oversight

Audit Followup Process for Office of Inspector General Internal Audits in the Office of Postsecondary Education.

Published by the Department of Education, Office of Inspector General on 2005-09-15.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                      UNITED STATES DEPARTMENT OF EDUCATION

                                      OFFICE OF INSPECTOR GENERAL




                                            September 15, 2005

                                                                                        CONTROL NUMBER
                                                                                          ED-OIG/A19F0002

Sally Stroup
Assistant Secretary
Office of Postsecondary Education
U.S. Department of Education
1990 K Street, NW
Washington, DC 20006

Dear Ms. Stroup:

This Final Audit Report (Control Number ED-OIG/A19F0002) presents the results of our audit
of the Audit Followup Process for Office of Inspector General Internal Audits in the Office of
Postsecondary Education. The objective of our audit was to verify whether adequate
documentation was maintained to support that corrective action items have been implemented as
stated in the Department of Education’s (Department) corrective action plans (CAP). This audit
is a part of a review of the Department’s internal audit followup process being performed in four
principal offices (POs). A summary report will be provided to the Department’s Chief Financial
Officer upon completion of the audits in individual offices.


                                           BACKGROUND
Office of Management and Budget (OMB) Circular A-50, entitled “Audit Followup,” provides
the requirements for establishing systems to assure prompt and proper resolution and
implementation of audit recommendations. The Department established a Post Audit User Guide
(Guide) to provide policy and procedures for the audit followup process. Section I, “Overview,”
of the Guide states,

       The effectiveness of the post audit process depends upon taking appropriate,
       timely action to resolve audit findings and their underlying causes, as well as
       providing an effective system for audit close-out, record maintenance, and follow-
       up on corrective actions.



                           400 MARYLAND AVE., S.W. WASHINGTON, D.C. 20202-1510

           Our mission is to ensure equal access to education and to promote educational excellence
Ms. Stroup	                                                                      Page 2 of 10



While overall responsibility for the audit followup process is assigned to the Office of the Chief
Financial Officer (OCFO), Post Audit Group (PAG), each Assistant Secretary is responsible for
ensuring that the overall audit followup process operates efficiently and consistently. The Guide
defines further responsibilities of the Action Official (AO), generally the Assistant Secretary, to
include:

    • 	 Determining the action to be taken and the financial adjustments to be made in resolving
        findings in audit reports concerning respective program areas of responsibility,
    • 	 Maintaining formal, documented systems of cooperative audit resolution and follow-up
        to ensure that audit recommendations are implemented, completion dates captured, and
        appropriate documentation maintained to support completed corrective actions.

The Department tracks audit resolution and the completion of corrective action items through the
Audit Accountability and Resolution Tracking System (AARTS). For each audit, AARTS stores
detailed information on audit resolution, proposed corrective action items, Office of Inspector
General (OIG) concurrence with these action items, responsible individuals, and completion and
closure data.

When a PO has completed all corrective action items for an internal OIG audit, the PO certifies
this fact to PAG and requests closure of the audit in AARTS. PAG staff perform a review of the
documentation in the audit resolution file maintained by the PO to determine whether
implementation of corrective action items is supported. Once PAG is satisfied that
implementation of the corrective action items reviewed is supported, the audit is closed in
AARTS. PAG staff stated that until sometime in Fiscal Year (FY) 2004, only a sample of
corrective action items was evaluated and that PO staff did not necessarily know that all
corrective action items were not reviewed. PAG staff stated that currently all corrective action
items are evaluated in these reviews.


                                     AUDIT RESULTS
We found improvements are needed in the Office of Postsecondary Education’s (OPE) internal
control over its audit followup process. While OPE maintained files with documentation
regarding audit followup activity, we found OPE’s audit followup process did not support the
completion of all corrective action items. In addition, this process did not always support
completion of corrective action items by the date reported as completed in AARTS. Finally,
OPE used the PO Comments field in AARTS to modify an agreed upon corrective action item
instead of modifying the Action Item field.

