Quality Testing of Audits of Grantees' Records--How It Is Done by Selected Federal Agencies and What Improvements Are Needed

Federal grantmaking agencies are responsible for seeing that grant funds are spent for authorized purposes. Audits of grantees' records are one of the principal methods of carrying out this responsibility. Federal agencies that rely on audits by State and local auditors and independent accountants are responsible for seeing that the audits are performed in accordance with applicable standards and audit guidelines provided by the agency. It is important that the agencies examine the audit work because the audits are one of the principal bases the agencies have to see that grantees have properly handled their Federal funds. The quality assurance programs were reviewed for the following three agencies: the Department of Health, Education, and Welfare (HEW); the Department of Commerce; and the Community Services Administration.