GENERAL MANAGEMENT:

The Department Needs to Strengthen Its

Audit Follow-up System

 OIG-02-059 March 4, 2002

Office of Inspector General

*******

The Department of the Treasury
Contents

Department Needs to Strengthen Its Audit Follow-up System (OIG-02-059) Page 1

Audit Report....................................................................................................... 2

Results in Brief.................................................................................................. 3

Background....................................................................................................... 4

Findings and Recommendations.......................................................................... 5

Department-wide Evaluations Need To Be Performed To

 Assess System Performance....................................................................... 5

Recommendations ...................................................................................... 12

Customs Regulatory Audit and ATF Inspection Division Audit 

 Follow-up Systems Need To Be Monitored By The DCFO’s Office............... 14

Recommendations ...................................................................................... 16

Appendices

Appendix 1: Objectives, Scope, and Methodology......................................... 18

Appendix 2: Management Comments ........................................................... 19

Appendix 3: Major Contributors to this Report .............................................. 21

Appendix 4: Report Distribution.................................................................... 22

Abbreviations

ATF Bureau of Alcohol, Tobacco and Firearms

CFO Chief Financial Officer

Customs U. S. Customs Service

DCFO Deputy Chief Financial Officer

FY Fiscal Year

GAO U. S. General Accounting Office

IG Inspector General

ITC system Inventory, Tracking and Closure System

OIG Office of Inspector General

OMB Office of Management and Budget

PCA Planned Corrective Action

TD Treasury Directive

TIGTA Treasury Inspector General for Tax Administration
OIG Audit

Report

The Department of the Treasury

Office of Inspector General

Department Needs to Strengthen Its Audit Follow-up System (OIG-02-059) Page 2

Edward R. Kingman, Jr.

Assistant Secretary for Management

 and Chief Financial Officer

Office of Management and Budget Circular No. A-50 Revised, 

Audit Follow-up (OMB Circular A-50), requires Federal agencies to 

establish systems to assure the prompt and proper resolution and 

implementation of audit recommendations. This Circular also 

requires that these systems provide for a complete record of action 

taken on both monetary and non-monetary findings and 

recommendations. The Inventory, Tracking and Closure System 

(ITC system) is a Treasury-wide database tool that enables 

management to monitor the progress of internal control issues 

within the Department. The ITCS is comprised of five subsystems. 

One of the five subsystems is the Audit subsystem. The Audit 

subsystem serves as the Department’s primary automated tool for 

monitoring and tracking the status of audits issued by or for the 

Inspectors General (IG) and the U.S. General Accounting Office 

(GAO) from audit report issuance through final action. 

We performed an audit to determine whether the Department’s 

audit follow-up system complied with OMB requirements. This 

audit was conducted as part of the Office of Inspector General 

Annual Plan For Fiscal Year 2001. We performed our work 

between November 2000 and September 2001 primarily at offices 

in the Washington, D.C., area that came under the authority of the 

Assistant Secretary for Management and Chief Financial Officer. A 

more detailed description of our objectives, scope, and 

methodology is provided as Appendix 1.
Department Needs to Strengthen Its Audit Follow-up System (OIG-02-059) Page 3

Results in Brief

We found that the Department’s audit follow-up system did not 

fully comply with OMB requirements. Specifically, the 

Department’s follow-up system did not (1) ensure that Departmentwide evaluations were performed to assess system performance, 

and (2) assign responsibility for or ensure that the U.S. Customs 

Service's (Customs) regulatory audit and the Bureau of Alcohol, 

Tobacco and Firearms' (ATF) inspection division audit follow-up 

systems meet OMB standards.

We recommended that the Assistant Secretary for Management 

and Chief Financial Officer ensure: (1) periodic evaluations are 

performed to determine whether the Department’s audit follow-up 

system results in efficient, prompt, and proper resolution and 

corrective action on audit recommendations; (2) copies of all audit 

reports are maintained; (3) resource requirements are evaluated 

and, if necessary, appropriate action is taken; (4) responsibility is 

assigned for ensuring audit follow-up systems for Customs’ 

regulatory audit and ATF’s inspection activities meet OMB 

standards; and (5) other regulatory audit and inspection activities 

within the Department are identified and, where applicable, related 

audit follow-up systems are evaluated.

