Viewing page 24 of 474

This transcription has been completed. Contact us with corrections.

-16-

which Coopers and Lybrand felt was indispensable if they encountered a significant problem.

Mr. Collins introduced Mr. Peratino, who outlined the history of his Office of Audits at the Institution.  Mr. Peratino noted that, reporting directly through the Under Secretary to the Secretary, his responsibilities include both internal auditing of Smithsonian programs and the auditing of contractors' activities.  In describing his approach to the audits, he explained that the audit plan for each year is worked out in advance, with additional audits scheduled according to requests from management.  In approving "An Independent Study of the Smithsonian's Relationship to the Federal Government" (the Hughes report), the Board of Regents called for a five-year internal audit cycle.  In pursuit of this goal, staff additions budgeted for fiscal year 1981 will reduce the cycle from seven years to six years.

Mr. Peratino distributed and described three representative audits conducted in recent years:  the Cooper-Hewitt Museum, the Management Analysis Office, and the Office of Computer Services.  Over the years the Office of Audits has recommended improvements in internal controls but has found no fraud within the Smithsonian's auxiliary activities.

Noting that the Director of the Office of Audits should have direct access to the Audit and Review Committee whenever warranted, the Committee indicated that it plans to meet with the internal auditor regular, perhaps annually, and that