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    Subject Term: "Financial reporting"

    39 publications with a total of 158 open recommendations including 29 priority recommendations
    Director: J. Lawrence Malenich
    Phone: (202) 512-9399

    7 open recommendations
    Recommendation: To help ensure that agencies' civil monetary penalties are adjusted timely and keep pace with inflation, the Acting Administrator of the General Services Administration (GSA) should publish the initial catch-up inflation adjustment in the Federal Register.

    Agency: General Services Administration
    Status: Open

    Comments: GSA agreed with our recommendation and stated that it is developing a comprehensive plan to address the recommendation. GSA also stated that its projected time frame for publishing the catch-up inflation adjustment ruling is the end of October 2017, after completing the review and concurrence process.
    Recommendation: To help ensure that agencies' civil monetary penalties are adjusted timely and keep pace with inflation, the Acting Chairman of the National Transportation Safety Board (NTSB) should publish the initial catch-up inflation adjustment in the Federal Register.

    Agency: National Transportation Safety Board
    Status: Open

    Comments: In an e-mail commenting on our draft report, the Governmental Affairs Liaison at NTSB stated that NTSB plans to publish the initial catch-up inflation adjustment in October 2017.
    Recommendation: To help ensure that agencies' civil monetary penalties are adjusted timely and keep pace with inflation, the Secretary of Agriculture (USDA) should publish the initial catch-up inflation adjustment in the Federal Register.

    Agency: Department of Agriculture
    Status: Open

    Comments: In response to our request for comments on our draft report and recommendation to USDA, the Attorney-Advisor in the Office of General Counsel at USDA stated in an e-mail that USDA did not have any comments.
    Recommendation: To help ensure timely and complete reporting of agencies' civil monetary penalty information in agency financial reports (AFR) and to provide the Office of Management and Budget (OMB) and other decision makers with the information needed to help ensure the effectiveness of civil monetary penalties in enforcing statutes and preventing violations, the Chairman of the Federal Election Commission (FEC) should publish civil monetary penalties within its jurisdiction, including any penalty adjustments, in FEC's 2017 AFR.

    Agency: Federal Election Commission
    Status: Open

    Comments: In response to our request for comments on our draft report and recommendation to FEB, the Director of Congressional, Legislative and Intergovernmental Affairs at FEC stated in an e-mail that FEC had no comments.
    Recommendation: To help ensure timely and complete reporting of agencies' civil monetary penalty information in agency financial reports (AFR) and to provide the Office of Management and Budget (OMB) and other decision makers with the information needed to help ensure the effectiveness of civil monetary penalties in enforcing statutes and preventing violations, the Acting Chairman of the Federal Maritime Commission (FMC) should publish civil monetary penalties within its jurisdiction, including any penalty adjustments, in FMC's 2017 AFR.

    Agency: Federal Maritime Commission
    Status: Open

    Comments: In responding to our draft report, FMC stated that it plans to publish updates to its civil monetary penalty information in its 2017 performance and accountability report.
    Recommendation: To help ensure timely and complete reporting of agencies' civil monetary penalty information in agency financial reports (AFR) and to provide the Office of Management and Budget (OMB) and other decision makers with the information needed to help ensure the effectiveness of civil monetary penalties in enforcing statutes and preventing violations, the Chairman of the National Indian Gaming Commission (NIGC) should publish civil monetary penalties within its jurisdiction, including any penalty adjustments, in the Department of the Interior's 2017 AFR.

    Agency: National Indian Gaming Commission
    Status: Open

    Comments: In response to our request for comments on our draft report, NIGC stated that it generally agreed with our recommendation. In addition, NIGC stated that as an independent federal regulatory agency within the Department of the Interior (DOI), NIGC and DOI have developed procedures to ensure that the required civil monetary penalty information will be reported to DOI for its annual agency financial report starting with fiscal year 2017.
    Recommendation: To help ensure timely and complete reporting of agencies' civil monetary penalty information in agency financial reports (AFR) and to provide the Office of Management and Budget (OMB) and other decision makers with the information needed to help ensure the effectiveness of civil monetary penalties in enforcing statutes and preventing violations, the Director of OMB should clarify its guidance related to civil monetary penalty inflation adjustment information that agencies are required to report in the AFRs.

    Agency: Executive Office of the President: Office of Management and Budget
    Status: Open

    Comments: In response to our request for comment, OMB staff stated that they generally agreed with our recommendation.
    Director: Gregory C. Wilshusen
    Phone: (202) 512-6244

    2 open recommendations
    Recommendation: To effectively manage its information security program, the Chairman of the SEC should maintain up-to-date network diagrams and asset inventories in the system security plans for General Support System and a key financial system to accurately and completely reflect the current operating environment.

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: To effectively manage its information security program, the Chairman of the SEC should perform continuous monitoring using automated configuration and vulnerability scanning on the operating systems, databases, and network devices.

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Director: Wilshusen, Gregory C
    Phone: (202) 512-6244

    10 open recommendations
    Recommendation: To help strengthen information security controls over key financial and tax processing systems, and to more effectively implement security-related policies and plans, the Commissioner of Internal Revenue, in addition to addressing previously made but still unresolved recommendations from our prior audits, should implement the audit plans for the 12 systems and applications that we reviewed in the production computing environment.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: To help strengthen information security controls over key financial and tax processing systems, and to more effectively implement security-related policies and plans, the Commissioner of Internal Revenue, in addition to addressing previously made but still unresolved recommendations from our prior audits, should ensure that system administrators and security operations analysts are alerted in the event of audit processing failures.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: To help strengthen information security controls over key financial and tax processing systems, and to more effectively implement security-related policies and plans, the Commissioner of Internal Revenue, in addition to addressing previously made but still unresolved recommendations from our prior audits, should update information contingency plan test procedures to include updating contingency plans to reflect changes to the current operating environment.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: To help strengthen information security controls over key financial and tax processing systems, and to more effectively implement security-related policies and plans, the Commissioner of Internal Revenue, in addition to addressing previously made but still unresolved recommendations from our prior audits, should ensure that approved risk-based decisions pertaining to database configurations are based on suitable justification.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: To help strengthen information security controls over key financial and tax processing systems, and to more effectively implement security-related policies and plans, the Commissioner of Internal Revenue, in addition to addressing previously made but still unresolved recommendations from our prior audits, should develop, document, and implement the use of detailed procedures to facilitate the periodic review and analysis of audit records for its financial systems.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: To help strengthen information security controls over key financial and tax processing systems, and to more effectively implement security-related policies and plans, the Commissioner of Internal Revenue, in addition to addressing previously made but still unresolved recommendations from our prior audits, should develop an enterprise-wide system owner procedural document to control critical mainframe operating system commands.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: To help strengthen information security controls over key financial and tax processing systems, and to more effectively implement security-related policies and plans, the Commissioner of Internal Revenue, in addition to addressing previously made but still unresolved recommendations from our prior audits, should regularly update configuration standards and guidelines for network devices to incorporate recommendations from industry leaders, security agencies, and key practices from IRS partners to address known vulnerabilities applicable to IRS's environment.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: To help strengthen information security controls over key financial and tax processing systems, and to more effectively implement security-related policies and plans, the Commissioner of Internal Revenue, in addition to addressing previously made but still unresolved recommendations from our prior audits, should implement a compliance verification application, or other appropriate process, to ensure configuration policies are comprehensively tested on the mainframe.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: To help strengthen information security controls over key financial and tax processing systems, and to more effectively implement security-related policies and plans, the Commissioner of Internal Revenue, in addition to addressing previously made but still unresolved recommendations from our prior audits, should ensure that all known significant audit findings and recommendations related to financial reporting, which includes those in GAO's public and limited official use only reports, that directly relate to the objective of A-123 internal control tests are reviewed and monitored.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: To help strengthen information security controls over key financial and tax processing systems, and to more effectively implement security-related policies and plans, the Commissioner of Internal Revenue, in addition to addressing previously made but still unresolved recommendations from our prior audits, should identify and review service organizations' listing of user controls that are deemed relevant and test those controls to appropriately draw conclusions about the operating effectiveness of controls.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Director: Dawn B. Simpson
    Phone: (202) 512-3406

    3 open recommendations
    including 3 priority recommendations
    Recommendation: The Secretary of the Treasury should direct the Fiscal Assistant Secretary to develop and implement procedures and metrics for monitoring the federal government's year-to-year progress in resolving intragovernmental differences for significant federal entities at the reciprocal category and trading partner levels.

    Agency: Department of the Treasury
    Status: Open
    Priority recommendation

    Comments: As of the completion of our fiscal year 2016 consolidated financial statements (CFS) audit, we identified this control deficiency related to monitoring intragovernmental differences. Treasury stated that it will continue to evolve its processes as deemed necessary to ensure that appropriate and effective metrics are deployed to measure and monitor agency performance. We will follow-up on progress made by Treasury and OMB as part of our fiscal year 2017 CFS audit, which is ongoing as of September 2017.
    Recommendation: The Secretary of the Treasury should direct the Fiscal Assistant Secretary to develop and implement a sufficient process for working with federal entities to reduce or resolve the need for significant adjustments to federal entity data submitted for the CFS.

    Agency: Department of the Treasury
    Status: Open
    Priority recommendation

    Comments: As of the completion of our fiscal year 2016 consolidated financial statements (CFS) audit, we identified this control deficiency related to significant adjustments to federal entity data submitted for the CFS. Treasury stated that it will continue to work with agencies to facilitate improvement of processes, minimizing the need for Treasury adjustments to agency reporting. We will follow-up on progress made by Treasury and OMB as part of our fiscal year 2017 CFS audit, which is ongoing as of September 2017.
    Recommendation: The Secretary of the Treasury should direct the Fiscal Assistant Secretary, working in coordination with the Controller of OMB, to improve corrective action plans for (1) treaties and international agreements, (2) additional audit procedures for intragovernmental activity and balances, and (3) the Reconciliation Statements so that they include sufficient information to address the control deficiencies in these areas effectively.

    Agency: Department of the Treasury
    Status: Open
    Priority recommendation

    Comments: As of the completion of our fiscal year 2016 consolidated financial statements (CFS) audit, we identified improvements needed to corrective action plans in three areas. Treasury stated that its current remediation plan, including its various corrective action plans, is comprehensive, appropriate, and effective, with robust ongoing monitoring processes in place. However, we continue to believe that the corrective action plans in these three areas do not include sufficient information to effectively address related control deficiencies involving processes used to prepare the CFS. We will follow-up on progress made by Treasury and OMB as part of our fiscal year 2017 CFS audit, which is ongoing as of September 2017.
    Director: Malenich, J Lawrence
    Phone: (202) 512-3406

    9 open recommendations
    Recommendation: The Director of the Federal Housing Finance Agency should direct the Chief Financial Officer to develop a mechanism that captures all of the key factors to be considered, such as materiality and risk, when designing the evaluation of internal control over financial reporting and collaborate, as appropriate, with the Inspector General to develop a similar mechanism for use by FHFA-OIG.

    Agency: Federal Housing Finance Agency
    Status: Open

    Comments: FHFA agreed with this recommendation. FHFA is in the process of developing a mechanism that captures key factors, including risk and materiality, when designing the evaluation of internal control over financial reporting. This mechanism will be documented for the FY 2017 evaluation of internal control over financial reporting. FHFA and FHFA OIG are collaborating in these efforts.
    Recommendation: The Director of the Federal Housing Finance Agency should direct the Chief Financial Officer to coordinate with the Inspector General, as appropriate, when calculating materiality thresholds to reasonably assure that materiality determinations are appropriate for the agency as a whole and rationale is adequately documented.

    Agency: Federal Housing Finance Agency
    Status: Open

    Comments: FHFA agreed with this recommendation. During the FY 2017 evaluation of internal control over financial reporting, FHFA will coordinate with the FHFA OIG when calculating materiality thresholds to reasonably assure that materiality determinations are appropriate for the Agency as a whole and the rationale is adequately documented.
    Recommendation: The Director of the Federal Housing Finance Agency should direct the Chief Financial Officer to coordinate with the Inspector General, as appropriate, to assess and document the aggregate effect of all deficiencies identified at the agency-wide level during the evaluation of internal control over financial reporting.

    Agency: Federal Housing Finance Agency
    Status: Open

    Comments: FHFA agreed with this recommendation. FHFA will coordinate with the FHFA OIG during the FY 2017 evaluation of internal control over financial reporting to assess and document the aggregate effect of all deficiencies identified at the Agency-wide level.
    Recommendation: The Director of the Federal Housing Finance Agency should direct the Chief Financial Officer to (1) summarize in sufficient detail by internal control principle those activities from the program offices that have an effect on internal control over financial reporting to reasonably assure the consideration of all internal control components and related principles; (2) collaborate, as appropriate, with the Inspector General to implement corresponding actions at FHFA-OIG; and (3) document how that information is used to conclude on the internal control components and related principles for financial reporting.