The Acting Chief Financial Officer’s (CFO) response took exception 

to our first finding that the Department was not in compliance with 

OMB Circular A-50 with regard to performance of Department-wide 

evaluations and accompanying recommendations. Management’s 

response, however, indicated general agreement with our second 

finding that the Department did not ensure that agency regulatory 

audit and inspection activities audit follow-up systems meet OMB 

standards. The complete text of the Acting CFO’s response is 

provided in Appendix 2.

Despite stated disagreement with our first finding, the Acting 

CFO’s response did not provide any new information that would 

refute the results of our review or the facts presented in this 

report. We, therefore, believe the finding and its accompanying 

recommendations are still valid. The Acting CFO’s response to our 
Department Needs to Strengthen Its Audit Follow-up System (OIG-02-059) Page 4

second finding outlined corrective actions that when fully 

implemented should satisfy the two accompanying 

recommendations. 

Background

Treasury Directive (TD) 40-03, Treasury Audit Resolution, Followup, and Closure, dated February 2, 2001, provides the Department 

of the Treasury's policy with regard to audit follow-up. This 

directive requires that: (1) all audit recommendations are acted 

upon timely, (2) progress is adequately monitored, (3) actions are 

properly completed and closed out, (4) statistical information and 

other data are appropriately reported according to Section 5 of the 

Inspector General Act, and (5) audit follow-up standards are met 

for reports issued by or for the IGs and GAO. TD 40-03 also 

assigns responsibility for tracking all audit recommendations 

through the ITC system to the Deputy Chief Financial Officer 

(DCFO). 

The Audit subsystem of the ITC system serves as the 

Department’s primary automated tool for monitoring and tracking 

the status of audits issued by or for the IGs and GAO from audit 

report issuance through final action. Managers from Treasury’s 

bureaus, the DCFO, and the Office of the Assistant Secretary for 

Management and Chief Financial Officer have access to the audit 

information contained in the ITC system through the Department’s 

Executive Information System. Users can choose from over 20 

different types of reports to generate information about audit 

reports, findings, recommendations, and planned corrective actions 

(PCA). 

When an audit report is issued, the findings and recommendations 

are uploaded to the ITC system. The appropriate bureau then 

enters PCAs, including original due dates, into the ITC system for 

each recommendation. Audit reports are tracked through the ITC 

system until final action is completed for every PCA. Ultimately, 

the effectiveness of resolving findings identified by the Office of 

Inspector General (OIG), Treasury Inspector General for Tax 
Department Needs to Strengthen Its Audit Follow-up System (OIG-02-059) Page 5

Administration (TIGTA), GAO, and other audits and evaluations 

depend on implementing reported recommendations.

Findings and Recommendations

Finding 1 Department-wide Evaluations Need To Be Performed To 

Assess System Performance

The DCFO's office did not perform (1) required periodic evaluations 

to assess audit follow-up performance Department-wide or (2) onsite verifications of corrective actions taken. According to 

management, it lacked the necessary resources to perform this 

function. As a result, ITC system data on audit reports, findings, 

recommendations, monetary benefits, and corrective action plans, 

may not be sufficiently reliable. In addition, the Department’s audit 

follow-up system may not provide the necessary assurance that 

management responded in a timely manner to all audit reports, 

promptly implemented audit recommendations, submitted 

corrective action plans timely, or actually took corrective actions.

