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In Brief: Analysis of Survey Results on the Smithsonian’s Annual Financial Statement Assurance Letter Process, No.A-13-08, Issued January 31, 2014

Why We Did This Audit

Our audit objectives were to evaluate (a) the process that unit directors use to attest to the effectiveness of their units’ financial reporting controls and financial information reliability; (b) the training and guidance that the Office of the Comptroller provides to unit directors regarding financial reporting controls; and (c) Smithsonian management’s response to deficiencies or areas of concern identified by the unit directors during the attestation letter process.

Background

All Smithsonian unit directors must attest annually that their units’ financial reporting controls are operating effectively and that financial information does not contain material misstatements or omissions. In June 2011, Smithsonian management created Smithsonian Directive 310, Financial Reporting and Risk Management Internal Controls. This directive outlines the guidance to unit directors regarding their responsibility during the annual attestation letter process.

What We Found

In responses to our survey questions, unit directors stated that they generally understand what they are attesting to, and they have an effective process to support their attestations.

Over half of the respondents did not receive formal training regarding their responsibilities as outlined in SD 310. However, those that did attend training indicated that it was effective or very effective. In addition, while the unit directors believed that the Office of the Comptroller generally provided them with effective guidance, some of them would like more direction on internal control standards.

Unit directors did not identify any material weaknesses, deficiencies, or areas of concern during the fiscal year 2012 attestation letter process.

The survey results did not indicate any major problems with the fiscal year 2012 assurance letter process; however, the respondents did offer several areas where Smithsonian management could improve the process and offer additional training.

What We Recommended

To improve the annual assurance letter process, we recommended that the Chief Financial Officer evaluate the unit directors’ comments to the survey and provide an action plan that addresses the survey’s results.

Management concurred with our recommendation and plans to offer one annual classroom style training class as well as on-line training. Further, management will continue to offer individual sessions to directors by request.




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