U.S. Environmental Protection Agency
                   Office of Inspector General

                   At  a   Glance
                                                          09-2-0195
                                                       July 14, 2009
                                                                Catalyst for Improving the Environment
Why We Did This Review

One of the responsibilities of
I Federal agencies is to conduct
quality control reviews of
selected audits made by non-
Federal auditors. In reviewing
the single audit for the Town of
Worthington, West Virginia, for
the fiscal year ending June 30,
2004, we found a lack of
adequate detail in describing the
reported deficiencies and how the
related recommendations would
address the findings reported.

Background

On June 8, 2000, the U.S.
Environmental Protection
Agency (EPA) awarded the Town
of Worthington, West Virginia, a
grant for $1.2 million for
designing and constructing a
drinking water system.  Federal
regulations require entities that
expend more than $500,000  of
Federal funds in a given year to
have a single audit conducted.
Leland O'Neal, CPA, conducted
the single audit for the fiscal year
ending June 30, 2004.
For further information, contact
our Office of Congressional,
Public Affairs and Management
at (202) 566-2391.

To view the full report,
click on the following link:
www.epa.qov/oiq/reports/2009/
20090714-09-2-0195.pdf
Quality Control Review of Leland O'Neal, CPA,
Single Audit for Town of Worthington,
West Virginia, for Fiscal Year Ended June 30, 2004
 What We Found
The single audit report for the Town of Worthington, West Virginia, for the
fiscal year ending June 30, 2004, was substandard. According to the Uniform
Quality Control Guide for A-l 33 Audits, issued by the President's Council on
Integrity and Efficiency, a substandard audit is defined as one that contains
significant audit deficiencies that could potentially affect the audit results.  The
audit did not meet general, field work, and reporting standards as required by
the Government Auditing Standards. For example,

    •  The audit documentation did not contain sufficient evidence that the
       audit was adequately planned and compliance testing was not
       supported by evidential matter.

    •  The audit report did not contain a finding that the recipient's
       accounting system was inadequate when it should have, and did not
       include a corrective action plan from the recipient.

    •  The auditor did not meet Federal continuing education requirements.
 As a result, the audit report could not be used for its intended purpose, which
 was to provide the Federal agency with assurance that the grant funds were
 spent in compliance with Federal requirements.
 What We Recommend
 We recommend that EPA's Region 3 Regional Administrator:

    •  Meet with the Town of Worthington officials to ensure that the Town
       understands Office of Management and Budget Circular A-133
       requirements, and its obligations to meet these requirements.
    •  Designate the Town of Worthington as a high-risk grant recipient, in
       accordance with Title 40 Code of Federal Regulations Part 31.12,
       should the recipient receive any new EPA awards.

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