Exceptions or deviations that are discovered in an audit can’t be just hmm’d over; they require action, usually a response by management, as well as a corrective action plan.
At the 2011 AICPA Not-For-Profit Conference, Kimberly K. McCormick, a partner with Grant Thornton LLP, offered a refresher on audit findings. McCormick said that the following considerations should be in mind for audit findings:
- Write from the perspective of a federal agency.
- Too much is better than too little.
- Be specific, particularly in criteria and condition.
- Try not to repeat yourself in the condition, effect and cause elements.
- Be practical with recommendations.
- Evaluate Office of Management and Budget (OMB) Circular A-133 findings for Generally Accepted Government Auditing Standards (GAGAS) applicability.
- When a finding is both GAGAS and A-133, report only once with a cross-reference.
- Consider the effect of findings on opinions.
Further, McCormick offered the following tips for a Schedule of Findings and Questioned Costs (SFQC):
- Educate staff and partners about the importance of the schedule.
- Include a “cold” review as part of the reporting procedures to review the SFQC and major program work.
- Start with a blank “pro forma” of the SFQC.
- Add a procedure to compare the listings of major programs in the SFQC to the audit documentation.
- Include a ‘double check” of the SFQC during the final quality control review of the single audit report to identify errors before issuance.