Sneak Preview: IHS Is Revising Its Audit Resolution Procedures
(The following was excerpted from a recent article in the Single Audit Information Service.) The Department of Health and Human Services (HHS), Indian Health Service (IHS) is taking steps to update its audit resolution policies and procedures for both federal and nonfederal audits by the end of the year to ensure that it issues management decisions and resolves audits by the required six-month timeframe, in response to a recent HHS Office of Inspector General (OIG) audit.
OIG sought to determine whether IHS resolved audit recommendations in a timely manner during federal fiscal years (FY) 2015 and FY 2016 and to identify all unresolved audit recommendations that were due for resolution as of Sept. 30, 2016. These audits applied to awards that were subject to requirements under former Office of Management and Budget Circular A-133, which has since been superseded by Subpart F of the uniform guidance (2 C.F.R. Part 200).
Under IHS guidance based on Circular A-133, IHS was required to issue a management decision letter containing corrective actions to resolve the audit findings of a nonfederal entity’s single audit within six months after receipt of the final report by the federal government. (The uniform guidance — along with HHS regulations at 45 C.F.R. Part 75 — requires resolution within six months of acceptance of the audit report by the Federal Audit Clearinghouse.) For federal audits (e.g., OIG audits), IHS officials also were required to resolve audit findings within six months.
In its review, OIG found that IHS resolved 138 audit recommendations that were outstanding during FYs 2015 and 2016. However, IHS did not resolve 123 of those 138 recommendations (89 percent) within the required six-month resolution period. In addition, IHS as of Sept. 30, 2016, had not resolved 513 audit recommendations for FYs 2015 and 2016 that were past due for resolution. OIG noted that these 513 past-due recommendations were “procedural in nature” and generally involved “concerns about policies and procedures and internal controls; none of the recommendations involved recommended disallowances.”
Although IHS had policies and procedures in place to ensure that nonfederal audit recommendations were resolved in compliance with federal requirements and that audit recommendations will be considered “unresolved” if they are not resolved within six months of the audit report’s issue date, OIG determined that the agency generally did not follow these policies and procedures.
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