What types of final documents do you issue?
Financial Audit Reports
Our two main financial audits are mandated by State and/or federal laws. They are:
- State of Michigan Comprehensive Annual Financial Report Audit
- Statewide Single Audit
Financial audits are designed to provide reasonable assurance about whether the basic financial statements and/or financial schedules of an audited entity are presented fairly, in all material respects, in accordance with generally accepted accounting principles.
Performance Audit Reports
Most of our discretionary, nonmandated, audit hours each year are focused on performance auditing. Performance audits provide findings and conclusions based on an evaluation of sufficient, appropriate evidence against criteria.
We conduct performance audits based on the potential for improving the effectiveness and efficiency of State government operations.
We perform limited testing to determine if previous performance audit report recommendations were addressed by an agency.
Investigative Audit Reports
Investigative audits take place as a result of a reported allegation of fraud, waste, or abuse involving State government officials, State employees, or entities receiving State money or other support. These audits are designed to detect and deter the misappropriation of public assets.
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 terminate 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 that 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 the audit scope and objectives, setting the audit’s time frame, and performing 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, and audits of similar entities and from other states.
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 the agency with draft report.
- Obtain the agency preliminary response.
- Meet with the agency to address its concerns.
- Finalize the report.
- Release the report.
How does an agency respond to your recommendations?
In each report containing audit findings, we include an initial (i.e., preliminary) agency response in which the agency indicates if it agrees or disagrees with the recommendation(s) and how and when it plans to comply.
Corrective Action Plans
By State law, upon completion of an audit, the agency is required to submit its plan to comply with the recommendations to the State Budget Office, which reviews the plan for completeness and forwards it to us for informational purposes. We upload the plan to our Web site as an entry under the corresponding audit report.
What professional standards do you have?
The federal Single Audit Act Amendments of 1996 and implementing regulations.
What is your authority for audit?
Is the 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 eleven consecutive unmodified “clean” opinions. This is the highest level of opinion.