Department-wide Evaluations

OMB Circular A-50 states that each agency shall establish systems 

to assure the prompt and proper resolution and implementation of 

audit recommendations. These systems shall provide for a 

complete record of action taken on both monetary and nonmonetary findings and recommendations. This Circular also 

provides standards for agency follow-up systems. These 

standards, in part, require:

• Periodic analysis of audit recommendations, resolution, and 

corrective action, to determine trends and system-wide 

problems, and to recommend solutions; and

• Periodic evaluation to determine whether the audit follow-up 

system results in efficient, prompt, and proper resolution and 

corrective action on audit recommendations.
Department Needs to Strengthen Its Audit Follow-up System (OIG-02-059) Page 6

TD 40-03 establishes policies and assigns responsibilities for 

monitoring audit follow-up within the Department. This directive 

provides, in part, that the Assistant Secretary for Management and 

Chief Financial Officer is responsible for ensuring that appropriate 

audit follow-up policies and procedures are in place Departmentwide. This directive also assigns “audit follow-up official” 

responsibilities to the DCFO that include:

• Tracking all audit recommendations from audit report issuance 

to final action through the ITC system;

• Ensuring that bureaus provide timely and adequate information 

on the status of recommendations;

• Performing periodic analyses of audit recommendations to learn 

trends and Department-wide problems, and to recommend 

solutions;

• Evaluating audit follow-up performance Department-wide, 

through mechanisms including sample on-site verifications of 

corrective actions taken; and

• Making recommendations to the Assistant Secretary for 

Management and Chief Financial Officer to strengthen audit 

follow-up performance.

Our review found that the DCFO's office performed trend analyses 

of system data with regard to audit recommendations, resolution, 

and corrective actions, which were reported quarterly to senior 

Department management. We could not find evidence that the 

DCFO’s office produced periodic reports to senior management that 

clearly identified systemic causes for problems identified through 

its trend analyses or provided recommendations to eliminate the 

underlying causes of the problems identified. We were informed 

that the DCFO’s office did not conduct Department-wide 

evaluations of the audit follow-up system, perform sample 

verifications of corrective actions taken by the bureaus as required 

by TD 40-03, or make recommendations to the Assistant Secretary 

for Management and Chief Financial Officer on ways to strengthen 
Department Needs to Strengthen Its Audit Follow-up System (OIG-02-059) Page 7

audit follow-up performance. As a result, the system did not 

provide for the prompt input of audit reports or submission of 

corrective actions, nor assurance that corrective actions were 

implemented. 

After reviewing trend analysis information reported by the DCFO’s 

office, we reviewed ITC system data and confirmed many of the 

deficiencies periodically reported by DCFO to senior Department 

management. The types of deficiencies identified by the 

Department and our review include, but were not limited to, the 

following:

• Audit reports, findings, and recommendations were not always 

entered into the ITC system or entered timely. Our review 

showed that 29 audit reports were not entered into the ITC 

system as of December 2000. Four, or 14 percent, were more 

than 1 year old. Our review also showed that of the 808 

reports listed in the files provided by the DCFO’s office, 219 

reports, or 27 percent, were not entered into the system within 

60 days of the report issuance date. On a prorata basis, the 

number of reports not entered in a timely manner were evenly 

distributed, about 40 percent each, between those issued by 

GAO and the OIG. TIGTA audit reports accounted for another 

10 percent of the untimely-entered reports. The remaining 10 

percent were not identifiable to a specific audit entity. 

For GAO and TIGA audit reports, bureau management is 

responsible for recording report data in the ITC. For OIG audit 

reports, OIG personnel perform this function, and we 

acknowledge that many of our reports were not recorded in the 

ITC in a timely manner. After the period covered by this audit, 

we worked with the DCFO’s office to resolve various 

technology issues with this process and as of 

September 30, 2001, we had eliminated the backlog of 

unrecorded OIG reports.

• Corrective action plans were not entered or not entered timely. 

Fifty-nine (59) of the 561 audit reports contained in the PCA file 

provided by the DCFO’s office contained 48 recommendations 
Department Needs to Strengthen Its Audit Follow-up System (OIG-02-059) Page 8

without a corrective action plan. Forty-four percent of these 

recommendations were in the ITC system for more than 6 

months and 4 of the recommendations had reported monetary 

benefits totaling $315,260.

• Changes to corrective action dates. We selected 15 audit 

reports to assess the number of due date changes made by the 

bureaus. We selected these 15 reports because of the relatively 

high number of PCAs related to the audit reports. We found 

that these 15 reports had 22 recommendations with 242 

revisions to the original due dates, which equated to an average 

of 11 date changes per audit recommendation.

