efficient management of the grants process to ensure management can make timely decisions based on accurate data at any point during the financial year. In light of the above, have reduced this rating to a deficiency (low) in FY20 but are still reporting this due to the relevance to availability of accurate documentation.Cause:Plan operates across multiple countries, and the information which was required was not kept centrally and/or was not easily accessible by the central GH team, but held by individuals across multiple countries, meaning the information and documents were challenging to obtain.Effect:If this information is not available on a timely basis for audit, it must mean that management cannot obtain this information to ensure that their financial records are accurate at any one point in time. This issue has ultimately led to the grants remediation project lead by Plan?s GH grants team taking far longer than anticipated, which ultimately costs the charity money.Recommendation:We recommend that all information related to grant contracts is sent to and maintained by local NO and CO teams operating the grant contract so that they are available to management in a timely manner to assist decision making in relation to the financial statements.Views of Responsible Officials and Management?s Corrective Action Plan:View of responsible officials and management?s corrective action plan are included at the end of this report after the summary schedule of prior audit findings and status.

Federal Agency: AllProgram: AllCFDA #: AllAward #: AllAward year: FY20Pass-through: All applicableCriteria:Accurate and reliable financial records are necessary to meet ongoing financial reporting and operational needs and requirements.Condition:Our testing noted a number of issues regarding the unliquidated advances adjustment to unspent grant funds, these can be summarised as follows:Manual exclusion of balances from the SAP advances module report to monitor unliquidated advances? During the financial year, management has taken remedial action with the field to improve the accuracy and completeness of the input data on unliquidated advances. However for the purposes of the year end, management is still unable to place full reliance on information and have had to manually exclude balances. This impacts the accuracy of the reporting outputs.Non-monitoring of partner advance balances.? Due to the remedial actions taken by GH management on the underlying data (as mentioned above), management have not had the capacity to regularly monitor and review partner advances.Delay in Country Office liquidation of Partner Advances.? We noted a number of instances where partner certificates obtained by management to support the unliquidated advances balance at year end did not agree to the figure in SAP. This resulted in management making a number of assumptions over the yearend balance and booking extrapolated adjustments in all three financial years.In FY20 and FY19 we noted that fewer manual exclusions from the data produced from SAP were required compared to previous years, but system information was still wrong in some cases and a large adjustment was required based on the certificates, however this was identified by management.Cause:Issues have been caused by a number of interrelated factors:? In March 2017, the format of the data which is uploaded into the Business Intelligence programme which provides the report on partner advances was amended. This led to some transactions not being fully uploaded and has led to differences in EUR values included on the General Ledger and the reports used by management to monitor partner advances.? Country Offices (Cos) have not been following the correct process for payment and liquidation of partner advances.? Underlying reporting issues within SAP and data quality issues.Effect:Issues noted have a number of implications for Plan:? Inaccurate reports/other reporting issues may mean management are unable to adequately monitor and review partner advance balances during the year or at the year-end.? Improper use of SAP by COs affects the quality of information available at GH and leads to manual intervention in system generated reports to correct for errors. This increases the risk of poor quality financial information and reporting.? There is an increased risk that management do not identify unusual or long outstanding advances given to partners, meaning there is a greater risk of issues not being identified and resolved.? Ultimately, the issues we have identified can impact the material accuracy of expenditure and prepaid expenses FSLIs and the final classification of net assets between unrestricted and temporarily restricted within the Plan International, Inc. accounts.Recommendation:Country Offices (COs) should continue to be trained in the use of SAP, with the importance of using correct transaction types for processing advances and liquidations stressed.Management should ensure that any new reports are written to allow all information to be captured.Management should put in place a system/report which allows timely monitoring of partner advances, for example quarterly meetings with COs.COs should put in place procedures to ensure advances can be liquidated on a timely basis following receipt of details on liquidation from partners.Views of Responsible Officials and Management?s Corrective Action Plan:View of responsible officials and management?s corrective action plan are included at the end of this report after the summary schedule of prior audit findings and status.

