4.1 Purpose. This chapter identifies and explains the procedures and actions the Service will take when responding to and implementing recommendations in Inspector General (OIG) reports. It does not apply to reports issued by the General Accounting Office for which guidance may be found in Part 416, General Accounting Office Audits.
A. Internal Audit means an audit report of a Service program or operation.
B. External Audit means a single audit completed by an independent audit organization under the Single Audit Act of l984, a grant audit, a pre-award audit of contractor proposed future costs, a concessions audit, or a contractor claim audit. The responsible official for external audits is usually the contracting officer or grants awarding official within whose purview the subject matter of the audit falls.
C. Questioned Cost means a cost that is questioned by the OIG (or other audit entity) because of an alleged violation of a provision of a law, regulation, contract, grant, cooperative agreement, or other agreement or document governing the expenditure of funds; a finding that, at the time of the audit, such cost was not supported by adequate documentation; or a finding that the expenditure of funds for the intended purpose was unnecessary or unreasonable. A questioned cost may include an unsupported cost as a separate subcategory.
D. Unsupported Cost means a cost questioned by the OIG because such cost was not supported by adequate documentation.
E. Disallowed Costs are those costs the Service has sustained or agreed should not be charged to the Government.
F. Recommendation that Funds be Put to Better Use means a recommendation by the OIG that funds could be used more efficiently if the Service took actions to implement and complete the recommendation including reductions in outlays, de-obligation of funds from programs or operations, costs not incurred by implementing recommended improvements related to the operations of the Service or a contractor or grantee; avoidance of unnecessary expenditures noted in pre-award reviews of contract or grant agreements; or any other savings which are specifically identified.
G. Potential Additional Revenues represent monetary amounts from revenue generating functions such as rent, leases, or fees that were underpaid or not realized because policies, procedures, agreements, or requirements were lacking or were not followed. For example, this category may be used in audit reports involving concessions, grants, reimbursable services, and fees.
H. Management Decision within the context of audit follow-up activities means the evaluation of the findings and recommendations included in an audit report and the issuance of a final decision concerning the findings and recommendations, including actions concluded to be necessary. The decision includes a statement of actions to be taken along with names of responsible officials, dates for accomplishment of actions to be taken, and OIG agreement with the statement of actions to be taken. Any action that extends beyond 1 year from the date of the decision for its accomplishment should include a detailed action plan with quarterly milestones for completion. When funds recommended to be put to better use or potential additional (or underpaid) revenues are identified in an audit report, the decision does not require agreement between the Service and the OIG on specific dollar amounts. This issue, however, should be addressed in the Service's response to the audit report wherein the Service should either concur with the amount or justify an alternative amount.
I. Resolution is the process of reaching a decision on action to be taken on audit recommendations when there is disagreement between the Service and the OIG on a decision. If an agreement cannot be reached, the OIG will refer the report to the Assistant Secretary - Policy, Management and Budget for resolution. The referral must occur within 90 days for internal audits and 120 days for external audits from the date of the final audit report, except when formally extended by the OIG upon appropriate justification by the Service.
J. Final Action is the completion of all actions necessary with respect to the findings and recommendations included in the audit report. In the event the Service concludes that no action is necessary, after previously agreeing to action, final action occurs when the Department concurs in the Service's conclusion.
4.3 Procedures.
A. The review and response to draft and final audit reports must be accomplished within required time limits and remedial actions agreed upon must be undertaken within established time frames.
B. Audit responses should fully address findings and specific recommendations, and clearly state Service agreement or disagreement with each recommendation.
(1) If in agreement with an OIG recommendation, the response will explain what actions will be taken to implement the recommendation. The response must include dates for accomplishment of actions it agrees to take along with names and titles of responsible Service officials. Implementation dates that extend beyond 1 year from the date of the decision will be accompanied by a detailed implementation plan, showing actions to be accomplished on a quarterly basis. If Service officials disagree with an OIG recommendation, the response must fully explain the reasons and present an alternative course of action if any are deemed appropriate. If officials subsequently determine that a change in the implementation target dates or other deviations from a Service decision needs to be made, a request will be submitted to the Audit Liaison Officer (ALO).
(2) For all questioned costs, identification must be made of the amount of costs management has disallowed and/or reinstated in a written statement of findings and determinations.
(3) Agreement or disagreement with funds recommended to be put to better use or potential additional (or underpaid) revenues for those recommendations to which the OIG has assigned amounts in these categories shall be identified. If Service officials disagree with all or part of the monetary amounts in these categories, they should identify separately the amounts with which they agree from the amounts with which they disagree. Officials shall explain why there is a disagreement.
C. The ALO must be notified upon completion of final action for each recommendation referred by the OIG for tracking through implementation. Related supporting documentation for each recommendation for which final action is not complete must be provided.
D. Quarterly status reports will be provided to the ALO for each audit until final action is complete. Reports are due 15 days following the last day of the quarter.