From these 15 reports, we selected 3 findings with 1 

recommendation each to assess the bureau’s justification for 82 

revised due dates. Our review disclosed that the bureau, in 

many instances, used broad general statements such as “press 

of other business” to justify date changes for multiple corrective 

actions. In reviewing the bureau’s files, we were unable to find 

documentation that explained what was meant by “press of 

other business.” As a result, we were unable to assess the 

validity of the changes.

With regard to corrective action date changes, we also noted 

the following statement in the Department’s March 2001 

quarterly report: “All too often our plans appear to be ill 

considered or overly optimistic as to projected completion 

dates, whereupon milestones are not met or, if met, do not 

solve the problem. ... We should seek to eliminate instances 

where plans are revised continually with no resolution of the 

problems.”

• Audit recommendations were improperly closed. When an audit 

report includes recommendations that are repeated from a prior 

audit report, the practice has been to close out the 

recommendations in the earlier report and track them under the 

current report. However, for the two reports we looked at, 18 

of 23 recommendations repeated from prior reports were closed 
Department Needs to Strengthen Its Audit Follow-up System (OIG-02-059) Page 9

out under those report numbers but were not being tracked 

under the current report. 

• Sustained monetary benefit amounts were not entered or not

entered timely. A review of 41 contract audit reports1 with 

questioned costs showed that sustained costs totaling about 

$6.5 million were not entered into the ITC system for 18, or 44 

percent, of the reports. A more detailed review of 6 of the 18 

reports showed that 4 reports with sustained cost of about 

$5.1 million had been issued for more than 1 year. The oldest 

was issued prior to May 1999.

We also identified three program audits with questioned costs 

of about $3.4 million. Our review showed that questioned 

costs of approximately $120,000 for one of these audits was 

recorded in the ITC system although the auditors did not 

question any costs in the report. 

Our review also disclosed that the Department did not have copies 

of some audit reports on file. For instance, we selected 123 audit 

reports for review. We found that 45 (24 TIGTA, 17 OIG, and 4 

GAO), or 37 percent, of the audit reports were not available within 

the DCFO’s office. We therefore had to obtain audit reports from 

other sources to verify the accuracy of certain ITC system data. 

According to staff personnel, they also had to rely on bureau 

personnel at times for audit reports to carryout their 

responsibilities.

In summary, while many of the aforementioned deficiencies have 

been highlighted by the Department in its quarterly reports, reviews 

have not been performed to identify root causes for the more 

systemic problems nor have specific recommendations been 

developed and proposed for their resolution. 

 

1

 Contract audits are performed to provide agency components responsible for procurement and 

contract administration with reviews of contractor and subcontractor internal controls and examinations 

of their accounting and financial management systems. 
Department Needs to Strengthen Its Audit Follow-up System (OIG-02-059) Page 10

Resource Requirements not Identified or Prioritized

Management attributed many of the issues we encountered during 

the audit to a lack of resources. Although a lack of resources may 

be part of the cause, our review did not identify any study or 

evaluation performed by management that determined the 

resources it would need to ensure all mandatory OMB requirements 

were met. We, therefore, believe that an evaluation of resource 

requirements, including priority of work being performed, should be 

made and alternative methods or reprioritization for accomplishing 

the workload should be evaluated.

Management Comments

The Acting CFO made, in part, the following comments with regard 

to this finding:

• The OIG’s draft report erroneously referred to a lack of analysis, 

evaluation, and reporting on audit follow-up matters by the 

Department; thus, recommendation 1 was unnecessary because 

required actions had already been taken.

• The Acting CFO’s offices worked with the OIG to ensure that 

the proper parties received physical copies of the audit reports; 

therefore, recommendation 2 was not required because this 

matter was resolved. Further, management did not believe it 

was necessary to receive paper copies of all audit reports.

• Departmental management was aware of its resource 

requirements through analysis already completed; thus, 

recommendation 3 was unnecessary.