Federal Agency: AllProgram: AllCFDA #: AllAward #: AllAward year: FY20Pass-through: All applicableCriteria:Accurate and reliable financial records are necessary to meet ongoing financial reporting and operational needs and requirements.Condition:For all transactions, the impact of exchange rates takes place in the following stages:1) Transaction level? Translation from document currency (ie currency of income/expense per invoice) to local currency at the time of initial recognition? Local currency to functional currency (Euro)? Translation to actual rate at date of settlement? Translation of outstanding amounts within the balance sheet at the period end rate2) Consolidation level? Functional currency to reporting currency (USD)Our testing over exchange rates is initially to compare the average and closing rates used within the financial statements to the rates provided by our independent internal research team. The closing rates, although showing some minor differences are within an acceptable range, however the average rates, due to the volatility in rates during the year and how rates are set up in SAP have resulted in a number of issues/differences as follows:? The rate of exchange used throughout a month, is the spot rate from the second last working day of the prior month. This is not therefore `the rate of exchange ruling at the date of the transaction? in accordance with the PII accounting policies as stated in the financial statements. US GAAP permits the use of `an appropriately weighted? average exchange rate. Unless system driven and automated, rates at the date of the transaction are usually considered too burdensome and it is common practice to use a monthly average exchange rate. Plan?s income and more so expenditure, is heavily weighted towards the end of the month due to grant reporting cycles therefore an appropriately weighted average exchange rate used for a month should take this into account. We have recalculated the rates and the exchange difference impact under US accounting standards and included the differences arising within our statement of uncorrected misstatements, detailed in the effect section below.? The monthly rate used for consolidation purposes is again the spot rate from the second to last day of the previous month and not an appropriate average rate as required. We have recalculated the exchange difference arising on translation of PII?s financial statements into the reporting currency (USD) and again included this within our statement of uncorrected misstatements.There has been no significant change to the details of the control point raised in FY19. The foreign exchange methodology remains inappropriate.As a specific issue for FY20, we noted three general ledger accounts in two separate countries where the exchange rate used appears to have been manually overridden in error.Cause? The rates used, as noted above, are a spot rate from the second to last day of the prior month, not a transaction date rate or suitable weighted average, or another alternative.? Whilst the treasury team was aware the rate used was from the previous month, there was not an awareness that this was not in accordance with the requirements of the accounting standards or that this would result in material differences.? Resolving legacy issues from merging ledgers have not been a priority for management.? Review of the variant schedule has not been undertaken with sufficient regularity.EffectForeign exchange translation methodology is currently not in accordance with accounting standards.There are differences within the PII financial statements that have been identified but not corrected as a result of the foreign exchange translation methodology issues noted. Certain general ledger accounts are not being retranslated as required. This led to the below uncorrected misstatements within the financial statements for PII at the transactional level: Dr Income $807, Dr Expenditure $1,764k, Cr Net losses on foreign exchange $2,571k.Recommendation:We recommend the following:? As management plans, designs and configures the new ERP system, consideration should be given to the need to input foreign exchange rates into the system on a daily basis to ensure compliance with the accounting standards and Plan?s accounting policies.? Alternatively, there should be an annual review at GH level to assess the likely difference and adjustments processed if material.? Legacy issues resulting from the merging of ledgers in prior years should be cleared up within SAP before data is migrated to the new ERP system.? Foreign exchange rates should be checked to ensure that the rates being used are appropriate. Areas of political unrest are more likely to see volatile foreign exchanges rates, which should be monitored.? The variant schedule should be reviewed on a regular basis to ensure that all monetary assets and liabilities are correctly retranslated at the period end / balance sheet date.Views of Responsible Officials and Management?s Corrective Action Plan:View of responsible officials and management?s corrective action plan are included at the end of this report after the summary schedule of prior audit findings and status.

