Department of Administration
Audit Follow-Up Process
Results in Brief
The Legislature has long been concerned that state agencies do not take
prompt action to address findings disclosed in legislative audits. In response
to those concerns, legislation was passed in 1987 establishing a formal
process to follow up on audit recommendations. Part of this process requires
the Department of Administration to prepare a report identifying the actions
agencies took on recommendations. The Audit Subcommittee receives the Department's
reports, reviews actions taken, and examines any justifications for failure
to carry out recommendations. Since the audit follow-up process began,
agency action on recommendations has increased. Although this demonstrates
that the audit follow-up process is working, we found that improvements
can be made. The accuracy of the information provided by the Department
of Administration plays a key role in the audit follow-up process. However,
the Department of Administration has not established effective controls
to ensure it reports accurately on the status of audit recommendations.
As a result, some recommendations reported as fully implemented were not
fully implemented. To ensure the Audit Subcommittee has accurate information
to exercise its oversight responsibilities, the Department of Administration
needs to strengthen its management controls over the audit follow-up process.
1. Since the audit follow-up process was established in 1987, agency actions
on audit recommendations have improved. Between 1988 and 1992, recommendations
not acted on by agencies declined from 15% to 5%. In addition, the percent
of recommendations fully implemented and partially implemented increased.
2. We tested 25 recommendations reported as fully implemented, and determined
that 7 were inaccurately reported by the Department of Administration.
Partial action was taken on three recommendations and no action was taken
on four recommendations. Inaccurate information diminishes the effectiveness
of the audit follow-up process. (page 13)
3. Some problems identified in audit reports remained uncorrected. For
instance, federal funds remained in jeopardy for almost two years after
the Division of Emergency Management claimed to have fully implemented
the audit recommendations. In addition, the State Motor Pool has not fully
implemented a recommendation that was estimated to save $487,500. (page
4. The Department lacks management controls over its audit follow-up activities.
It does not have written policies and procedures or a supervisory review
process to ensure accurate reporting on the status of audit recommendations.
In addition, it did not always enforce provisions of the State Administrative
Manual which require state agencies to provide documentation supporting
the actions taken on audit recommendations. As a result, Budget Division
files contained no supporting documentation for 12 of 25 recommendations
tested. This documentation is necessary for accurate reporting and efficient
follow-up. (page 14)