After evaluating management’s response to the draft report, 

information gathered during our review, and our draft report, we 

believe:

• Our draft report clearly acknowledged DCFO’s trend analysis 

efforts regarding ITC system data and its quarterly reporting of 

this information. Further, our report did not take exception to 
Department Needs to Strengthen Its Audit Follow-up System (OIG-02-059) Page 11

DCFO’s compliance with OMB and the Department’s 

requirement that it performed “trend analysis.” Our report 

stated that Department-wide reviews, which are different from 

the requirement to perform trend analysis, were not performed. 

OMB and the Department’s requirement that Department-wide 

reviews be performed envision more in-depth review than would 

be associated with trend analysis work. For instance, 

Department-wide reviews are to include sample on-site 

verification of corrective action taken. Further, DCFO personnel 

informed us that they did not perform this type of in-depth 

review or go on-site to verify, where appropriate, that corrective 

actions were in fact taken.

• The actions the CFO stated it took regarding the distribution of 

OIG audit reports is a positive step in addressing 

recommendation 2. However, we believe additional effort is 

needed to address the proper distribution of TIGTA and GAO 

reports that were not available to the DCFO staff. In addition, 

we agree that “paper copies” of audit reports are not necessary 

if the audit reports are available to responsible DCFO staff 

through electronic or digital media.

• Despite the CFO’s stated disagreement with our first finding 

and recommendation, we believe the finding and its 

accompanying recommendations, including recommendation 3, 

are still valid for the reasons stated in the report. Therefore, we 

do not agree with the CFO’s justification for not performing an 

evaluation of its resource requirements to determine whether 

any additional resource or alternative work procedures are 

necessary to ensure that all mandatory OMB requirements are 

met.
Department Needs to Strengthen Its Audit Follow-up System (OIG-02-059) Page 12

Recommendations

The Assistant Secretary for Management and Chief Financial 

Officer should:

1. ensure that (a) periodic evaluations are performed to determine 

whether the audit follow-up system results in efficient, prompt, 

and proper resolution and corrective action on audit 

recommendations; (b) periodic analyses of audit 

recommendations, resolution, and corrective action are 

performed to identify Department-wide problems, and 

(c) appropriate action is taken when warranted to strengthen 

audit follow-up performance or address systemic Departmentwide problems.

Management Comment. The Acting CFO disagreed with the 

finding that the DCFO’s office was not in compliance with OMB 

Circular A-50 with regard to conducting Department-wide 

reviews. Therefore, it was inappropriate for the report to 

recommend a course of action that was already being done. 

OIG Comment. Our report recognized that the DCFO’s office 

performed required trend analyses but did not perform 

Department-wide evaluations. In addition, the Acting CFO’s 

response did not provide any new information to support 

management’s contention that it performed required 

Department-wide reviews. Accordingly, this recommendation is 

not considered resolved.

2. ensure that a copy of each audit report is obtained and 

maintained to ensure a complete record for verification of 

system data and other job-related responsibilities.

Management Comment. The Acting CFO’s response indicated 

disagreement with this recommendation. However, the 

response also stated that the CFO’s offices had worked with 

the OIG to ensure that the proper parties received physical 

copies of the audit reports. Management also stated it did not 
Department Needs to Strengthen Its Audit Follow-up System (OIG-02-059) Page 13

believe it was necessary to receive paper copies of all audit 

reports. 

OIG Comment. The actions taken by the Acting CFO’s offices 

to address recommendation 2 partially satisfy this 

recommendation. Additional effort is needed, however, to 

address the proper distribution of TIGTA and GAO reports that 

were not available to the DCFO staff. Therefore, this 

recommendation is not resolved. In addition, we agree that 

“paper copies” of audit reports are not necessary if the audit 

reports are available to responsible DCFO staff through 

electronic or digital media. 

3. evaluate the resource requirements necessary to meet OMB 

audit follow-up requirements and, if necessary, take appropriate 

action to ensure all mandatory requirements are met.

Management Comment. The Acting CFO’s response indicated 

disagreement with this recommendation. The response stated 

that management was aware of its resource requirements and 

thus did not need to conduct any analysis beyond those already 

completed.

