Financial Statements, Schedule of Expenditures of Federal...

The report accompanying these financial statements was issued by BDO USA, LLP, a Delaware limited liability partnership and the U.S. member of BDO International Limited, a UK company limited by guarantee.

Aga Khan Foundation U.S.A. Financial Statements, Schedule of Expenditures of Federal Awards and Reports Required by Government Auditing Standards and the Uniform Guidance Years Ended December 31, 2016 and 2015

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Aga Khan Foundation U.S.A.

Financial Statements, Schedule of Expenditures of Federal

Awards and Reports Required by Government Auditing Standards and

the Uniform Guidance Years Ended December 31, 2016 and 2015


Contents

2

Independent Auditor’s Report 3-4 Financial Statements

Statements of Financial Position 5

Statements of Activities 6-7 Statements of Cash Flows 8 Notes to Financial Statements 9-21

Schedule of Expenditures of Federal Awards

Schedule of Expenditures of Federal Awards 22 Notes to the Schedule of Expenditures of Federal Awards 23

Independent Auditor’s Reports Required by Government Auditing Standards and the Uniform Guidance

Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 24-25

Independent Auditor’s Report on Compliance for Each Major Federal Program and Report on Internal Control Over Compliance Required by the Uniform Guidance 26-27

Schedule of Findings and Questioned Costs 28-29

BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms.

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Independent Auditor’s Report To the Board of Directors Aga Khan Foundation U.S.A. Washington, D.C. Report on the Financial Statements We have audited the accompanying financial statements of Aga Khan Foundation U.S.A. (the “Foundation”), which comprise the statements of financial position as of December 31, 2016 and 2015, and the related statements of activities and cash flows for the years then ended, and the related notes to the financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

8401 Greensboro Drive, Suite 800McLean, VA 22102

Tel: 703-893-0600Fax: 703-893-2766 www.bdo.com

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Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Aga Khan Foundation U.S.A. as of December 31, 2016 and 2015, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Other Information Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying schedule of expenditures of federal awards, as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated June 5, 2017 on our consideration of Aga Khan Foundation U.S.A’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Foundation’s internal control over financial reporting and compliance. June 5, 2017

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Financial Statements

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December 31, 2016 2015

AssetsCash and cash equivalents 29,997,892$ 29,822,287$ Notes receivable 14,250,000 7,500,000 Investments 39,736,024 36,425,197 Accounts receivable and other current assets 69,712 130,365 Grants receivable 358,928 - Donor agency receivables 587,943 4,565,821 Receivables from affiliates 3,551,300 4,361,793 Contributions receivable, net 11,732,377 12,051,175 Fixed assets, net 74,298,311 75,074,723

Total assets 174,582,487$ 169,931,361$

Liabilities and net assets

LiabilitiesAccounts payable and accrued liabilities 528,149$ 279,893$ Property tax accrual 1,433,934 3,376,462 Payables to affiliates 985,576 2,572,447 Deferred rent 82,515 57,010 Deferred revenue 3,495,861 2,268,088

Total liabilities 6,526,035 8,553,900

Net assets:Unrestricted 153,849,019 145,532,240 Temporarily restricted 14,207,433 15,845,221

Total net assets 168,056,452 161,377,461

Total liabilities and net assets 174,582,487$ 169,931,361$ The accompanying notes are an integral part of these financial statements.


Statements of Financial Position

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TemporarilyYear ended December 31, 2016 Unrestricted Restricted Total

Revenues:Contributions 24,559,933$ 2,233,169$ 26,793,102$ Federal grants 13,322,642 - 13,322,642 Other grants 976,641 337,716 1,314,357 Investment return 409,479 - 409,479 Net assets released from restrictions 4,208,673 (4,208,673) -

Total revenues 43,477,368 (1,637,788) 41,839,579

Expenses:Program grants 28,073,103 - 28,073,103

Supporting Services General and administrative expenses

Salaries 2,747,366 - 2,747,366 Legal, accounting and consulting 192,184 - 192,184 Travel 145,243 - 145,243 Doubtful pledges recovery (51,213) - (51,213) General office 221,768 - 221,768 Premises 355,249 - 355,249 Taxes and licenses (on property) 620,538 - 620,538 Resource development and communications 150,071 - 150,071

Total general and administrative expenses 4,381,206 - 4,381,206

Fundraising and public education events 1,231,867 - 1,231,867

Depreciation and amortization 1,474,412 - 1,474,412

Total supporting services 7,087,485 - 7,087,485

Total expenses 35,160,589 - 35,160,589

Change in net assets 8,316,779 (1,637,788) 6,678,991

Net assets at beginning of year 145,532,240 15,845,221 161,377,461

Net assets at end of year 153,849,019$ 14,207,433$ 168,056,452$ The accompanying notes are an integral part of these financial statements.