OPE audit resolution staff were aware of the Department’s documentation requirements for audit
resolution files, but expressed concern that the Department’s guidance was not specific and was
subject to interpretation. OPE audit resolution staff generally believed they followed
requirements and documented corrective actions taken. However, we found documentation did



                                         ED-OIG/A19F0002

Ms. Stroup                                                                                     Page 3 of 10



not support completion of 7 of the 221 corrective action items reviewed. As a result, OPE does
not have assurance that corrective action items were implemented. In addition, reporting
corrective action items as completed before the actions have actually been taken compromises
the integrity of the data included in AARTS, understates internal management reports and reports
to Congress on corrective action items that have not yet been completed, and may negatively
impact the Department’s credibility. Finally, when the AARTS PO Comments field is used to
modify corrective action items, OIG does not have the opportunity to review and either concur
with or reject the revised action item as being sufficient to address the issues noted during the
audit.

In response to our draft report, OPE concurred with our finding and provided corrective actions
to address three of the four recommendations included in our report. OPE did not concur with
recommendation 1.3 because it believed updating actual completion dates in AARTS would
require reopening audits, which would be too time-consuming and, therefore, costly. OIG
disagrees with OPE because modifying the actual completion dates would not require audits to
be reopened, and the completion dates that need to be changed only impact one audit. In
addition, OPE stated it was worth noting that it provided documentation supporting the
completion of each action item reviewed by the OIG. However, as noted in the audit report, we
found that while OPE provided us with documentation pertaining to audit followup activity for
each corrective action item reviewed, this documentation did not always support completion of
corrective action items.

The full text of the OPE response is included as Attachment 2 to this audit report.


Finding 1         OPE Audit Followup Was Not Always Effective
We found OPE’s audit followup process was not always effective. While OPE certified that
corrective action items were completed, we found they were unable to support completion of 7 of
the 22 corrective action items reviewed (32 percent). We were able to validate closure dates for
9 of the 15 supported corrective actions through OPE provided documentation.2 We found OPE
reported 3 of these 9 action items (33 percent) as completed in the Department’s audit tracking
system prior to dates reflected by supporting documentation. We also noted for one additional
corrective action item reviewed OPE used the PO Comments field in AARTS to indicate that a
corrective action item would not be completed as initially described instead of changing the
Action Item field.




1
  Initially, we selected 23 corrective action items to verify if documentation was maintained in the audit resolution
files to support completion of the action items. However, we subsequently determined OPE decided not to complete
one of the agreed upon corrective action items, as further discussed in the finding.
2
  In six cases, we could not validate closure dates because of limitations in the supporting documentation provided
by OPE.

                                                ED-OIG/A19F0002

Ms. Stroup	                                                                               Page 4 of 10



Documentation Did Not Support Completion of Corrective Action Items

While OPE maintained audit resolution files, the file documentation did not support completion
of 12 of the 22 corrective action items reviewed (55 percent). OPE provided additional
documentation not originally in the audit resolution files that supported completion of five
additional corrective action items. Ultimately, OPE could not provide documentation to support
completion of 7 of the 22 corrective action items (32 percent). Unsupported action items noted
during this audit included the following:

    • 	 In one audit, the corrective action item stated that training would be provided to program
        officers on conducting compliance reviews.3 OPE’s audit resolution file did not contain
        any documentation other than a list of 14 program officers. There were no copies of
        training certificates or information on when the training was given, who offered the
        training, or an agenda or other information about the content of the training. OPE
        subsequently provided the front cover of a training document, which was dated 10
        months after the training was to have taken place, and an undated training agenda.

    • 	 For this same audit, another corrective action item stated that the Acting Director shared
        Grants Policy # 22 with staff, directed that it be followed for authorizing grantees to
        drawdown funds from expired grant awards, and that proposed deviation from the
        procedures in the policy must be approved by the TRIO Director.4 The audit resolution
        file included an email with attached guidelines for Talent Search/Educational
        Opportunity Center grants that did not reach their proposed participants in the first year.
        Grants Policy Bulletin #22 was not discussed in the email or guidelines. The audit file
        did not include documentation of any direction stating that the TRIO Director must
        approve any proposed deviations.

