oversight

2016 Peer Review of the FCA OIG

Published by the Farm Credit Administration, Office of Inspector General on 2016-08-02.

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

                              PEER REVIEW OF THE
                                  FARM CREDIT
                                ADMINISTRATION
                              OFFICE OF INSPECTOR
Office of Inspector General
                                    GENERAL
         Peer Review




                                 Report No. ER-16-04



                                                  Federal Labor Relations Authority
                              1400 K Street, N.W. Suite 250, Washington, D.C. 20424
                                       UNITED STATES OF AMERICA
                                  FEDERAL LABOR RELATIONS AUTHORITY
                                       WASHINGTON, D.C. 20424-0001


INSPECTOR GENERAL


                                        System Review Report

   August 2, 2016

   To:    Elizabeth M. Dean, Inspector General
          Farm Credit Administration
          Office of Inspector General

   We have reviewed the system of quality control for the audit organization of the Farm Credit
   Administration (FCA) Office of Inspector General (OIG) in effect for the year ended March 31,
   2016. A system of quality of control encompasses the FCA OIG’s organizational structure and
   the policies adopted and procedures established to provide it with reasonable assurance of
   conforming with Government Auditing Standards. The elements of quality control are described
   in Government Auditing Standards. The FCA OIG is responsible for establishing and
   maintaining a system of quality control that is designed to provide the FCA OIG with reasonable
   assurance that the organization and its personnel comply with professional standards and
   applicable legal and regulatory requirements in all material respects. Our responsibility is to
   express an opinion on the design of the system of quality control and FCA OIG’s compliance
   therewith based on our review.

   Our review was conducted in accordance with Government Auditing Standards and the Council
   of the Inspectors General on Integrity and Efficiency (CIGIE) Guide for Conducting Peer
   Reviews of the Audit Organizations of Federal Offices of Inspector General. During our review,
   we interviewed the FCA OIG personnel and obtained an understanding of the nature of FCA
   OIG audit organization, and the design of the FCA OIG’s system of quality control sufficient to
   assess the risks implicit in its audit function. Based on our assessments, we selected audits and
   administrative files to test for conformity with professional standards and compliance with the
   FCA OIG’s system of quality control. The audits selected represented a reasonable cross-section
   of the FCA OIG’s audit organization, with emphasis on higher-risk audits. Prior to concluding
   the peer review, we reassessed the adequacy of the scope of the peer review procedures and met
   with the FCA OIG’s management to discuss the results of our review. We believe that the
   procedures we performed provide a reasonable basis for our opinion.

   In performing our review, we obtained an understanding of the system of quality control for the
   FCA OIG audit organization. In addition, we tested compliance with the FCA OIG’s quality
   control policies and procedures to the extent we considered appropriate. These tests covered the
   application of the FCA OIG’s policies and procedures on selected audits. Our review was based
   on selected tests; therefore, it would not necessarily detect all weaknesses in the system of
   quality control or all instances of noncompliance with it.
There are inherent limitations in the effectiveness of any system of quality control, and, therefore,
noncompliance with the system of quality control may occur and not be detected. Projection of any
evaluation of a system of quality control to future periods is subject to the risk that the system of
quality control may become inadequate because of changes in conditions, or because the degree of
compliance with the policies or procedures may deteriorate.

Enclosure 1 to this report identifies the FCA OIG office that we visited and the audits that we
reviewed.

In our opinion, the system of quality control for the audit organization of the FCA OIG in effect for
the year ended March 31, 2016, has been suitably designed and complied with to provide the FCA
OIG with reasonable assurance of performing and reporting in conformity with applicable
professional standards in all material respects. Audit organizations can receive a rating of pass, pass
with deficiencies, or fail. The FCA OIG has received an External Peer Review rating of pass.




Dana Rooney
Inspector General

Enclosure
                                                                                       Enclosure 1

Scope and Methodology

We tested compliance with the FCA OIG audit organization’s system of quality control to the extent
we considered appropriate. These tests included a review of 3 of 14 audit reports issued during the
period April 1, 2013 through March 31, 2016. We also reviewed the internal quality control reviews
performed by the FCA OIG.

In addition, we reviewed the FCA OIG’s monitoring of audits performed by Independent Public
Accountants (IPAs) where the IPA served as the auditor during the period April 1, 2013 through
March 31, 2016. During the period, the FCA OIG contracted for the audit of its agency’s Fiscal
Years 2013, 2014, and 2015 financial statements.

We visited the McLean, VA office of FCA OIG, which is its only office.

Reviewed Audits performed by the FCA OIG:

Report No.          Report Date        Report Title
A-16-01             3/31/2016          The Farm Credit Administration’s Risk Project

A-15-03             2/29/2016          Human Capital Planning at the Farm Credit Administration

Reviewed Monitoring Files of the FCA OIG for Contracted Audits:

Report No.          Report Date        Report Title
A-15-FS             11/09/2015         Audit of Farm Credit Administration’s
                                       Financial Statements for Fiscal Year 2015