Aga Khan Foundation U.S.A

Statement of Activities

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TemporarilyYear ended December 31, 2015 Unrestricted Restricted Total

Revenues:Contributions 27,992,881$ 2,097,022$ 30,089,903$ Federal grants 19,977,980 - 19,977,980 Other grants 134,227 2,384,634 2,518,861 Investment return (473,574) - (473,574) Net assets released from restrictions 5,249,081 (5,249,081) -

Total revenues 52,880,595 (767,425) 52,113,170

Expenses:Program grants 41,293,909 - 41,293,909

Supporting Services General and administrative expenses

Salaries 2,628,801 - 2,628,801 Legal, accounting and consulting 131,252 - 131,252 Travel 166,608 - 166,608 Doubtful pledges provision 245,125 - 245,125 General office 305,311 - 305,311 Premises 245,036 - 245,036 Taxes and licenses (on property) 1,141,414 - 1,141,414 Resource development and communications 188,054 - 188,054

Total general and administrative expenses 5,051,601 - 5,051,601

Fundraising and public education events 1,152,572 - 1,152,572

Depreciation and amortization 1,485,579 - 1,485,579

Total supporting services 7,689,752 - 7,689,752

Total expenses 48,983,661 - 48,983,661

Change in net assets 3,896,934 (767,425) 3,129,509

Net assets at beginning of year 141,635,306 16,612,646 158,247,952

Net assets at end of year 145,532,240$ 15,845,221$ 161,377,461$ The accompanying notes are an integral part of these financial statements.


Statement of Activities

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Years ended December 31, 2016 2015

Cash flows from operating activitiesChange in net assets 6,678,991$ 3,129,509$

Adjustments to reconcile change in net assets to net cashprovided by (used in) operating activities:Depreciation and amortization 1,474,412 1,485,579 Stock contribution received (887,847) (3,735,940) Realized losses on contributed stocks 873,876 3,722,699 Proceeds from sale of stock contributions received 13,971 13,241 Realized (gain)/loss on equity investment in FMFB (266,712) 114,467 Change in cash surrender value of life insurance policies (2,930,084) (2,689,230) Allowance for doubtful contributions (69,446) 78,906 Present value component of discounts on contributions receivable (14,057) (20,948)

(Increase) decrease in assets:Notes receivable (6,750,000) (3,750,000) Accounts receivable and other current assets 60,653 (46,370) Grants receivable (358,928) 715,250 Donor agency receivables 3,977,878 (1,288,062) Receivables from affiliates 810,493 (1,843,586) Contributions receivable 402,301 1,520,627

Increase (decrease) in liabilities:Accounts payable and accrued liabilities 248,256 (53,339) Property tax accrual (1,942,528) 974,073 Payables to affiliates (1,586,871) (1,545,861) Deferred rent 25,505 57,010 Deferred revenue 1,227,773 (303,234)

Net cash provided by (used in) operating activities 987,636 (3,465,209)

Cash flows from investing activitiesPurchase of Investments - short term (114,031) (1,564,402) Fixed asset purchases (698,000) - Proceeds from fixed assets disposal - 22,499

Net cash used in investing activities (812,031) (1,541,903)

Net increase (decrease) in cash and cash equivalents 175,605 (5,007,112)

Cash and cash equivalents, beginning of year 29,822,287 34,829,399

Cash and cash equivalents, end of year 29,997,892$ 29,822,287$ The accompanying notes are an integral part of these financial statements.


Statements of Cash Flows


Notes to Financial Statements

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1. Organization Aga Khan Foundation U.S.A. (the Foundation) was incorporated on October 9, 1981 to promote development and social welfare through philanthropic activities. The Foundation's principal sources of financial support are grants and contributions from individuals, government agencies, and domestic and foreign corporations and foundations, including the Aga Khan Foundation established in Geneva, Switzerland. The Foundation's headquarters is located in Washington, D.C. The Foundation is a not-for-profit organization and is generally exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code of 1986, except for income derived from unrelated business sources. 2. Summary of Significant Accounting Policies The following is a summary of the significant accounting policies followed by the Foundation in the preparation of these financial statements: Basis of Accounting The financial statements of the Foundation have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). Cash and Cash Equivalents Cash and cash equivalents consist primarily of money market funds and certificates of deposit with original maturities of three months or less. The carrying value of these cash and cash equivalents approximated their fair values at year end. Concentration of Credit Risk Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits. Accounts at federally insured institutions are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per bank at December 31, 2016 and 2015. At December 31, 2016 and 2015, the Foundation held $27,746,892 and $27,571,287, respectively, in uninsured funds. The Foundation has never experienced any losses related to these balances and believes it is not exposed to any significant credit risk on its cash and cash equivalents and certificates of deposits. The Foundation maintains cash and cash equivalents and investments with high quality institutions and has established diversification and maturity guidelines to reduce risk and maintain liquidity. The Foundation maintains separate cash accounts in banks that combine the balances of all Foundation accounts to determine amounts insured by the FDIC. The Foundation mitigates exposure to the FDIC limits by sweeping balances to money market funds owned in the Foundation’s name. Credit risk with respect to accounts and contributions receivable was limited because these amounts are due from a large number of individual donors.