    • 	 In another audit, the corrective action item stated OPE would, “[f]ollow-up on audit
        resolution actions with OCFO and SFA [Student Financial Assistance] to help ensure
        findings and liabilities are properly resolved.” 5 OPE provided us with results from a
        query of the Single Audit database. OPE staff stated the office randomly selected two
        grantees that were out of compliance with the Single Audit Act and OMB Circular A-133
        to determine what documentation exists to indicate that Higher Education Programs
        (HEP) followed-up with grantees to resolve audit findings. However, OPE was unable to
        provide documentation that HEP followed-up on these two audits.

PAG issued Audit Closure Memos for each of the four audits included in this review. These four
audits contained the 22 corrective action items we reviewed. We noted 8 of the 22 corrective
action items were identified as reviewed by PAG prior to issuance of the Audit Closure Memos.

3
  Audit Control Number (ACN) A07-90034: “Department Controls Over TRIO Grantee Monitoring,” issued

January 4, 2002, Corrective Action 1.4.1.

4
  ACN A07-90034, Corrective Action 2.1.1.

5
  ACN A04-90013: “Office of Higher Education Programs Needs to Improve Its Oversight of Parts A and B of the 

Title III Program,” issued December 27, 2000, Corrective Action 2.5.1.


                                              ED-OIG/A19F0002

Ms. Stroup                                                                      Page 5 of 10



We determined 6 of the 8 corrective action items reviewed by PAG were adequately supported
by documentation provided by OPE. The results of our analysis of the effectiveness of PAG’s
review process will be included in the audit followup summary report issued to the Chief
Financial Officer upon completion of the audits in individual offices.

Documentation Did Not Support Reported Completion Dates

For the 9 corrective action items for which completion dates could be verified, OPE reported 3
corrective action items as completed in AARTS prior to dates reflected by supporting
documentation (33 percent). These items were reported as completed from 12 to 22 months
before dates reflected on supporting documentation. For example, OPE provided us an undated
Annual Performance Report as supporting documentation for a corrective action item reported in
AARTS as completed on September 24, 2002.6 Because documentation did not support
completion of the corrective action item by that date, we requested additional documentation.
OPE subsequently provided us with a data review and analysis report, dated July 15, 2004, which
we reviewed and determined did not support the reported completion date in AARTS.

Principal Office Comment Field Used to Modify Proposed Corrective Action Item

In one additional corrective action item reviewed, data from the PO Comments field in the CAP
indicated an action item would not be completed as initially described. This field was used
instead of modifying the agreed upon action item to accurately reflect the final decision of
management. Specifically, this action item called for OPE to implement a peer review process.7
The PO Comments field stated in part:

          The Institutional Development and Undergraduate Education Service (IDUES)
          will not implement a peer review monitoring model . . . .The peer review model
          has not been funded or implemented. The [IDUES] area needs to evaluate the
          new executive information system and reconsider the feasibility of peer
          monitoring in light of budgetary and other resource constraints.

An AARTS database administrator stated when information is entered or changed in the PO
Comments field there is no change to the resolution status and the OIG would not necessarily
become aware of the change. However, he added when the Action Item field is changed within
the system, the status reverts to "unresolved," OIG is notified of the change, and has the
opportunity to concur or nonconcur with the revised action.

Requirements for Audit Followup

OMB Circular A-50, entitled “Audit Followup,” provides the requirements for establishing
systems to assure prompt and proper resolution and implementation of audit recommendations.
The Circular states—

6
    ACN A04-90013, Corrective Action 1.1.1.
7
    ACN A04-90013, Corrective Action 1.7.1.

                                              ED-OIG/A19F0002

Ms. Stroup                                                                       Page 6 of 10



        Audit followup is an integral part of good management, and is a shared
        responsibility of agency management officials and auditors. Corrective action
        taken by management on resolved findings and recommendations is essential to
        improving the effectiveness and efficiency of Government operations. Each
        agency shall establish systems to assure the prompt and proper resolution and
        implementation of audit recommendations. These systems shall provide for a
        complete record of action taken on both monetary and non-monetary findings and
        recommendations.

