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The numbers are in: An outside audit of the House’s finances has given the chamber a clean bill of fiscal health for 2012.
It’s the second consecutive year the House has received a largely positive audit after two prior years of shaky reviews during the tenure of Chief Administrative Officer Dan Beard.
“Thanks to Chief Administrative Officer Dan Strodel and his team, who over the past few years have successfully implemented a comprehensive internal controls program and a new financial management system, the House has seen considerable improvements over the 2009 and 2010 audits which reported adverse opinions on internal controls,” House Administration Chairwoman Candice S. Miller, R-Mich., said in a letter to colleagues on Wednesday.
Strodel, whom Miller commended later in an official statement for “take[ing] the necessary actions to restore the House’s good financial standing,” was tapped to lead the equivalent of the House’s human resources department in the summer of 2010, following Beard’s abrupt departure.
Beard resigned on July 1, 2010, one day after an independent auditor informed committee members that the chamber would fail the internal controls portion of its financial audit for the first time in more than a decade.
The 2012 House financial audit made public on Wednesday revealed “an unqualified opinion on the House’s financial statements” for the 15th consecutive year, which House Inspector General Theresa M. Grafenstine called “a noteworthy accomplishment.” The auditors also did not identify any instances of noncompliance with the law throughout fiscal 2012.
In summarizing the findings by outside auditors Cotton & Co. LLP, however, Grafenstine also noted that while “the House continues to make significant progress in implementing a comprehensive internal controls program ... auditors reported two significant deficiencies in internal control over ... financial reporting processes and information technology.”
“Significant deficiencies” is not as bad a category as “material weakness,” which auditors define as that which indicates that “there is reasonable possibility that a material misstatement of an entity’s financial statements will not be prevented, or detected and corrected on a timely basis.”
A “significant deficiency,” meanwhile, refers “a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.”
In a Feb. 21, 2013, memo to Grafenstine, Strodel said that the CAO’s team was committed to addressing these deficiencies but did not publicly elaborate on specific plans to combat the weaknesses.
Apart from the statement from Miller, the audit was released with little fanfare. It was an opportunity, though, for the communications officers for Speaker John A. Boehner, R-Ohio, to tout their boss’s role in pushing for annual independent audits of House finances back in 1992, when he was a rising star in the Republican rank and file.