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Investments The cash surrender value of the life insurance policies is based on information provided by the respective insurance companies to the Foundation. Changes in cash surrender value, net of premiums paid, were recognized in the statements of activities as investment return in accordance with authoritative guidance. Investments also include certificates of deposit with original maturities of greater than six months. Unrealized and realized gains and losses are included in the statements of activities during the period in which they occur. Grants Receivable The Foundation receives funding from grants received from several grantors for direct and indirect program costs. This funding is generally subject to restrictions, which must be met through incurring qualifying expenses for particular programs. These balances are receivable in less than one year and are carried at undiscounted cost. Donor Agency Receivables and Deferred Revenue Donor agency grant revenue is recognized and donor agency receivables accrued when matching program expenses are incurred. Donor agency grant receipts, based on approved grant agreements that are in excess of matching grant expenses for the year, are recognized as deferred revenue in the statements of financial position. Fixed Assets Fixed assets are carried at cost. The Foundation capitalizes assets with an original cost of $5,000 or greater. Depreciation of furniture, fixtures and equipment is computed on the straight-line method over the estimated useful lives of five years. Buildings are depreciated over 20 years. Leasehold improvements are amortized over the shorter of the remaining term of the lease or their estimated useful life of five years. The Foundation capitalized donated assets at fair value. These assets are not depreciated since the Foundation deems that these items have historical value that is worth preserving perpetually and intends to protect and preserve these assets. Impairment of Long-Lived Assets The Foundation reviews the carrying amounts of assets whenever events or circumstances indicate that such carrying amounts may not be recoverable. When considered impaired, the carrying amount of the asset is reduced, by a charge to the accompanying statements of activities, to its current fair value. Deferred Rent Rent expense is recognized on a straight-line basis over the life of the lease. The difference between rent expense recognized and rental payments, as stipulated in the lease, is reflected as deferred rent in the statements of financial position.



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Classification of Net Assets The Foundation's net assets have been grouped into the following classes: Unrestricted Net Assets Unrestricted net assets generally result from unrestricted contributions, unconditional promises to give, unconditional pledges, donations, and Federal grants. They also result from realized and unrealized gains and losses on contributed stocks and interest from investing in income producing assets. Netted against the revenues are expenses related to funding program activities, the making of grants, raising contributions, and performing administrative functions. Temporarily Restricted Net Assets Temporarily restricted net assets generally result from contributions pledged by donors for use in future time periods or for any restricted purposes. When these restrictions are met, temporarily restricted net assets are released from restrictions and reclassified to unrestricted net assets and reported in the statements of activities as net assets released from restrictions. Contributions The Foundation recognizes contributions and unconditional promises to give as revenue in the period received or promised, whichever is earlier. All contributions are considered to be unrestricted unless specifically restricted by the donor. Contributions reported as temporarily restricted are those received with donor stipulations that limit their use for specific purposes or are subject to time restrictions. A donor restriction expires when the purpose of the contribution is accomplished or a stipulated time restriction ends. If the restrictions are met within the same year that the contribution was received, the revenue is classified as unrestricted. Unconditional promises to give, recorded in 2008 and prior years, which are expected to be received in future years, are recorded at the present value of their estimated future cash flows using discount rates approximating the risk free rate of return on U.S. government securities with similar maturities. Unconditional promises to give, received in years after 2008, are recorded at the present value of their estimated future cash flows using discount rates equal to one year LIBOR plus 50 basis points. Contributions receivable are recorded at the net realizable value. An allowance for doubtful receivables is recorded based on aging of contributions receivable, except for receivables from special campaigns, for which an allowance is recorded based on past collection history of similar campaigns. In-Kind Donations Included in contributions revenue and fundraising and public education events expenses in the statements of activities are in-kind donations of $115,070 and $97,712 for goods provided at fundraising activities for the years ended December 31, 2016 and 2015, respectively. Federal Grants Federal grants revenue is recognized when the Foundation has incurred eligible expenditures and met all of the other grant eligibility requirements.



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Fair Value Measurements The Foundation follows the Accounting Standards Codification (ASC) 820, Fair Value Measurements. ASC 820 establishes a common definition for fair value to be applied under generally accepted accounting principles requiring use of fair value, establishes a framework for measuring fair value, and expands disclosures about such fair value measurements. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. Measurement date is the date of the financial statements. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Foundation. Unobservable inputs are inputs that reflect the Foundation’s estimates about the assumptions market participants would use in pricing the asset or liability developed based on the best information available under the circumstances. The hierarchy is broken down into three levels based on the reliability of inputs as follows:

• Level 1 - Valuations based on quoted prices in active markets for identical assets or liabilities that the Foundation has the ability to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment.

• Level 2 - Valuations based on quoted prices in markets that are not active or for which all significant inputs are directly or indirectly observable.

• Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

Income Taxes Under provisions of the Internal Revenue Code and the applicable state regulations, the Foundation is exempt from taxes on income other than unrelated business income. No provision for income taxes has been recorded as of December 31, 2016 and 2015, since the Foundation had no material unrelated business income. The Foundation has adopted ASC 740-10, Accounting for Uncertainty in Income Taxes. Under ASC 740-10, the Foundation must recognize the tax benefit associated with tax positions taken for tax return purposes when it is more-likely than not that the position will be sustained. The Foundation does not believe there are any unrecognized tax benefits that need to be recorded. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and



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liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Functional Allocation of Expenses The costs of providing various programs and supporting services have been summarized in the statements of activities based on their respective functions. Certain costs, other than depreciation and amortization, have been allocated to the programs and supporting services benefited as presented in the statements of activities. Functional costs are defined by their purpose:

Program grants relate to expenses incurred to provide grant funds to various programs in order to achieve the Foundation’s programmatic goals. General and administrative expenses relate to expenses incurred by the Foundation’s offices for administration of the various programs and to manage operations of the Foundation. Fundraising and public education events activities relate to direct costs to solicit gifts for the Foundation and to carry out events related to public education.

Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2015-09, “Revenue from Contracts with Customers (Topic 606).” The update establishes a comprehensive revenue recognition standard for virtually all industries under U.S. GAAP including those that previously followed industry-specific guidance. The principle of the update is that an entity should recognize revenue to depict the transfer of promised goods and services to customers under a contract in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance is effective for the Foundation’s fiscal year 2019. Management is currently determining the impact that adoption of this guidance will have on the Foundation’s financial statements. In February 2016, the FASB issued ASU 2016-02, “Leases” (Topic 842), which is the leasing standard for both lessees and lessors. Under this update, a lessee will recognize lease assets and liabilities on the statement of financial position for all arrangements with terms longer than 12 months. Lessor accounting remains largely consistent with existing U.S. GAAP. The guidance is effective for the Foundation’s fiscal year 2020. Management is currently determining the impact that adoption of this guidance will have on the Foundation’s financial statements. In August 2016, the FASB issued ASU 2016-14, “Not-for-Profit Entities (Topic 958) – Presentation of Financial Statements of Not-for-Profit Entities”. The ASU amends the current reporting model for nonprofit organizations and enhances their required disclosures. The major changes include: (a) requiring the presentation of only two classes of net assets now entitled “net assets without donor restrictions” and “net assets with donor restrictions”, (b) modifying the presentation of underwater endowment funds and related disclosures, (c) requiring the use of the placed in service approach to recognize the expirations of restrictions on gifts used to acquire or construct long-lived assets absent explicit donor stipulations otherwise, (d) requiring that all nonprofits present an analysis of expenses by function and nature in either the statement of activities, a separate statement, or in the notes and disclose a summary of the allocation methods used to allocate costs, (e) requiring the disclosure of quantitative and qualitative information regarding liquidity and availability of



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resources, (f) presenting investment return net of external and direct internal investment expenses, and (g) modifying other financial statement reporting requirements and disclosures intended to increase the usefulness of nonprofit financial statements. The guidance is effective for the Foundation’s fiscal year 2018. Early adoption is permitted. The provisions of the ASU must be applied on a retrospective basis for all years presented although certain optional practical expedients are available for periods prior to adoption. Management is currently determining the impact that adoption of this guidance will have on the Foundation’s financial statements. 3. Notes Receivable In August 2014 the Foundation gave a note (loan) of $3,750,000 to Aga Khan Hospital and Medical College Foundation to advance its charitable mission by increasing the quality of and access to medical care and education in Pakistan, which will be accomplished through the expansion and improvement of facilities and construction of a private wing to generate revenue and enable the borrower to subsidize medical education and services for Pakistanis who otherwise will not be able to afford them. The closing date of the note receivable was August 29, 2014. The maturity date of the loan is October 1, 2033 and principal payments are not due until October 1, 2019. Interest payments are to be 1% per annum at a fixed rate. Interest only payments of $3,333 are to be paid beginning October 1, 2014 to October 1, 2018. In 2016, an additional $1,000,000 was issued. The payment terms and interest rates are the same as the original note issued. The outstanding balance as of December 31, 2016 is $4,750,000. In September 2015 the Foundation issued a note (loan) of $3,750,000 to University of Central Asia (UCA) for a construction project that will advance its charitable mission by increasing the quality of and access to education in Tajikistan. The closing date of the note receivable was October 5, 2015. The maturity date of the loan is October 1, 2042 and principal payments (semi-annual payments) of $93,750 are due in April and October. Interest payments are to be 1% per annum at a fixed rate. The first payment on the note is due on April 1, 2023. Interest only payments of $18,339 are to be paid beginning March 31, 2016, to October 5, 2022. In 2016, an additional $3,750,000 was issued. The payment terms and interest rates are the same as the original note issued. The outstanding balance as of December 31, 2016 is $ 7,500,000. In February 2016 the Foundation issued a note (loan) of $1,000,000 to First Microfinance Bank of Tajikistan for purposes that include providing access to finance for individuals and enterprises for poverty alleviation. AKF USA conducts a mission-related investment program whereby it provides loans to organizations carrying on projects that advance AKF USA's mission. The closing date of the note receivable was December 8, 2015. The maturity date of the loan is June 7, 2017 and should be paid in a single lump sum upon final maturity. Interest payments are to be 3.96% per annum at a fixed rate. In February 2016 the Foundation issued a note (loan) of $1,000,000 to First Microfinance Bank of Tajikistan for charitable and educational purposes that include providing access to finance for individuals and enterprises for poverty alleviation. AKF USA conducts a mission-related investment program whereby it provides loans to organizations carrying on projects that advance AKF USA's mission. AKF USA has determined that the loan will advance its charitable mission by increasing the access to financing for small to medium enterprises (SMEs) in Tajikistan. The closing date of the note receivable was December 8, 2015. The maturity date of the loan is December 31, 2022 and should be paid in a single lump sum upon final maturity. Interest payments are to be 5.28% per annum at a fixed rate.



