Air Force Audit Agency:

Opportunities to Improve Internal Auditing

AFMD-90-16: Published: Feb 20, 1990. Publicly Released: Feb 28, 1990.

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Pursuant to a congressional request, GAO reviewed the Air Force Audit Agency's (AFAA): (1) allocation of audit resources; (2) use of military and civilian auditors; (3) audit quality; and (4) independence.

GAO found that: (1) AFAA provided audit coverage over all significant Air Force procurement areas and major weapons systems during fiscal years (FYs) 1986 through 1988; (2) AFAA recommendations led to $339 million in potential monetary benefits during FY 1988; (3) audits of major operations resulted in such significant management improvements as improved internal controls, contracting procedures, and financial management systems; and (4) AFAA operated independently in accordance with generally accepted auditing standards. GAO also found that: (1) the Air Force could potentially save $2 million annually if AFAA replaced military auditor positions with civilian staff; (2) AFAA needs to consider mission criticality, financial integrity, and budget size when allocating audit resources; and (3) AFAA could improve its referencing policy by requiring that auditors reference written summaries to original working papers.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: FY 1991 and 1992 annual audit plans for AFAA focused audit resources on higher priority audits based on their individual merits.

    Recommendation: In order to improve AFAA audit planning and scheduling, the Secretary of the Air Force should direct the Auditor General to plan audits throughout AFAA based on the individual merits of the audits rather than a predetermined allocation of resources between centrally directed and installation-level audits.

    Agency Affected: Department of Defense: Department of the Air Force

  2. Status: Closed - Implemented

    Comments: The first military auditors left AFAA in July 1990. This began a 4-year process agreed upon by the Secretary and the Chairman, House Armed Services Committee. In FY 1991, 67 military positions were converted. During FY 1992, AFAA converted 62 more positions. By September 30 1994, the Air Force Audit Agency had converted all its military auditor positions to civilian status.

    Recommendation: To reduce the costs of AFAA operations, the Secretary of the Air Force should replace all military auditor positions with civilian positions.

    Agency Affected: Department of Defense: Department of the Air Force

  3. Status: Closed - Implemented

    Comments: Revised policy AFR 175-102 was published on August 31, 1990 which requires that all draft reports be referenced to auditors' summaries from each audit which, in turn, have been cross-referenced to the original working papers.

    Recommendation: To improve the quality of AFAA audit reports, the Secretary of the Air Force should direct the Auditor General to require that all draft audit reports be referenced to original audit working papers or, at a minimum, to auditors' summaries which have been referenced to original working papers at each site, before those summaries are used to prepare final audit reports.

    Agency Affected: Department of Defense: Department of the Air Force

  4. Status: Closed - Implemented

    Comments: A revised policy AFR 175-102 was published on August 31, 1990 to require that assistant auditors general are provided written assurance that each draft report has been referenced in accordance with AFAA policy.

    Recommendation: To improve the quality of AFAA audit reports, the Secretary of the Air Force should direct the Auditor General to require that associate directors provide assistant auditors general written confirmation that each draft audit report has been referenced in accordance with AFAA policy.

    Agency Affected: Department of Defense: Department of the Air Force

 

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