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Wetlands Reserve Program Case StudyAn
Overview of the External Audit Process
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Organizational Chart
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Government Accountability Office (GAO)Independent, nonpartisan agency that works with Congress
• Evaluates government policies & programs
• Audits agency operations
• Investigates allegations
• Issues legal decisions & opinions
(Completes reviews or audits at the request of Congress)
USDA Office of Inspector General (OIG)Auditing and investigative branch of the U.S. Department of Agriculture
• Investigate allegations of fraud & abuse
• Performs preventive audits
• Audits management and control systems
• Audits large USDA payments
(Completes audits or investigations requested by USDA or Agency leadership or initiated through hotline inquiries)
GAO and OIG activities with NRCS are coordinated through the Compliance Audit Functional Lead within the Compliance Division.
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External Oversight
Nine Steps of the Audit Process
1. Notification 2. Pre-Briefing3. EntranceConference
4. Monitoring5. Preliminary
Findings6. Exit
Pre-Briefing
7. ExitConference
8. Final Report 9. Closure
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Office of Inspector General Case Study:
NRCS Wetlands Reserve Program
Compensation for Easements
OIG Audit Report No.10099-3-SFAugust, 2005
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Step 1. Audit Notification from OIG
• Receive letter of notification
• Copy of notification to Chief’s Executive Team
• Identify Agency Point of Contact
• Brief Point of Contact on responsibilities and duties within the audit process
Office of Inspector General Case Study
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Purpose:To formally initiate the audit process and outline the objectives of the
audit
Objectives:1. Become familiar with laws, regulations, policies, and procedures
pertaining to NRCS’ implementation of WRP
2. Identify key internal controls pertaining to NRCS’ implementation of WRP and perform a limited review of the controls
3. Determine areas that warrant future audit work
Office of Inspector General Case StudyNRCS WRP Audit – Letter of Notification
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Step 2. Pre-Briefing with Agency Leadership
• Review notification
• Develop key points of agency position regarding objectives of the Audit
• Agency Point of Contact is identified
Office of Inspector General Case Study
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Step 3. Entrance Conference held
• Led by Compliance Division Director
• Introduce Agency Point of Contact
• OIG defines audit’s scope, objectives, and methodology
Office of Inspector General Case Study
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Step 4. Monitoring
• OIG conducts onsite interviews at various levels within the Agency
• Data requests are made
Office of Inspector General Case Study
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State’s role in audit process becomes critical to fact-finding.
Step 5. Preliminary Findings Rendered via Draft Report
• Brief Deputy Chief, SPA with talking points for leadership
• Communicate responses via the Point of Contact to OIG
Office of Inspector General Case Study
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Findings & Recommendations
• Finding 1:
• Finding 2:
• Finding 3:
• Finding 4:
Office of Inspector General Case StudyNRCS WRP Audit
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Controls over easement appraisal process were inadequate
WRP easement payments exceeded statutory limitations
Federally purchased crop bases were not retired
NRCS did not properly report WRP easements to FSA
Findings & Recommendations
Office of Inspector General Case StudyNRCS WRP Audit
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• Finding 1 had 10 recommendations
• Finding 2 had 3 recommendations
• Finding 3 had 5 recommendations
• Finding 4 had 4 recommendations
Step 6. An Exit Pre-Briefing is held
• Review of discussion draft report with audit subject-area Deputy Chief and appropriate program managers
• Develop strategy for Agency response
• Agency POC has lead for preparing Agency response and submitting to Compliance Division who will coordinate for submission to OIG
Office of Inspector General Case Study
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Step 7. Exit Conference held with OIG
• Led by Compliance Division Director with the audit subject-area Deputy Chief and appropriate program managers
• Discussion Draft Report is reviewed for Agency comments
• Record any management decisions.
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Preparation of Agency Response
Agency has thirty days to provide OIG a written response to the Findings and Recommendations with a estimated completion date
Finding 1:
Recommendation 1:
Agency Response:
Office of Inspector General Case StudyNRCS WRP Audit
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Controls over the easement appraisal process inadequate
Chief of NRCS should work with appraisal managers at other Federal agencies such as the Forest Service or the Department of Interior to create and fill a Chief Appraiser position
NRCS agrees that a chief appraiser is a valuable addition to the NRCS staff, and, thus, has employed a State-certified Chief General Appraiser to serve this capacity
Step 9. Closure (Completion Plan)
• Work with the Point of Contact to prepare final action items to reach and accomplish each management decision.
• Include dates and responsibilities for status updates.
• Monitor and report progress.
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Preparation of Agency Response
OIG will provide a written response (Management Decision Memo) to the Agency outlining whether or not they approved the responses.
OIG Position:
Office of Inspector General Case StudyNRCS WRP Audit
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OIG accepts NRCS’ management decision for this recommendation
Step 8. Release of Final Report
• Copy, Summary, and Talking Points to the Deputy Chief SPA
• Copies to Chief’s Executive Team
• Develop plan to resolve any pending management decisions
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Step 9. Closure (Prepare Closure Requests)
• Letter to OCFO from the Director, Compliance Division requesting closure
• Reference OIG number, list recommendation numbers, attach adequate supporting documentation
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Step 9. Closure (Recommendation Approved by OCFO)
• Notify Leadership
• Provide Talking Points
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Step 9. Closure (Final Closure Approved by OCFO)
• Notify Leadership
• Document and archive case file.
Office of Inspector General Case Study
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