Audit Division

Audit Summary

Department of Administration

Audit Follow-Up Process

Report LA96-32

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.

Principal Findings

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. (page 11)

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 13)

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)