The Department’s Post Audit User Guide, Section IV, “Internal Audits,” Chapter 1, “ED Office
of Inspector General (ED-OIG) Audit Reports and Alternative Products,” Part G, “Corrective
Actions,” states:

        Each AO must maintain documentation to support implementation of each
        corrective action in accordance with the Guidelines for Establishing File Folders
        and Maintaining Documentation. The documentation must be specifically
        identifiable to a corrective action to withstand any post audit closure review by
        PAG/OCFO, ED-OIG, [Government Accountability Office] GAO and/or OMB.
        All ED-OIG audit records must be retained by an AO for at least five years after
        ED-OIG is notified that all corrective actions have been completed.

The Department’s Guidelines for Establishing File Folders and Maintaining
Documentation states:

        A file folder should be established for each audit report beginning with the draft
        report. Each folder should contain . . .Documentation to support implementation
        of corrective actions or specific notes that indicate where said documents are
        located . . .Explanation of how such documentation supports the corrective action,
        if not readily understood or evident.

The Guidelines for Establishing File Folders and Maintaining Documentation also provides
examples of supporting documentation to include memos of understanding, final regulations,
Dear Colleague Letters, records from databases, and policies and procedures.

OPE audit resolution staff generally believed that available documentation was adequate to
support completion of action items. However, they expressed concern with the Department’s
guidance because they believed it was not specific enough to identify documentation that would
support different types of corrective actions. OPE audit resolution staff also indicated that in
some cases they attempted to document outcomes rather than processes followed. OPE audit
resolution staff further indicated that they did not believe they could change the Action Item field
in AARTS without PAG’s authority.

Without appropriate documentation, OPE does not have assurance that identified deficiencies
were corrected. As such, the risk remains that related programs may not be effectively managed.


                                         ED-OIG/A19F0002

Ms. Stroup	                                                                      Page 7 of 10



By reporting corrective action items as completed when they have not been, or in advance of the
actual completion date, OPE compromises the integrity of the data included in AARTS and may
negatively impact the Department’s credibility. Management reports on corrective action items
due for completion may be understated. In addition, the Department’s Semiannual Report to
Congress on Audit Followup may also under report the audits for which corrective action items
have not been completed.

By documenting changes to an agreed upon action item in the AARTS PO Comments field, OIG
did not have the opportunity to concur or nonconcur with the revised action item as being
sufficient to address the issues noted during the audit.

In a written response to our preliminary findings and recommendations presented at the exit
conference, OPE reiterated that staff believed the documentation was sufficient to be in
compliance with requirements. In addition, OPE officials stated they are making and have made
numerous changes to ensure corrective actions are documented in accordance with the
Department’s guidance. OPE provided an Audit Processes document, dated April 5, 2005,
which is being used by the office to automate internal tracking functions for OIG and
Government Accountability Office audits. The document consists of various flowcharts relating
to the different phases of the audit process.

During our audit, we noted three of the four audit resolution files we reviewed contained an
email from an OPE staff member suggesting the types of evidence that would be needed to
document completion of each corrective action item. However, these suggestions were not
always followed by OPE staff. In four of the seven unsupported corrective action items noted in
our audit, the suggested documentation would have adequately supported completion of the
corrective action item. While OPE’s Audit Processes document flowcharts its internal processes
for performing various audit-related functions, including audit followup, it does not address our
concerns with adequately documenting and correctly reporting completion of action items.


Recommendations:

We recommend that the Assistant Secretary for the Office of Postsecondary Education:

    1.1 	     Ensure audit followup documentation clearly supports completion of the stated action
              item as it is worded in the CAP.

    1.2 	     Ensure completion dates reported in AARTS are consistent with dates reflected in
              supporting documentation.

    1.3 	     Update AARTS to reflect the actual completion dates for the action items noted in the
              audit with discrepancies in the reported completion dates.

    1.4 	     Ensure changes to agreed upon action items are identified by editing the Action Item
              field in AARTS rather than using the PO Comments field.

                                          ED-OIG/A19F0002

Ms. Stroup                                                                     Page 8 of 10



OPE Response:

In its response to the draft report, OPE concurred with the finding and provided corrective
actions to address three of the four recommendations included in our report. However, OPE did
not concur with recommendation 1.3 because it believes updating the actual completion dates in
AARTS would require closed audits to be reopened, which would be time-consuming and,
therefore, costly. OPE also stated it was worth noting that it was able to provide documentation
supporting the completion of each action item reviewed by the OIG.

