Recommendation: The Secretary of Agriculture should direct the Under Secretary for Food, Nutrition, and Consumer Services to design policies and procedures to reasonably assure that all award recipients required to submit single audit reports do so in accordance with OMB guidance.

Agency: Department of Agriculture
Status: Open
Priority recommendation

Comments: U.S. Department of Agriculture's (USDA) Food and Nutrition Service (FNS) neither agreed nor disagreed with our recommendation. As of February 3, 2020, FNS stated that it has made revisions to the agency audit manual to meet the intent of the recommendation. In a section of the manual devoted to Cognizant and Awarding Agency Responsibilities (2 CFR 200.513), FNS is adding a bullet that states that the Federal awarding agency must "ensure that audits are completed and reports are received in a timely manner and in accordance with the requirements of 2 CFR 200.512(a)." FNS plans on releasing the full agency audit manual to FNS users in final by the end of Fiscal Year 2020. We believe that FNS's corrective actions will help FNS to meet the intent of our recommendation with regards to designing policies. However, to fully meet the intent of the recommendation, in addition to revising policies, FNS also needs to implement procedures to ensure staff are following the revised policies. We will assess these efforts once completed.

Recommendation: The Secretary of Agriculture should direct the Under Secretary for Food, Nutrition, and Consumer Services to revise policies and procedures to reasonably assure that management decisions contain the required elements and are issued timely in accordance with OMB guidance.

Agency: Department of Agriculture
Status: Open
Priority recommendation

Comments: U.S. Department of Agriculture's (USDA) Food and Nutrition Service (FNS) neither agreed nor disagreed with our recommendation. As of February 3, 2020, FNS stated that it has made revisions to the agency audit manual to meet the intent of the recommendation. In a section of the manual devoted to Cognizant and Awarding Agency Responsibilities (2 CFR 200.513), FNS stated that it is expanding upon an existing bullet that states that the Federal awarding agency must "issue a management decision on audit findings within six months after receipt of the audit report....". FNS indicated this section of the manual will be expanded to include the four elements that a management decision must clearly state in writing as prescribed in 2 CFR 200.521(a). FNS plans on releasing the full agency audit manual to FNS users in final by the end of Fiscal Year 2020. We believe that FNS's corrective actions will help FNS to meet the intent of our recommendation with regards to designing policies. However, to fully meet the intent of the recommendation, in addition to revising policies, FNS also needs to implement procedures to ensure staff are following the revised policies. We will assess these efforts once completed.

Recommendation: The Secretary of Agriculture should direct the Under Secretary for Food, Nutrition, and Consumer Services to design and implement policies and procedures for identifying and managing high-risk and recurring single audit findings using a risk-based approach.

Agency: Department of Agriculture
Status: Open

Comments: U.S. Department of Agriculture's (USDA) Food and Nutrition Service (FNS) neither agreed nor disagreed with our recommendation. As of February 3, 2020, FNS stated that it has made revisions to the agency audit manual to meet the intent of the recommendation. In a section of the manual devoted to Cognizant and Awarding Agency Responsibilities (2 CFR 200.513), FNS is adding a bullet stating that the cognizant agency is responsible for "developing a risk-based approach to manage high-risk and recurring single audit findings to identify problems so that adequate resources can be dedicated to address the problem." FNS plans on releasing the full agency audit manual to FNS users in final by the end of Fiscal Year 2020. We believe that FNS's corrective actions will partially help FNS to meet the intent of our recommendation with regards to designing policies. When designing policies, we believe FNS also needs to clearly provide guidance on the risk management strategy over high-risk and recurring single audit findings, including the steps to follow for identifying problem areas and setting priorities for addressing them. To fully meet the intent of the recommendation, in addition to revising policies, FNS also needs to implement procedures to ensure staff are following the revised policies. We will assess these efforts once completed.

Recommendation: The Secretary of Agriculture should direct the Under Secretary for Rural Development to design policies and procedures to reasonably assure that all award recipients required to submit single audit reports do so in accordance with OMB guidance.

Agency: Department of Agriculture
Status: Open
Priority recommendation

Comments: U.S. Department of Agriculture's (USDA) Rural Development (RD) concurred with our recommendation. To address the GAO recommendation, in February 2020, RD stated that it has developed a disbursement report that will capture disbursements equal to or greater than $750,000 and is currently documenting that process and creating instructions for the program areas. RD indicated that it plans to complete these actions by June 30, 2020. We will assess these efforts once completed.

Recommendation: The Secretary of Agriculture should direct the Under Secretary for Rural Development to revise policies and procedures to reasonably assure that management decisions contain the required elements and are issued timely in accordance with OMB guidance.

Agency: Department of Agriculture
Status: Open
Priority recommendation

Comments: U.S. Department of Agriculture's (USDA) Rural Development (RD) concurred with our recommendation. To address the GAO recommendation, in February 2020, RD stated it has developed a Management Decision Manual template that the program areas will use and is currently creating instructions for the program areas. RD indicated that it plans to complete these actions by June 30, 2020. We will assess these efforts once completed.

