FEMA
Grant Programs
Directorate
Audit Resolution
Briefing
1
GPD Audit Branch

The Audit Branch is responsible for
coordinating GPD’s response to OIG, GAO
and Single Audit Act Audit findings.

The Audit Branch ensures that corrective
actions are implemented and that audit
recommendations are resolved and closed
by the audit organization.
2
Who Audits FEMA Grantees?
 DHS Office of Inspector General
(OIG)
 US Government Accountability
Office (GAO)
 Independent, non-federal Auditors
such as CPA Firms and State
Auditors (Single Audit Act)
3
DHS Office of Inspector General
4
US Government Accountability Office
5
Single Audit Act Audits
 Rigorous, organization-wide audit or examination of an entity
that receives Federal assistance. Required when the entity
expends:
• $500K prior to12/26/14, $750K after 12/26/14
 The audit objective is to provide assurance to the US Federal
government as to the management of such funds by recipients
such as states, cities, universities, and non-profit organizations.
 The audit is typically performed by an independent certified
public accountant (CPA) and encompasses both financial and
compliance components.
 The Single Audits must be submitted to the Federal Audit
Clearinghouse along with a data collection form, Form SF-SAC.
6
GPD Audit Process Overview
GAO/OIG
Step 1
Step 2
Step 3
Step 4
Step 5
Step 6
• Review
• Participate in • Review Draft • Respond to • Review Final • Prepare
Engagement Field Work
Report
Draft Report
Report
Corrective
Letter
Action Plan
• Attend Exit
• Respond to
Update
• Attend
Conference
Final Report
Entrance
• Request
• Prepare
Conference
Closure
Corrective
Action Plan
7
Engagement Letter and Entrance
Conference
 GAO and OIG initiate formal audits with an engagement
letter and an entrance conference
 The entrance conference is a meeting between GPD and
GAO/OIG at the start of an engagement to:
• Clarify audit scope and objectives.
• Identify specific document requests and special
requirements.
8
Field Work
 GAO and OIG have the authority to coordinate directly
with recipients for interviews, document requests, and
follow-up meetings.
9
Draft Report
 GAO and OIG issue draft reports upon completion of the
audit field work.
 Draft reports include an overview of the subject audit,
findings from the audit, and recommendations.
• Normally issued prior to the exit conference for
review and advanced preparation.
• GAO may issue a Statement of Facts to gain
concurrence on the factual basis of their findings.
10
Exit Conference
 Discuss and validate information in the draft report
 “Concur”, “generally concur”, or “non-concur” to each
recommendation.
 Provide informal comments during or soon after the exit
conference for incorporation into the final report.
• Request changes to specific wording in the report
• Request revisions for relevant missed or
misunderstood information
 DHS/OIG holds an exit conference with the recipient of
an audit/“auditee”.
11
Formal Response to the Draft Report
 Agency’s formal response to the findings and their
recommendations.
 “Concur” or “non-concur” to each recommendation.
 Explanation for each recommendation with which it does
not concur based on interpretation of the law, regulation,
or authority of officials to take or not take action.
 A Corrective Action Plan (CAP) should address:
• Any actions taken or planned for each
recommendation and dates for achieving the action
 Recipient also has opportunity to respond to draft report.
12
Final Report
 Final report is generally issued approximately one
month after receipt of response to the draft report.
 The report should be reviewed for validity and to
determine next actions.
 If the response to the draft report included corrective
actions taken or planned for each recommendation, the
auditor’s analysis will address changes to the
recommendations (closed, resolved but open,
unresolved and open).
 Posted on the OIG or GAO website.
13
Formal Response to the Final Report
GPD must provide a formal response to GAO (within 60
days) or OIG (within 90 days) reports and include:
 Agency views on the findings and recommendations
 “Concur”, “generally concur”, or “non-concur” to each
recommendation.
 Corrective Action Plan (CAP): corrective measures that
are proposed or already implemented that address
findings and recommendations noted in the final report.
 For recommendations of non concurrence GPD
provides and explanation of their position.
14
Corrective Action Plan and Closure
 A CAP Update must be provided on each corrective action after it is
completed to close out the recommendation.
 Updates should be provided every 90 days after the initial CAP or as
established in the CAP until all corrective actions are complete.
 Updates and supporting documents provided by the state are
reviewed to determine if the actions satisfied the recommendation.
 GPD provides written notification (CAP Update Memo) to GAO/OIG
Coordinator on status of the state’s actions.
 Closure of a recommendation can be requested once the corrective
action is complete and the intent of the recommendation is met.
 Closure of the audit can be requested once all recommendations
have been resolved and closed.
15
Disallowed Costs
 Questioned costs may be identified during OIG audits.
 The FEMA Finance Center in the Office of the Chief
Financial Officer (OCFO) is responsible for debt collection.
 The HQ or Regional Program Office validates amount
owed.
 The process is initiated when the presumed debtor is
notified of questioned cost/potential debt via a Notice of
Potential Debt Letter (NPDL).
 Presumed debtor has right to appeal the amount owed:
this involves program specific issues and provides for due
process.
16
Debt Collection Appeals Process
 FEMA FD 116-1 outlines standard appeals
process for recipients under any FEMA grant
program.
 Process requires written explanation and
documentary evidence to show why debt is not
owed (allowable).
 Requires Notice of Potential Debt to be included in
Grantee Notification Letter or separately.
 If owed, the debt is turned over to OCFO for
collection.
17
Summary of GPD’s FY14 Audit
Recommendations
 Purpose of analysis: To identify the most frequently
occurring problem areas in OIG audits and provide
information that can be used to inform a range of grant
management activities including:
 Monitoring
 Policy and Guidance Development
 Record Keeping
18
Methodology