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4. Investments The following table sets forth the fair values of those financial assets and liabilities that are recorded at fair value on a recurring basis according to the hierarchy described in ASC 820, as of December 31, 2016:

Level 1 Level 2 Level 3 Total

Certificates of deposit $ 16,848,859 $ - $ - $ 16,848,859 Life insurance policies - 19,748,145 - 19,748,145 Equity investment in FMFB - - 3,139,020 3,139,020

Total $ 16,848,859 $ 19,748,145 $ 3,139,020 $ 39,736,024 The following table sets forth the fair values of those financial assets and liabilities that are recorded at fair value on a recurring basis according to the hierarchy described in ASC 820, as of December 31, 2015:

Level 1 Level 2 Level 3 Total

Certificates of deposit $ 16,734,828 $ - $ - $ 16,734,828 Life insurance policies - 16,818,061 - 16,818,061 Equity investment in FMFB - - 2,872,308 2,872,308

Total $ 16,734,828 $ 16,818,061 $ 2,872,308 $ 36,425,197 In September 2012, the Foundation entered into a shareholder agreement with First Microfinance Bank of Afghanistan (FMFB). The Foundation made an initial investment of $2,499,952 to acquire an equity ownership of 11.8% representing 10,504 shares. The investment is reported under the equity method of accounting and is adjusted annually for the Foundation’s proportionate share of the bank’s earnings or losses. The Foundation recorded an unrealized gain of $266,712 and an unrealized loss of ($114,467) under the equity method for the years ended December 31, 2016 and 2015, respectively. The following sets forth the reconciliation of beginning and ending balances related to fair value measurements using significant unobservable inputs (Level 3), as of December 31, 2016 and 2015, respectively: 2016 2015

Beginning balance $ 2,872,308 $ 2,986,775 Purchases and additions - - Sales, issuances, distributions, and settlements - - Realized and unrealized gains (losses) relating to

instruments still held at the statements of financial position date

266,712

(114,467) Net transfers in and out of Level 3 - -

Ending balance

$ 3,139,020

$ 2,872,308



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The following table summarizes the significant unobservable inputs the Foundation used to value its investments categorized within Level 2 and Level 3 as of December 31, 2016. This table is not intended to be all-inclusive, but instead captures the significant unobservable inputs relevant to its determination of fair values.

Fair Value at Significant Range December 31, Valuation Unobservable (Weighted

Description 2016 Technique Inputs Average)

Life insurance policies $ 19,748,145

Cash Surrender Value N/A N/A

Equity investment in FMFB $ 3,139,020

Discounted Cash Flow

Percentage ownership of net assets

11.8% of the total stocks of the bank

The following table summarizes the significant unobservable inputs the Foundation used to value its investments categorized within Level 2 and Level 3 as of December 31, 2015. This table is not intended to be all-inclusive, but instead captures the significant unobservable inputs relevant to its determination of fair values. Fair Value at Significant Range December 31, Valuation Unobservable (Weighted

Description 2015 Technique Inputs Average)

Life insurance policies $ 16,818,061

Cash Surrender Value N/A N/A

Equity investment in FMFB $ 2,872,308

Discounted Cash Flow

Percentage ownership of net assets

11.8% of the total stocks of the bank

There were no changes in valuation techniques noted for level 2 and level 3 investments for 2016 and 2015. Level 3 Sensitivity of Fair Value Measurements and Changes in Significant Unobservable Inputs The significant unobservable inputs used in the fair value measurement of the Foundation’s investments are subject to market risks resulting from changes in the market value of its investments.



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5. Contributions Receivable Contributions receivable consists of the following unconditional promises to give at: December 31, 2016 2015 Amounts due in: Less than one year $ 11,835,461 $ 11,965,924 One to five years 7,027,169 7,299,007

Total contributions receivable 18,862,630 19,264,931 Less: Present value component of discounts (215,680) (229,737)

Allowance for doubtful contributions (6,914,573) (6,984,019)

Total contributions receivable, net $ 11,732,377 $ 12,051,175 6. Fixed Assets Fixed assets consist of the following at: December 31, 2016 2015 Property held for charitable purposes: Land $ 60,651,176 $ 60,651,176 Buildings 32,845,580 32,597,580 Donated assets (historic books and photographs) 890,067 440,067 Subtotal 94,386,823 93,688,823 Assets held for administrative purposes: Leasehold improvements - - Furniture and fixtures - - Equipment 22,900 22,900

Subtotal 22,900 22,900 Less accumulated depreciation and amortization (20,111,412) (18,637,000) Total net fixed assets $ 74,298,311 $ 75,074,723 Depreciation and amortization expense totaled $1,474,412 and $1,485,579 for the years ended December 31, 2016 and 2015, respectively.