Recommendation: The Secretary of Agriculture should direct the Under Secretary for Rural Development to design and implement policies and procedures for identifying and managing high-risk and recurring single audit findings using a risk-based approach.

Agency: Department of Agriculture
Status: Open

Comments: U.S. Department of Agriculture's (USDA) Rural Development (RD) concurred with our recommendation. To address the GAO recommendation, in February 2020, RD stated that it has developed a process to rate each single audit finding. According to RD, the ratings will be tracked in an Access Database, where it will generate reports indicating reoccurring and high-risk findings by borrower and by program. RD indicated that it plans to complete these actions by June 30, 2020. We will assess these efforts once completed.

Recommendation: The Secretary of Housing and Urban Development should direct the Principal Deputy Assistant Secretary for the Office of Community Planning and Development to design and implement policies and procedures for identifying and managing high-risk and recurring single audit findings using a risk-based approach.

Agency: Department of Housing and Urban Development
Status: Open

Comments: The Department of Housing and Urban Development's (HUD) Office of Community Planning and Development (CPD) stated that it did not agree with GAO's emphasis on high risk/recurring single audit findings. Nevertheless, in March 2019, HUD's CPD stated that it is working towards a redesigned model for analyzing risk as a basis for monitoring. In August 2020, HUD informed us that CPD is finalizing the beta test for the risk model. Although the risk model will be further defined and enhanced in fiscal year 2021 for fiscal year 2022, CPD plans to roll out the beta test of the risk model to develop the fiscal year 2021 risk rankings. Single audit will be one factor that is included in calculating the risk scores. CPD will validate and assess the results of the beta test and make adjustments as needed. We will continue to monitor agency's actions to address this recommendation.

Recommendation: The Secretary of Housing and Urban Development should direct the Principal Deputy Assistant Secretary for the Office of Public and Indian Housing to design and implement policies and procedures for identifying and managing high-risk and recurring single audit findings using a risk-based approach.

Agency: Department of Housing and Urban Development
Status: Open

Comments: The Department of Housing and Urban Development's (HUD) Office of Public and Indian Housing (PIH) agreed with this recommendation. On May 7, 2018, PIH stated that it had implemented a Risk Based Approach Tool designed to identify and manage high-risk and recurring single audit findings. The Risk Based Approach tool was intended to track and focus on audit findings reported as material weaknesses or significant deficiencies and was designed to determine the resources needed and available to assist in mitigating the audit findings. However, in March 2019, PIH informed us that in late 2018, PIH began to work toward repositioning goals, priorities and identification of key risk indicators. PIH stated that it is now focused on aligning risk indicators to the HUD and PIH priorities. PIH priorities for fiscal year 2019 include addressing Public Housing Authorities insolvency which may be identified through an Independent Public Accountant audit or through other means. PIH stated that it no longer uses the assessment tool that included over 100 risk indicators. PIH indicated that it has a revised risk mitigation framework proposal that will be presented to the Enterprise Risk Counsel in the near future. In fiscal year 2020, we have sent additional follow-up questions to the agency and are currently waiting for a response. We will continue to monitor agency's actions to address this recommendation.

Recommendation: To gain efficiencies and improve taxpayer service, the Commissioner of Internal Revenue should direct the appropriate officials, based on the quality of service provided by comparable organizations and on what matters most to the customer, to determine a customer service telephone standard, and the resources required to achieve this standard based on input from Congress and other stakeholders.

Agency: Department of the Treasury: Internal Revenue Service
Status: Open

Comments: As of August 2019, IRS finalized a customer service strategy identifying an optimal telephone level of service. According to the strategy, IRS has a process to compare major metrics with other agencies and private industry, and conducted two studies to look at industry practices. In response to our recommendation, IRS compared its telephone data with similar telephone environments, and determined that a telephone level of service between 70 and 80 percent provides an optimal balance for servicing customer service telephones and paper correspondence requests. However, IRS faced two significant challenges in managing the 2019 filing season: (1) implementing major tax law changes from the Tax Cuts and Jobs Act (TCJA), and (2) a lapse in appropriations that left IRS unfunded during five weeks leading up to the opening of the 2019 filing season. As a result of issues stemming from these challenges, IRS revised its 2019 filing season telephone service goals from 80 percent to 65 percent during the filing season, and from 75 percent to 63 percent for all of fiscal year 2019. By not maintaining the identified optimal level of service standard, IRS is missing opportunities to illustrate gaps between actual and desired levels of service that may have resulted from issues linked to TCJA implementation and the lapse in appropriations. IRS did outline steps it is taking to achieve the optimal range of 70-80 percent telephone level of service outlined in its customer service strategy. Specifically, IRS said that it is working to upgrade equipment for all IRS business units that provide telephone services to taxpayers. It also cited examples of these upgrades, such as implementing a customer callback system that allows callers to keep their place in queue without remaining on the phone. While IRS said it has allocated funding to begin the development and installation of the customer callback feature, it did not provide an estimate of the resources required to upgrade the equipment and otherwise achieve the optimum range of telephone level of service. By not providing sufficient information to Congress on resources needed to achieve an optimal level of service, IRS is missing opportunities to justify the resources it believes are needed to improve taxpayer service.