    Agency: Federal Housing Finance Agency
    Status: Open

    Comments: FHFA agreed with this recommendation. During the FY 2017 evaluation of internal control over financial reporting, FHFA will summarize by internal control principle those activities from the program offices that have an effect on internal control over financial reporting to reasonably assure the consideration of all internal control components and related principles. FHFA will also document how information is used to conclude on the internal control components and related principles for financial reporting activities that are evaluated. FHFA will collaborate with FHFA OIG in these efforts.
    Recommendation: The Director of the Federal Housing Finance Agency should direct the Chief Financial Officer to enhance the evaluation of internal control over financial reporting by identifying and testing all key control activities, including those related to the preparation of the financial statements.

    Agency: Federal Housing Finance Agency
    Status: Open

    Comments: FHFA agreed with this recommendation. FHFA will enhance the FY 2017 evaluation of internal control over financial reporting by identifying and testing all key control activities, including those related to the preparation of the financial statements.
    Recommendation: The Director of the Federal Housing Finance Agency should direct the Chief Financial Officer to (1) thoroughly document FHFA's review of SSAE No. 16 reports issued for the period under evaluation by reasonably assuring that all applicable control objectives and related control activities are clearly identified and described and the evaluation of user entity controls is adequately explained and (2) collaborate, as appropriate, with the Inspector General to implement corresponding actions at FHFA-OIG.

    Agency: Federal Housing Finance Agency
    Status: Open

    Comments: FHFA agreed with this recommendation. During the FY 2017 evaluation of internal control over financial reporting, FHFA will thoroughly document FHFA's review of SSAE No. 16 reports issued for the period under evaluation by reasonably assuring that all applicable control objectives and related control activities are clearly identified and described and the evaluation of user entity controls is adequately explained. FHFA will collaborate with the FHFA OIG during these efforts.
    Recommendation: The Director of the Federal Housing Finance Agency should direct the Chief Financial Officer to (1) clearly define and document an approach that identifies the information systems that are key to financial reporting, the process areas these information systems support, the key control activities for each information system, and how the key control activities are evaluated and (2) collaborate, as appropriate, with the Inspector General to implement corresponding actions at FHFA-OIG.

    Agency: Federal Housing Finance Agency
    Status: Open

    Comments: FHFA agreed with this recommendation. During the FY 2017 evaluation of internal control over financial reporting, FHFA will clearly define and document an approach that identifies the information systems that are key to financial reporting, the process areas these information systems support, the key control activities for each information system, and how the key control activities are evaluated. FHFA will collaborate with the FHFA OIG in these efforts.
    Recommendation: The Director of the Federal Housing Finance Agency should direct the Chief Financial Officer to collaborate, as appropriate, with the Inspector General to (1) develop a complete list of the specific provisions of laws and regulations that may have an effect on material amounts and related disclosures in the financial statements that are applicable to FHFA-OIG and (2) prepare documentation that clearly links each applicable provision of law or regulation to the key control activities tested.

    Agency: Federal Housing Finance Agency
    Status: Open

    Comments: FHFA agreed with this recommendation. FHFA will collaborate with the FHFA OIG to develop a complete list of the specific provisions of laws and regulations that may have an effect on material amounts and related disclosures in the financial statements that are applicable to the FHFA OIG and prepare documentation that clearly links each applicable provision of law or regulation to the key control activities tested.
    Recommendation: The Director of the Federal Housing Finance Agency should direct the Chief Financial Officer to design an evaluation process that reasonably assures assignment of independent roles between the implementation and monitoring of control activities that are significant to the evaluation of internal control over financial reporting.

    Agency: Federal Housing Finance Agency
    Status: Open

    Comments: FHFA agreed with this recommendation. FHFA is designing an evaluation process that reasonably assures assignment of independent roles between implementation and monitoring of control activities that are significant to the evaluation of internal control over financial reporting. To this end, FHFA has hired an independent contractor to aid in the evaluation process for FY 2017, and has involved staff from FHFA's Office of Quality Assurance in the FY 2017 evaluation process to reasonably assure independent roles between monitoring and implementation going forward.
    Director: Nick Marinos
    Phone: (202) 512-9342

    1 open recommendations
    Recommendation: To help improve the corporation's implementation of its information security program, the Chairman of FDIC should direct the Chief Information Officer to update the procedure for granting access to the key financial application, to include responsibilities and steps for ensuring that the access privileges granted have been approved by the users' supervisor.

    Agency: Federal Deposit Insurance Corporation
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Director: J. Christopher Mihm
    Phone: (202) 512-6806

    1 open recommendations
    Recommendation: To promote transparency in the development and management of data standards for reporting federal spending, the Director of the Office of Management and Budget should ensure that the Data Standards Committee makes information about the topics of the committee's proceedings and any resulting outcomes available to the public.

    Agency: Executive Office of the President: Office of Management and Budget
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Director: Katherine Iritani
    Phone: (202) 512-7114

    2 open recommendations
    Recommendation: To improve consistency in CMS oversight of federal spending under section 1115 demonstrations, the Secretary of Health and Human Services should require the Administrator of CMS to develop and document standard operating procedures for monitoring spending under demonstrations that (1) require setting reporting requirements for states that provide CMS the data elements needed for CMS to assess compliance with demonstration spending limits; (2) require consistent enforcement of states' compliance with financial reporting requirements; and (3) require consistent tracking of the amount of unspent funds under demonstration spending limits.

    Agency: Department of Health and Human Services
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: To improve consistency in CMS oversight of federal spending under section 1115 demonstrations, the Secretary of Health and Human Services should require the Administrator of CMS to issue formal guidance on the revised budget neutrality policy, including information on how the policy will be applied.

    Agency: Department of Health and Human Services
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Director: Anne-Marie Fennell
    Phone: (202) 512-3841

    3 open recommendations
    Recommendation: To help improve oversight of the concessions program, the Secretary of the Interior should direct the Director of the National Park Service to review the financial reporting process and make any necessary adjustments to help ensure timely and accurate reporting of data on annual financial reports.

    Agency: Department of the Interior: National Park Service
    Status: Open

    Comments: In its May 25, 2017 update letter, the Department of the Interior stated that the National Park Service will (1) review the current financial reporting process and take steps to improve the timeliness of concessioners' annual financial reports as outlined in their contracts, and (2) develop internal controls to ensure that concessioner data is accurate. The agency anticipates having these actions implemented by March 31, 2018.
    Recommendation: To help improve oversight of the concessions program, the Secretary of the Interior should direct the Director of the National Park Service to finalize guidance on maintenance and capital improvements and make it publicly available to concessioners.

    Agency: Department of the Interior: National Park Service
    Status: Open

    Comments: In its May 25, 2017 update letter, the Department of the Interior stated that the National Park Service will finalize the existing draft guidance on maintenance and capital improvements to clarify the funding sources available to concessioners for particular repairs and maintenance needs. The agency added that the finalized guidance will be made publicly available. The agency anticipates having this guidance finalized by November 30, 2017.
    Recommendation: To help improve oversight of the concessions program, the Secretary of the Interior should direct the Director of the National Park Service to develop performance goals with targets and timeframes in its commercial services strategic plan.

    Agency: Department of the Interior: National Park Service
    Status: Open

    Comments: In its May 25, 2017 update letter, the Department of the Interior stated that the National Park Service will review the commercial services program strategic plan and develop meaningful and measurable performance goals with timeframes. The agency anticipates having this implemented by June 30, 2018.
    Director: Asif A. Khan
    Phone: (202) 512-9869

    8 open recommendations
    Recommendation: The Secretary of the Army should direct the Internal Review Directorate under the Assistant Secretary of the Army, Financial Management and Comptroller, to develop written policies and procedures for all financial management-related audit findings and recommendations under its purview that include the following: (1) how the status of the recommendations will be tracked; (2) the process and criteria to be followed for prioritizing the findings and recommendations; (3) the process for developing CAPs to remediate the findings and recommendations, including the detailed CAP elements recommended by the Implementation Guide for OMB Circular A-123; and (4) the process for monitoring the status and progress of the CAPs, including the documentation to be maintained for monitoring CAP status and any actions to be taken if a lack of progress is found.

    Agency: Department of Defense: Department of the Army
    Status: Open

    Comments: The Army concurred with this recommendation. The Army stated that the Internal Review Directorate has completed updating its written standard operating procedures to include monitoring financial management-related external audit findings and recommendations. The Army stated that this new guidance includes an explanation of how recommendations will be tracked; how findings and recommendations will be prioritized; how status and progress of corrective action plans (CAPs) will be developed; and how the status and progress of CAPs will be monitored.
    Recommendation: The Secretary of the Army should direct the Accountability and Audit Readiness Directorate under the Assistant Secretary of the Army, Financial Management and Comptroller, to enhance the directorate's policies and procedures for (1) tracking and prioritizing all financial management-related audit findings and recommendations under its purview and (2) developing and monitoring CAPs for all such recommendations so that they include sufficient details, such as the criteria used to prioritize the CAPs, the recommended CAP elements, and the process for monitoring and documenting the progress and status of CAPs.

    Agency: Department of Defense: Department of the Army
    Status: Open

    Comments: The Army concurred with this recommendation. The Army stated that the Accountability and Audit Readiness Directorate has completed actions to enhance its current standard operating procedures to include (1) updating its corrective action plan (CAP) database and reporting tool, (2) documenting its reporting procedures, and (3) updating its CAP template to include additional elements recommended by the Implementation Guide for OMB Circular A-123. In addition, the Army stated that its policies and procedures include steps to incorporate external financial management-related audit findings assigned to the Accountability and Audit Readiness Directorate by the Internal Review Directorate and that the existing process the Army uses to prioritize findings and the related CAPs and to monitor the progress and status of CAPs has been documented.
    Recommendation: The Secretary of the Navy should, when finalizing the Navy's policies and procedures for identifying and tracking its CAPs to remediate financial management-related audit findings and recommendations, enhance this guidance so it includes detailed steps and specific procedures for confirming and validating the completeness and accuracy of the status of these audit findings and recommendations.

    Agency: Department of Defense: Department of the Navy
    Status: Open

    Comments: The Navy concurred with this recommendation. The Navy stated that it is (1) recording new findings and recommendations on a weekly basis in its deficiency database, (2) reviewing historical audits to ensure that previous findings and recommendations are recorded, and (3) collaborating with audit agencies to establish a process to reconcile the status of recommendations to ensure that its deficiency database accurately reports open and closed recommendations. The Navy also stated that these processes would be documented and implemented by January 31, 2017.
    Recommendation: The Secretary of the Air Force should design and document a comprehensive process to ensure that the complete universe of all financial management-related findings and recommendations from all audit sources is identified and tracked.

    Agency: Department of Defense: Department of the Air Force
    Status: Open

    Comments: The Air Force concurred with this recommendation. The Air Force stated that it will revise its existing process for identifying and tracking all financial management-related findings and recommendations from all audit sources. The Air Force stated that the process will include the procedures for summarizing the status of findings on a bi-monthly basis and providing a summary for the FIAR Governance Board meetings. The Air Force stated that it plans to implement this recommendation by January 31, 2018.
    Recommendation: The Secretary of the Air Force should update the Air Force's written policies and procedures for prioritizing financial management-related audit findings and recommendations from all audit sources and for developing and monitoring CAPs so that they include sufficient details. These procedures should include the following details: (1) The process to be followed for prioritizing the financial management-related findings and recommendations from audit sources. (2) The guidance for developing CAPs for all financial management-related audit findings and recommendations from all audit sources to include complete details, including the elements recommended by the Implementation Guide for OMB Circular A-123. (3) The process for monitoring the status of the CAPs for all financial management-related audit findings and recommendations from all audit sources, including the documentation to support any corrective actions taken, as recommended by the Implementation Guide for OMB Circular A-123.

    Agency: Department of Defense: Department of the Air Force
    Status: Open

    Comments: The Air Force concurred with this recommendation. The Air Force stated that it will revise its existing written policies and procedures for tracking and monitoring all financial management-related audit findings and recommendations. Specifically, the Air Force stated the these revised policies and procedures will (1) articulate prioritizing findings and recommendations; (2) provide guidance for developing detailed and actionable corrective action plans (CAPs), which address the condition and root cause of the findings and include elements recommended by OMB Circular A-123; and (3) provide clear guidance for monitoring the status and progress towards implementing and closing the CAPs. The Air Force plans to implement this recommendation by January 31, 2019.
    Recommendation: To improve DOD management's process for monitoring the military services' audit remediation efforts and to provide timely and useful information to stakeholders as needed, the Secretary of Defense should direct the Secretary of the Army, the Secretary of the Navy, and the Secretary of the Air Force to prepare and submit to the Under Secretary of Defense (Comptroller), on at least a bimonthly basis for availability at the FIAR Governance Board meetings, a summary of key information included in the CAPs that at a minimum contains the data elements recommended by the Implementation Guide for OMB Circular A-123 for each CAP related to critical capabilities for achieving audit readiness.

