Federal Agencies' Actions To Improve Audit Resolution Systems

A GAO review showed that improper and delayed audit resolution is widespread and worsening and is generally caused by agencies' failure to comply with Office of Management and Budget (OPM) Circular A-73. Agencies are not acting on audit recommendations to recover funds, avoid cost, and improve operations. Eight needed improvements include: (1) audit resolution systems must be established and maintained for an accurate and complete record of audit findings until final disposition; (2) accounting and collection controls must be instituted to ensure that all amounts determined to be due the Government as a result of audits are established as receivables and recovered in accordance with the Federal Claims Collection Standards; (3) decisions to act on audit findings must be made within 6 months and final disposition should proceed rapidly; (4) findings must be resolved according to laws and regulations, including written justification and the legal basis for decisions not to act on both monetary and procedural findings; (5) procedures must be established and followed for elevating to agency heads or their designees disagreements between program managers and auditors and reports on which responsible officials have not provided a written determination within 6 months; (6) reports must be made to the agency head at least semiannually on the age and amounts of unresolved findings and resolutions of findings closed during the period; (7) systems must cover findings in all audits of agency activities; and (8) procedures must be established for coordinating corrective actions with other affected organizations. OMB must provide stronger leadership to agencies for improving their systems. Federal managers must be held more accountable for this management responsibility. OMB should clarify Circular A-73 to provide periodic reports to agency heads which include complete details on the resolution of findings and on the age and amounts of unresolved findings.