Summary: Pursuant to a congressional request, GAO assessed the Army Audit Agency's (AAA): (1) allocation of audit resources; (2) audit quality; and (3) independence.
GAO found that: (1) AAA audits resulted in reported monetary benefits of $1.6 billion for fiscal year (FY) 1987 and included significant recommendations for improved Army operations; (2) AAA generally provided extensive audit coverage of Army program and budget areas; (3) AAA could improve its audit coverage by conducting more Army-wide financial management audits, more closely monitoring the Army's $380-million accounting system redesign, and auditing Army financial reports and the accounting systems generating financial management information; (4) AAA did not ensure follow-up of audit recommendations until it conducted a subsequent audit, which could take place 1 to 10 years after the recommendations; (5) the Army's 3-percent reduction of AAA staffing would not seriously affect operations, coverage, or audit quality, although further reductions could adversely affect AAA ability to respond to increasing and expanding responsibilities; (6) a recent Army reorganization increased AAA organizational independence; (7) AAA audit working papers sometimes lacked sufficient evidence to support audit report statements, differed with audit reports on the extent of reported problems, and were not always cross-indexed with audit reports; and (8) AAA audit reports did not always cite the underlying causes of reported problems.
