Effective Date: 1/9/01

Series: Audit

Part 361: Audit Followup

Chapter 3: Followup to GAO Audit Reports

Originating Office: Office of Financial Management

3.1 Purpose.

B. Scope. This chapter applies to all audit reports issued by the General Accounting Office to the Department of the Interior.

3.2 Policy. It is the policy of the Department that prompt, objective consideration be given to the findings and recommendations contained in GAO audit reports. The reports will be given careful attention by those officials responsible for programs or activities covered by the reports, and such action will be taken as may be necessary to correct conditions that are shown to be deficient. Information, advice, and guidance from GAO reviews will be used for the maximum benefit to the Department as quickly as possible. This requires:

A. Full cooperation with GAO in the conduct of its audits.

B. Timely, objective consideration of GAO findings and recommendations, by Departmental officials who collectively have substantive knowledge and policy responsibility.

C. Coordination with all organizational elements materially affected by the GAO recommendations. This always requires coordination between bureaus and offices within the Office of the Secretary, and as required with other Federal agencies and the Office of Management and Budget.

D. Development and submission of responses within required time frames, as specified by GAO, for draft reports and as required by legislation for final reports.

3.3 Authority. This directive is issued pursuant to the provisions of the Budget and Accounting Procedures Act of 1950, 94 Stat. 311(31 USC sec. 3524); the Government Corporation Control Act, 95 Stat. 440, 441 (31 USC sec. 9101, 9107, 9108) Section 236 of the Legislative Reorganization Act of 1970, (31 USC Sec. 720(b)), and OMB Circular No. A-50 of 1982.

3.4 Roles and Responsibilities.

A. General Accounting Office (GAO).

(1) Properly notifies the Department of the Interior of all pending studies, reviews or audits to be conducted on operations under the responsibility of the Department of the Interior or requiring participation by or information from the Department of the Interior.

(2) Conducts studies, reviews or audits following appropriate Federal Government or other applicable standards, regulations or procedures.

(3) Provides the Department of the Interior with the results of studies, reviews or audits involving or referring to the Department of the Interior and allows for appropriate responses to any findings or conclusions.

B. Departmental GAO Audit Liaison Officer (ALO).

(1) Serves as the primary point of contact for all Department GAO audit activity, including audit notification letters, entrance and exit conferences scheduling for multi-bureau audits, receipt of draft and final reports, and coordination of review, comments and official response to all draft and final reports.

(2) Monitors Department audit follow-up activities for GAO audits and updates the Departmental audit follow-up tracking system on a frequent basis.

(3) Apprises the A/S-PMB, Director of Financial Management and cognizant bureau and office heads of audit recommendation implementation progress and other significant audit issues.

C. Each Program Assistant Secretary, and Bureau/Office Director

(1) Monitors GAO activity in their respective area of operation, and ensures that GAO receives the proper support and cooperation.

(2) Ensures that responses to GAO findings or recommendations are provided on a timely basis following established procedures of the Department and GAO.

D. Each Audit Liaison Officer (ALO)

(1) Ensures that full cooperation is provided to the GAO in the conduct of audits and to the audit follow-up official and the Office of Financial Management (PFM) in all audit follow-up activities.

(2) Keeps management apprised of significant audit issues/activities affecting the bureau.

3.7 Draft Reports. The GAO normally issues draft reports to agencies for review and comment so that final reports may incorporate agency views. In accordance with 31 U.S.C. 718(b)(1), agencies will provide comments on draft GAO reports within 15 to 30 calendar days of issuance. However, the law provides that, if an agency cannot respond to a report within the specified time frame, the agency may request additional time from GAO to comment.

A. PFM, as the organization delegated with the responsibility for audit follow up activity related to General Accounting Office audits, receives all draft reports from GAO on behalf of the Department.

C. Upon receipt of a GAO draft report, the responsible bureau or office will, within established time frames, prepare detailed comments, appropriately coordinated, expressing views on each finding and recommendation in the report. The responsible bureau or office should assure that the comments are concise, fully responsive to the matters discussed, and in a format suitable for transmission to the GAO without extensive editing. Although specific bureaus and offices may be responsible for preparing the response to GAO reports, they should keep in mind that it is a Departmental response and should be prepared in a manner consistent with Departmental policy.

