Audit recommendations are part of the audit report that provides senior management with suggested ways or corrective actions to address the identified deficiencies. Senior management will usually submit an action plan that will spell out how they will resolve the audit recommendations by a designated deadline. However, there may be some roadblocks that could impact resolving audit recommendations on time. Those roadblocks tend to involve groups or organizations that may delay resolving the audit recommendations due to a variety of reasons.
As an audited organization, you should pay attention these five groups that may impact resolving audit recommendations.
Funding Agency
The organization, public or private, that provides the funding to you may be tasked with overseeing the resolution of the audit recommendations. Common funding agencies include government agencies that award grants to nonprofit, public and private organizations to meet an objective or goal tied to the overall funding agency’s mission. Staffing may delay reviewing documentation or have conflicting priorities that places the open audit recommendations as an afterthought. Also, you must consider staffing changes at the funding agency that causes workload to be shifted to those inexperienced or unfamiliar with the open audit recommendations.
Auditing Agency
The auditing agency may be at fault for the delay in not resolving the open audit recommendations. Changing priorities, staffing changes, or not following up on the status can have an impact on your organization trying to close out the audit recommendations.
Legal/Judicial Agency
Legal actions against the audited organization can impact resolving open audit recommendations. A court order could delay or eliminate actions taken to address the audit recommendations. The judge’s ruling or orders could restrict the parties or individuals involved in the audit resolutions from taking any actions to addressing the audit recommendations.
Investigative Agency
Investigative agencies performing criminal or civil investigations against the audited organization could restrict resolving the open audit recommendations. Investigations into individuals or the organization as a whole impact could delay or restrict the ability to address the audit recommendations by the deadline. The auditing agency would need to coordinate with the investigative agency to minimize any potential conflicts that could compromise the investigation. The auditing agency would need to pay attention to any actions that may result in key individuals responsible for overseeing the audit recommendation not being available.
Senior Management of the Audited Organization
This may be surprising, but there may be instances where the roadblock to addressing and resolving the audit recommendation is you or the senior management of the audited organization. Lack of interest, competing priorities, or refusal to act are among the reasons that audit recommendations remain open. Senior management turnover, lack of knowledge and understanding in the audit resolution process can impact resolving the audit recommendations.
Takeaway
Addressing and closing out audit recommendations can be labor intensive, time-consuming, and stressful at times. On the other hand, closing out audit recommendations with a good action plan to complete ahead of the deadlines can be a relief that allows you to focus on your organization’s objectives and strategies. However, delays in closing out the audit recommendations can hurt meeting your organization’s objectives and goals. In many cases, there are groups who can impact your ability to resolve the audit resolutions. You will need to know who is impacting the resolution process and take a proactive approach to minimizing these roadblocks. Doing so will save you and your organization time, money, labor, and stress in minimizing the impact, while resolving the audit recommendations on time.