    Agency: Department of Defense
    Status: Open

    Comments: DOD concurred with this recommendation. DOD stated that it solicits input on a bi-monthly basis, on critical capability corrective action plans (CAPs) at a summary level. This information is provided routinely at regularly scheduled FIAR Governance Board meetings. DOD also stated that an updated notice of finding and recommendation (NFR) form template is being developed and will be provided to the military services to use for reporting this information so that it will include the recommended standard data elements outlined in OMB Circular A-123 to provide greater transparency into the nature of remediation plans. DOD also stated that FIAR Guidance will be updated to explicitly state that military services should include the OMB recommended standard data elements in CAPs.
    Recommendation: To reasonably assure that DOD management and external stakeholders have a comprehensive picture of the status of corrective actions needed for audit readiness throughout the department, the Secretary of Defense should direct the Under Secretary of Defense (Comptroller) to prepare a consolidated CAP management summary on a bimonthly basis that includes the data elements referred to above on the status of all CAPs related to critical capabilities for the military services and for the service providers and other defense organizations.

    Agency: Department of Defense
    Status: Open

    Comments: DOD partially concurred with this recommendation. According to DOD, the military services already provide summary-level updates on their critical capability corrective action plans (CAPs) at FIAR Governance Board meetings. It also stated that the template that is used to present CAPs to the FIAR Governance Board meetings at the summary level has been updated to align CAPs to critical capabilities. DOD still needs to address how all of the data elements from the Implementation Guide for OMB Circular A-123 will be summarized or otherwise reported for all CAPs pertaining to critical capabilities across the Department. In addition, DOD stated that because the DOD Comptroller takes responsibility for maintaining, monitoring, and reporting on the status of CAPs for the service providers and other defense organizations and of DOD-wide issues, the Comptroller will also summarize this information. However, DOD has not clarified what information from the military services will be summarized.
    Recommendation: To facilitate the development of a consolidated CAP management summary and the ability to efficiently respond to stakeholder requests, the Under Secretary of Defense (Comptroller) should develop and implement a centralized monitoring and reporting process that at a minimum (1) captures department-wide information on the military services' and other defense organizations' CAPs related to critical capabilities, including the standard data elements recommended in the Implementation Guide for OMB Circular A-123, and (2) maintains up-to-date information on the status of these CAPs.

    Agency: Department of Defense: Under Secretary of Defense (Comptroller)
    Status: Open

    Comments: DOD partially concurred with this recommendation. DOD stated that as outlined in the military services' responses to our recommendations directed to them, the Army, Navy, and Air Force have agreed to take the responsibility for developing, maintaining, and monitoring all CAPs at the level recommended by the Implementation Guide for OMB Circular A-123. Further, DOD stated that based on the Comptroller actively participating in monthly meetings with military services to gain an understanding of their CAPs and the information reported in bi-monthly FIAR Governance Board meetings, this provides the Department the ability to efficiently respond to stakeholder requests related to critical capabilities CAPs. However, DOD did not describe a centralized reporting process to ensure consistent standard data elements are provided in CAPs and that the information on the status of the CAPs is up to date.
    Director: Beryl H. Davis
    Phone: (202) 512-2623

    9 open recommendations
    including 4 priority recommendations
    Recommendation: To provide agencies access to SSA's more complete set of death data, Congress should consider amending the Social Security Act to explicitly allow SSA to share its full death file with Treasury for use through the DNP working system.

    Agency: Congress
    Status: Open

    Comments: When we confirm what actions have been taken we will update. As of August 3, 2017, no updated information has been provided.
    Recommendation: To reasonably assure that additional relevant databases are identified and evaluated for inclusion in the DNP working system, the Director of OMB should develop, document, and communicate a formal process that user agencies can use to identify, suggest, and receive feedback on additional databases to be evaluated for inclusion in the DNP working system.

    Agency: Executive Office of the President: Office of Management and Budget
    Status: Open

    Comments: We provided a draft of this report to OMB and Treasury and other agencies we reviewed for comment. In its written comments, OMB agreed with this recommendation and cited plans to implement it. As of August 3, 2017, no updated information has been provided by the OMB. We will continue to monitor the status of this recommendation.
    Recommendation: To reasonably assure that the DNP working system is used effectively and consistently, the Director of OMB should develop guidance that clarifies whether the use of DNP's payment integration functionality is required and--if required--the circumstances and process in which agencies may obtain an exemption from this requirement.

    Agency: Executive Office of the President: Office of Management and Budget
    Status: Open
    Priority recommendation

    Comments: We provided a draft of this report to OMB and Treasury and other agencies we reviewed for comment. In its written comments, OMB agreed with this recommendation and cited plans to implement it. As of August 3, 2017, no updated information has been provided by the OMB. We will continue to monitor the status of this recommendation.
    Recommendation: To reasonably assure that agencies use the DNP working system effectively, the Director of OMB should develop a strategy--and communicate its strategy through guidance--for how agencies should use the DNP working system to complement existing data matching processes and whether and how agencies should consider using the DNP working system to streamline existing data matching. Such guidance may cover how agencies should demonstrate that their data matching processes meet the requirements in the Improper Payments Elimination and Recovery Improvement Act of 2012, whether agencies can decide on their own which specific databases to use, and how agencies should use the functionalities available through the DNP working system.

    Agency: Executive Office of the President: Office of Management and Budget
    Status: Open
    Priority recommendation

    Comments: We provided a draft of this report to OMB and Treasury and other agencies we reviewed for comment. In its written comments, OMB stated that it generally agreed with the concept of developing a strategy for how agencies should use the Do Not Pay (DNP) working system to complement existing data matching processes and would explore the concept further. As of August 3, 2017, no updated information has been provided by the OMB. We will continue to monitor the status of this recommendation.
    Recommendation: To reasonably assure that agencies develop consistent policies and procedures to verify DNP matches, the Director of OMB should provide additional guidance that outlines when and how agencies should verify DNP matches against a secondary source and provide individuals an opportunity to contest before taking adverse actions as a result of DNP matches.

    Agency: Executive Office of the President: Office of Management and Budget
    Status: Open
    Priority recommendation

    Comments: We provided a draft of this report to OMB and Treasury and other agencies we reviewed for comment. In its written comments, OMB stated that it agreed with the of consistent policies and procedures and will work with agencies so that their policies and procedures for verifying Do Not Pay (DNP) matches are developed consistently. As of August 3, 2017, no updated information has been provided by the OMB. We will continue to monitor the status of this recommendation.
    Recommendation: To better monitor agency use of the DNP working system once a strategy has been developed, the Director of OMB should develop and implement monitoring mechanisms--such as goals, benchmarks, and performance measures--to evaluate agency use of the DNP working system.

    Agency: Executive Office of the President: Office of Management and Budget
    Status: Open
    Priority recommendation

    Comments: We provided a draft of this report to OMB and Treasury and other agencies we reviewed for comment. In its written comments, OMB stated that it agreed with the concept of monitoring mechanisms and will continue to work with agencies to reduce improper payments and encourage agencies to establish goals to improve payment accuracy that will be monitored and evaluated by OMB. As of August 3, 2017, no updated information has been provided by the OMB. We will continue to monitor the status of this recommendation.
    Recommendation: To reasonably assure that agency-reported information on use of the DNP working system is reliable, the Director of OMB should develop a process for comparing agency reporting on the use of the DNP working system to available sources, such as OMB guidance and DNP working system adjudication reports.

    Agency: Executive Office of the President: Office of Management and Budget
    Status: Open

    Comments: We provided a draft of this report to OMB and Treasury and other agencies we reviewed for comment. In its written comments, OMB stated that it agreed with the concept of ensuring that data are reliable and will consider the feasibility of a process to compare agency submissions to available sources to reasonably assure that agency-reported information on use of the Do Not Pay (DNP) working system is reliable. As of August 3, 2017, no updated information has been provided by the OMB. We will continue to monitor the status of this recommendation.
    Recommendation: To reasonably assure that agency-reported information on use of the DNP working system is complete, the Director of OMB should revise its guidance to clarify whether agencies should report on their uses of all of the functionalities of the DNP working system in their agency financial reports.

    Agency: Executive Office of the President: Office of Management and Budget
    Status: Open

    Comments: We provided a draft of this report to OMB and Treasury and other agencies we reviewed for comment. In its written comments, OMB stated that it agreed with ensuring the completeness of data and will continue to work with agencies and the Chief Financial Officer community to ensure that agency-reported information on the use of the Do Not Pay (DNP) working system is complete. As of August 3, 2017, no updated information has been provided by the OMB. We will continue to monitor the status of this recommendation.
    Recommendation: The Secretary of the Treasury should modify the DNP working system to track adjudication of matches obtained through all functionalities.

    Agency: Department of the Treasury
    Status: Open

    Comments: In a memo dated April 13, 2017, the Department of Treasury (Treasury) stated that it is in the process of evaluating potential solutions to capture information on the impact of Portal functionalities (online single search, continuous monitoring, and batch matching), and has developed a plan with timeframes to assess the technical feasibility as well as user willingness to provide information. However, Treasury stated that it cannot be certain that this evaluation will identify viable solutions, and therefore cannot commit to making any modifications to the working system. Treasury explained, for instance, it may not be possible to design an effective and user-friendly strategy to capture agency decisions to remove an excluded party identified in a continuous monitoring file from a list of approved vendors. Further, Treasury explained that even if it can capture those decisions, it may be even more difficult to assign a dollar value to that decision as there would be no payment pending in this example. Nevertheless, Treasury stated that it is committed to thoroughly evaluating whether a solution is possible, and--if a solution proves feasibly--its goal is to complete a development plan for the implementation of any identified solutions by September 30, 2018.
    Director: Asif A. Khan
    Phone: (202) 512-9869

    7 open recommendations
    Recommendation: To improve the Navy's implementation of the FIAR Guidance for its General Fund FBWT FIP and facilitate efforts to achieve SBR auditability, the Secretary of the Navy should direct the Assistant Secretary of the Navy, Financial Management and Comptroller, to prepare a level I quantitative drilldown in accordance with the FIAR Guidance.

    Agency: Department of Defense: Department of the Navy
    Status: Open

    Comments: The Navy concurred with this recommendation and stated that it has actions planned, taken, or under way to prepare a quantitative drilldown. In August 2017 we contacted the Navy POC and requested an update on the status of this recommendation.
    Recommendation: To improve the Navy's implementation of the FIAR Guidance for its General Fund FBWT FIP and facilitate efforts to achieve SBR auditability, the Secretary of the Navy should direct the Assistant Secretary of the Navy, Financial Management and Comptroller, to prioritize audit readiness efforts for the key FBWT systems, prepare an audit strategy that identifies for each system (1) the Navy's plan for assessing the system to gain assurance that the system can be relied on; (2) the assessment types, including prioritizing the assessments based on qualitative and quantitative factors for each system; and (3) planned start and completion dates of these assessments for each system.

    Agency: Department of Defense: Department of the Navy
    Status: Open

    Comments: The Navy concurred with this recommendation and stated that it has actions planned, taken, or under way to prioritize audit readiness efforts for key FBWT systems. In August 2017 we contacted the Navy POC and requested an update on the status of this recommendation.
    Recommendation: To improve the Navy's implementation of the FIAR Guidance for its General Fund FBWT FIP and facilitate efforts to achieve SBR auditability, the Secretary of the Navy should direct the Assistant Secretary of the Navy, Financial Management and Comptroller, to prepare, in accordance with FIAR Guidance, the documentation of control activities and information technology general computer controls for significant systems; system certifications or accreditations; system, end user, and systems documentation locations; and hardware, software, and interfaces.

    Agency: Department of Defense: Department of the Navy
    Status: Open

    Comments: The Navy concurred with this recommendation and stated that it has actions planned, taken, or under way to document control activities, information technology general computer controls for significant systems, systems documentation locations, and hardware, software, and interfaces. In August 2017 we contacted the Navy POC and requested an update on the status of this recommendation.
    Recommendation: To improve the Navy's implementation of the FIAR Guidance for its General Fund FBWT FIP and facilitate efforts to achieve SBR auditability, the Secretary of the Navy should direct the Assistant Secretary of the Navy, Financial Management and Comptroller, to prepare an internal control assessment document for each assessable unit, summarizing control activities that are appropriately designed and in place.

    Agency: Department of Defense: Department of the Navy
    Status: Open

    Comments: The Navy concurred with this recommendation and stated that it has actions planned, taken, or under way to prepare an internal control assessment document. In August 2017 we contacted the Navy POC and requested an update on the status of this recommendation.
    Recommendation: To improve the Navy's implementation of the FIAR Guidance for its General Fund FBWT FIP and facilitate efforts to achieve SBR auditability, the Secretary of the Navy should direct the Assistant Secretary of the Navy, Financial Management and Comptroller, to perform sufficient testing for supporting documentation to reasonably determine whether such documentation, including that for key reconciliations, is available in a sustainable manner for future audit efforts.