Overall, OPE stated it has implemented several changes to improve the audit tracking process,
which include: (1) documenting operating procedures for OPE audit resolution; (2) establishing a
database to ensure tracking of OPE audit activities; and (3) maintaining electronic files of all
OPE audits and supporting documentation. In addition, OPE has hired a contractor to automate
OPE’s audit processes, including tracking and maintaining supporting documentation of all OPE
action items.

OIG Comments:

OIG disagrees with OPE’s position that updating actual completion dates for selected action
items in AARTS would be too time-consuming and costly. According to PAG staff, completion
dates can be changed without having to reopen a closed audit. In addition, the three action items
noted in the audit report with unsupported completion dates belong to just one closed audit. If
the dates are not updated to reflect the actual completion dates, the integrity of the data in
AARTS will be compromised.

OPE believed it was worth noting that it provided supporting documentation for each of the
action items in the review. However, we found that while OPE maintained audit resolution files
with documentation regarding audit followup activity for each corrective action item reviewed,
this documentation did not always support completion of corrective action items, as noted in this
report.


                  OBJECTIVE, SCOPE, AND METHODOLOGY
The objective of our audit was to verify whether adequate documentation was maintained to
support that corrective action items have been implemented as stated in the Department’s CAPs.

To accomplish our objective, we performed a review of internal control applicable to OPE’s
audit followup process. We reviewed applicable laws and regulations, and Department policies
and procedures. We conducted interviews with OCFO/PAG staff regarding Department policy
and procedures, and AARTS operation. We conducted interviews with OPE staff responsible for
resolving and following up on corrective action items for the audits selected. We also reviewed
documentation provided by OPE staff to support completion of corrective action items for the
recommendations included in our review.


                                        ED-OIG/A19F0002

Ms. Stroup                                                                     Page 9 of 10



The scope of our audit was limited to corrective action items developed in response to internal
OIG audits of OPE processes and programs. Our scope included only those corrective action
items reported as “completed” in AARTS during the period July 1, 2002, through September 30,
2004. We excluded from our review corrective action items for recurring audits, such as annual
financial statement audits, information security audits, or those with prior or planned followup
audits, so as not to duplicate audit effort. Overall, we selected a total of 23 corrective action
items from 4 OPE related audits. The selected audits and corrective action items reviewed are
listed in Attachment 1 to this report.

We relied on computer-processed data initially obtained from AARTS to identify action items
applicable to the scope period. An alternative data source is not available to directly test the
completeness of the corrective action items as reported in AARTS. However, we tested the
accuracy of AARTS data by comparing AARTS data to supporting documentation. We also
conducted a limited review of AARTS data controls and relied on feedback from resolution staff
to gain additional assurance relating to the completeness and accuracy of AARTS data. Based on
these tests and assessments, we determined that the computer-processed data was sufficiently
reliable for the purpose of our audit.

Our review was based on the corrective action items defined by OPE in its CAPs and agreed
upon by OIG in the audit resolution process. We reviewed and analyzed documentation in OPE’s
audit resolution files to determine whether completion of each selected corrective action item was
supported. In cases where documentation in the file did not support completion of the action
item, we provided OPE with an opportunity to provide additional documentation from other
sources. We reviewed any additional documentation subsequently provided to make a final
determination as to whether completion of the corrective action items was then supported. In
addition, we verified the reported completion dates in AARTS against the supporting
documentation provided, where possible, for those corrective action items that were supported.

We conducted fieldwork at OPE offices in Washington, DC, during the period October 2004
through March 2005. We held an exit conference with OPE staff on May 12, 2005. Our audit
was performed in accordance with generally accepted government auditing standards appropriate
to the scope of the review described above.


                            ADMINISTRATIVE MATTERS
Corrective actions proposed (resolution phase) and implemented (closure phase) by your office
will be monitored and tracked through the Department’s Audit Accountability and Resolution
Tracking System (AARTS). Department policy requires that you develop a final corrective
action plan (CAP) for our review in the automated system within 30 days of the issuance of this
report. The CAP should set forth the specific action items, and targeted completion dates,
necessary to implement final corrective actions on the findings and recommendations contained
in this final audit report.



