What types of final documents do you issue?
Financial Audit Reports
Our two main financial audit reports are mandated by State and/or federal laws. They are:
- State of Michigan Comprehensive Annual Financial Report
- Statewide Single Audit
Financial audits are designed to provide reasonable assurance about whether the financial statements and/or schedules of an entity are presented fairly and in all material respects according to generally accepted accounting principles.
Performance Audit Reports
- Most of our discretionary, non-mandated, audit hours each year are focused on performance auditing.
- We conduct performance audits based on the potential for improving the effectiveness and efficiency of State government operations.
- We will perform limited audit testing to determine if previous performance audit report findings were addressed by an agency.
Preliminary Survey Summaries
- If the results of a preliminary survey do not identify significant potential opportunities for improvements and/or risks of deficiencies that could impair management’s ability to operate a program effectively or efficiently, we may discontinue the audit and release a summary report of our preliminary survey.
How do you determine your audit plan?
We develop our audit plan using an approach based on assessments of risk and opportunities for improvement.
We focus audit efforts on the activities identified through a preliminary survey, which we believe have the greatest probability for needing improvement and/or the most significant consequences if proper execution does not occur.
Auditing identifies where and how improvements can be made; therefore, audit reports are written on an exception basis. Stated another way, we typically do not continue audits if the program appears to function as intended; our resources are more impact-driven if we focus on areas for improvement.
How does an audit progress?
Generally, we conduct audits in three main phases:
- The planning phase sets the foundation for the audit and includes conducting a preliminary survey, brainstorming, conducting research, developing audit objectives and scope, setting the audit’s timeframe, and many other activities. In this phase, we will:
- Review organization structure
- Review applicable State and Federal laws
- Research legislation impacting the audited program.
- Understand how the auditee strives to reach its mission, goals, policies, and procedures. Review agency-produced reports.
- Identify relevant criteria to audit against, such as best practices, benchmarks, audits of similar entities and from other states, and
- This phase begins the strategic audit activities. During fieldwork, we will:
- Interview agency personnel
- Sample and analyze data
- Issue surveys if applicable
- Validate evidence
- Determine materiality of potential findings
- Communicate with the agency
- Issue draft audit findings
- This is the final stage. At this time, we:
- Draft the preliminary report
- Ensure compliance with auditing standards
- Ensure compliance with internal quality standards
- Provide agency with draft report
- Obtain the agency preliminary response
- Meet with the agency to address their concerns
- Finalize the report
- Release the report
How does an agency respond to your recommendations?
- In each report containing performance audit findings, we include an initial agency response where they indicate if they agree or don’t agree with the finding and when they plan to comply with the recommendation(s).
Corrective Action Plans
- By State law, an agency is required to submit their plan to comply with the audit recommendations to the State Budget Office, Internal Audit Services, within 60 days of the release of an audit report. Once SBO reviews the plan for completeness, they forward it to us for informational purposes. We upload them to our website as an entry under the corresponding audit report.
What professional standards do you have?
Generally Accepted Government Auditing Standards issued by the Comptroller General of the United States.
Generally Accepted Auditing Standards issued by the American Institute of Certified Public Accountants.
What is your authority for audit?
Is Office of the Auditor General audited?
Yes, we are subject to a triennial peer review required by Government Auditing Standards. The peer review is performed by a six-person National State Auditors Association external quality control review team. We have received ten consecutive clean opinions. This is the highest level of opinion.
We are included in the required annual financial report of the Legislature