Examined 68 OIG recommendations from FY14
Sorted into categories to better identify commonalities
Commonalities were ordered according to frequency
Commonalities were translated into 10 actionable items
19
Summary
FEMA's Monitoring - Recommendations are for FEMA to:

Evaluate all recipients for risk

Enforce accurate and timely reporting

Review recipient actions i.e. accuracy of reports,
compliance with federal monitoring guidance

Verify compliance with required corrective actions
20
Summary
Procedures - several recommendations cited the need to
develop new or to clarify existing procedures related to the
following:
• Personnel costs
• Property and inventory management
• Maintaining adequate documentation on items
• Accurate and timely recipient recording and reporting
21
Summary
 Sub recipient Monitoring mentioned in 15
recommendations.
 Need for monitoring plan with procedures.
 Need for schedule and system for monitoring property
records retention, equipment use and disposition.
22
Summary
 Debt Collection – the reasons for questioned costs
involve:
 Unjustified sole source procurements
 Inaccurate M&A
 Unsupported costs
 Recipients retaining funds on behalf of subs
23
Summary
Homeland Security Strategies – recommendations
encourage assessing, developing and updating state
strategies.
Note: FEMA has eliminated the requirement to have a
homeland security strategy in the FY 2015 HSGP NOFO.
Expectation is that OIG may refocus on THIRAs and SPRs
in future audits.
24
Summary
Performance Measures – recommendations encourage:
 Establishing measures to assess progress
 Providing a system to measure preparedness
Note: OIG seems to have agreed that SPRs will suffice
to address these recommendations.
25
Summary
Sustainment - Recommendation is for recipient to have
sustainability plan as sound business practice.
26
Summary
Obligation/Approval of Funding – Recommendations advise:
 Shortening the timeframe for obligation of funds to
sub recipients.
 Sub recipients consent for recipients’ retaining funds.
27
Summary
Procurement recommendations relate to:
 Ensuring awareness of federal and state regulations
particularly compliance with sole source and cost
analyses requirements.
28
Summary
Internal Controls recommendations:
 Personnel costs
 Reporting
 Cost analyses
 Sole source procurement
29
Summary
Training - focus of recommendations is on:
 Updating training & exercise plan
 Conducting exercises
 Having NIMS-qualified instructors
 Incorporating stakeholders that would be involved in an
actual incident or event
30
Point of Contact:
Deborah Scott
Acting Chief, Audit Resolution Branch
Grant Programs Directorate
FEMA-GPD-Audit-Resolution@fema.dhs.gov
31