OIG Comment. This recommendation is tied directly to 

recommendation 1. Since our audit work and this report 

showed that the DCFO’s office did not perform Departmentwide reviews, and management’s response provided no new 

information with regard to this matter, we believe the finding 

and its accompanying recommendations, including 

recommendation 3, are still valid. In addition, during the course

of our review, the OIG auditors were not provided any 

information on completed prior year studies with regard to the 

resources necessary to perform Department-wide reviews. 

Therefore, we do not agree with the Acting CFO’s justification 

for not performing an evaluation of its resource requirements to 

determine whether any additional resource or alternative work 

procedures are necessary to ensure that all mandatory OMB 

requirements are met. Accordingly, we do not consider this 

recommendation resolved.
Department Needs to Strengthen Its Audit Follow-up System (OIG-02-059) Page 14

Finding 2 Customs Regulatory Audit And ATF Inspection Division 

Audit Follow-up Systems Need To Be Monitored By The 

DCFO’s Office

The Department has not ensured that appropriate audit follow-up 

systems are in place for agency units responsible for regulatory 

audit and inspection activities. As a result, audit follow-up 

systems employed by regulatory audit and inspection divisions are 

not in compliance with OMB standards. Moreover, there is no 

assurance that the follow-up systems used by regulatory and 

inspection divisions within Treasury’s bureaus result in efficient,

prompt, or proper resolution and corrective action on audit 

recommendations. 

During our audit, the DCFO acknowledged that it had not been 

involved in overseeing regulatory audit activities. The DCFO's 

office plans to review the requirements and ensure that the 

relevant bureaus are fulfilling their responsibilities.

OMB Circular A-50 standards for agency follow-up systems 

require, in part:

• Prompt resolution and corrective actions on audit 

recommendations (i.e., resolution within 6 months after 

issuance of a final report);

• Semi-annual reports to the agency head on the status of all 

unresolved audit reports over 6 months old ... and collections, 

offsets, write-offs, demands for payment and other monetary 

benefits resulting from audits; and

• Periodic evaluations of whether the audit follow-up system 

results in efficient, prompt, and proper resolution and corrective 

action on audit recommendations.

The Circular states that these standards are applicable to agency 

units responsible for regulatory audit or inspection activities 

involving the review of financial matters that may result in
Department Needs to Strengthen Its Audit Follow-up System (OIG-02-059) Page 15

(1) fines or penalties, (2) assessments or price adjustments, or

(3) other monetary recoveries by the Government. The Circular 

further states that the agency audit follow-up official shall ensure 

that appropriate follow-up systems are in place for agency units 

responsible for regulatory audit or inspection activities.

TD 40-03 establishes policies and assigns responsibilities for 

monitoring audit follow-up within the Department of the Treasury. 

This directive states that basic audit follow-up standards apply to 

regulatory and inspection reviews of financial matters that may 

result in fines or penalties, assessments or price adjustment, or 

other monetary recoveries by the Government.

We found that the Department’s ITC system is not used to track 

audit reports or findings issued by Customs' regulatory audit or 

ATF's inspection divisions. In addition, staff in the DCFO's office 

informed us that they did not receive periodic reports on the status 

of unresolved recommendations over 6 months old from regulatory 

audit and inspection divisions within the bureaus.

Customs and ATF officials informed us that they conducted 

reviews that resulted in fines, penalties, assessments, or monetary 

recoveries by the Government. The officials also informed us that 

their internal audit follow-up systems did not routinely track, and 

they did not report outside their bureau, information about 

unresolved recommendations that were outstanding more than 6 

months from the issuance of the final report.

