Need for More Effective Cross-Service Auditing Arrangements

FGMSD-77-55: Published: Sep 26, 1977. Publicly Released: Sep 26, 1977.

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Federal Management Circular 73-2 requires that when two or more Federal agencies assist the same organization, they should consider establishing cross-service arrangements under which one Federal agency audits for the other. Such arrangements can conserve manpower, promote efficiency, and minimize the impact of audits on the operations of the auditee. However, the Federal agencies are not using cross-service arrangements to the maximum extent possible. This results in duplicate audit effort, a waste of time and money, and the interruption of program personnel work.

Barriers which inhibit cross-service auditing include: lack of Federal-wide funding information on grantees; limited Federal audit staffs; lack of reimbursement procedures; the large number of Federal programs; and the lack of a standard audit guide which covers multiple programs and funding sources.

Recommendation for Executive Action

  1. Status: Closed

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

    Recommendation: The Office of Management and Budget (OMB) should assess the feasibility and practicability of establishing a system to identify grantees which receive funds from several Federal agencies or under several federally assisted programs. Once these grantees are identified, OMB can work with the Federal grantor agencies to alleviate the other barriers to cross-service auditing. OMB should revise its administrative requirements for Federal grants to require that periodic audits encompass all Federal fundings received by a particular grantee and that copies of audit reports and related correspondence be furnished by the audit organization to each funding source.

    Agency Affected:

 

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