Improved Grant Auditing and Resolution of Findings Could Save the Law Enforcement Assistance Administration Millions

A review was made of the audit practices of the Law Enforcement Assistance Administration (LEAA), including audits conducted by, and of, its grantees and subgrantees and the use and disposition of such audits. Top management at LEAA has known for years that its recipients are not being regularly audited and that many audits are not made to find out if recipients comply with Federal grant terms. Nonetheless, little decisive action has been taken to correct the problem, and as a result, the Government loses money that would otherwise be collected or saved.

The lack of adequate auditing guidelines and procedures at LEAA is costly in three ways: (1) grantees and subgrantees are keeping funds which they are not entitled to under applicable laws and regulations; (2) LEAA and some State planning agencies miss the opportunity to improve grant programs by delaying or foregoing needed corrective actions recommended by auditors; and (3) LEAA does not get full return on its expenses of the audit. Auditors repeatedly report the same deficiencies, indicating that recipients have not taken corrective action. Not only do delays occur in forwarding audit reports to program managers responsible for resolving the findings, but program managers procrastinate in acting on the findings. Furthermore, the LEAA resolution of some findings appears questionable. Instead of making collections, many findings were cleared based on promises of corrective actions or on certifications that questionable expenditures were proper. In one case, auditors identified over $5 million in improper or undocumented costs, and in relying on the grant recipient's promise to correct the deficiencies, LEAA program managers allowed the recipient to keep all but $12,867 of the questioned expenditures. A subsequent LEAA audit disclosed that the grant recipient had not corrected may of the previously identified weaknesses. Inadequate audit resolution procedures and practices were found at some State planning agencies as well, with LEAA auditors determining that 31 of the 47 agencies reviewed need to followup on audit findings.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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