Report | Aug. 26, 2013

Report on Quality Control Review of the Grant Thornton, LLP, FY 2011 Single Audit of the Henry M. Jackson Foundation for the Advancement ofMilitary Medicine

DODIG-2013-124

Objective

As the cognizant Federal agency for the Henry M. Jackson Foundation for the Advancement of Military Medicine (the Foundation), we began a review of the Grant Thornton LLP (Grant Thornton), single audit and supporting working papers for the audit period October 1, 2010 through September 30, 2011. The purpose of our review was to determine whether the single audit was conducted in accordance with auditing standards1 and the auditing and reporting requirements of the Office of Management and Budget (OMB) Circular A-133, “Audits of States, Local Governments, and Non-Profit Organizations,” (Circular A-133). Appendix A contains additional criteria, scope, and methodology of the review; and Appendix B lists the compliance requirements that Grant Thornton determined to be applicable to the FY 2011 audit.

Background

The Foundation is a not-for-profit organization authorized by Congress in May 1983 to support military medical research. The Foundation administers, manages, and supports scientific programs that benefit members of the armed forces and civilians. During FY 2011, the Foundation expended $398.4 million in Federal awards, under one Federal program, the research and development cluster. Of the $398.4 million, $335.9 million was expended for Department of Defense programs.

Review Results

We discontinued our quality control review due to the determination that some of the Grant Thornton work papers could not be relied on and, therefore, neither could the audit report opinion on compliance with requirements on the Federal program. Grant Thornton needs to perform additional audit procedures to support the audit conclusions and overall audit opinion (Finding A). We will reschedule our review once the additional audit work is completed and the audit report is resubmitted to the Federal Audit Clearinghouse.

Although we are discontinuing our review, we identified an issue with Grant Thornton’s sampling policy that needs to be addressed to ensure the audit procedures performed for all single audits are sufficient to support the opinion on compliance with requirements on Federal programs (Finding B).

Management Comments and DoDIG Response

The National Managing Partner, Professional Standards Group, Grant Thornton, LLP, agreed to take the recommended actions. Management comments were responsive and conform to requirements; no additional comments are needed. Management comments are included in their entirety at the end of this report.