Wetlands Reserve Program Case Study An Overview of the External Audit Process Helping People Help The Land

Organizational Chart Helping People Help The Land

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. Helping People Help The Land External Oversight

Nine Steps of the Audit Process 1. Notification2. Pre-Briefing 3. Entrance Conference 4. Monitoring 5. Preliminary Findings 6. Exit Pre-Briefing 7. Exit Conference 8. Final Report9. Closure Helping People Help The Land

Office of Inspector General Case Study: NRCS Wetlands Reserve Program Compensation for Easements OIG Audit Report No SF August, 2005 Helping People Help The Land

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 Helping People Help The Land

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 Study NRCS WRP Audit – Letter of Notification Helping People Help The Land

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 Helping People Help The Land

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 Helping People Help The Land

Step 4. Monitoring OIG conducts onsite interviews at various levels within the Agency Data requests are made Office of Inspector General Case Study Helping People Help The Land 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 Helping People Help The Land

Findings & Recommendations Finding 1: Finding 2: Finding 3: Finding 4: Office of Inspector General Case Study NRCS WRP Audit Helping People Help The Land 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 Study NRCS WRP Audit Helping People Help The Land 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 Helping People Help The Land

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. Office of Inspector General Case Study Helping People Help The Land

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 Study NRCS WRP Audit Helping People Help The Land 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. Office of Inspector General Case Study Helping People Help The Land

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 Study NRCS WRP Audit Helping People Help The Land 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 Office of Inspector General Case Study Helping People Help The Land

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 Office of Inspector General Case Study Helping People Help The Land

Step 9. Closure (Recommendation Approved by OCFO) Notify Leadership Provide Talking Points Office of Inspector General Case Study Helping People Help The Land

Step 9. Closure (Final Closure Approved by OCFO) Notify Leadership Document and archive case file. Office of Inspector General Case Study Helping People Help The Land