    Agency: Department of Defense: Department of the Navy
    Status: Open

    Comments: The Navy concurred with this recommendation and stated that it has actions planned, taken, or under way to test the effectiveness of Fund Balance with Treasury controls, which includes assessing the availability of supporting documentation. In August 2017 we contacted the Navy POC and requested an update on the status of this recommendation.
    Recommendation: To improve the Navy's implementation of the FIAR Guidance for its General Fund FBWT FIP and facilitate efforts to achieve SBR auditability, the Secretary of the Navy should direct the Assistant Secretary of the Navy, Financial Management and Comptroller, to, for each fiscal year expected to be under audit, identify and address unusual and invalid transactions, abnormal balances, and missing data fields in the universe of collection and disbursement transactions.

    Agency: Department of Defense: Department of the Navy
    Status: Open

    Comments: The Navy concurred with this recommendation and stated that it has actions planned, taken, or under way to obtain monthly data from Defense Finance and Accounting Service on invalid Fund Balance with Treasury transactions. In August 2017 we contacted the Navy POC and requested an update on the status of this recommendation.
    Recommendation: To improve the Navy's implementation of the FIAR Guidance for its General Fund FBWT FIP and facilitate efforts to achieve SBR auditability, the Secretary of the Navy should direct the Assistant Secretary of the Navy, Financial Management and Comptroller, to update FBWT data flowcharts and narratives to fully describe the flow of data from the Navy's receipt of collection and disbursement transaction information through the financial statement line items, including the reversal of general ledger trial balance data generated by the automated system and other entries made within Defense Departmental Reporting System - Budgetary.

    Agency: Department of Defense: Department of the Navy
    Status: Open

    Comments: The Navy concurred with this recommendations and stated that it has actions planned, taken, or under way to develop procedures and documentation that describe the processes associated with the flow of data. In August 2017 we contacted the Navy POC and requested an update on the status of this recommendation.
    Director: Paula M. Rascona
    Phone: (202) 512-9816

    3 open recommendations
    including 3 priority recommendations
    Recommendation: To help ensure effective government-wide implementation and that complete and consistent spending data will be reported as required by the DATA Act, the Director of OMB, in collaboration with the Secretary of the Treasury, should establish or leverage existing processes and controls to determine the complete population of agencies that are required to report spending data under the DATA Act and make the results of those determinations publicly available.

    Agency: Executive Office of the President: Office of Management and Budget
    Status: Open
    Priority recommendation

    Comments: OMB stated that each agency is responsible for determining whether it is subject to the DATA Act. To help agencies make that determination, OMB published guidance in the form of frequently asked questions and stated that the agencies may consult with OMB for additional counsel. In response to our recommendation, OMB staff told us they have reached out to federal agencies to identify which agencies have determined that they are exempt from reporting under the DATA Act and prepared a list of such agencies. However, OMB has not provided us the list or the procedures for reviewing agency determinations and compiling the results. In addition, OMB has not established procedures for ensuring non-exempt agencies are reporting spending data as required. Finally, OMB has not stated whether it will make the results of the determinations publicly available. Further, additional clarification would improve the usefulness of the frequently asked questions. For example, they state "Any Federal agency submitting data that OMB posts on its SF 133 Report on Budget Execution and Budgetary Resources is required to comply with DATA Act reporting." However, the SF 133 Report for the third quarter of 2016 includes entities such as the Postal Service which are not required by the DATA Act to report financial and payment information. In explaining the frequently asked questions to us, OMB officials clarified that they meant that an entity is required to report if its data appears on the SF 133 and it meets the applicable statutory definition of agency. The frequently asked questions document does not clearly communicate this two-prong approach. Additionally, OMB's verbal clarification when meeting with us does not account for those entities that meet the statutory definition of agency and are required by the DATA Act to report financial and payment information but do not appear on the SF 133. We will continue to assess OMB's efforts to address this recommendation.
    Recommendation: To help ensure effective government-wide implementation and that complete and consistent spending data will be reported as required by the DATA Act, the Director of OMB, in collaboration with the Secretary of the Treasury, should reassess, on a periodic basis, which agencies are required to report spending data under the DATA Act and make appropriate notifications to affected agencies.

    Agency: Executive Office of the President: Office of Management and Budget
    Status: Open
    Priority recommendation

    Comments: OMB does not have plans to reassess, on a periodic basis, which agencies are required to report spending data under the DATA Act. We continue to believe action on this recommendation is important to effectively implement the DATA Act. We will continue to assess OMB's efforts to address this recommendation.
    Recommendation: To help ensure effective implementation of the DATA Act by the agencies and facilitate the further establishment of overall government-wide governance, the Director of OMB, in collaboration with the Secretary of the Treasury, should request that non-CFO Act agencies required to report federal spending data under the DATA Act submit updated implementation plans, including updated timelines and milestones, cost estimates, and risks, to address new technical requirements.

    Agency: Executive Office of the President: Office of Management and Budget
    Status: Open
    Priority recommendation

    Comments: On June 15, 2016, OMB directed CFO Act agencies to update key components of their implementation plans by August 12, 2016. The requirement did not extend to non-CFO Act agencies. OMB stated that it is monitoring non-CFO Act agencies by providing feedback to non-CFO Act agencies through workshops instead of requesting updated implementation plan information. According to OMB officials, OMB has not followed-up with non-CFO Act agencies or requested updated implementation plan information because they are working with the CFO Act agencies which comprise approximately 90 percent of federal spending. In addition to these outreach efforts, OMB has worked with Treasury to engage with small and independent agencies through weekly phone calls and other forms of communication. However, the DATA Act applies to most federal agencies, and we believe that it is important to monitor smaller agencies' implementation plans as well as large agencies. We will continue to assess OMB's efforts to address this recommendation.
    Director: Dawn B. Simpson
    Phone: (202) 512-3406

    1 open recommendations
    including 1 priority recommendation
    Recommendation: The Secretary of the Treasury should direct the Fiscal Assistant Secretary to develop and implement procedures to determine whether user accounts already exist before establishing or recertifying user accounts in the Governmentwide Treasury Account Symbol Adjusted Trial Balance System or Governmentwide Financial Report System.

    Agency: Department of the Treasury
    Status: Open
    Priority recommendation

    Comments: As of the completion of our fiscal year 2016 consolidated financial statements (CFS) audit, Treasury agreed that this recommendation remained open. Treasury plans to implement processes to validate new users who do not already have an existing account in the Governmentwide Treasury Account Symbol Adjusted Trial Balance System (GTAS) or the Governmentwide Financial Report System (GFRS); and to ensure that users do not have conflicting roles or privileges. We will follow-up on progress made by Treasury as part of our fiscal year 2017 CFS audit, which is ongoing as of March 2017.
    Director: David A. Powner
    Phone: (202) 512-9286

    4 open recommendations
    Recommendation: To help IRS improve its process for determining IT funding priorities and to provide timely information on the progress of its investments, the Commissioner of IRS should direct the Chief Technology Officer to document IRS's process for selecting and prioritizing operations support activities.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: In its August 2016 statement of actions to address our recommendations, IRS reported that it was documenting the process for selecting and prioritizing all non-Business Systems Modernization activities, and noted that it expects to have draft documentation by September 2016, and finalized documentation no later than April 2017. We will be following-up with the agency to obtain documentation of actions taken to address this recommendation, and will update this status accordingly.
    Recommendation: To help IRS improve its process for determining IT funding priorities and to provide timely information on the progress of its investments, the Commissioner of IRS should direct the Chief Technology Officer to establish, document, and implement policies and procedures for selecting new and reselecting ongoing business systems modernization activities, consistent with IRS's process for prioritizing operations support priorities, which addresses (1) prioritization and comparison of IT assets against each other, (2) criteria for making selection and prioritization decisions, and (3) ensuring IRS executives' final funding decisions on IT proposals are based on IRS's prioritization process.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: In its August 2016 statement of actions to address our recommendations, IRS highlighted process improvements, which it noted would influence its efforts to address this recommendation. IRS committed to documenting the prioritization policies and procedures for its Business Systems Modernization activities as these new process improvements stabilize. We will be following-up with IRS to obtain documentation of actions taken to address this recommendation, and will update this status accordingly.
    Recommendation: To help IRS improve its process for determining IT funding priorities and to provide timely information on the progress of its investments, the Commissioner of IRS should direct the Chief Technology Officer to modify existing processes for Foreign Account Tax Compliance Act (FATCA) and Return Review Program (RRP) for measuring work performed by IRS staff to incorporate best practices, including accounting for actual work performed and using the level of effort measure sparingly.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: In its August 2016 statement of actions to address our recommendations, IRS stated it would evaluate the use of a more quantitative measure for work performed and thereby use the level of effort measure sparingly. IRS stated that it would meet with GAO to discuss the results of this evaluation by the end of January 2017. We plan to meet with IRS in the near future to discuss this recommendation, and will update this status accordingly.
    Recommendation: To help IRS improve its process for determining IT funding priorities and to provide timely information on the progress of its investments, the Commissioner of IRS should direct the Chief Technology Officer to report on actual costs and scope delivery at least quarterly for the Customer Account Data Engine 2 and the Affordable Care Act Administration. For these investments, IRS should develop metrics similar to FATCA and RRP.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: In its August 2016 statement of actions to address our recommendations, IRS stated that the Customer Account Data Engine 2 program management office is currently standing up processes to report on planned versus actual costs and scope delivery on a monthly basis. Additionally, IRS stated that it would consider the approach currently being used by the Foreign Account Tax Compliance Act and Return Review Program investments. The agency stated that development work for the Affordable Care Act Administration investment was minimal, and as a result, application of this recommendation would not be beneficial. We will be following-up with IRS to obtain documentation of actions taken to address this recommendation, and will update this status accordingly.
    Director: J. Christopher Mihm
    Phone: (202) 512-6806

    13 open recommendations
    Recommendation: To improve the public reporting of major management challenges and to ensure performance information is useful, transparent, and complete, the Secretary of Agriculture should describe the Department of Agriculture's (USDA) major management challenges and include performance goals, performance measures, milestones and an agency official responsible for resolving each of its major management challenges as part of USDA's agency performance plan.

    Agency: Department of Agriculture
    Status: Open

    Comments: As of August 2017, USDA had not taken any actions to implement our recommendation. When the 2019 annual performance plan is issued, we will update the status of this recommendation.
    Recommendation: To improve the public reporting of major management challenges and to ensure performance information is useful, transparent, and complete, the Secretary of Commerce should describe the Department of Commerce's major management challenges and include performance goals, performance measures, milestones and an agency official responsible for resolving each of its major management challenges as part of the Department of Commerce's agency performance plan.

    Agency: Department of Commerce
    Status: Open

    Comments: According to the Department of Commerce' action plan to address GAO's recommendations, it will begin including a description of the Department's major management challenges, as well as related performance goals, performance milestones and an agency official responsible for resolving each of its major management challenges, in the Department's annual performance plan reporting, starting with the report to be issued concurrent with final fiscal year 2018 Congressional Budget Justifications (CBJ). As of August 2017, Commerce has not taken action to implement our recommendation. Our review of the Department of Commerce's 2018 CBJ found that it did not include recommended information. When the 2019 CBJ is issued, we will update the status of this recommendation.
    Recommendation: To improve the public reporting of major management challenges and to ensure performance information is useful, transparent, and complete, the Secretary of Defense should include planned actions for each of the Department of Defense's (DOD) major management challenges and ensure that required information about its major management challenges, currently in DOD's Agency Strategic Plan for Fiscal Years 2015-2018, be included in its agency performance plan so that progress toward resolving each of its major management challenges is transparent and reported annually.

    Agency: Department of Defense
    Status: Open

    Comments: As of August 2017, the Department of Defense had not taken any actions to implement our recommendation. When the 2019 annual performance plan is issued, we will update the status of this recommendation.
    Recommendation: To improve the public reporting of major management challenges and to ensure performance information is useful, transparent, and complete, the Secretary of Energy should describe the Department of Energy's major management challenges and include performance goals, performance measures, milestones and an agency official responsible for resolving each of its major management challenges as part of the Department of Energy's agency performance plan.

    Agency: Department of Energy
    Status: Open

    Comments: As of August 2017, the Department of Energy had not taken any actions to implement our recommendation. When the 2019 annual performance plan is issued, we will update the status of this recommendation.
    Recommendation: To improve the public reporting of major management challenges and to ensure performance information is useful, transparent, and complete, the Attorney General should describe the Department of Justice's major management challenges and include performance goals, performance measures, milestones, planned actions and an agency official responsible for resolving each of its major management challenges as part of the Department of Justice's agency performance plan.

    Agency: Department of Justice
    Status: Open

    Comments: According to the Department of Justice's action plan to address GAO's recommendations, it will report the Office of Inspector General Top Management Challenges in both the Annual Financial Report (AFR) and the Annual Performance Report(APR)/Annual Performance Plan(APP). For the APR/APP, the Department of Justice will also include the appropriate performance goals, performance measures, milestones, planned actions addressing the challenges and the name(s) of agency official(s) responsible for resolving each of its major management challenges. As of August 2017, however, the Department of Justice had not taken any actions to implement our recommendation. When the 2019 annual performance plan is issued, we will update the status of this recommendation.
    Recommendation: To improve the public reporting of major management challenges and to ensure performance information is useful, transparent, and complete, the Secretary of Labor should describe the Department of Labor's major management challenges and include performance goals, performance measures, milestones, planned actions, and an agency official responsible for resolving each of its major management challenges as part of the Department of Labor's agency performance plan.

