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Audit Reports

Date

MWAA's Office of Audit Does Not Have an Adequate Quality Assurance and Improvement Program

Requested By
Self-Initiated
Project ID
ZA2015035
File Attachment

The Metropolitan Washington Airports Authority (MWAA) manages Ronald Reagan Washington National Airport and Washington Dulles International Airport through a lease with the U.S. Department of Transportation (DOT). MWAA is also responsible for the multibillion-dollar Dulles Corridor Metrorail Project. Our prior audits of MWAA identified weaknesses in its internal controls that were causing questionable procurement practices, mismanagement, a lack of overall accountability, and unallowable and unsupported expenses. We initiated this audit to determine whether MWAA’s Office of Audit has established and carried out an audit quality assurance and improvement program (QAIP) in accordance with applicable standards.

MWAA’s Office of Audit has not established or carried out an audit QAIP in full conformance with standards and may not be achieving the most value from its audits. Specifically, the Office (1) lacked a quality review process, (2) has insufficient audit policies and procedures, (3) does not adequately support its reports, and (4) inadequately documented its audit plans and risk assessments. While the Office is beginning to make improvements, it faces continuing challenges to performing high quality work and achieving its goal of providing reasonable assurance that MWAA has an effective system of internal controls. Enhanced oversight, policies and procedures, documentation, and audit planning will be critical to establishing an effective QAIP.

We made seven recommendations for MWAA to bring its QAIP in conformance with standards. MWAA concurred with all seven recommendations and provided appropriate planned actions and completion dates. Accordingly, we consider these recommendations resolved but open pending completion of MWAA’s planned actions.

Recommendations

Closed on
No. 1 to MWAA
That MWAA's Board of Directors develop and implement a dual reporting structure for the Office of Audit to both the Board and CEO in accordance with IIA standards.
Closed on
No. 2 to MWAA
That MWAA's Board of Directors ensure that the Vice President of the Office of Audit: Develop and implement a procedure for periodic assessments of the Office of Audit's quality assurance and improvement program from an office independent from the Office of Audit. This procedure should include annually providing the results of the assessment and, if necessary, an action plan for addressing recommendations to senior management and the Board.
Closed on
No. 3 to MWAA
That MWAA's Board of Directors ensure that the Vice President of the Office of Audit: Develop and implement a policy to obtain an external peer review of MWAA's Office of Audit with senior management and the Board participation in the selection of the reviewer. The policy should include providing the results of the assessment and, if necessary, an action plan for addressing recommendations to senior management and the Board.
Closed on
No. 4 to MWAA
We recommend that MWAA's Board of Directors ensure that the Vice President of the Office of Audit develop and implement a procedure for issuing Office of Audit policies, including approval of the policies by senior management and the Board.
Closed on
No. 5 to MWAA
That MWAA's Board of Directors ensure that the Vice President of the Office of Audit: Develop and implement Office of Audit policies to include the following: a. obtaining and tracking continuing professional development. b. documenting and controlling audit work paper files. c. documenting individual independence and reporting impairments and remediation of impairments. d. requiring supervisors to review and document the review of all work from planning to reporting, including the review of work papers.
Closed on
No. 6 to MWAA
That MWAA's Board of Directors ensure that the Vice President of the Office of Audit: Amend and implement the Office of Audit's policy to cite conformance or nonconformance with standards in its audit reports.
Closed on
No. 7 to MWAA
That MWAA's Board of Directors ensure that the Vice President of the Office of Audit: Develop and implement processes for developing audit plans and conducting risk assessments, including the following: a. consulting with the CEO and other senior management officials when preparing the annual Risk Assessment and Audit Plans and ensuring that discussions and views on these matters are documented for future reference and shared with the Board of Directors. b. annually assessing and documenting auditable activities and their associated risks levels, the Office of Audit's priorities, and the basis for the prioritization.