E. The ALO will be notified when a contractor appeals a contracting officer's decision on a contractor claim audit report. The notice will include identification of the audit report, the date issued, the date of the contracting officer's decision on the claim, and the amount of money appealed. The notice will also identify the board or court to which the claim was made along with the docket number. A subsequent notice will be given to the ALO upon final disposition of the claim by the board or court.
4.4 Classification of Monetary Amounts. Inspector General internal audit reports of Service operations and programs as well as external audit reports involving audits of contract pre-awards and post awards and claims, grants, and concessions and single audits routinely classify monetary amounts associated with audit findings as questioned costs, funds recommended for better use, or potential additional revenues as defined in 4.2 above. The semiannual report to Congress on audit follow-up will report on final action taken for the above listed reports containing questioned costs and funds recommended for better use. Audits reports containing potential additional revenues will be classified and reported separately.
4.5 Reporting.
A. The Department must submit a semiannual report to Congress with specific and detailed information on the status of final action on audit reports. This report is compiled by the Assistant Secretary - Policy, Management and Budget from information provided by each bureau.
B. Service offices are to provide information to the ALO for the 6-month periods ending March 31 and September 30 for input to the Secretary's Report on Audit Follow-up (DOI-84-083). This report information is forwarded to the Assistant Secretary for Fish and Wildlife and Parks not later than April 15 and October 15, respectively. Reports will consist of the following:
(1) Any comments on audit follow-up that the Director determines to be appropriate.
(2) Statistical tables showing the total number of reports and the total dollar value of disallowed costs for audits:
(a) For which final action had not been taken by the commencement of the reporting period.
(b) On which Service decisions were made during the reporting period.
(c) For which final action was taken during the reporting period, including the dollar value of disallowed costs that were recovered by the Service through collection, offset, property in lieu of cash, or otherwise, and the dollar value of costs disallowed that were written off.
(d) For which no action had been taken by the end of the reporting period.
(3) Statistical tables showing the total number of audit reports and the dollar value of recommendations that funds be put to better use by the Service agreed to in a Service decision for audit reports:
(a) For which final action had not been taken by the commencement of the reporting period.
(b) On which Service decisions were made during the reporting period.
(c) For which final action was taken during the reporting period including the dollar value of recommendations that were actually completed, and the dollar value of recommendations that the Service had subsequently concluded should not or could not be implemented or completed.
(d) For which no final action had been taken by the end of the reporting period.
(4) A statement regarding audit reports on which Service decisions have been made but final action had not been taken, except for those audit reports on which a decision was made within the preceding year containing:
(a) A list of such audit reports and the date each report was issued.
(b) The dollar value of disallowed costs for each report.
(c) The dollar value of recommendations that funds be put to better use agreed to by the Service for each report.
(d) An explanation of the reasons final action had not been taken with respect to each such audit report, except that such statement may exclude audit reports that are under formal administrative or judicial appeal or upon which the Service has agreed to pursue a legislative solution. The number of reports in each category so excluded shall be identified.
4.6 Application of Regulatory Audits. A regulatory audit is an audit report issued by any organization of the Department, except the OIG, that has a responsible for regulatory or inspection activities involving the review of financial matters that may result in fines, penalties, assessments, price adjustments, or other monetary recoveries by the Government. Service officials responding to regulatory audits will ensure that decisions for regulatory audits are promptly issued and that final actions are completed consistent with the requirements of this chapter.
4.7 Accounting and Collection Controls. In order to ensure effective recovery action of audit-related debt, the Service will establish accounting and collection controls for amounts due the Service. Notice must be given to the ALO upon establishing and collecting audit-related receivables. Unless otherwise required by statute, all debts arising from disallowed costs should be collected in accordance with the Federal Claims Collections Standards (4 CFR 101-106) and the Departmental Manual (344 DM, Debt Collection).
A. Recording Receivables. Amounts due the Service will be recorded as accounts receivable within 30 days from completion of the findings and determinations on the audit. Disallowed costs will be supported by the Service's written findings and determinations and will be recorded as receivables notwithstanding subsequent appeal or litigation.
B. Interest Charges. Interest on audit-related debts will begin to accrue no later than 30 days from the date the Service is notified of the debt and will continue to accrue through appeal. Interest rates will apply as prescribed in the Federal Claims Collection Standards.
C. Allowance for Uncollectible Amounts. Consideration will be given to the possibility of collecting audit-related debts. An allowance account, however, will be established to reflect the amount of receivables estimated to be uncollectible.
D. Payment of Debts. The Service should ensure that the payment of audit-related debt does not result in charges to other Federal programs or a reduced level of program activity.
E. Administrative Offsets. There may be instances where a portion of the funds for a grant, contact, or other agreement is held back as a safeguard against overpayment pending completion, final inspection, or approval of work; or in accordance with other provisions of a grant or contract. In such instances, it is not necessary to record a receivable, since disallowed costs may be offset against undisbursed funds in the grant or contract audited.