    Agency: Department of Labor
    Status: Open

    Comments: According to the Department of Labor's action plan to address GAO's recommendations, it will comply with the updated Circular A-11 guidance to report on major management challenges in its next Annual Performance Report (APR), published with the FY 2018 Congressional Budget Justification. In its most recent APR, the Department of Labor took steps to implement this recommendation by including planned actions and an agency official responsible for each of the three issues it identified as a major management challenge. Further action is needed to establish performance goals, performance measures, and milestones. When the Fiscal Year 2017 APR is issued, we will update the status of this recommendation.
    Recommendation: To improve the public reporting of major management challenges and to ensure performance information is useful, transparent, and complete, the Secretary of Transportation should describe the Department of Transportation's major management challenges and include performance goals, performance measures, milestones, planned actions and an agency official responsible for resolving major management challenges as part of the Department of Transportation's agency performance plan.

    Agency: Department of Transportation
    Status: Open

    Comments: As of August 2017, the Department of Transportation had not taken any actions to implement our recommendation. When the 2019 annual performance plan is issued, we will update the status of this recommendation.
    Recommendation: To improve the public reporting of major management challenges and to ensure performance information is useful, transparent, and complete, the Secretary of the Treasury should include performance goals, performance measures, milestones, and an agency official responsible for resolving major management challenges as part of the Department of the Treasury's agency performance plan.

    Agency: Department of the Treasury
    Status: Open

    Comments: As of August 2017, Treasury had not taken any actions to implement our recommendation. When the 2019 annual performance plan is issued, we will update the status of this recommendation.
    Recommendation: To improve the public reporting of major management challenges and to ensure performance information is useful, transparent, and complete, the Administrator of the Environmental Protection Agency (EPA) should include performance goals, performance measures, milestones, planned actions and an agency official responsible for resolving each of its major management challenges as part of EPA's agency performance plan.

    Agency: Environmental Protection Agency
    Status: Open

    Comments: In its Fiscal Year 2018 APP, EPA took steps to implement this recommendation by clearly identifying its major management challenges and including planned actions for resolving them. Further action is needed to establish performance goals, performance measures, milestones, and identify an agency official responsible for resolving the challenge. When the 2019 annual performance plan is issued, we will update the status of this recommendation.
    Recommendation: To improve the public reporting of major management challenges and to ensure performance information is useful, transparent, and complete, the Administrator of the General Services Administration (GSA) should describe GSA's major management challenges and include performance goals, performance measures, milestones and an agency official responsible for resolving each of its major management challenges as part of GSA's agency performance plan.

    Agency: General Services Administration
    Status: Open

    Comments: In its Fiscal Year 2018 APP, GSA took steps to implement this recommendation by clearly identifying three major management challenges and including planned actions, performance measures, milestones, and an agency official responsible for resolving them. Further action is needed to establish performance goals. When the 2019 annual performance plan is issued, we will update the status of this recommendation.
    Recommendation: To improve the public reporting of major management challenges and to ensure performance information is useful, transparent, and complete, the Secretary of Health and Human Services (HHS) should include performance goals, milestones and an agency official responsible for resolving each of HHS's major management challenges as part of HHS's agency performance plan.

    Agency: Department of Health and Human Services
    Status: Open

    Comments: According to its website, for fiscal year 2018, HHS is meeting its performance reporting requirements as designated in the GPRA Modernization Act of 2010 and OMB Circular A-11 through the program performance information provided in the FY 2018 HHS Budget Justifications to Congress. As of August 2017, however, HHS has not taken action to implement our recommendation. Our review of HHS' 2018 Congressional Budget Justification found that it did not include recommended information. When the 2019 CBJ is issued, we will update the status of this recommendation.
    Recommendation: To improve the public reporting of major management challenges and to ensure performance information is useful, transparent, and complete, the Secretary of the Interior should describe the Department of Interior's major management challenges and include performance goals, performance measures, planned actions, milestones and an agency official responsible for resolving each of its major management challenges as part of the Department of the Interior's agency performance plan.

    Agency: Department of the Interior
    Status: Open

    Comments: As of August 2017, the Department of Interior had not taken any actions to implement our recommendation. It is unclear in the APP what Interior considers to be its major management challenges and, if there are such issues, which performance information aligns with resolving those issues. When the 2019 annual performance plan is issued, we will update the status of this recommendation.
    Recommendation: To improve the public reporting of major management challenges and to ensure performance information is useful, transparent, and complete, the Director of the National Science Foundation (NSF) should describe NSF's major management challenges and identify performance goals, performance measures, milestones, and an agency official responsible for resolving each of its major management challenges as part of NSF's agency performance plan.

    Agency: National Science Foundation
    Status: Open

    Comments: In its Fiscal Year 2018 APP, NSF took steps to implement this recommendation by clearly identifying its major management challenges and including planned actions for resolving them. Further action is needed to establish performance goals, performance measures, milestones, and identify an agency official responsible for resolving the challenge. When the 2019 annual performance plan is issued, we will update the status of this recommendation.
    Director: Malenich, J Lawrence
    Phone: (202) 512-3406

    5 open recommendations
    Recommendation: To provide reasonable assurance that the property, equipment, and software transactions are properly tracked and capitalized or expensed as appropriate, the Director of CFPB should direct the program offices to require vendors to provide detailed invoices with costs broken out by project.

    Agency: Consumer Financial Protection Bureau
    Status: Open

    Comments: During our fiscal year 2016 audit, we continued to find control deficiencies over CFPB's accounting for its property, equipment, and software. CFPB was still in the process of working with its Office of Procurement and program offices to require more detailed invoices with costs broken out by project. We will continue to evaluate CFPB's actions to address this recommendation during our fiscal year 2017 financial statement audit.
    Recommendation: To provide reasonable assurance that the property, equipment, and software transactions are properly tracked and capitalized or expensed as appropriate, the Director of CFPB should direct the Chief Financial Officer to update OCFO's financial records to include costs by project.

    Agency: Consumer Financial Protection Bureau
    Status: Open

    Comments: Although CFPB took actions to attempt to address this recommendation, as of September 30, 2016, there were still some unidentified costs in the OCFO's financial records. In addition, our fiscal year 2016 audit continued to identify deficiencies over the recording of property, equipment, and software costs. We will continue to evaluate CFPB's actions to address this recommendation during our fiscal year 2017 financial statement audit.
    Recommendation: The Director of CFPB should direct the Office of Technology and Innovation's Chief Information Officer to develop and document training materials that are consistent with CFPB's policies and procedures and provide training to employees, on a recurring basis, on how to conduct inventory of electronic equipment and how to update and maintain accurate inventory records.

    Agency: Consumer Financial Protection Bureau
    Status: Open

    Comments: During our fiscal year 2016 audit, we continued to find incomplete and inaccurate information in CFPB's inventory records. We will continue to evaluate CFPB's actions to address this recommendation during our fiscal year 2017 financial statement audit.
    Recommendation: The Director of CFPB should direct the Chief Financial Officer and Chief Information Officer to develop and implement procedures that require coordination between the OCFO and the Office of Technology and Innovation to provide reasonable assurance that the records maintained by both divisions are accurate, consistent, complete, and comparable for inventory and accounting purposes.

    Agency: Consumer Financial Protection Bureau
    Status: Open

    Comments: During our fiscal year 2016 audit, we continued to find incomplete and inaccurate information in CFPB's inventory records. We will continue to evaluate CFPB's actions to address this recommendation during our fiscal year 2017 financial statement audit.
    Recommendation: The Director of CFPB should direct the Chief Financial Officer to design and implement effective procedures over the preparation of CFPB financial statements and note disclosures, including procedures such as completing the FAM 2010 and 2020 checklists at fiscal year-end, to provide reasonable assurance that the financial statements as of fiscal year-end are prepared in accordance with GAAP and note disclosures are adequate.

    Agency: Consumer Financial Protection Bureau
    Status: Open

    Comments: During our fiscal year 2016 audit, we continued to find errors and inconsistent disclosures in CFPB's financial statements, some of which resulted in post-closing adjusting entries. We will continue to evaluate CFPB's actions to address this recommendation during our fiscal year 2017 financial statement audit.
    Director: Clark, Cheryl E
    Phone: (202) 512-9377

    12 open recommendations
    Recommendation: The IRS Commissioner should direct the appropriate IRS officials to establish a process to prevent Employment Operations staff from allowing potential employees to enter on duty without favorable determinations of suitability by Personnel Security adjudicators.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: In December 2015, the HCO developed a process and revised procedures in an attempt to improve the monitoring of Employment Operations office decisions to reasonably assure that new employees do not enter on duty before prescreening adjudications are completed and approved by Personnel Security adjudicators. However, during our fiscal year 2016 audit, we identified IRS employees who entered on duty without completed or approved suitability adjudication determinations. We will continue to evaluate IRS's actions to address this recommendation during our fiscal year 2017 audit.
    Recommendation: The IRS Commissioner should direct the appropriate IRS officials to establish a policy and procedures requiring IRS officials to review and address situations in which it is later discovered that an employee deemed unsuitable for employment during the prescreening process was erroneously allowed to enter on duty.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: While IRS responded that it established a policy and procedures, it did not provide documentation to sufficiently demonstrate that the policy and procedures were implemented. During our fiscal year 2016 audit, we identified an instance where an employee was allowed to enter on duty and it was subsequently discovered that this employee was deemed unsuitable for employment during the prescreening process. IRS did not provide additional documentation to demonstrate that its procedures had been carried out for this employee. We will continue to evaluate IRS's actions to address this recommendation during our fiscal year 2017 audit.
    Recommendation: The IRS Commissioner should direct the appropriate IRS officials to develop and provide training, on a recurring basis, to all Facilities Management and Security Services specialists and managers involved in the duress alarm validation and testing process to reinforce the related policies and procedures.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: According to IRS, in February 2016, AWSS developed and provided training on duress alarm validation and testing to FMSS specialists and managers. However, during our June 2016 field office audit testing, we found that the FMSS specialists responsible for the physical security at the sites we visited had not received training on duress alarm validation and testing. Further, our testing identified instances where (1) duress alarm testing did not include all duress alarms, (2) documented validations of the duress alarm inventory were not completed timely or available to individuals (FMSS and non-FMSS staff) before each test was conducted, and (3) descriptions of the duress alarm inventory used by the security specialist to conduct testing were labeled incorrectly. During follow up discussions with IRS officials, we were informed that FMSS specialists were not fully evaluating alarm test results and adhering to established procedures for monitoring those tests. We will continue to evaluate IRS's efforts to address this recommendation during our fiscal year 2017 audit.
    Recommendation: The IRS Commissioner should direct the appropriate IRS officials to establish and implement a policy requiring recurring training for TAC group and territory managers on their TSRRD responsibilities, including detailed instructions for completing responses to questions in TSRRD and for reviewing TSRRD submissions for accuracy and completeness. This training should be updated for changes in TSRRD questions over time and be provided to new TAC group and territory managers soon after they are hired or appointed.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: IRS efforts to address this recommendation are ongoing. IRS stated that during fiscal year 2017, the Wage and Investment organization will incorporate into the IRM its new training policy requiring training for TAC group and territory managers on their TSRRD responsibilities, including specific instructions for completing questions in TSRRD and for reviewing TSRRD submissions. According to IRS, this training will be provided on a recurring basis to account for changes in TSRRD questions and newly hired or appointed TAC group and territory managers. As these actions occurred after the end of fiscal year 2016, we will evaluate IRS's actions to address this recommendation during our fiscal year 2017 audit.
    Recommendation: The IRS Commissioner should direct the appropriate IRS officials to determine the reason(s) why staff did not always comply with IRS's established policies and procedures related to initiating, monitoring, and reviewing the monitoring of manual refunds and, based on this determination, establish a process to better enforce compliance with these requirements.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: IRS efforts to address this recommendation are ongoing. IRS stated that by September 2017, it will determine the reasons for staff noncompliance with established policies and procedures related to initiating, monitoring, and reviewing the monitoring of manual refunds, and based on this determination, establish a process to better enforce compliance with these requirements. We will continue to evaluate IRS's actions to address this recommendation during our fiscal year 2017 audit.
    Recommendation: The IRS Commissioner should direct the appropriate IRS officials to enhance the training program provided to COs to address all the job responsibilities related to certifying manual refunds for payment, including the required review of supporting documentation for manual refunds.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: IRS stated that in February 2016, it provided a refresher course to COs as part of their annual training to address their responsibilities related to certifying manual refunds. However, based on our review of the refresher course materials, the course did not address our recommendation to enhance the training program. For example, the materials did not provide guidelines on how to perform the required reviews related to certifying manual refunds. As a result, during our fiscal year 2016 audit, we continued to find instances where the COs did not comply with the review requirements. We will continue to evaluate IRS's actions to address this recommendation during our fiscal year 2017 audit.
    Recommendation: The IRS Commissioner should direct the appropriate IRS officials to identify the cause of and implement a solution for dealing with the periodic backlogs of ICO inventory that is hampering the performance of quality reviews.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: IRS efforts to address this recommendation are ongoing. IRS stated that by September 2017, it will identify a cause of and implement a solution for dealing with the periodic backlogs of ICO inventory. We will continue to evaluate IRS's actions to address this recommendation during our fiscal year 2017 audit.
    Recommendation: The IRS Commissioner should direct the appropriate IRS officials to establish policies for (1) how long an asset can remain in missing status before it is removed from P&E reported on the financial statements and (2) how long assets can go unverified during the annual inventory process before they are identified as missing in the property management system.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: IRS's IT organization issued AM064, Asset Management Policy Directive to Identify Uncertified Class A and Class B Assets as Missing in KISAM, effective October 1, 2016. The directive states that in accordance with the annual Hardware Asset Management Inventory Certification Plan, assets that are not verified or certified for more than two inventory cycles should be identified as missing in IRS's property management system. It further states that the property management system should be updated by the end of the first quarter of the fiscal year after an asset meets the "missing" criterion. In November 2016, IRS's CFO organization developed the Missing Assets Financial Reporting Assessment procedure, which states that assets in missing status for 1 year or more should be removed from the P&E reported on IRS's financial statements. As these actions occurred after the end of fiscal year 2016, we will evaluate IRS's actions to address this recommendation during our fiscal year 2017 audit.
    Recommendation: The IRS Commissioner should direct the appropriate IRS officials to establish and implement procedures to reasonably assure that missing assets are timely removed from the financial statements when applicable.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: In November 2016, IRS's CFO organization established the Missing Assets Financial Reporting Assessment procedure, which included procedures for identifying assets that have been in missing status in the property management system for 1 year or more and removing them from the P&E reported on the financial statements. As this procedure was established after the end of fiscal year 2016, we will evaluate IRS's implementation of this procedure during our fiscal year 2017 audit.
    Recommendation: The IRS Commissioner should direct the appropriate officials to establish and implement monitoring procedures designed to reasonably assure that the key detailed information for tangible capitalized P&E is properly recorded and updated in the KISAM system.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: IRS's IT organization established SOP FY17-01, Asset Management Program Monitoring and Review, effective October 1, 2016. The SOP details the IRS Asset Management Group's procedures for conducting a quarterly review on a sample of asset records and transactions in KISAM to verify the accuracy and completeness of key KISAM data elements and correct any discrepancies found. In September 2016, IRS issued AWSS-01-0916-0001, Interim Guidance for IRM 1.14.4, Personal Property Management, to require the FMSS territory manager or section chief to perform quarterly sample reviews of non-IT assets in KISAM to verify that key data elements are complete and updated. As these procedures were established after we conducted our internal control testing in fiscal year 2016, we will evaluate IRS's implementation of these procedures during our fiscal year 2017 audit.
    Recommendation: The IRS Commissioner should direct the appropriate officials to design a process to reasonably assure the adequacy of detailed supporting information for tangible P&E amounts recorded in the general ledger.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: IRS's actions to address this recommendation are ongoing. According to IRS, by September 2017, its CFO organization will implement a P&E subsidiary ledger, and will design and implement processes based on the subsidiary ledger that will reasonably assure the adequacy of detailed supporting information for tangible P&E amounts recorded in the general ledger. We will assess IRS's actions to address this recommendation during our fiscal year 2017 audit.
    Recommendation: The IRS Commissioner should direct the appropriate IRS officials to establish and implement detailed written procedures for calculating future lease payments for noncancelable operating leases that are reported in the notes to the financial statements. The procedures should (1) include steps for considering any ad hoc clauses that may have specific termination dates and (2) include a requirement for supervisory review to provide reasonable assurance of the accuracy of future lease payment amounts for noncancelable operating leases.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: In October 2016, IRS established procedures for calculating future lease payments for noncancelable operating leases that are reported in the notes to its financial statements. The procedures included (1) steps for considering any ad hoc clauses that may have specific termination dates and (2) a requirement for supervisor review to provide reasonable assurance of the accuracy of future lease payment amounts for noncancelable operating leases. As these actions occurred after the end of fiscal year 2016, we will evaluate IRS's actions to address this recommendation during our fiscal year 2017 audit.
    Director: Asif A. Khan
    Phone: (202) 512-9869

