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Audits and Inspections

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The OIG conducts audits and inspections of Agency programs and operations. Some audits and inspections are specifically required by statute.

An audit is an independent, formal, and methodical examination of an organization, program, function, or activity. FCA audits are required to comply with Government Auditing Standards (commonly called the Yellow Book). Through the audit process the OIG helps ensure that FCA accomplishes its mission efficiently and effectively.

Generally, inspections are reviews of a more limited scope than audits. They are performed in accordance with the Quality Standards for Inspections issued by the President's Council on Integrity and Efficiency (PCIE).

Audits and inspections may be categorized as either financial or performance reviews.

Financial Reviews
These include financial statement audits and any other reviews related to FCA’s financial operations. The objective of these reviews is to determine whether FCA’s financial statements present fairly the financial position, results of operations, and cash flows.

Performance Reviews
There are two types of performance reviews: economy and efficiency, and program. Economy and efficiency reviews determine

• whether the entity is acquiring, protecting, and using its resources (such as personnel, property, and space) economically and efficiently;
• the causes of any inefficiencies or uneconomical practices; and
• whether the entity has complied with laws and regulations on matters of economy and efficiency.

In program reviews, the OIG evaluates selected FCA administrative and program operations, focusing on whether management controls, practices, processes, and procedures are adequate and effective. Program reviews also determine

• the extent to which desired results or benefits established by the legislation or other authorizing body are being achieved;
• the effectiveness of an organization, program, activity, or function; and
• whether the entity has complied with significant laws and regulations applicable to the program.

The Audit and Inspection Process
For each fiscal year, the OIG develops an audit and inspection plan. This plan outlines potential reviews to conduct, the objectives of each review, and the resources required to conduct them.

In developing the audit and inspection plan for the year, the OIG considers the following:

• Issues that may pose a risk to FCA’s mission
• Interests of FCA’s Board members and senior managers
• Interests of Congress and others

Send the OIG your suggestions for, or comments about, topics for audit or inspection.

The audit and inspection process involves the following steps:

1. Notification. The OIG notifies accountable managers of its intent to begin a review.
   
   
2. Entrance Conference. The OIG advises Agency officials of the objectives and scope of the review and the general methodology that will be followed, and solicits input from Agency officials.
   
   
3. Field Work. The OIG analyzes selected areas of a program, activity, or function. It obtains sufficient evidence to support the findings and conclusions and to make recommendations or agreed-upon actions. (A recommendation is an OIG suggestion to solve a problem or improve a condition. An agreed-upon action is an action that both management and OIG have agreed will be taken to solve a problem or improve a condition.)
   
   
4. Draft Audit or Inspection Report. The OIG drafts a report to document the objectives, review, findings, recommendations, and/or agreed-upon actions resulting from the OIG’s audit or inspection.
   
   
5. Exit Conference. The OIG meets with the accountable manager(s) to validate the facts contained in the draft report and to obtain management’s views on the OIG’s findings and conclusions. The OIG strives to maintain an open channel of communication with managers to ensure that findings, conclusions, recommendations, and/or agreed-upon actions are accurately and fairly presented in the report.
   
   
6. Final Draft Report. The OIG amends the draft report, as appropriate, based on management’s input and reissues it to management for an official written response. 
   
   
7. Management Response. Management officials respond in writing to the final draft report, indicating how they plan to correct any deficiencies identified in the report. If the Inspector General receives that response within 30 days, the OIG includes it with the final report.
   
   
8. Audit Follow-up. OIG staff and the Agency’s audit follow-up official monitor Agency managers’ actions to ensure that recommendations are followed and agreed-upon actions are taken.
   
   
9. Audit and Inspection Report Distribution. The OIG distributes audit and inspection reports to the Chairman, Board members, and the accountable managers. These final reports are normally public documents and are available on the FCA Web site.  Information from audit and inspection reports is summarized in the OIG’s Semiannual Report to Congress.