                                        ED-OIG/A19F0002

Ms. Stroup                                                                     Page 10 of 10



In accordance with the Inspector General Act of 1978, as amended, the Office of Inspector
General is required to report to Congress twice a year on the audits that remain unresolved after
six months from the date of issuance.

Statements that managerial practices need improvements, as well as other conclusions and
recommendations in this report, represent the opinions of the Office of Inspector General.
Determinations of corrective action to be taken will be made by the appropriate Department of
Education officials.

In accordance with the Freedom of Information Act (5 U.S.C. §552), reports issued by the Office
of Inspector General are available to members of the press and general public to the extent
information contained therein is not subject to exemptions in the Act.

We appreciate the cooperation provided to us during this review. Should you have any questions
concerning this report, please call Michele Weaver-Dugan at (202) 245-6941. Please refer to the
control number in all correspondence related to the report.

                                      Sincerely,       



                                      Helen Lew /s/         

                                      Assistant Inspector General for Audit Services           





cc:     Dottie Kingsley, Audit Liaison Officer, OPE
        Charles Miller, Supervisor, PAG/OCFO




                                        ED-OIG/A19F0002

          ATTACHMENT 1 – Audits and Corrective Action Items Reviewed

Number Audit           Title          Issue   Corrective       Unsupported Unsupported
      Control                         Date   Action Items      Action Items Completion
      Number                                  Reviewed                        Dates
  1    A07- Department Controls      1/4/02 1.2.2, 1.3.1,       1.3.1, 1.4.1, None
       90034 Over TRIO Grantee               1.4.1, 1.5.1,      2.1.1, 2.2.1,
              Monitoring                     2.1.1, 2.2.1,          2.2.2
                                                 2.2.2
  2     A04- Office of Higher       12/27/00 1.1.1, 1.2.1,      2.3.1, 2.5.1   1.1.1, 1.3.1,
        90013 Education Programs             1.3.1, 1.6.1,                         1.6.1
              Needs To Improve its           1.7.1, 2.3.1,
              Oversight of Parts A               2.5.1
              and B of the Title III
              Program
  3     A04- Review of Title III     6/30/00   1.2.1, 2.2.1,       None           None
        90014 Program, HEA,                    2.2.2, 2.2.3,
              Compliance with                  2.3.1, 2.4.1,
              GPRA Requirements                    2.4.2
              for Implementation of
              Performance Indicators
  4     A07- Gaining Early           6/7/02    1.2.1, 3.2.1        None           None
        A0033 Awareness and
              Readiness for
              Undergraduate
              Programs
TOTAL                                               23               7              3
                                                                                                                 Attachment 2

                     UNITED STATES DEPARTMENT OF EDUCATION

                                   OFPIC8 OF POSTSECONDARY EDUCATION


                                                                                                 TH8 ASSISTANT S8CR8TARY




MEMORANDUM


DATE:               PIJ3 22       !ffij

TO: 	              Michele Weaver-Dugan, Director
                   Operations Lnternal Audit Team
                   U.S. Department of Education 

                   Office oflnspector General 

                   400 Maryland Avenue, SW 

                   Washington, DC 20202-1510 


FROM: 	            Sally L. Stroup

SUBJECT: 	 Draft Audit Report
           Audit Follow-up Process for Office ofTnspector General Internal Audits in
           the Office of Postsecondary Education
           Control No. ED-OIGI A 19-F0002

Thank you for the opportunity to comment on the Office of Inspector General's (OIG)
draft audit report: Audit FollOW-lip Process{or Office ofInsp ector General Internal
Audits in tlte Office of Postsecondary Education dated July 5, 2005. The objective of the
report was to verify whether adequate documentation was maintained to support that
corrective action items have been implemented as stated in the Office of Postsecondary
Education's (OPE) Corrective Action Plans (CAP).

The draft report states that OPE audit follow-up was not always effective. However, it is
worth noting that OPE was able to provide documentation supporting the completion of
each action item reviewed by the OIG. In addition, OPE believes that in collecting the
documentation , the written guidance in the Post Audit User's Guide and the
Department's Guidelines for Establishing File Folders and Maintaining Documentation
was followed. 	 Nonetheless, OPE acknowledges that additional steps can be taken to
strengthen the documentation collected.