Federal Agency: United States Agency for International Development (USAID) and United States Department of LaborProgram: Philippines: Marawi Response, Nepal: Early Grade Reading Program, Combating Forced Labor and Human Trafficking on Fishing Vessels in the Asia-Pacific Region, Thailand Fostering Accountability in Recruitment for Fishery Workers (Fair Fish)CFDA #: 98.001, 17.401Award #: 72049218CA00007, PHL100524; AID-OAA-I-14-00044, 4-330-0214446-52134L, NPL100338; IL-31472-17-75-K, ARO100103; IL-32819-18-75-K, THA101230Award year: FY20Pass-through: From Plan International USA, Inc.Criteria:2 CFR 200.502, subpart (a) states that the determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs.Condition:In relation to the criteria above, we defined timely processing as within the shortest period for which we would expect expenditures to be reported or used to make financial decisions, being one month. Our findings relate to both items which were not posted on a timely basis, but were posted in the correct financial year, and those that were posted in the incorrect financial year (`out of period? items). During our testing, we noted the following:Philippines: Marawi Response? We noted one out of period item, totalling $3,616, where the expense related to the previous financial year but was not processed and reimbursed until FY20 due to delays in recording the initial transaction.? We also noted one item, totalling $1,696, that was not accounted for in a timely manner due to the closure of operations following COVID-19 related lockdown measures being imposed in the affected region, but which was not recorded out of period.? The above were the relevant findings out of 60 items tested totalling $998,132.Nepal: Early Grade Reading Program? For seven items, totalling $13,557, (out of 60 items tested totalling $104,313) we noted that the recording and processing of the transaction within the entity's accounting records did not occur in a timely manner, but which were not recorded out of period. The reasoning for this varied and included delays due to the impact of COVID-19, late receipt of supporting documentation from employees or third parties and incorrect amounts initially being recorded and subsequently corrected.Thailand Fostering Accountability in Recruitment for Fishery Workers (Fair Fish)? For one out of period item, totalling $2,474, (out of 30 items tested totalling $217,378) we noted that a travel expense related to the previous financial year but was not processed and reimbursed until FY20 due to delays in recording the initial transaction.Combating Forced Labor and Human Trafficking on Fishing Vessels in the Asia-Pacific Region? We noted two out of period items, totalling $3,548, (out of 30 items tested totalling $307,717) where the expense related to the previous financial year but were not processed and reimbursed until FY20 due to delays in recording the initial transaction.We noted no questioned costs in any of the items above.Cause:The specific causes for each finding have been included alongside their conditions above.Effect:The errors and control weaknesses could lead to future questioned costs or inaccurate reporting.Recommendation:We recommend that Plan emphasise to all relevant staff the importance of processing items in a timely manner, and where this may differ from the usual expectation, for example in the instance of travel expenses, that an expectation of the timeliness of posting of these transactions be included in their internal control policies.Views of Responsible Officials and Management?s Corrective Action Plan:View of responsible officials and management?s corrective action plan are included at the end of this report after the summary schedule of prior audit findings and status.

Federal Agency: United States Department of StateProgram: Ethiopia: South Sudanese Refugee Assistance IV, Ethiopia: South Sudanese Refugee Assistance IIICFDA #: 19.517Award #: S-PRMCO-19-CA-0086, ETH102251; S-PRMCO-18-CA-0057, ETH102133Award year: FY20Pass-through: From Plan International USA, Inc.Criteria:Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity is not suspended or debarred or otherwise excluded from participating in the transaction. ?Covered transactions? include those procurement contracts for goods and services awarded under a nonprocurement transaction that are expected to equal or exceed $25,000 or meet certain other criteria specified in the guidance. Plan?s procurement, suspension and debarment policies require that suspension and debarment checks are performed for all suppliers prior to commencing business with them, regardless of transaction value.Condition:For 13 transactions/10 suppliers tested across the two awards totalling $57,241 out of a population of $167,067 and 41 transactions/28 suppliers, Plan was unable to provide support demonstrating that suspension and debarment checks were performed before the transactions were recorded in their general ledger in line with their internal control policies.We noted no questioned costs in any of the items above.Cause:During the time that the transactions were incurred, a software system was used to perform these checks for which the process for evidencing the checks from this system was not sufficient to prove that they had been performed. We do however note that since March 2020, a new process has been implemented which uses a new suspension and debarment software supplier to perform these checks and we have not noted any exceptions in our testing since that date.Effect:The errors and control weaknesses could lead to future questioned costs or inaccurate reporting.Recommendation:As is noted above, we understand that this issue has already been rectified and note that Plan should continue to use the new system as detailed in their control policies.Views of Responsible Officials and Management?s Corrective Action Plan:View of responsible officials and management?s corrective action plan are included at the end of this report after the summary schedule of prior audit findings and status.

Ref 2019-003: Grants - Availability of supporting documentation and evidence (significant deficiency) Criteria Accurate and reliable financial records of many kinds are necessary to meet ongoing financial reporting and operational needs and requirements. Condition: This finding is relevant to our audit of grants to provide assurance over the split between net assets with and without donor restrictions. Our sample testing required management to provide us with 5 standard pieces of documentation which are produced in relation to each grant. Management was not able to provide this information in a timely manner with some information outstanding up to 8 weeks during the FY19 audit. The information was subsequently made available. Cause: Plan operates across multiple countries, and the information which was required was not kept centrally and/or was not easily accessible by the central GH team, but held by individuals across multiple countries, meaning the information and documents were challenging to obtain. Effect: If this information is not available on a timely basis for audit, it must mean that management cannot obtain this information to ensure that their financial records are accurate at any one point in time. This issue has ultimately led to the grants remediation project lead by Plan?s GH grants team taking far longer than anticipated, which ultimately costs the charity money. Recommendation: We recommend that all information related to grant contracts is sent to and maintained by local NO and CO teams operating the grant contract. Views of Responsible Officials and Management?s Corrective Action Plan: View of responsible officials and management?s corrective action plan are included at the end of this report after the summary schedule of prior audit findings and status.

