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Single Audit: Actions Needed to Ensure That Findings Are Corrected

GAO-02-705 Published: Jun 26, 2002. Publicly Released: Jun 26, 2002.
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Highlights

In examining the efforts of the Departments of Education, Housing and Urban Development, and Transportation to ensure that recipients corrected single audit report findings, GAO found that each agency had procedures for obtaining and distributing the audit reports to appropriate officials for action. However, they often did not issue the required written management decisions or have documentary evidence of their evaluations of and conclusions on recipients' actions to correct the audit findings. In addition, program managers did not summarize and communicate information on single audit results and recipient actions to correct audit findings to agency management.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Transportation To ensure that recipients correct the weaknesses identified in single audit reports, the Secretary for the Departments of Education, HUD, and Transportation should ensure that each has established and follows guidance that addresses the Office of Management and Budget Circular A-133 requirements for all agency programs whose awards are subject to the Single Audit Act. This guidance should clearly define the roles and responsibilities of each agency unit in ensuring appropriate and timely actions on single audit findings including documenting results of evaluations of and conclusions on recipients' actions to correct audit findings.
Closed – Implemented
The Department of Transportation (DOT) has taken actions by establishing the Guidance For Closing Single Audit Recommendations Memo (dated April 12, 2012), which DOT established to address the Office of Management and Budget (OMB) Circular A-133 requirements and the GAO recommendation that relates to documenting results of evaluations of and conclusions on recipients' actions to correct audit findings. We verified that this memo contains language which meets the intent of the GAO recommendation by requiring "documentation" of (1) various phases of the management decisions, (2) management follow up, (3) actions taken, and (4) explicit statement by management that actions taken fulfill the recommendation and the management decisions.
Department of Education To ensure that recipients correct the weaknesses identified in single audit reports, the Secretary for the Departments of Education, HUD, and Transportation should ensure that each has established and follows guidance that addresses the Office of Management and Budget Circular A-133 requirements for all agency programs whose awards are subject to the Single Audit Act. This guidance should clearly define the roles and responsibilities of each agency unit in ensuring appropriate and timely actions on single audit findings including preparing and issuing management decisions that clearly communicate the reports of agency analyses of single audit findings and the adequacy of corrective actions implemented or planned by the recipient.
Closed – Implemented
Education issued guidance to implement GAO's recommendations.
Department of Education The Secretary of each of the three agencies should implement policies and procedures for reporting information to agency management on (1) the types and causes of findings identified in single audit reports and (2) the status of corrective actions.
Closed – Implemented
Education issued guidance to implement GAO's recommendations.
Department of Housing and Urban Development To ensure that recipients correct the weaknesses identified in single audit reports, the Secretary for the Departments of Education, HUD, and Transportation should ensure that each has established and follows guidance that addresses the Office of Management and Budget Circular A-133 requirements for all agency programs whose awards are subject to the Single Audit Act. This guidance should clearly define the roles and responsibilities of each agency unit in ensuring appropriate and timely actions on single audit findings including preparing and issuing management decisions that clearly communicate the reports of agency analyses of single audit findings and the adequacy of corrective actions implemented or planned by the recipient.
Closed – Implemented
The Department issued relevant guidance, Handbook 2000.06 Rev-4 that is dated October 2011 that implements this recommendation. The Department also established a Web page that provides and reinforces the requirements of the Single Audit Act and OMB Circular A-133.
Department of Transportation To ensure that recipients correct the weaknesses identified in single audit reports, the Secretary for the Departments of Education, HUD, and Transportation should ensure that each has established and follows guidance that addresses the Office of Management and Budget Circular A-133 requirements for all agency programs whose awards are subject to the Single Audit Act. This guidance should clearly define the roles and responsibilities of each agency unit in ensuring appropriate and timely actions on single audit findings including preparing and issuing management decisions that clearly communicate the reports of agency analyses of single audit findings and the adequacy of corrective actions implemented or planned by the recipient.
Closed – Implemented
The Department of Transportation (DOT) has addressed this recommendation by requiring (1) single audits with recommendations to be tracked in the Transportation Inspector General Reporting System (TIGR) and (2) departmental program officials in the operating administrations (OA) evaluate the actions taken and report back on the corrective actions. The National Single Audit Coordinator (NSAC) for DOT reviews the reported corrective actions in light of the recommendations that were made. If the NSAC determines that a corrective action has addressed the recommendation, the recommendation is taken out of the TIGR tracking system.
Department of Housing and Urban Development The Secretary of each of the three agencies should implement policies and procedures for reporting information to agency management on (1) the types and causes of findings identified in single audit reports and (2) the status of corrective actions.