    1 open recommendations
    including 1 priority recommendation
    Recommendation: To help meet its financial management improvement and audit readiness goals, the Secretary of Defense should direct the Under Secretary of Defense (Comptroller) to reconsider the status of the three panel recommendations that DOD classified as met that we determined were partially met and take the necessary actions to reasonably assure that these recommendations have been met.

    Agency: Department of Defense
    Status: Open
    Priority recommendation

    Comments: In September 2015, we reported that DOD had completed action on 6 of the Committee Panel's 29 recommendations. However, we disagreed with DOD's reported status of met for 3 other recommendations related to (1) attestations on audit readiness to be included in each of the Financial Improvement and Audit Readiness (FIAR) Plan Status Reports; (2) inclusion of FIAR-related goals in Senior Executive Service performance plans, and rewarding and evaluating performances over time based on those goals; and (3) the review of audit readiness assertions by component senior executive committees. In response to our recommendation, in its November 2015 FIAR Plan Status Report, DOD revised the implementation status for these three recommendations from met to partially met and gave further consideration to actions needed to reasonably assure whether the recommendations had been met. In its May 2016 FIAR Plan Status Report DOD stated that it had completed corrective action on one of these three Committee Panel recommendations and reported actions on the other two recommendations as partially met. As of May 2017, DOD reported that its actions for all three Congressional Panel recommendations met those recommendations. However, DOD had not yet identified a method to reward executives based on evaluated performance on FIAR-related goals. In addition, DOD needs to continue to state in each FIAR Plan Status Report whether DOD is on track to be audit ready as of September 30, 2017. Therefore, as of August 30, 2017, this recommendation was still open.
    Director: Mihm, J Christopher
    Phone: (202) 512-6806

    2 open recommendations
    including 2 priority recommendations
    Recommendation: To ensure that federal program spending data are provided to the public in a transparent, useful, and timely manner, the Director of OMB should accelerate efforts to determine how best to merge DATA Act purposes and requirements with the GPRAMA requirement to produce a federal program inventory.

    Agency: Executive Office of the President: Office of Management and Budget
    Status: Open
    Priority recommendation

    Comments: OMB staff told us that they don't expect to be able to identify programs for the purposes of DATA Act reporting until sometime after May 2017. However, they said that they are conducting a program definition and alignment study to identify a more consistent framework for defining federal agency programs with the aim of improving government-wide comparability and tying programs to spending. The effort is supported by a working group comprised of representatives from the CFO community. OMB staff noted that they expect to begin analyzing the results of the study in fall 2016.
    Recommendation: To ensure that the integrity of data standards is maintained over time, the Director of OMB, in collaboration with the Secretary of the Treasury, should establish a set of clear policies and processes for developing and maintaining data standards that are consistent with leading practices for data governance.

    Agency: Executive Office of the President: Office of Management and Budget
    Status: Open
    Priority recommendation

    Comments: OMB and Treasury have taken some initial steps to build a data governance structure including conducting interviews with key stakeholders and developing a set of recommendations for decision-making authority. In September 2016, OMB and Treasury took another step toward establishing a data governance structure by creating a new Data Standards and Management Committee that will be responsible for maintaining established standards and identifying new data elements. However, more remains to be done. As part of our ongoing feedback with OMB, we shared 5 key practices that we believe should inform their plans to develop a data governance framework moving forward.
    Director: Dalkin, James R
    Phone: (202) 512-3133

    1 open recommendations
    Recommendation: The U.S. Securities and Exchange Commission should direct the COO and CFO to implement controls, such as periodic reviews of asset dispositions, to help reasonably assure that SEC's procedures for the preparation and maintenance of documentation related to the disposition of assets are consistently implemented and that any deviations from established procedures are documented.

    Agency: United States Securities and Exchange Commission
    Status: Open

    Comments: SEC Officials are still working on corrective actions as of the end of fiscal year 2016. We will follow up on this recommendation during our fiscal year 2017 SEC financial statement audit.
    Director: Kingsbury, Nancy R
    Phone: (202) 512-2700

    3 open recommendations
    including 2 priority recommendations
    Recommendation: In addition to implementing our previous recommendations, to effectively implement key elements of the IRS information security program, the Commissioner of Internal Revenue should ensure contractors receive security awareness training within 5 business days of being granted access to an IRS information system.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: During the audit of IRS' FY 2017 financial statements, IRS indicated that it had not yet implemented this recommendation. When IRS indicates that it has implemented this recommendation, we will review its actions.
    Recommendation: In addition to implementing our previous recommendations, to effectively implement key elements of the IRS information security program, the Commissioner of Internal Revenue should ensure that control testing methodology and results fully meet the intent of the control objectives being tested.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open
    Priority recommendation

    Comments: During the audit of IRS's FY 2017 financial statements, IRS indicated that it has not completed these actions. When IRS indicates that it has implemented the recommendation, we will evaluate the effectiveness of its actions.
    Recommendation: In addition to implementing our previous recommendations, to effectively implement key elements of the IRS information security program, the Commissioner of Internal Revenue should update the remedial action verification process to ensure actions are fully implemented.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open
    Priority recommendation

    Comments: During the audit of IRS's FY 2017 financial statements, IRS indicated that it has not completed actions to implement the recommendation. When IRS indicates that it has implemented the recommendation, we will evaluate the effectiveness of its actions.
    Director: Clark, Cheryl E
    Phone: (202) 512-9377

    2 open recommendations
    Recommendation: The Commissioner of Internal Revenue should direct the appropriate IRS officials to establish and implement policies and procedures requiring a review process to reasonably assure that the accounts related to deceased taxpayers are only reopened for valid refunds.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: In January 2016, IRS automated the process of locking deceased taxpayer accounts during its year-end processing. However, during our fiscal year 2016 audit, we continued to find instances in which IRS employees reopened deceased taxpayer accounts and disbursed invalid refunds. We will continue to evaluate IRS's actions to address this recommendation during our fiscal year 2017 audit.
    Recommendation: The Commissioner of Internal Revenue should direct the appropriate IRS officials to establish and implement policies and procedures that require monitoring to reasonably assure that accounts related to deceased taxpayers that have been reopened are timely closed after processing the refund.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: In January 2016, IRS automated the process of locking accounts related to deceased taxpayers during its year-end processing. However, during our fiscal year 2016 audit, we continued to find instances in which IRS employees reopened deceased taxpayer accounts to process refunds and did not close them timely. We will continue to evaluate IRS's actions to address this recommendation during our fiscal year 2017 audit.
    Director: Gary Engel
    Phone: (202) 512-3406

    2 open recommendations
    including 2 priority recommendations
    Recommendation: The Secretary of the Treasury should direct the Fiscal Assistant Secretary, working in coordination with the Controller of OMB, to establish and implement policies and procedures for accounting for and reporting all significant General Fund activity and balances, obtaining assurance on the reliability of the amounts, and reconciling the activity and balances between the General Fund and federal entities.

    Agency: Department of the Treasury
    Status: Open
    Priority recommendation

    Comments: As of the completion of our fiscal year 2016 consolidated financial statements (CFS) audit, Treasury and OMB agreed that this recommendation remained open. Treasury has established the General Fund as a federal reporting entity. In fiscal year 2017, the focus will be on preparing for the first financial audit of the General Fund. We will follow-up on progress made by Treasury and OMB as part of our fiscal year 2017 CFS audit, which is ongoing as of March 2017.
    Recommendation: The Secretary of the Treasury should direct the Fiscal Assistant Secretary, working in coordination with the Controller of OMB, to establish a formalized process to require the performance of additional audit procedures specifically focused on intragovernmental activity and balances between federal entities to provide increased audit assurance over the reliability of such information.

    Agency: Department of the Treasury
    Status: Open
    Priority recommendation

    Comments: As of the completion of our fiscal year 2016 consolidated financial statements (CFS) audit, Treasury and OMB agreed that this recommendation remained open. As a result of multiple initiatives over the past few years, Treasury and OMB have seen a significant decrease in elimination differences of intragovernmental data submitted by federal entities. Therefore, Treasury and OMB have determined at this time there is not a justified need for the additional cost and burden on federal entities to implement additional audit procedures specifically focused on intragovernmental activity and balances. We will follow-up on progress made by Treasury and OMB as part of our fiscal year 2017 CFS audit, which is ongoing as of March 2017.
    Director: Malenich, J Lawrence
    Phone: (202) 512-3406

    2 open recommendations
    Recommendation: The CFPB should direct the Chief Financial Officer to design and implement control procedures that require coordination between the Office of Procurement and other program offices at the time of capitalization to ensure that property and equipment costs, including costs associated with internal-use software, are properly capitalized or expensed as appropriate.

