Department of the Interior
Effective
Date: 9/28/07
Series: Audits
Part 360: Departmental Audits
Chapter
2: Audits and Related Services
Originating
Office: Office of Inspector General
360
DM 2
2.1 General. The OIG provides various
audit and other services for the bureaus. Audit services include performance audits,
financial audits, and attestation engagements.
The OIG also conducts evaluations of bureau programs and operations, insuring
quality control over Single Audit reports, and conducts peer reviews of the
other Federal OIG offices.
2.2 Types of Audits.
A. Performance Audits. Performance audits are objective and
systematic assessments of an agency's programs, functions, operations, and
activities against specified criteria or best practices. Program audits determine if desired results or
benefits established for a program are being achieved; the organizations,
programs, activities, or functions are operated effectively; the program is
complying with significant laws and regulations; and if the program is operated
economically and efficiently.
B. Financial Audits. Financial audits are primarily concerned with
whether the entity's principal financial statements are presented fairly, in
all material respects, in conformity with generally accepted accounting
principles.
C. Attestation Engagements. Attestation engagements concern examining,
reviewing or performing agreed-upon procedures on a subject matter or an
assertion about a subject matter and reporting on the results. The subject matter may take many forms,
including historical or prospective performance or condition, analyses, and
systems and processes. Attestation
engagements can cover a broad range of financial or non-financial subjects and
can be a part of a financial audit or performance audit. Potential subjects of attestation engagements
include reporting on an entity’s internal control over financial reporting; an
entity’s compliance with requirements of specified laws, regulations, rules,
contracts, or grants; and the allowability and reasonableness of proposed
contract amounts, of royalty payments made by lessees, and of fees paid by concessionaires.
2.3 Audit Services.
A. Audit
Services from OIG. All requests for
final audits of incurred costs and audits of claims for equitable adjustment,
termination settlement proposals, and other contractor claims must be submitted
to the OIG Director of External Audits. Although
bureaus and offices should generally submit requests for audits of pricing proposals,
interim incurred costs, and overhead reviews, to the Defense Contract Audit
Agency (DCAA), or contract out for such services, they may also request these
audits from the OIG. All requests to the
OIG should be made on Form DI-1902, "Request for Audit." If the OIG cannot perform the audit, it will
advise the bureau to seek assistance from other auditors. Bureaus and offices should notify the OIG of
all audits that it plans to contract for with non-Federal auditors.
B. Requesting
Audit Services from DCAA. Requests
to DCAA for audit services, which are performed on a reimbursable basis, must
be made in writing, and a copy of the request must be submitted to the OIG
Director of External Audits. The request
must include the name and address of the requester and the contractor; the
contract, solicitation, or cooperative agreement number; the type of contract
awarded or proposed; and the reason the audit is needed. The request should instruct DCAA to send
copies of the final report to the requestor, the Department's Audit Follow-up
and Management Control Official, and the External Audits Director. As with audits performed by the OIG, the
Department will be responsible for tracking the resolution of any
recommendations or questioned costs included in DCAA audit reports.
2.4 Non-audit Services. Auditors may provide non-audit
services that are not covered by Generally Accepted Government Accounting
Standards (GAGAS), such as (1) perform tasks requested by management that
directly support the entity’s operations, such as developing or implementing
accounting systems; determining account balances; developing internal control
systems; or (2) provide information or data to a requesting party without
providing verification, analysis, or evaluation of the information or data,
and, therefore, the work does not usually provide a basis for conclusions,
recommendations, or opinions on the information or data. These services may or may not result in the
issuance of a report.
2.5 Other
Types of Services.
A. Evaluations. Evaluations are systematic limited-scope
examinations of practices, organizations, events, or conditions to assess the
efficiency, vulnerability, risk, and/or effectiveness of programs or
activities.
B. Advisory
Services. Advisory services are
initiated by a request from management and are aimed at providing management
with quick responses to specific questions, objective advice as members of task
forces, or monitoring assistance on ongoing initiatives. Requested services may be for assistance in
reviewing a program, operation, or activity; fact-finding; or collecting data
for management decision-making or deliberation.
The results of advisory services can be provided to management in
report, briefing, or outline formats.
2.6 Single
Audit Reports. The Single Audit Act of 1984, as amended, and OMB Circular
A-133 establish the audit requirements for states and local governments,
Insular Area governments, Indian tribal organizations, and nonprofit
organizations that receive Federal financial assistance. These organizations must arrange for
independent audits of the Federal funds received and prescribe the scope of the
audits, in accordance with the requirements of OMB Circular A-133. Audits are to be made on an organization-wide
basis rather than an individual grant basis. The OIG is responsible for insuring quality
controls over single audits for organizations for which the OIG is the Federal
cognizant audit agency as designated by the OMB. As such, the OIG focuses its efforts on
conducting comprehensive desk reviews and onsite quality control reviews and
sends letters to the auditors and auditees identifying any deficiencies noted
during the reviews.
2.7 Peer Reviews. The OIG is responsible for performing peer reviews of the other Federal Offices of Inspector General in accordance with the guidelines established by the President's Council on Integrity and Efficiency. Peer reviews are performed on a 3‑year cycle.
2 8 Annual
Work Plan. The OIG publishes an annual work plan prior to the
beginning of each fiscal year to provide a framework for the focus areas for
the coming year.
A. The
annual work plan includes planned audits and other services to promote
efficiency, economy, and effectiveness; to evaluate performance against planned
outcomes; and to prevent and detect fraud, waste, and abuse in bureau programs
and operations.
B. The
annual work plan includes audits required by law, such as financial statement
audits required by the Chief Financial Officers Act of 1990; audits and other
reviews requested by the Department, the Congress, or other OIG clients; and
discretionary audits, reviews, and other services that address the Department's
top management challenges, emerging problems and issues, and audits and key
mission areas identified by the DOI's strategic plan and GPRA performance
goals.
C. The
work plan is flexible and may be modified during the year to accommodate higher
priority audits identified by the OIG or other services requested by the
Department, the Congress, or other OIG clients.
In that regard, the Department and bureau managers are encouraged to
submit suggestions or requests for audits or other reviews throughout the year.
9/28/07
#3768
Replaces
2/21/89 #2842