Closed – Implemented
HUD has developed the Single Audit Act (SAA) module in the Audit Resolution and Corrective Action Tracking System (ARCATS) to provide a centralized system for managing the resolution of Single Audit Act audit findings and recommendations to meet requirements in accordance with the SAA and the OMB Circular A-133. The user guidance is available on the HUD CFO intranet website.
Department of Transportation The Secretary of each of the three agencies should implement policies and procedures for reporting information to agency management on (1) the types and causes of findings identified in single audit reports and (2) the status of corrective actions.
Closed – Implemented
The Department of Transportation (DOT) addressed this recommendation in two ways. The identification of the types and causes of findings is done by an official in the Office of the Secretary of Transportation's Office of the Senior Procurement Executive. This official analyzes trends in the single audit compliance findings. For example, the official will see how many single audit findings relate to noncompliance with unallocated costs or the Davis-Bacon Act. This official is responsible for single audit policy, oversight, and analysis for the Office of the Secretary of Transportation.
Department of Education To ensure that recipients correct the weaknesses identified in single audit reports, the Secretary for the Departments of Education, HUD, and Transportation should ensure that each has established and follows guidance that addresses the Office of Management and Budget Circular A-133 requirements for all agency programs whose awards are subject to the Single Audit Act. This guidance should clearly define the roles and responsibilities of each agency unit in ensuring appropriate and timely actions on single audit findings including performing follow up procedures to ensure that the recipient implemented adequate corrective action.
Closed – Implemented
Education issued guidance to implement GAO's recommendations.
Department of Housing and Urban Development To ensure that recipients correct the weaknesses identified in single audit reports, the Secretary for the Departments of Education, HUD, and Transportation should ensure that each has established and follows guidance that addresses the Office of Management and Budget Circular A-133 requirements for all agency programs whose awards are subject to the Single Audit Act. This guidance should clearly define the roles and responsibilities of each agency unit in ensuring appropriate and timely actions on single audit findings including performing follow up procedures to ensure that the recipient implemented adequate corrective action.
Closed – Implemented
The Department issued guidance defining roles, responsibilites, and procedures related to follow-up on findings identified in Single Audit reports.
Department of Transportation To ensure that recipients correct the weaknesses identified in single audit reports, the Secretary for the Departments of Education, HUD, and Transportation should ensure that each has established and follows guidance that addresses the Office of Management and Budget Circular A-133 requirements for all agency programs whose awards are subject to the Single Audit Act. This guidance should clearly define the roles and responsibilities of each agency unit in ensuring appropriate and timely actions on single audit findings including performing follow up procedures to ensure that the recipient implemented adequate corrective action.
Closed – Implemented
The Department of Transportation (DOT) has adopted this recommendation by requiring the National Single Audit Coordinator (NSAC) for DOT to review the reported corrective actions in light of the recommendations made. If the NSAC determines that a corrective action has addressed the recommendation, the recommendation is taken out of the DOT's Transportation Inspector General Reporting System (TIGR). implementing the step that has the NSAC reviewing the corrective action before its associated recommendation is closed in TIGR. DOT has addressed this recommendation by requiring (1) single audits with recommendations to be tracked in the Transportation Inspector General Reporting System (TIGR) and (2) departmental program officials in the operating administrations (OAs) evaluate the actions taken and report back on the corrective actions.
Department of Education To ensure that recipients correct the weaknesses identified in single audit reports, the Secretary for the Departments of Education, HUD, and Transportation should ensure that each has established and follows guidance that addresses the Office of Management and Budget Circular A-133 requirements for all agency programs whose awards are subject to the Single Audit Act. This guidance should clearly define the roles and responsibilities of each agency unit in ensuring appropriate and timely actions on single audit findings including documenting results of evaluations of and conclusions on recipients' actions to correct audit findings.
Closed – Implemented
Education issued guidance to implement GAO's recommendations.
Department of Housing and Urban Development To ensure that recipients correct the weaknesses identified in single audit reports, the Secretary for the Departments of Education, HUD, and Transportation should ensure that each has established and follows guidance that addresses the Office of Management and Budget Circular A-133 requirements for all agency programs whose awards are subject to the Single Audit Act. This guidance should clearly define the roles and responsibilities of each agency unit in ensuring appropriate and timely actions on single audit findings including documenting results of evaluations of and conclusions on recipients' actions to correct audit findings.
Closed – Implemented
The Department issued guidance defining roles, responsibilites, and procedures related to follow-up on findings identified in Single Audit reports.

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Auditing standardsFinancial management systemsInternal controlsFederal fundsFederal grantsFunds managementAuditsAudit reportsSingle auditsDatabase management systems