CPA firms who don't want to write findings re: grants are missing the point
Quite frequently, I hear CPAs in my yellow book and Single Audit classes saying "You don't really write that up do you? We don't write that sort of thing up." That is because their mind is still in commercial audit mode. The owner of a corporation doesn't want you to write up every little finding - it is no one's business but hers. But in the government environment - we aren't serving the auditee - we are serving those who benefit from the grant. When we keep those folks in mind - the elderly, the poor, the CHILDREN! (yes, I get emotional about those the programs are serving) - we do write up findings. We don't care whether the auditee is happy with the results. They aren't our ultimate customer.
Here is an email conversation I had with one of my colleagues. I think my colleague does a nice job of describing why one of his client's won't write findings:
Hi, Leita:I just finished the session with X&X. It went well,although there were some disagreements when I talked about what the fedsexpected to see in a finding....
Hm. Many CPAs avoid writing findings like the plague. Costs too much time and time is MONEY. They miss the big picture of what they are up to – enhancing accountability and transparency in government. Was that what the disagreement was about?Thanks for keeping me updated.:)Leita
Hi Leita: You got it! I used one of their findings that the entity had not kept time records, and was required to. The effect they had was that it had violated the rules, which was the condition again. The real impact was that hundreds of thousands of $ was unsupported. But they couldn't say that -- and keep the client.
One of the senior members insisted that I was expecting them to go beyond their professional responsibilities. I explained that I wasn't a federal rep. I just wanted to let them know what the fed auditors expected, so they would not be surprised if the issue came up. There was a disagreement, but it stayed friendly.
I thought of pointing out that if they were hired by the HUD OIG to do the same audits, using the same engagement letter and the same GAAS and GAGAS standards, they would report the effect if HUD had told them that's what it wanted and expected. So the professional responsibilities would have been the same (engagement letter, audit standards, A-133), but the findings would have been different because of what the client wanted to disclose in the findings. But, I decided to let that one go.
Governmental auditors unite! Leita Hart-Fanta, CPA, CGFM, and CGAP is the author of “The Yellow Book Interpreted” and owner of Yellowbook-CPE.com a website devoted to training for governmental auditors. Whether you are an internal auditor or monitor for a government entity or a CPA doing grant audits, you will enjoy Leita’s humorous take on the complexity of auditing in the government environment.