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7. Fair Value Disclosure of Financial Instruments The estimated fair values of the financial instruments of the Foundation are as follows at December 31: 2016 2015 Carrying

Amount Fair Value Carrying

Amount Fair Value Assets Cash and cash equivalents $ 29,997,892 $ 29,997,892 $ 29,822,287 $ 29,822,287 Contributions receivable, net $ 11,732,376 $ 11,392,863 $ 12,051,175 $ 11,738,201 Investments $ 39,736,024 $ 39,736,024 $ 36,425,197 $ 36,425,197 The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value: Cash and cash equivalents: The carrying value is a reasonable estimate of fair value. Contributions receivable: Contributions receivable are recorded at fair value when notice of the intent is received. The fair value of contributions receivable at the statements of financial position date is estimated by discounting the estimated future cash flows to their present values, using the appropriate risk free rates of return on U.S. government securities with similar maturities. Investments: Valuation for the certificates of deposits are based on quoted prices in active markets for identical assets or liabilities that a reporting entity has the ability to access at the measurement date, and where transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis and are deemed level 1 investments. Valuations based on quoted prices in markets that are not active or for which all significant inputs are directly or indirectly observable are level 2 and level 3 investments. Some of the Foundation’s investments are considered Level 3 investments, for which a readily determinable fair value does not exist. The Impact Investment with the First Microfinance Bank of Afghanistan has been categorized as Level 3 in the fair value hierarchy. The following section describes the valuation methodologies used by the Foundation to measure its financial assets and liabilities at fair value. • Certificates of Deposit—The Foundation’s certificates of deposit earn a fixed rate of interest

for a specified period of time. The Foundation’s estimated fair value for these investments is based on Level 1 inputs.

• Life Insurance Policies—The cash surrender value of the life insurance policies is based on information provided by the respective insurance companies to the Foundation. The Foundation’s estimated fair value for these investments is based on Level 2 inputs.

• Equity Investment—The Foundation’s equity investment consists of an equity ownership percentage in First Microfinance Bank of Afghanistan. The investment is valued using the equity method. The Foundation’s estimated fair value for these investments is based on Level 3 inputs.



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8. Commitments and Contingencies Leases The Foundation’s lease expired on May 31, 2015 and on July 14, 2015 the Foundation renewed its lease for office space under a non-cancelable operating lease that will expire on May 1, 2023. The lease contained escalation provisions for increases in operating expenses and real estate taxes. During 2016 and 2015, rent expense related to this lease was $355,249 and $237,238, respectively. Future minimum rental payments under this operating lease are as follows: Year Ending December 31, 2017 $ 325,394 2018 333,497 2019 341,818 2020 350,357 2021 359,115 Thereafter 572,953

$ 2,283,134

Grant Commitments The Foundation's Board of Directors approves annual and multi-year grants for programs in support of its tax-exempt purposes. These programs are supported by grants, including donated commodities, received from donor agencies. Grant commitments were approximately $23.1 million and $38.5 million at December 31, 2016 and 2015, respectively. Property Taxes The Foundation has a potential contingent liability relating to ad valorem property tax appeals before the Harris County Appraisal Review Board in relation to its property located at 2323 Allen Parkway, Houston, Texas (“Property”). These appeals concern the 2013, 2014, 2015, and 2016 tax years. In the event of an adverse result, and the Foundation decides not to appeal further, it would owe ad valorem property tax associated with the Property for each of the tax years at issue. The potential ad valorem property tax owed in such instance would total approximately $2.4 million (or $600,000 for each tax year), plus interest and penalties. The amount of such liability is not final and the Foundation anticipates a reduction of tax, interest, and/or penalties as the appeals process moves forward. However, any potential reduction of tax is uncertain at this time. To date, the Foundation has not paid ad valorem property taxes associated with the Property for the 2014, 2015, or 2016 tax years to the Harris County Appraisal District. The Foundation has accrued $551,286 for property tax and interest and penalties as of December 31, 2016 and paid $2,493,814 of the $3,376,462 that was accrued for as of December 31, 2015. The outstanding accrual balance as of December 31, 2016 is $1,433,934.



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Regulatory Federal grants are subject to audit by relevant Federal agencies. Management believes that adjustments, if any, from these audits would not have a material effect on the Foundation's financial position or changes in net assets. 9. Related-Party Transactions The Foundation is related to the Aga Khan Foundation established in Geneva, Switzerland, and has received contributions from this organization in the amounts of $1,706,188 and $1,751,486 in 2016 and 2015, respectively, to help offset capital expenses, operating costs and award program grant expenses. As of December 31, 2016 and 2015, the amounts payable to affiliates for programs approved by the Board of Directors, were $985,576 and $2,572,447, respectively. As of December 31, 2016 and 2015, amounts receivable for program advances from affiliates were $3,551,300 and $4,361,793, respectively. In 2012, the Foundation entered into an amended shareholder agreement with the First Microfinance Bank of Afghanistan in which the Foundation made an initial investment of $2,499,952 to acquire an equity ownership of 11.8% representing 10,504 shares. The First Microfinance Bank of Afghanistan is an agency of Aga Khan Development Network. In August 2014 the Foundation gave a note (loan) of approximately $3,750,000 to Aga Khan Hospital and Medical College Foundation to advance its charitable mission by increasing the quality of and access to medical care and education in Pakistan. In 2016, an additional $1,000,000 was issued. The payment terms and interest rates are the same as the original note issued. The outstanding balance as of December 31, 2016 is $4,750,000. The Aga Khan Hospital and Medical College Foundation is an agency of Aga Khan Development Network (refer to Note 3). In September 2015 the Foundation issued a note (loan) of $3,750,000 to University of Central Asia (UCA) for a construction project that will advance its charitable mission by increasing the quality of and access to education in Tajikistan. The closing date of the note receivable was October 5, 2015. The maturity date of the loan is October 1, 2042 and principal payments (semi-annual payments) of $93,750 are due in April and October. Interest payments are to be 1% per annum at a fixed rate. The first payment on the note is due on April 1, 2023. Interest only payments of $18,339 are to be paid beginning March 31, 2016, to October 5, 2022. In 2016, an additional $3,750,000 was issued. The payment terms and interest rates are the same as the original note issued. The outstanding balance as of December 31, 2016 is $7,500,000. In February 2016 the Foundation issued a note (loan) of $1,000,000 to First Microfinance Bank of Tajikistan for purposes that include providing access to finance for individuals and enterprises for poverty alleviation. AKF USA conducts a mission-related investment program whereby it provides loans to organizations carrying on projects that advance AKF USA's mission. The closing date of the note receivable was December 8, 2015. The maturity date of the loan is June 7, 2017 and should be paid in a single lump sum upon final maturity. Interest payments are to be 3.96% per annum at a fixed rate.