D. The program Assistant Secretary normally signs responses to draft reports following review and approval of the response by affected organizations of the Department as identified by PFM. The response should contain a cover letter and an enclosure to the cover letter, as described below.

(1) The cover letter should be an overview or background position statement. The position statement provides perspective or general background for the specific comments that follow. It is appropriate to use this section to reflect fundamental disagreement with major facts reported or conclusions drawn by GAO, or pertinent comments on the overall thrust of the GAO report. The statement is normally incorporated into the cover letter.

(a) Concurrence with the recommendation should include the actions necessary to carry out the recommendation, the estimated completion dates; and the name of the program office responsible for implementation. This may include concurrences in the objective of the recommendation but an alternate course of action to accomplish this objective. In such instances, the reason(s) for the alternative should be shown. In either event, the response should be as specific as possible; generalities and vague promises are to be avoided.

(b) Nonconcurrence and the specific reasons for such nonconcurrence.

(c) A deferral of a decision, if it is decided that additional information is needed before a decision can be made. In this event, the response should state the type of additional information to be gathered, and the date such information will be available and a decision made. Note: In the event of this type of response, it is important to attempt to gather the additional information during the interim period between response to the draft and issuance of the final report so that responsive comments may be made to the final report.

The enclosure, if necessary, should set forth disagreements with specific factors or conclusions of the report, provide updated and clarifying information, and point out other pertinent editorial changes needed. The purpose of this enclosure is to seek appropriate changes to the GAO report.

D. Comments prepared by the designated organization will be transmitted to PFM, which is responsible for:

(1) Reviewing the proposed comments to determine whether: (a) they are fully responsive to the matters commented on by GAO; and (b) ensuring that the views expressed appear reasonable, constructive, and consistent with other Department responses/positions on similar matters.

(2) Returning the proposed response to the program office for clarification in the event that it is not sufficiently responsive or if modifications are required to assure consistency with Departmental policy.

(3) Obtaining concurrence and surnames from Departmental offices who have oversight responsibility for the program.

(4) Transmitting the reply to the program Assistant Secretary for signature.

(5) Ensuring that the signed responses are transmitted to GAO within the specified time frames and providing a copy of the signed response to the originating bureau/office and interested organizations.

3.8 Official Oral Comments.

B. Official oral comments can be provided only by the program Assistant Secretary, a Deputy Assistant Secretary or a Bureau head. Official oral comments to GAO should have the concurrence of Departmental offices that would normally provide concurrence. This can be accomplished by providing surnaming offices with written comments for their review and concurrence prior to being presented orally. The GAO Liaison for the Department should specifically request a Comment Memorandum from GAO to ensure that the Department comments have been accurately and appropriately captured. The official responsible for providing the Department's oral comments to GAO should initial GAO's writeup of those comments. If GAO declines to provide a Comment Memorandum, official oral comments will not be provided to GAO.

3.9 Final Reports.

A. Section 236 of the Legislative Reorganization Act of 1970 (84 Stat. 1140, 1171) and Office of Management and Budget (OMB) Circular A-50 provide that whenever a GAO report contains recommendations to the head of any Federal agency, the agency will:

(1) Not later than 60 calendar days after the date of the report, submit a written statement to the House of Representatives, Committee on Government Reform and Oversight, and to the Senate, Committee on Governmental Affairs of the action taken with respect to the recommendations; and

(2) In connection with the first request for appropriations for the agency submitted to the Congress more than 60 days after the date of such report, submit a written statement to the Committees on Appropriations of the House of Representatives and the Senate on the action taken with regard to the recommendations.

B. OMB Circular A-50 requires that a Departmental response be submitted to the Director, OMB, within 60 calendar days after formal transmittal of a GAO report to the Department when one or more of the following apply:

(1) The report contains a specific recommendation for the Secretary.

(2) The report contains financial statements accompanied by either a qualified audit opinion or a disclaimer of opinion.

(3) The report claims a violation of the Antideficiency Act that has not been reported to the appropriate authorities.

(4) The report indicates a violation of other laws.

(5) When requested to comment by OMB.

C. Assistant Secretaries, bureaus and offices whose programs are affected by the report should place a high priority on preparation of a timely and responsive statement to final GAO reports. Extensions of time for such responses are not allowed.

