Corrective Action Plan Template

Overview

Following an audit, an auditee is responsible for preparing a Summary Schedule of Prior Audit Findings, as well as a corrective action plan (CAP) for current year audit findings. While the uniform guidance provides greater detail about what to include in the summary schedule, it includes limited discussion about how to develop a effective CAP (§200.511(c)). This template from Thompson Grants provides some considerations to help nonfederal entities pertaining to the CAP.

As the uniform guidance states, the corrective action plan must address each audit finding included in the audit report for the current year (§200.516). It must be a document separate from the auditor’s findings, and provide the name(s) of the contact person(s) responsible for the corrective action, the corrective action to be taken and the anticipated completion date. When an auditee does not agree with the audit finding or believes that corrective action is not required, the CAP must include a detailed explanation of the reasons.

The auditee must initiate and proceed with the necessary corrective action (e.g., change policies, repay funds) as rapidly as possible and the corrective action should begin no later than upon receipt of the auditor’s report (§200.521(d)). The auditee must report the status of all audit findings in subsequent single audits as part of its Summary Schedule of Prior Audit Findings (i.e., corrected, partially corrected, or not corrected).

When developing the CAP, auditees should gather the right team members to effectively address the corrective action and identify all errors and deficiencies. They are then encouraged to analyze the internal root cause of each matter that becomes an audit finding during the course of the audit. The CAP should then reflect a process to address and correct this underlying cause, as well as the actual error the auditor reported. For some recipients (i.e., states) under specific programs (i.e., Medicaid), they should perform a cost-benefit analysis to determine which corrective actions are most cost-effective.

Auditees should seek outside assistance and informal acceptance of the CAP by the federal agency or pass-through entity if they are concerned about the feasibility of the CAP or need help framing the necessary actions to include. This process may include working together to analyze the issues underlying the noncompliance, brainstorming solutions, receiving technical assistance, scoping out action steps and writing the plan. It is also helpful to obtain informal agency feedback if the auditee is concerned that the CAP will not be accepted.

The uniform guidance has a focus on performance. Including an achievable timeline with the anticipated completion date for each finding is a high priority under the guidance, as is completing corrective actions according to the planned timeline. Once the plan is put into action, auditees should track its progress regularly to ensure that milestones are met, that the plan is effective, and that modifications can be made if needed.

Corrective Action Plan (CAP) Template