    Agency: Consumer Financial Protection Bureau
    Status: Open

    Comments: Although CFPB took actions to attempt to address this recommendation, as of September 30, 2016, it was still in the process of implementing additional corrective actions. In addition, our fiscal year 2016 audit continued to identify deficiencies over the recording of property, equipment, and software costs. We will continue to evaluate CFPB's actions to address this recommendation during our fiscal year 2017 financial statement audit.
    Recommendation: The CFPB should direct the Chief Financial Officer to strengthen the design and implementation of control procedures to require, as part of the Office of the Chief Financial Officer's quarterly review procedures, review of underlying supporting documents, including tracking schedules, invoices, and obligating documents, to ensure that property and equipment transactions are properly identified and capitalized or expensed as appropriate.

    Agency: Consumer Financial Protection Bureau
    Status: Open

    Comments: As of September 30, 2016, we continued to find that the Office of the Chief Financial Officer's review was not always effective in timely detecting and correcting classification errors between costs that should be capitalized and costs that should be expensed. We will continue to evaluate CFPB's actions to address this recommendation during our fiscal year 2017 financial statement audit.
    Director: Wise, David J
    Phone: (202) 512-2834

    1 open recommendations
    Recommendation: To provide increased transparency about the funding amounts agencies are spending to maintain their assets and manage their backlogs, the Director of OMB should require the OMB Deputy Director for Management, as chair of the FRPC, in collaboration and consultation with FRPC member agencies, to collect information--through FRPP or other mechanisms--on funding agencies annually spent to address existing deferred maintenance and repair deficiencies and report summary level information in the FRPC's fiscal year report.

    Agency: Executive Office of the President: Office of Management and Budget
    Status: Open

    Comments: As of December 2015, OMB had worked with the FRPC to develop a method to collect annual recurring maintenance and repair data in the FRPP. This effort includes (1) developing separate definitions for "operations" and "maintenance" costs, which are currently reported in the FRPP as a combined cost number, and (2) defining a methodology that agencies can use to consistently collect and report annual deferred maintenance and repair expenditures. OMB expects these actions to be completed by the fiscal year 2018 FRPP reporting cycle. As of March 28, 2017, OMB had not provided GAO with any additional updates regarding the status of this recommendation..
    Director: Clark, Cheryl E
    Phone: (202) 512-9377

    3 open recommendations
    Recommendation: The Commission should direct the appropriate officials to establish and implement written policies and procedures requiring timely and continuous supervisory review of all financial transactions.

    Agency: American Battle Monuments Commission
    Status: Open

    Comments: In the Commission's fiscal year 2016 Independent Auditor's Report, the auditor reported that the Commission resolved the material weakness related to not effectively reviewing financial transactions to ensure that they were accurate, valid, complete, and recorded in the appropriate accounting period. We contacted the agency to ask for further information on the policy and process for supervisory review of financial transactions, but no response was received within the established deadline for us to conduct our follow up. Therefore, because we were not able to verify that related policies and procedures were established and implemented, we will follow up on this open recommendation at a later date.
    Recommendation: To improve its monitoring of internal control, the Commission should direct the appropriate officials to establish and implement written policies and procedures for planning and conducting the Commission's annual assessment of internal control over financial reporting as required by OMB A-123. The policies and procedures should include; (1) documenting an understanding of its internal control environment, which entails such elements as the tone at the top, ethical standards, and personnel management, which can have a significant effect on how the organization functions and the integrity of its financial accounting and reporting; (2) documenting its assessment of the risk of material misstatement to its financial statements; (3) establishing and documenting its internal control objectives and related internal control activities in place to meet those objectives; (4) documenting the tests to be performed and the results of each test, clearly identifying exceptions and resulting deficiencies; and (5) establishing a corrective action plan for all identified deficiencies that specifies how and when each deficiency will be corrected, and assigning responsibility for its effective and timely resolution.

    Agency: American Battle Monuments Commission
    Status: Open

    Comments: In the Commission's fiscal year 2016 Independent Auditor's Report, the auditor continued to report that the Commission did not have an adequate process for monitoring the design and operating effectiveness of its internal control to identify, evaluate, and correct internal control deficiencies. For example, the Commission did not document its OMB A-123 approach for assessing its internal control, or provide sufficient, appropriate evidence to support its conclusions on the effectiveness of its internal control activities. The Commission responded that it will continue to implement an enterprise-wide system of controls and monitor and report on those controls in compliance with FMFIA. During fiscal year 2017, the Commission informed us that they issued a related policy, however, their independent auditor continues to identify this area as a material weakness. Therefore, we will follow up on this open recommendation at a later date.
    Recommendation: To improve its monitoring of internal control, the Commission should direct the appropriate officials to establish and implement written policies and procedures for monitoring the activities of the external service organizations that perform significant aspects of the Commission's financial transaction processing and reporting, including implementing relevant complementary user entity controls identified by the service auditors.

    Agency: American Battle Monuments Commission
    Status: Open

    Comments: In the Commission's fiscal year 2015 Independent Auditor's Report, the auditor continued to report that the Commission did not adequately document and monitor the effectiveness of internal controls at the service organizations that performed significant aspects of its financial transaction processing and reporting, including processing its federal employee payroll transactions, reconciling its fund balance with Treasury, and preparing its annual financial statements. Specifically, ABMC did not evaluate the service organizations' service auditor reports that contained information on the service organizations' controls and the effectiveness of those controls, and did not consider the impact of the findings and conclusions contained in the service auditor reports on the effectiveness of its internal control. Further, ABMC did not design and implement appropriate complementary user entity controls that were identified by the service auditors. The Commission stated that it will continue to implement an enterprise-wide system of controls and monitor and report on those controls in compliance with FMFIA during fiscal year 2017. Therefore, we will follow up on this open recommendation at a later date.
    Director: Engel, Gary T
    Phone: (202)512-8815

    2 open recommendations
    including 2 priority recommendations
    Recommendation: To improve the reliability of the information presented in the CFS budget statements, the Secretary of the Treasury should direct the Fiscal Assistant Secretary, working in coordination with the Controller of OMB's Office of Federal Financial Management, to establish and implement effective procedures for reporting amounts in the CFS budget statements that are fully consistent with the underlying information in significant federal entities' audited financial statements and other financial data.

    Agency: Department of the Treasury
    Status: Open
    Priority recommendation

    Comments: As of the completion of our fiscal year 2016 consolidated financial statements (CFS) audit, Treasury and OMB agreed that this recommendation remained open. Treasury partnered with the Federal Accounting Standards Advisory Board (FASAB) to develop a Statement of Federal Financial Accounting Standards exposure draft that identifies items needed to reconcile net cost to outlays at the entity level, with a focus on demonstrating consistency with significant entities' audited financial statements. We will follow-up on progress made by Treasury and OMB as part of our fiscal year 2017 CFS audit, which is ongoing as of March 2017.
    Recommendation: To improve the reliability of the information presented in the CFS budget statements, the Secretary of the Treasury should direct the Fiscal Assistant Secretary, working in coordination with the Controller of OMB's Office of Federal Financial Management, to establish and implement effective procedures for identifying and reporting all items needed to prepare the CFS budget statements.

    Agency: Department of the Treasury
    Status: Open
    Priority recommendation

    Comments: As of the completion of our fiscal year 2016 consolidated financial statements (CFS) audit, Treasury and OMB agreed that this recommendation remained open. Treasury has improved its process for preparing the budget statements over the past three years and is continuing to do so. For example, Treasury has developed a reconciliation process to ensure that all cash related amounts reconcile on a monthly basis. We will follow-up on progress made by Treasury and OMB as part of our fiscal year 2017 CFS audit, which is ongoing as of March 2017.
    Director: Khan, Asif A
    Phone: (202)512-9869

    9 open recommendations
    including 9 priority recommendations
    Recommendation: The Secretary of Defense should direct the Under Secretary of Defense (Comptroller), with regard to estimating improper payments, to establish and implement key quality assurance procedures, such as reconciliations, to ensure the completeness and accuracy of the sampled populations.

    Agency: Department of Defense
    Status: Open
    Priority recommendation

    Comments: The Department of Defense (DOD), in concurring with this recommendation, stated that the Department will work with the Defense Finance and Accounting Service (DFAS) to implement key quality assurance procedures, such as reconciliations, to ensure the completeness and accuracy of sampled populations. In June 2016, DOD officials stated that while the department is moving toward full auditability of its financial statements, the capability to ensure the completeness and accuracy of the sampled populations is still under development. As of August 31, 2017, DOD's efforts in this area were ongoing.
    Recommendation: The Secretary of Defense should direct the Under Secretary of Defense (Comptroller), with regard to estimating improper payments, to revise the procedures documented in DOD's sampling methodologies so that they (1) are in accordance with OMB guidance and generally accepted statistical standards and (2) produce statistically valid improper payment error rates, statistically valid improper payment dollar estimates, and appropriate confidence intervals for both. At a minimum, such procedures should take into account the size and complexity of the transactions being sampled.

    Agency: Department of Defense
    Status: Open
    Priority recommendation

    Comments: The Department of Defense (DOD) partially concurred with this recommendation, stating that sampling methodologies would be reviewed for all payment types and would be modified as appropriate to produce valid improper payment estimates and appropriate confidence intervals for them. In its May 2016 FIAR Plan Status Report, DOD officials stated that the department is reviewing the methodologies associated with identifying improper payments for seven improper payment programs, and if warranted, will change their sampling plans (methodologies). These seven programs are: Defense Finance and Accounting Service's Military Pay, Civilian Pay, Military Retirement, and Travel Pay; U.S. Corps of Engineers' Commercial Pay and Travel Pay; and Navy ERP commercial payments. In June 2016, DOD officials stated that the Office of the Under Secretary of Defense (Comptroller) will continue to coordinate with those DOD components currently using simple random sample designs, to develop methodologies that are stratified by an appropriate variable, such as an invoice or payment amount based on appropriate confidence intervals. As of August 31, 2017, this recommendation was still open.
    Recommendation: The Secretary of Defense should direct the Under Secretary of Defense (Comptroller), with regard to identifying programs susceptible to significant improper payments, to conduct a risk assessment that is in compliance with IPERA.

    Agency: Department of Defense
    Status: Open
    Priority recommendation

    Comments: The Department of Defense (DOD), in concurring with this recommendation, stated that it would work collaboratively with the applicable Defense components to develop a framework to conduct a risk assessment that is in compliance with the Improper Payments Elimination and Recovery Act (IPERA). Risk assessments for six DOD programs (military health benefits, military pay, civilian pay, Defense Finance and Accounting Service (DFAS) travel pay, retiree & annuitant pay, and DFAS commercial pay) complied with IPERA requirements based on documentation provided to support them. However, based on our review of documentation provided by the U.S. Army Corps of Engineers (USACE), risk assessments for the two programs it administers (USACE travel pay and USACE commercial pay) have not been performed. DOD officials stated that the risk assessment documentation for the two USACE programs is under development. In October 2016, DOD issued a remediation plan for travel pay improper payments and recovery. As of August 31 2017, this recommendation was still open.
    Recommendation: The Secretary of Defense should direct the Under Secretary of Defense (Comptroller), with regard to reducing improper payments, to establish procedures that produce corrective action plans that comply fully with IPERA and OMB implementation guidance, including at a minimum, holding individuals responsible for implementing corrective actions and monitoring the status of the corrective actions.

    Agency: Department of Defense
    Status: Open
    Priority recommendation

    Comments: The Department of Defense, in concurring with this recommendation, stated that it would work collaboratively with applicable components to establish procedures that produce corrective action plans that fully comply with the Improper Payment Elimination and Recovery Act and Office of Management and Budget (OMB) guidance. According to DOD officials, these established procedures will include individual accountability for implementing corrective actions and monitoring the status of corrective actions. As of June 2016, DOD officials told us that department enters corrective actions plans associated with audit findings into a notice of findings and recommendations (NFR) database developed to track their status and progress. The database was deployed in May 2016. According to DOD's fiscal year 2015 Agency Financial Report, DOD's travel pay had the highest error rate among all DOD-reported improper payment programs, and therefore DOD would place its initial focus to achieve measurable progress more quickly in this area. In June 2016, DOD officials stated that the Office of the Under Secretary of Defense (Comptroller) (OUSD(C)) would revise and expand the DOD Travel Remediation Plan into a more comprehensive plan which includes establishing Senior Accountable Officials (SAOs) within each military service. OUSD(C) will collaborate with each SAO to ensure the development of standardized procedures and corrective action plans to include training, root cause identification, and quality assurance goals that comply with improper payment law and regulatory guidance. On October 7, 2016, DOD issued its remediation plan entitled "Preventing Travel Pay Improper Payments and Recovery." The remediation plan notes two primary causes of improper travel payments; each of which highlights the need for increased detail (documentation), attention to detail (accuracy), and a more regular and effective training regimen. The remediation plan includes several requirements that must be met to reinforce internal controls and accountability. Beginning in fiscal year 2017, the DOD Comptroller and component SAOs are to receive travel pay metrics reports to measure progress. The first report is intended to establish a baseline. As of April 2017, DOD officials stated that there are corrective action plans, but the implementation of these plans needs to be assigned to the individual level components. As of August 31, 2017, this recommendation was still open.
    Recommendation: The Secretary of Defense should direct the Under Secretary of Defense (Comptroller), with regard to reducing improper payments, to establish procedures that produce corrective action plans that are in accordance with best practices, such as those recommended by the Chief Financial Officers Council (CFOC), and include (1) measuring the progress made toward remediating root causes and (2) communicating to agency leaders and key stakeholders the progress made toward remediating the root causes of improper payments.