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In February 2016 the Foundation issued a note (loan) of $1,000,000 to First Microfinance Bank of Tajikistan for charitable and educational purposes that include providing access to finance for individuals and enterprises for poverty alleviation. AKF USA conducts a mission-related investment program whereby it provides loans to organizations carrying on projects that advance AKF USA's mission. AKF USA has determined that the loan will advance its charitable mission by increasing the access to financing for small to medium enterprises (SMEs) in Tajikistan. The closing date of the note receivable was December 8, 2015. The maturity date of the loan is December 31, 2022 and should be paid in a single lump sum upon final maturity. Interest payments are to be 5.28% per annum at a fixed rate. 10. Retirement Plan The Foundation has a defined-contribution retirement plan. All employees who meet the eligibility requirements can participate in the plan. Under the plan, the Foundation makes contributions based on a percentage of the payroll of those employees who participate in the plan. Costs incurred for the plan were $109,850 and $126,794 for the years ended December 31, 2016 and 2015, respectively. 11. Expenses The following presents the expenses classified by functional categories. Depreciation expense on buildings in the amount of $1,472,112 and $1,483,279 was allocated from general and administrative expenses to program grant expenses in 2016 and 2015, respectively. Depreciation expense on furniture, fixtures and equipment in the amount of $2,300 and $2,300 for the years ended December 31, 2016 and 2015, respectively, was allocated from general and administrative expenses. Staffing costs in the amount of $371,882 and $238,380 for 2016 and 2015, respectively, were allocated to various programs from general and administrative expenses. December 31, 2016 2015

Program grants $ 29,917,098 $ 43,015,568 General and administrative 4,011,624 4,815,521 Fundraising and public donation events 1,231,867 1,152,572 Total expenses $ 35,160,589 $ 48,983,661 12. Temporarily Restricted Net Assets As of December 31, 2016 and 2015, temporarily restricted net assets of $14,207,433 and $15,845,221, respectively, were restricted as to time. 13. Subsequent Events The Foundation evaluated subsequent events through June 5, 2017 which is the date the financial statements were available to be issued. No subsequent events were noted that required adjustments to or disclosure in the financial statements.

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Year ended December 31, 2016

Federal Grantor/Pass-through Federal CFDA Grant Award Passed-through Passed Through to Total FederalGrantor/Program or Cluster Title Number Number Entity Identifying Number Subrecipients Expenditures

U.S. Agency for International Development (USAID)

Multi-Input Area Development Global Development Alliance 98.001 AID-306-A-13-00002 N/A 478,729$ 4,962,797$ Economic and Social Connections: A Multi-Input Area N/A Development Financing Facility for Tajikistan 98.001 AID-176-A-14-0009-00 N/A 229,949 831,727 Afghan Civil Engagement Program 98.001 N/A AID-306-A-14-0000-1 780,323 929,628 Community Based Disaster Risk Reduction Program in Afghanistan 98.001 DFD-G-00-09-00095-00 N/A 1,192,822 1,233,361 The YETU Initiative 98.001 AID-615-A-14-00002 N/A 92,028 530,449 Diamo Diei (Health for All) Project 98.001 AID-OAA-A-16-00012 N/A - 28,312 Increasing Groundnut Productivity of Smallholder Farmers in Ghana, Mali and Nigeria 98.001 N/A MT069018 - 24,733 Large-Scale Diffusion of Technologies for Sorghum and Millet Systems in Mali (DT_SMS) 98.001 N/A MT069018 - 145,907 Disseminating learning agenda on resilient-smart technologies to improve the adaptive capacity of smallholder farmers in the Mopti region, Mali Prime 98.001 N/A MT069018 - 64,283 Scaling-up Climate-Smart Agroforestry Technologies for improved market access, food and nutritional security (SmAT-Scaling) 98.001 N/A MT069018 - 314,114 Deloitte Local Governance in Tajikistan 98.001 N/A AID-OFDA-G-11-00162 - 62,434 Global Alliance for Community Philanthropy 98.001 AID-OAA-A-14-00077 N/A 111,262 111,262 Telemedicine in Cote D' Iviore 98.001 AID-624-A-16-00007 N/A 131,720 239,502