Ref 2019-004: Controls over unliquidated partner advances (repeat of prior year finding 2018-003 and 2017-002) (significant deficiency) Criteria: Accurate and reliable financial records of many kinds are necessary to meet ongoing financial reporting and operational needs and requirements. Condition: Our testing in noted a number of issues regarding the unliquidated advances adjustment to unspent grant funds, these can be summarised as follows: ? Manual exclusion of balances from the SAP advances module report to monitor unliquidated advances. During the financial year management have taken remedial action with the field to improve the accuracy and completeness of the input data on unliquidated advances. However for the purposes of the year end, management are still unable to place full reliance on information and have had to manually exclude balances. This impacts the accuracy of the reporting outputs. ? Non-monitoring of partner advance balances. Due to the remedial actions taken by GH management on the underlying data (as mentioned above), management have not had the capacity to regularly monitor and review partner advances. ? Delay in Country Office liquidation of Partner Advances. We noted a number of instances where partner certificates obtained by management to support the unliquidated advances balance at year end did not agree to the figure in SAP. This resulted in management making a number of assumptions over the yearend balance and booking extrapolated adjustments in all three financial years. ? In FY19 we noted that fewer manual exclusions from the data produced from SAP were required compared to previous years, but system information was still wrong in some cases and a large adjustment was required based on the certificates however this was identified by management. Cause: Issues have been caused by a number of interrelated factors: ? In March 2017, the format of the data which is uploaded into the Business Intelligence programme which provides the report on partner advances was amended. This led to some transactions not being fully uploaded and has led to differences in EUR values included on the General Ledger and the reports used by management to monitor partner advances. ? Country Offices (Cos) have not been following the correct process for payment and liquidation of partner advances. ? Underlying reporting issues within SAP and data quality issues. Recommendation: Country Offices (Cos) should continue to be trained in the use of SAP, with the importance of using correct transaction types for processing advances and liquidations stressed. Management should ensure that any new reports are written to allow all information to be captured. Management should put in place a system/report which allows timely monitoring of partner advances, for example quarterly meetings with Cos. Cos should put in place procedures to ensure advances can be liquidated on a timely basis following receipt of details on liquidation from partners. Views of Responsible Officials and Management?s Corrective Action Plan: View of responsible officials and management?s corrective action plan are included at the end of this report after the summary schedule of prior audit findings and status.

