Wetlands Reserve Program Case Study An Overview of the External Audit Process

1. Wetlands Reserve Program Case StudyAnOverview of the External Audit Process Helping People Help The Land

2. Organizational Chart Helping People Help The Land

3. External Oversight Helping People Help The Land

4. Nine Steps of the Audit Process 1. Notification 2. Pre-Briefing 3. Entrance Conference 4. Monitoring 5. Preliminary Findings 6. Exit Pre-Briefing 7. Exit Conference 8. Final Report 9. Closure Helping People Help The Land

5. Office of Inspector General Case Study:NRCS Wetlands Reserve ProgramCompensation for Easements OIG Audit Report No.10099-3-SFAugust, 2005 Helping People Help The Land

6. Office of Inspector General Case Study Step 1. Audit Notification from OIG • Receive letter of notification • Copy of notification to Chief’s Executive Team • Identify Agency Point of Contact • Brief Point of Contact on responsibilities and duties within the audit process Helping People Help The Land

7. Office of Inspector General Case StudyNRCS WRP Audit – Letter of Notification Purpose: To formally initiate the audit process and outline the objectives of the audit Objectives: • Become familiar with laws, regulations, policies, and procedures pertaining to NRCS’ implementation of WRP • Identify key internal controls pertaining to NRCS’ implementation of WRP and perform a limited review of the controls • Determine areas that warrant future audit work Helping People Help The Land

8. Office of Inspector General Case Study Step 2. Pre-Briefing with Agency Leadership • Review notification • Develop key points of agency position regarding objectives of the Audit • Agency Point of Contact is identified Helping People Help The Land

9. Office of Inspector General Case Study Step 3. Entrance Conference held • Led by Compliance Division Director • Introduce Agency Point of Contact • OIG defines audit’s scope, objectives, and methodology Helping People Help The Land

10. Office of Inspector General Case Study Step 4. Monitoring • OIG conducts onsite interviews at various levels within the Agency • Data requests are made State’s role in audit process becomes critical to fact-finding. Helping People Help The Land

11. Office of Inspector General Case Study Step 5. Preliminary Findings Rendered via Draft Report • Brief Deputy Chief, SPA with talking points for leadership • Communicate responses via the Point of Contact to OIG Helping People Help The Land

12. Office of Inspector General Case StudyNRCS WRP Audit Findings & Recommendations • Finding 1: • Finding 2: • Finding 3: • Finding 4: • Controls over easement appraisal process were inadequate • WRP easement payments exceeded statutory limitations • Federally purchased crop bases were not retired • NRCS did not properly report WRP easements to FSA Helping People Help The Land

13. Office of Inspector General Case StudyNRCS WRP Audit Findings & Recommendations • Finding 1 had 10 recommendations • Finding 2 had 3 recommendations • Finding 3 had 5 recommendations • Finding 4 had 4 recommendations Helping People Help The Land

14. Office of Inspector General Case Study Step 6. An Exit Pre-Briefing is held • Review of discussion draft report with audit subject-area Deputy Chief and appropriate program managers • Develop strategy for Agency response • Agency POC has lead for preparing Agency response and submitting to Compliance Division who will coordinate for submission to OIG Helping People Help The Land

15. Office of Inspector General Case Study Step 7. Exit Conference held with OIG • Led by Compliance Division Director with the audit subject-area Deputy Chief and appropriate program managers • Discussion Draft Report is reviewed for Agency comments • Record any management decisions. Helping People Help The Land

16. Office of Inspector General Case StudyNRCS WRP Audit Controls over the easement appraisal process inadequate Chief of NRCS should work with appraisal managers at other Federal agencies such as the Forest Service or the Department of Interior to create and fill a Chief Appraiser position NRCS agrees that a chief appraiser is a valuable addition to the NRCS staff, and, thus, has employed a State-certified Chief General Appraiser to serve this capacity Preparation of Agency Response Agency has thirty days to provide OIG a written response to the Findings and Recommendations with a estimated completion date Finding 1: Recommendation 1: Agency Response: Helping People Help The Land

17. Office of Inspector General Case Study Step 9. Closure (Completion Plan) • Work with the Point of Contact to prepare final action items to reach and accomplish each management decision. • Include dates and responsibilities for status updates. • Monitor and report progress. Helping People Help The Land

18. Office of Inspector General Case StudyNRCS WRP Audit Preparation of Agency Response OIG will provide a written response (Management Decision Memo) to the Agency outlining whether or not they approved the responses. OIG Position: OIG accepts NRCS’ management decision for this recommendation Helping People Help The Land

19. Office of Inspector General Case Study Step 8. Release of Final Report • Copy, Summary, and Talking Points to the Deputy Chief SPA • Copies to Chief’s Executive Team • Develop plan to resolve any pending management decisions Helping People Help The Land

20. Office of Inspector General Case Study Step 9. Closure (Prepare Closure Requests) • Letter to OCFO from the Director, Compliance Division requesting closure • Reference OIG number, list recommendation numbers, attach adequate supporting documentation Helping People Help The Land

21. Office of Inspector General Case Study Step 9. Closure (Recommendation Approved by OCFO) • Notify Leadership • Provide Talking Points Helping People Help The Land

22. Office of Inspector General Case Study Step 9. Closure (Final Closure Approved by OCFO) • Notify Leadership • Document and archive case file. Helping People Help The Land