Total U.S. Agency for International Development 3,016,832 9,478,509

U.S. Department of State

Strengthening Afghan Governance and Alternative Livelihood 19.704 SINLEC-14-GR-0042 N/A 398,224 481,454 Total U.S. Department of State 398,224 481,454

U.S. Department of Agriculture - Commodity Grants

Mopti Coordinated Area Development Program (Phase III) 10.608 FCC-688-2012/035-00 N/A 959,943 2,173,027 Mozambican Cashew Project 10.608 N/A FCC-656-2013/038-00 - 27,122 Cashew Development Project Mozambique represented by Norges Vel and Sub-agreement with TechnoServe, Inc. 10.608 FCC-656-2013/038-00 N/A - 1,172,358

Total U.S. Department of Agriculture 959,943 3,372,507

Total Expenditures of Federal Awards 4,374,999$ 13,332,470$ See accompanying notes to Schedule of Expenditures of Federal Awards.




Notes to the Schedule of Expenditures of Federal Awards Year Ended December 31, 2016

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1. Basis of Presentation The accompanying Schedule of Expenditures of Federal Awards (the “Schedule”) includes the federal award activity of Aga Khan Foundation U.S.A. (the “Foundation”) under programs of the federal government for the year ended December 31, 2016. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Foundation, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Foundation. 2. Summary of Significant Accounting Policies Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, either the cost principles in the Office of Management and Budget (OMB) Circular A-122, Cost Principles for Non-Profit Organizations, or the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Foundation has elected not to use the 10percent de minimis indirect cost rate allowed under the Uniform Guidance. Commodities to be distributed that were donated by the U.S. Government are recorded at amounts representing the market value as determined by the Commodity Credit Corporation. Monetized commodities are recorded as assets and liabilities at their fair market value at the time of transfer of title, and the values are adjusted upon monetization. The monetized proceeds are controlled by the Foundation for disbursements through its affiliated entities for program expenditures. The expenditures are recorded consistent with the recognition of other cash grants made, as and when the proceeds are disbursed for program expenditures. In fiscal year 2016, $2,059,790 worth of commodities was monetized.

Independent Auditor’s Reports Required by Government Auditing Standards

and the Uniform Guidance


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Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards To the Board of Directors Aga Khan Foundation U.S.A. Washington D.C. We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of Aga Khan Foundation U.S.A. (the “Foundation”), which comprise the statement of financial position as of December 31, 2016, and the related statements of activities and cash flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated June 5, 2017. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the Foundation's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Foundation's internal control. Accordingly, we do not express an opinion on the effectiveness of the Foundation's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.



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Compliance and Other Matters As part of obtaining reasonable assurance about whether the Foundation's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. June 5, 2017

amaguae

New Stamp


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Independent Auditor’s Report on Compliance For Each Major Federal Program and Report on Internal Control Over Compliance Required by the Uniform Guidance To the Board of Directors Aga Khan Foundation U.S.A. Washington D.C. Report on Compliance for Each Major Federal Program We have audited Aga Khan Foundation U.S.A.’s (the “Foundation”) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on the Foundation’s major federal program for the year ended December 31, 2016. The Foundation’s major federal program is identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Management’s Responsibility Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs. Auditor’s Responsibility Our responsibility is to express an opinion on compliance for the Foundation’s major federal program based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the Foundation’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for its major federal program. However, our audit does not provide a legal determination of the Foundation’s compliance. Opinion on Each Major Federal Program In our opinion, the Foundation complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on its major federal program for the year ended December 31, 2016.



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Report on Internal Control Over Compliance Management of the Foundation is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the Foundation’s internal control over compliance with the types of requirements that could have a direct and material effect on the major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for the major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Foundation’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose. June 5, 2017

amaguae

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Schedule of Findings and Questioned Costs Year Ended December 31, 2016

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Section I - Summary of Auditor’s Results

Financial Statements Type of report the auditor issued on whether the financial statements audited were prepared in accordance with GAAP: Unmodified Internal control over financial reporting:

• Material weakness(es) identified? yes X no

• Significant deficiency(ies) identified?

yes

X

none reported

Noncompliance material to financial statements noted?

yes

X

no

Federal Awards

Internal control over major federal programs:

• Material weakness(es) identified? yes X no

• Significant deficiency(ies) identified?

yes

X

none reported

Type of auditor’s report issued on compliance for

major federal programs: Unmodified

Any audit findings disclosed that are required to to be reported in accordance with 2 CFR 200.516(a)?

yes

X

no

Identification of major federal programs:

CFDA/Contract Number Name of Federal Program or Cluster

98.001 U.S. AID Foreign Assistance For Programs

Overseas

Dollar threshold used to distinguish

between Type A and Type B programs: $750,000 Auditee qualified as low-risk auditee?

X

yes

no


Schedule of Findings and Questioned Costs Year Ended December 31, 2016

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Section II - Financial Statement Findings There were no findings related to the financial statements which are required to be reported in accordance with generally accepted government auditing standards (GAGAS). Section III - Federal Award Findings and Questioned Costs There were no findings and questioned costs for Federal awards (as defined in section 2 CFR 200.516(a) that are required to be reported.

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