Ref 2019-006: Foreign exchange translation methodology (material weakness) Criteria: Accurate and reliable financial records of many kinds are necessary to meet ongoing financial reporting and operational needs and requirements. Condition: For all transactions, the impact of exchange rates takes place in the following stages: 1) Transaction level ? Translation from document currency (ie currency of income/expense per invoice) to local currency at the time of initial recognition ? Local currency to functional currency (Euro) ? Translation to actual rate at date of settlement ? Translation of outstanding amounts within the balance sheet at the period end rate 2) Consolidation level ? Functional currency to reporting currency (USD) Our testing over exchange rates is initially to compare the average and closing rates used within the financial statements to the rates provided by our independent internal research team. The closing rates, although showing some minor differences are within an acceptable range (see comments on variant schedule below), however the average rates, due to the volatility in rates during the year and how rates are set up in SAP has resulted in a number of issues/differences as follows: ? The rate of exchange used throughout a month, is the spot rate from the second last working day of the prior month. This is not therefore `the rate of exchange ruling at the date of the transaction? in accordance with the PII accounting policies as stated in the financial statements. US GAAP permits the use of `an appropriately weighted? average exchange rate. Unless system driven and automated, rates at the date of the transaction are usually considered too burdensome and it is common practice to use a monthly average exchange rate. Plan?s income and more so expenditure, is heavily weighted towards the end of the month due to grant reporting cycles therefore an appropriately weighted average exchange rate used for a month should take this into account. We have recalculated the rates and the exchange difference impact under US accounting standards and included the differences arising within our statement of uncorrected misstatements, detailed in the effect section below. ? The monthly rate used for consolidation purposes is again the spot rate from the second to last day of the previous month and not an appropriate average rate as required. We have recalculated the exchange difference arising on translation of PII?s financial statements into the reporting currency (USD) and again included this within our statement of uncorrected misstatements. Other exchange related matters During the testing of the foreign exchange translations noted above, we also identified a number of related issues: ? 189 ledger accounts were identified that had a closing balance in Euros at the consolidated level but without a local balance as these were therefore falling outside of the normal period end revaluation process. We understand that this issue was caused by the merging of two ledgers in a previous financial year, where journals were incorrectly posted at the consolidated level only. The total value of these accounts is below our de-minimis level and therefore no audit adjustment is proposed, however it is recommended that the residual amounts are cleared from the ledger. ? It was noted that for the first four months of the financial year, the foreign exchange rate used within SAP (in line with management?s current methodology) was incorrect for Sudan when compared to PwC third party sources and other publicly available sources. We note treasury source the rates from the European Commission, however where an exchange rate is subject to significant change we recommend the rates obtained are corroborated with other sources. The impact of this is incorporated into the uncorrected misstatement noted below for PII. ? Management utilises a variant schedule to determine which monetary assets are revalued at each period end / balance sheet date. When testing the appropriateness of the variant classification, we noted monetary accounts that were incorrectly classified and so were not retranslated. ? The working papers to support the CTA adjustments in Plan WW and Plan Inc.do not agree to the numbers within the financial statements because the numbers are essentially balancing figures. Moreover these are system generated figures and cannot be explained by management. Cause ? The rates used, as noted above, are a spot rate from the second to last day of the prior month, not a transaction date rate or suitable weighted average, or another alternative. ? Whilst the treasury team was aware the rate used was from the previous month, there was not an awareness that this was not in accordance with the requirements of the accounting standards or that this would result in material differences. ? Resolving legacy issues from merging ledgers have not been a priority for management. ? Review of the variant schedule has not been undertaken with sufficient regularity. Effect Foreign exchange translation methodology is currently not in accordance with accounting standards. There are differences within the PII financial statements that have been identified but not corrected as a result of the foreign exchange translation methodology issues noted. Certain general ledger accounts are not being retranslated as required. This led to the below uncorrected misstatements within the financial statements for PII at the transactional level: Dr Income $801k, Cr Expenditure $2,259k, Dr Net losses on foreign exchange $1,458k Note this this error includes a Dr of $547,259 to expenditure for the use of an incorrect rate for Sudan Pounds (Genih) for the first four months of the year (i.e the impact on expenditure of the timing differences would be higher without this) This led to the below uncorrected misstatements within the financial statements for PII at the consolidation level: Dr Income $3,065k, Cr Expenditure $3,280k, Dr Currency translation movement $215k. Recommendation: We recommend the following: ? As management plans, designs and configures the new ERP system, consideration should be given to the need to input foreign exchange rates into the system on a daily basis to ensure compliance with the accounting standards and Plan?s accounting policies. ? Alternatively, there should be an annual review at GH level to assess the likely difference and adjustments processed if material. ? Legacy issues resulting from the merging of ledgers in prior years should be cleared up within SAP before data is migrated to the new ERP system. ? Foreign exchange rates should be checked to ensure that the rates being used are appropriate. Areas of political unrest are more likely to see volatile foreign exchanges rates, which should be monitored. ? The variant schedule should be reviewed on a regular basis to ensure that all monetary assets and liabilities are correctly retranslated at the period end / balance sheet date. Views of Responsible Officials and Management?s Corrective Action Plan: View of responsible officials and management?s corrective action plan are included at the end of this report after the summary schedule of prior audit findings and status.

Ref 2019-008: Activities allowed or unallowed (deficiency) Federal Agency: United States Agency for International Development (USAID) Program: Malawi:One Community, Feed the Future Rwanda Hinga Weze CFDA #: 98.001 Award #: AID-612-A-16-00001, AID-696-C-17-00001 Award year: FY19 Pass-through: Johns Hopkins University, CNFA Criteria: Uniform Guidance principles are expected to be followed in all respects, accurate and reliable financial records of many kinds are necessary to meet ongoing financial reporting and operational needs and requirements and internal controls are expected to be sufficiently designed and implemented. Condition: During our testing of the following awards during the FY19 audit, we noted the following: Malawi:One Community ? For one item, no support could be provided to justify the expense. This has not been retained in accordance with required Uniform Guidance document retention policies. The cost involved was not of a reportable amount as a questioned cost. Feed the Future Rwanda Hinga Weze ? Up until the month of December 2018 SAP journals had only been approved by one individual. This is contrary to Plan's internal control policy of two sign offs. The cause of this is due to misunderstanding of the control policy. From Jan 2019 this control had been improved and no further exceptions were noted with the journal approval process. This related to 17 journals. Cause: The specific causes for each finding have been included alongside their conditions above. Effect: The errors and control weaknesses could lead to future questioned costs or inaccurate reporting. Recommendation: We recommend that in Malawi, document retention policies are reiterated with employees. Given the journal approval process in Rwanda has since been resolved, no further recommendation is noted. Views of Responsible Officials and Management?s Corrective Action Plan: View of responsible officials and management?s corrective action plan are included at the end of this report after the summary schedule of prior audit findings and status.

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