Efforts to Prevent, Identify, and Recover Improper and Erroneous Payments
by Selected Department of Justice Components
Audit Report 07-17
Office of the Inspector General
January 10, 2007
|MEMORANDUM TO:||Glenn A. Fine
|SUBJECT:||Response to the Office of Inspector General (OIG) Draft Audit Report: “Efforts to Prevent, Identify, and Recover Improper and Erroneous Payments by Selected Department of Justice Components”
The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) appreciates the opportunity to respond to the recommendations from the OIG’s above-cited draft audit report. We welcome constructive criticism of our programs, as this independent review process typically helps us to improve our ability to plan and manage our resources more efficiently.
In general, ATF concurs with the findings and recommendations of your report, and our responses are as follows:
Recommendation Number 9: Ensure future risk assessments include: (1) the results from the most recent financial statement audit, including any material weaknesses or reportable conditions; (2) the effect of those weaknesses or conditions on its risk of making improper payments; and (3) a description of the corrective action taken to address those weaknesses or conditions as required by Bulletin 06-11.
Response: We concur with this recommendation. ATF will ensure that any future risk assessments include results from the most recent financial statement audit. The risk assessments will include a review of the appropriate systems, procedures, and policies that mitigate the likelihood that improper payments occur. To the extent that ATF has any material weaknesses, the effect of those weaknesses will be considered in the risk assessment and corrective actions will be identified in accordance with Bulletin 06-11.
Recommendation Number 10: Ensure risk assessments include: (1) an assurance statement of an unqualified, qualified, or no-assurance opinion; (2) the reason for the opinion and its effect on the component’s risk of making improper payments; and (3) any corrective actions being taken to address the opinion and the component’s risk.
Response: We concur with this recommendation. For future risk assessments, ATF will include an assurance statement, the reason for the opinion and its effect on the risk of making improper payments, and the planned corrective actions to address the opinion and reduce the level of risk.
Recommendation Number 11: Conduct a complete program inventory and risk assessment for each program, and maintain documentation as required by Bulletin 06-11.
Response: We concur with this recommendation. ATF will prepare a complete program inventory to identify programs and activities susceptible to improper payments as recommended. In accordance with Bulletin 06-11, ATF will conduct a risk assessment and maintain documentation of the risk assessment and results.
Recommendation Number 17: Develop methods for tracking improper payments separately from other debts, so it can provide information on the amount of improper payments identified and recovered. Additionally, ATF should include and maintain documentation on the timeframe in which the identified and recovered improper payments occurred.
Response: We concur with this recommendation. ATF will improve its current mechanism in place for tracking improper payments separately from other debts. ATF has specific document codes and general ledger accounts that are used to distinguish accounts receivable by type. In addition, ATF has a query tool for extracting reports that provide detailed information on improper payments. Moreover, ATF will improve how it maintains documentation, which establishes the timeframe when improper payments are identified and ultimately recovered. That documentation includes, but is not limited to, written memoranda for establishing accounts receivable and copies of the check payments when recovered. To the extent that recoveries are obtained through the Treasury Offset Program, additional documentation is maintained for the resulting Intragovernmental Payment and Collection transaction.
Recommendation Number 18: Demonstrate progress toward utilizing the recovery audit contractor as required by Bulletin 06-11, unless an approved internal recovery audit program that is compliant with all areas within Bulletin 06-11 and other applicable laws and regulations is developed, and a waiver is submitted to and approved by the Director, Justice Management Division, Finance Staff, as required by Bulletin 06-11.
Response: We concur with this recommendation. ATF plans to utilize the Department of Justice recovery audit contractor available through the contract administered by FedSource. ATF is preparing the documentation necessary for initiating a task order with FedSource to secure the recovery audit services.
Recommendation Number 19: Expand the scope of the recovery audit program to encompass, at a minimum, all payments made from FY 2003 forward as required by Bulletin 06-11.
Response: We concur with this recommendation. ATF will ensure that the scope of the recovery audit program will include payments made from FY 2003 forward. ATF will incorporate this requirement in the task order for the recovery audit services.
Recommendation Number 20: Develop and implement a final written policy and procedure when a program is in place for ATF’s recovery audit program as required by Bulletin 06-11.
Response: We concur with this recommendation. ATF is developing a corrective action plan that will include the development of written policy and procedures for its recovery audit program as required by Bulletin 06-11.
Should you have any questions regarding this response, please contact Ms. Carol Campbell, Chief, Audit and Evaluation Branch, Inspection Division, Office of Professional Responsibility and Security Operations, at (202) 648-9205.
Michael J. Sullivan
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