Based on information provided for fiscal years (FY) 1999 and 

2000, Customs and ATF issued more than 256 reports with 

recommended recoveries of approximately $96 million and 

collections of approximately $57 million. These two bureaus also 

identified at least 155 additional recommendations outstanding at 

the end of FY 2000 that involved monetary recoveries. Seventythree, or 47 percent, of the outstanding recommendations were 

more than I year old.
Department Needs to Strengthen Its Audit Follow-up System (OIG-02-059) Page 16

Recommendations

The Assistant Secretary for Management and Chief Financial 

Officer should:

4. assign to the DCFO responsibility, as the Department’s audit 

follow-up official, to ensure audit follow-up systems for 

regulatory audit and inspection activities meet OMB standards. 

Management Comment. The Acting CFO’s response indicated 

agreement with our finding and stated that a memorandum 

defining the Department’s oversight and expectations would be 

issued by July 31, 2002. 

OIG Comment. We consider this recommendation to have a 

management decision with a projected final action date of 

July 31, 2002.

5. ensure that all regulatory audit and inspection activities within 

the Department are identified and, where applicable, evaluate 

the audit follow-up systems to determine whether the systems:

(1) meet OMB standards; and (2) result in efficient, prompt, and 

proper resolution and corrective action on audit 

recommendations.

Management Comment. The Acting CFO’s response indicted 

agreement with this recommendation and stated that reviews to 

determine whether bureau regulatory audit and inspection 

activities are in compliance with OMB Circular A-50 will be 

completed by April 30, 2002.

OIG Comment. We consider this recommendation to have a 

management decision with a projected final action date of 

April 30, 2002.
Department Needs to Strengthen Its Audit Follow-up System (OIG-02-059) Page 17

* * * * * *

We would like to extend our appreciation for the cooperation and 

courtesies extended to our staff during the review. If you have any 

questions, please contact me at (202) 927-5400 or 

Thomas E. Byrnes, Director, Program Audits, at (202) 927-5904. 

Major contributors to this report are listed in Appendix 3.

Marla A. Freedman

Assistant Inspector General for Audit
Appendix 1

Objectives, Scope, and Methodology

Department Needs to Strengthen Its Audit Follow-up System (OIG-02-059) Page 18

Our objectives were to determine whether the Treasury's 

Inventory, Tracking and Closure (ITC) Audit subsystem had 

adequate management controls, accurate and reliable data, and 

effective management accountability for unresolved or disputed 

recommendations reported to Congress.

To accomplish our objective, we conducted on-site work from 

November 2000 through September 2001. We interviewed key 

personnel involved in the Department’s audit follow-up system who 

came under the authority of the Assistant Secretary for 

Management and Chief Financial Officer. We also interviewed 

bureau personnel who had audit follow-up responsibilities, which 

included personnel from Customs, ATF, United States Secret 

Service, and Internal Revenue Service. We reviewed OMB 

requirements, prior Inspector General reports, and Treasury and 

bureau policies and procedures related to audit follow-up.

We obtained and analyzed five files (reports, findings, 

recommendations, planned corrective actions, and due date 

histories) from the Department’s ITC Audit subsystem. These files 

contained all pertinent audit follow-up information maintained by 

the Department on (1) open recommendations and 

(2) recommendations that were closed between January 1999 and 

December 2000.

Although our review focused on transactions and records related to 

calendar years 1999 through 2000, we reviewed transactions from 

other periods as deemed necessary.

We conducted our audit in accordance with generally accepted 

government auditing standards.
Appendix 2

Management Comments

Department Needs to Strengthen Its Audit Follow-up System (OIG-02-059) Page 19
Appendix 2

Management Comments

Department Needs to Strengthen Its Audit Follow-up System (OIG-02-059) Page 20
Appendix 3

Major Contributors To This Report

Department Needs to Strengthen Its Audit Follow-up System (OIG-02-059) Page 21

Thomas E. Byrnes, Director, Departmental Offices Audits

William S. Schroeder, Audit Manager

Marshall Toutsi, Auditor-in-Charge
Appendix 4

Report Distribution

Department Needs to Strengthen Its Audit Follow-up System (OIG-02-059) Page 22

The Department of the Treasury

Assistant Secretary for Management and Chief Financial Officer

Deputy Chief Financial Officer

Office of Strategic Planning and Evaluations

Office of Accounting and Internal Control

Office of Management and Budget

OIG Budget Examiner