March 1, 2016

The Department of Energy’s Audit Resolution and Followup Process

From fiscal years 2011 through 2014, the Office of Inspector General issued 372 reports, most of which included recommendations for corrective actions or improvements in programs, operations, and management functions.  Accordingly, Department Order 224.3, Audit Resolution and Followup Program, requires that audit reports and all associated recommendations should generally be closed within 1 year.  It also requires that management officials certify that corrective actions have been completed and are effective prior to closure.

In February 2004, May 2007, and September 2010, we issued audit reports that identified issues related to the audit resolution and followup process.  Specifically, we noted that the Department, in some cases, closed agreed-upon recommendations despite the fact that corrective actions were not always complete or effective.  The audits further determined that the Department was not always meeting its established target milestones for audit report closure.  We initiated this audit to determine whether the Department had corrected previous problems with the audit resolution and followup process and whether related issues identified through recent audits had been resolved.

While the Department made improvements to the audit resolution and followup process, weaknesses continued to exist.  Our review of closed recommendations in four OIG audit reports found that in three of the four reports, the recommendations had been closed even though corrective actions taken by the Department’s program offices and National Nuclear Security Administration were incomplete or ineffective.  Audit reports and related recommendations are considered closed when management certifies that all necessary corrective actions have been completed.

Corrective actions taken by the Department were sometimes incomplete, ineffective, or untimely, in part, because of insufficient guidance and/or inadequate monitoring and oversight of the audit resolution and followup process.  Additionally, program offices continued to submit assurance certifications and close recommendations without always performing formal followup procedures to assess the effectiveness of actions taken.

Topic: Management & Administration