Below are OPE's comments on the OIG finding and each recommendation.




                                    19<)0 K STREET, N.W. WAS HIN GTO N , D.C. 20006

     Our mission is to ensure equal access to education and 10 promote CduCQliOnai exccllcIlce litrollgltoul the Nation.
Page 2 - Ms. Michele Weaver-Dugan


FINDING NO. 1 - OPE's Audit Follow-up Was Not Always Effective.

The OIG cited issues in the following three areas:

   •   Documentation did not support completion of all corrective action items.
   •   Documentation did not always support reported completion dates.
   •   Modification of a corrective action item occurred without notification to the OIG.

The OIG made four recommendations with respect to the only Finding.

RECOMMENDATION 1.1 - Ensure Audit Follow-up Documentation Clearly
Supports Completion Of The Stated Action Item As It Is Worded In The CAP.

OPE concurs with this recommendation.

Please note that the final audit reports reviewed by the OIG were completed between
2000 and 2002. Since that time, OPE has implemented several changes to improve the
audit tracking process. These changes include: (1) documenting operating procedures
for OPE audit resolution; (2) establishing a database to ensure tracking of OPE audit
activities; and (3) maintaining electronic files of all OPE audits and supporting
documentation.

In addition, OPE has hired a contractor to automate OPE's audit processes, including
tracking and maintaining supporting documentation of all OPE action items. With the
completion and implementation of this centralized Web-based system called a "Pre­
AARTS" module (estimated to be ready in the Fall of2005), OPE's audit team will have
greatly enhanced capabilities to track the status of audits. The system will help to ensure
that action items are successfully completed and accurately documented. Pre-AARTS
will also generate reminders to key players to complete their audit responsibilities on
time, and store dated communications and other supporting documentation for corrective
actions prior to allowing one to enter the actual completion date.

Audit training materials will be developed for OPE staff who will use the Pre-AARTS
module. Training sessions will be held shortly after implementation ofthe Pre-AARTS
module and will include how to develop clearly worded CAPs and action item
comments, the process by which to properly update an action item; and appropriate
supporting documentation.

RECOMMENDATION 1.2 - Ensure Completion Dates Reported In AARTS Are
Consistent With Dates Reflected In Supporting Documentation.

OPE concurs with this recommendation.

Currently, OPE collects documentation for an action item before requesting audit closure
and is moving toward collecting and storing the supporting documentation in its
centralized audit files prior to completion of the action item date in AARTS. Also, as
Page 3 - Ms. Michele Weaver-Dugan


addressed in our response to Recommendation 1.1, OPE's Pre-AARTS module and
related training will directly address action item completion and recommended
supporting documentation.

RECOMMENDATION 1.3 - Update AARTS To Reflect The Actual Completion
Dates For The Action Items Noted In The Audit With Discrepancies In The
Reported Completion Dates.

OPE does not concur with this recommendation. All of the audits included in the OIG's
review are officially closed. A closed audit must be re-opened to change any information
about the action item. Re-opening audits would be time-consuming and, therefore,
costly. OPE believes that prospective activities, such as OPE's Pre-AARTS module
training will address the concerns identified by the OIG.

RECOMMENDATION 1.4 - Ensure Changes To Agreed Upon Action Items Are
Identified By Editing The Action Item Field In AARTS Rather Than Using The PO
Comments Field.

OPE concurs with this recommendation.

OPE has already taken action to ensure that the OIG is notified of any action item
changes by correctly entering this information in AARTS. This process was followed in
July 2005 for an open Government Accountability Office audit. OPE's planned Pre­
AARTS module training will directly address CAP and action item development and
updates. Further, OPE suggests that this process also be added to the Department's
AAR TS User Manual for Internal Audits.

Again, thank you for the opportunity to comment on this draft audit report. If you have
further questions, please feel free to contact Dottie Kingsley, OPE's Audit Liaison
Officer at (202) 502-7505 or bye-mail at dottie.kingsley@ed.gov.