(1) Departmental Responses.

(a) The response to final GAO reports must concisely express the Department's views on the findings and recommendations in the report. It must identify those actions taken or planned in response to each recommendation. In those cases where there is no substantial difference between the draft and final reports, and the Department's views are accurately and adequately stated in the report, a statement reaffirming and updating those views will be sufficient as the official response to the final report.

(b) Upon receipt of a GAO final report, PFM will designate the appropriate organization for originating the response. Normally, the designation will be made to the same organization that prepared the response to the GAO draft report. The designation will be communicated through a memorandum of instruction which will identify due dates for processing the response and notification of those Departmental offices responsible for concurring with the proposed response.

(2) Format and Content of Response to Final Reports. Comments to GAO reports should take the form of an enclosure to a cover letter which briefly summarizes Departmental views on the findings, suggestions, and recommendations in the report and specifically references the report by number and date of issue. The enclosure should state each GAO recommendation and then follow with "Concurrence or Nonconcurrence" and the Departmental comment. Comments should be specific and detailed, reflect actions accomplished, and provide a precise agenda of actions remaining, and indicate the program official responsible for implementation.

(a) Since a 2-6 month time lapse may occur between the draft and final reports, it is not uncommon for the findings, recommendations, and Departmental response to change. With the additional time for study, decision and action, the response to the final report should be more specific, reflect actions accomplished in the interim, and provide a precise agenda for actions remaining.

(b) For nonconcurrence responses to the draft report, GAO will either have withdrawn the recommendation or will have provided further support for its position. If GAO retains the recommendation, it should be restudied and a final decision made whether to accept and act on the recommendation or to continue to disagree. In either event, the response should clearly indicate the decision and provide the basis for any remaining nonconcurrence.

(c) Generally, the Program Assistant Secretary or the Assistant Secretary - PMB will sign the Departmental response to final GAO reports.

(3) Recipients of the Departmental Response. Responses to published reports are transmitted to the addressees listed in Appendix 1. Addressees listed in Appendix 1 may be supplemented as considered appropriate by the Departmental Office of Congressional and Legislative Affairs. Supplemental addressees are normally those Congressional committees or subcommittees exercising oversight of Department programs.

(a) The Comptroller General and Director, Office of Management and Budget will each be provided with a copy of the Departmental response.

(b) The originating office will prepare a single letter addressed to the Chairman, Committee on Government Reform and Oversight, House of Representatives, without preparing copies to other addressees. The proposed response should be forwarded to the Program Assistant Secretary for surname to indicate concurrence with the proposed response contents prior to being forwarded to PFM for placement in the Departmental surname process. Once the initial letter has completed the surname process, the remaining letters should be prepared, and transmitted to the program Assistant Secretary for signature. The surname copy of the Government Reform and Oversight Committee letter should include the phrase: "Identical letters sent to: ____________." Individual surname copies are not required for the other identical letters listed on the Government Reform and Oversight Committee copy.

(4) Additional Requirements. If the Departmental response to a draft GAO report accurately and adequately reflects its current views, transmittal of a copy of those comments under a separate cover letter will be sufficient. When corrective action is incomplete, still under review, or planned, the response will include a statement of when the Department expects action to be completed.

(5) Advance Clearance and/or Coordination Requirements. Agency statements to Congressional committees, individual Members of Congress or the GAO, will be subject to advance coordination and/or clearance by OMB when the statement:

(a) Expresses views on proposed or pending legislation. (See Circular A-19, "Legislative coordination and clearance.")

(b) Deals with other agencies or with executive branch budget policies.

Requests for advance clearance and/or coordination will be prepared by the organization which originates the response, addressed to the Director, OMB, and forwarded in duplicate to the Assistant Secretary - Policy, Management and Budget for signature. Clearance action will be completed prior to release of the statement from the Department. If GAO recommends a legislative change, DOI concurrence or non-concurrence triggers OMB Circular A-19. Clearance of GAO responses that trigger A-19 should be coordinated with OMB through the Office of Congressional and Legislative Affairs, Legislative Counsel. The Departmental Manual designates Legislative Counsel as the clearinghouse for all such items.

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Appendix 1

1/9/01 #3354

Replaces 6/1/84 #2578