Opportunities for Improving Internal Auditing in the Department of Agriculture

CED-78-28: Published: Feb 9, 1978. Publicly Released: Feb 9, 1978.

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The Department of Agriculture's (USDA) audit requirements have increased sharply in recent years without a corresponding increase in the internal audit staff. To provide increased audit coverage and to make more effective use of available resources, the Office of Audit (OA) has: emphasized the use of advanced audit techniques such as statistical sampling and computer packages; increased the use of coordinated and program-type audits; attempted to increase the quantity and quality of State audits of USDA programs; and undertaken various management improvement projects intended to increase the efficiency and effectiveness of OA audit operations.

The number of staff-years initially programmed for internal audit in 1977 was about the same as in 1962 when the audit function was first centralized. OA has been able to provide improved audit coverage, but the size and complexity of the USDA programs have increased so greatly that a number of areas do not receive enough audit coverage. The main shortfall in coverage is in USDA programs administered by State and local governments and educational institutions. Overall, OA audit reports are accurate, fair, and objective; they include all significant deficiencies detected during the audit; and they give adequate consideration to auditor comments. However, management of audits and the timeliness and clarity of reports on major audits could be improved. OA has recognized the need to improve workpaper techniques, cross-referencing of reports to supporting workpapers, and the timeliness and clarity of reports.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Agriculture should require the Director of OA to: further increase the use of program audits while continuing to perform a reasonable level of cycle coordinated audits and maintain adequate staff to perform and implement management improvement projects promptly and work with other agencies to increase the number and quality of audits of Department programs by external audit groups. In addition, the Director of the OA should: complete the audit universe by adding requirements for contract audits and complete arrangements to coordinate requirements and plans for audits of the State welfare department indirect expense account reimbursements. He should also: take appropriate actions to insure that regional officers' report followup and closeout procedures are consistent and adequate, establish a system for periodic reports to OA on the status of open recommendations, and consider establishing an office-wide system to identify the more important recommendations for priority consideration.

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