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At its inception the importance of locating the office outside staff or program activities subject to audit in order to provide an appropriate degree of independence was recognized. Therefore, the office was placed under the responsibility of the Under Secretary. A current table of organization of the Smithsonian is enclosed for your information.

The Director, Office of Audits and Investigations, reports directly to the Under Secretary and serves as the representative of the Under Secretary on all internal audit matters of the Institution. The Director addresses all final audit reports to the Secretary, with copies to the Audit and Review Committee of the Board of Regents.

Adequate audit coverage at the Smithsonian is ensured by employing a variety of techniques. The Office of Audits and Investigations maintains a record of the audit universe which identifies auditable entities and functions. This record is used to identify entities and functions to be included in the Office's Annual Audit Plan. Factors considered in identifying entities and functions to be scheduled in the annual audit plan include

-- statutory and regulatory requirements
-- dollar magnitude
-- new or changed conditions
-- prior audit experience
-- information received from various sources, including interviews with certain office heads, such as accounting, procurement, and budget; assessments of internal control reviews indicating weaknesses and, therefore, vulnerability; requests from management officials who indicate problem areas; hot-line tips; and other investigative leads.

Taking all these factors into consideration, the Director, Office of Audits and Investigations, issues a proposed Annual Audit Plan in July for the ensuing fiscal year. The proposed plan is discussed with the Under Secretary and other Smithsonian management officials, whose comments for expediting or postponing proposed audits, or adding audits to the proposed plan are considered. A final Annual Audit Plan is then formally issued in September.

In addition to the above, the Smithsonian has established several other processes to protect the integrity of its interests. The Office of Protection Services oversees investigations pertaining to theft; our Ombudsman is responsible for assisting in the resolution of employee concerns; and our telephone hot-line offers a mechanism to receive late-breaking or confidential information.