    Agency: Department of Defense
    Status: Open
    Priority recommendation

    Comments: The Department of Defense (DOD), in concurring with this recommendation, stated that it would work collaboratively with the applicable components to establish procedures that produce corrective action plans that incorporate best practices, including those recommended by the Chief Financial Officers Council. DOD's corrective action plans would include information on (1) measuring the progress made toward remediating root causes and (2) communicating to agency leaders and key stakeholders the progress made toward remediating the root causes of improper payments. In June 2016, DOD officials told us that department enters corrective actions plans associated with audit findings into a notice of findings and recommendations (NFR) database developed to track their status and progress. The database was deployed in May 2016. According to DOD's fiscal year 2015 Agency Financial Report, DOD's travel pay had the highest error rate among all DOD-reported improper payment programs, and therefore DOD would place its initial focus to achieve measurable progress more quickly in this area. In June 2016, DOD officials stated that the Office of the Under Secretary of Defense (Comptroller) (OUSD(C)) will revise and expand the DOD Travel Remediation Plan into a more comprehensive plan which will include establishing Senior Accountable Officials (SAOs) within each military service. OUSD(C) will collaborate with each SAO to ensure the development of standardized procedures and corrective action plans to include training, root cause identification, and quality assurance goals that comply with improper payment law and regulatory guidance. On October 7, 2016, DOD issued its corrective/remediation plan entitled "Preventing Travel Pay Improper Payments and Recovery." We plan to review this plan for consistency with OMB and IPERA guidelines. In April 2017, we learned that the Office of Management and Budget had done an assessment of this plan and provided helpful suggestions. As of August 31, 2017, this recommendation was still open.
    Recommendation: The Secretary of Defense should direct the Under Secretary of Defense (Comptroller), with regard to implementing recovery audits, to develop and implement procedures to (1) identify costs related to the department's recovery audits and existing recovery efforts and (2) evaluate existing improper payment recovery efforts to ensure that they are cost effective.

    Agency: Department of Defense
    Status: Open
    Priority recommendation

    Comments: Department of Defense (DOD) officials concurred with this recommendation, stating that the DOD would review its procedures for improper payment recovery activities to ensure currency and accuracy and that it would also perform analyses to ensure that its recovery efforts are cost-effective. In July 2015, DOD reported that the development of cost estimates for recovery auditing was ongoing. In addition, DOD officials indicated that only the United States Army Corps of Engineers (USACE) has developed an analysis to evaluate the cost effectiveness of performing recovery audits. As of April 2017, DOD's efforts to develop cost-estimates for recovery audits were still under way. As of August 31, 2017, this recommendation was still open.
    Recommendation: The Secretary of Defense should direct the Under Secretary of Defense (Comptroller), with regard to implementing recovery audits, to monitor the implementation of the revised FMR chapter on recovery audits to ensure that the components either develop recovery audits or demonstrate that it is not cost effective to do so.

    Agency: Department of Defense
    Status: Open
    Priority recommendation

    Comments: Department of Defense (DOD) officials, in concurring with this recommendation, stated that DOD would work with the applicable components to monitor the implementation of the revised Financial Management Regulation (FMR) chapter on recovery audits. According to DOD officials, this action would help to ensure that recovery audits are developed, or will demonstrate that it is not cost-effective to do these audits. In July 2015, DOD was working to update the FMR chapter on recovery audits to reflect revised Office of Management and Budget (OMB) guidance issued in October 2014. DOD issued its revised FMR chapter in November 2015. This chapter requires components to develop cost-effective payment recapture audits or to submit a quantitative justification to the Office of the Under Secretary (Comptroller) for approval. However, we consider this recommendation to be open because DOD did not provide documentation demonstrating that the Office of the Under Secretary of Defense (Comptroller) is monitoring component implementation of recovery auditing. Further, as of April 2017, DOD's efforts to develop cost-estimates for recovery audits were still under way. As of August 31, 2017, this recommendation was still open.
    Recommendation: The Secretary of Defense should direct the Under Secretary of Defense (Comptroller), with regard to implementing recovery audits, to develop and submit to OMB for approval a payment recapture audit plan that fully complies with OMB guidance.

    Agency: Department of Defense
    Status: Open
    Priority recommendation

    Comments: Department of Defense (DOD) officials, in concurring with this recommendation, stated that DOD would develop and submit to the Office of Management and Budget (OMB) a payment recapture plan that fully complies with OMB guidance and is informed by a cost-effectiveness analysis. In July 2015, DOD's Office of the Under Secretary of Defense (Comptroller) efforts to develop a payment recapture audit plan to ensure cost-effectiveness were ongoing and these efforts must be completed before a plan can be submitted to the OMB. In June 2016, DOD officials stated that the Comptroller's efforts to develop a payment recapture audit plan to ensure cost-effectiveness were ongoing. As of August 31,2017, the department's efforts to implement this recommendation are continuing.
    Recommendation: The Secretary of Defense should direct the Under Secretary of Defense (Comptroller), with regard to reporting, to design and implement procedures to ensure that the department's annual improper payment and recovery audit reporting is complete, accurate, and in compliance with IPERA and OMB guidance.

    Agency: Department of Defense
    Status: Open
    Priority recommendation

    Comments: Department of Defense (DOD) officials, in concurring with this recommendation, stated that DOD would design and implement procedures to further ensure that its annual improper payment and recovery audit reporting is complete, accurate, and in compliance with the Improper Payments Elimination and Recovery Act (IPERA) requirements and Office of Management and Budget (OMB) guidance. In June 2015, DOD revised its FMR chapter on improper payments to require components to provide information needed to report on improper payment and recovery audit activities in its annual financial report (AFR) in accordance with IPERA requirements and OMB guidance. DOD's fiscal year 2015 AFR reflected its implementation of the revised FMR. We found that DOD's improper payment reporting in its fiscal year 2015 AFR had improved. However, we were not provided with evidence that Office of the Under Secretary of Defense (Comptroller) is performing oversight and monitoring activities to ensure the accuracy and completeness of the improper payment and recovery audit data submitted by DOD components for inclusion in the AFR. As of April 2017, DOD is continuing to work on procedures for ensuring that its reporting on improper payment and recovery audits is accurate, complete, and in compliance with IPERA and OMB guidance. As of August 31, 2017, this recommendation was still open.
    Director: Wilshusen, Gregory C
    Phone: (202)512-6244

    2 open recommendations
    Recommendation: To effectively implement key components of the IRS information security program, the Acting Commissioner of Internal Revenue should update policies and procedures to ensure that they address (1) both methods available for granting all users access to mainframe resources, (2) audit and monitoring of access from one processing environment to another, (3) use of appropriate accounts by multiple databases on a single server, (4) data storage shared between systems, (5) out-of-date security standards, and (6) reconciliation of access privileges.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: We are evaluating IRS's implementation of this recommendation as part of the audit of IRS's FY 2017 financial statements.
    Recommendation: To effectively implement key components of the IRS information security program, the Acting Commissioner of Internal Revenue should update mainframe test and evaluation processes to improve periodic monitoring of compliance with IRS policies.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: We are evaluating IRS's implementation of this recommendation as part of the audit of IRS's FY 2017 financial statements.
    Director: Clark, Cheryl E
    Phone: (202)512-3000

    1 open recommendations
    Recommendation: The Commissioner of the Internal Revenue Service should direct the appropriate IRS officials to update the Internal Revenue Manual (IRM) to specify steps to be followed to prevent campus support clerks as well as any other employees who process payments through the electronic check presentment system from making adjustments to taxpayer accounts.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: During fiscal year 2012, IRS updated the IRM to require managers to verify that all campus support employees who process payments through the electronic check presentment system have the appropriate command code restriction in their IDRS profiles to prevent them from making adjustments to taxpayer accounts. However, during our subsequent audits we found that in updating the IRM, IRS did not undertake a global review of the level of access provided to all employee groups who handle hard-copy taxpayer receipts and related sensitive information to ensure that their levels of IDRS access were appropriate. As a result, in May 2016, IRS reassessed the risks at its TACs, including the specific risks and mitigating factors associated with allowing TAC employees to process taxpayer remittances through the electronic check presentment system and to adjust taxpayer accounts. However, IRS did not update the IRM to reflect the conclusions from the risk assessment related to TAC employees needing access to certain sensitive command codes as part of their normal job duties. We will continue to evaluate IRS's actions to address this recommendation during our fiscal year 2017 audit.
    Director: Clark, Cheryl E
    Phone: (202)512-3000

    7 open recommendations
    Recommendation: The Secretary of the Commission should instruct the Director of Finance at Commission headquarters to monitor monthly cash reconciliations for all Fund Balance with Treasury accounts Commissionwide to ensure their completeness and accuracy.

    Agency: American Battle Monuments Commission
    Status: Open

    Comments: During fiscal year 2012, the Commission contracted with the Interior Business Center (IBC) to perform its monthly cash reconciliations with Treasury. During our testing, we found that IBC effectively reconciled cash on hand to Treasury records. However, we found that ABMC did not effectively monitor IBC's reconciliations. Specifically, ABMC did not document its review of the FMS-224 and Fund Balance with Treasury reconciliations performed by IBC. To fully address this recommendation, ABMC needs to document its review of the IBC prepared reconciliations to ensure they are accurate and complete. During fiscal year 2017, the Commission informed us that they plan to develop and implement corrective actions to address our recommendation. Therefore, we will follow up on this open recommendation at a later date.
    Recommendation: The Secretary of the Commission should instruct the Director of Human Resources and Administration at Commission headquarters to maintain a consolidated Active Contracts List, or require the Paris Overseas Office to maintain a separate list, with information on each contract including the name of the contact person; the status of work completed; whether retainage amounts had been paid; and whether any amounts were pending due to disagreements on work performed.

    Agency: American Battle Monuments Commission
    Status: Open

    Comments: During our fiscal year 2012 audit, although the Commission provided GAO with active contract lists, we determined that these lists were not consolidated nor were they adequately maintained by the director of Engineering. We also continued to find instances where the Commission did not properly close contracts and deobligate funds. In addition, the Commission could not identify any specific actions taken to address this recommendation. During our fiscal year 2017 follow-up, the Commission informed us that they plan to implement an automated procurement system that will meet the intent of our recommendation. Therefore, we will follow up on this open recommendation at a later date.
    Recommendation: The Secretary of the Commission should instruct the Director of Human Resources and Administration at Commission headquarters to ensure that the Active Contracts List is reconciled to contracts on the undelivered orders report produced by the Commission's accounting system.

    Agency: American Battle Monuments Commission
    Status: Open

    Comments: During our fiscal year 2012 audit, we found that the Headquarters active contracts list had not been reconciled to the undelivered orders account. In addition, we concluded that these lists were not adequately maintained. We also continued to find instances where the Commission did not properly close contracts and deobligate funds. In addition, the Commission could not identify any specific actions taken to address this recommendation. During our fiscal year 2017 follow-up, the Commission informed us that they plan to develop and implement procurement-related standard operating procedures to address our recommendation. Therefore, we will follow-up on this recommendation at a later date.
    Recommendation: The Secretary of the Commission should instruct the Director of Finance at Commission headquarters to follow existing budgetary procedures to ensure that contracts are officially agreed to and executed as of or before the date of obligation.

    Agency: American Battle Monuments Commission
    Status: Open

    Comments: During our fiscal year 2011 audit of the American Battle Monuments Commission's financial statements, the Commission informed us that this recommendation was implemented with FMS and that ABMC now follows commitment accounting which prevents contracts from being signed before funds are reserved. During our 2012 testing we continued to monitor and we found no related issues. However, the Commission was unable to provide documentation or support for the corrective action instituted with FMS. During our fiscal year 2017 follow-up, the Commission informed us that they plan to implement an automated procurement system that will meet the intent of our recommendation. Therefore, we will follow up on this open recommendation at a later date.
    Recommendation: The Secretary of the Commission should instruct the Director of Human Resources at the Commission's Paris Overseas Office to follow existing policy to prepare, approve, and file current forms to support pay changes in foreign employee's official personnel file.

    Agency: American Battle Monuments Commission
    Status: Open

    Comments: During our fiscal year 2012 audit, we tested a sample of payroll transactions and found that not all personnel files contained accurate forms to support current payroll information. In one sample, the ABM-87 was not approved by a Director or designee. In another sample, the salary for the grade and step did not match that of the employee's local compensation plan. In a third sample, the employee's salary was not updated for a General Schedule step increase until almost a year later. During our fiscal year 2017 follow-up, the Commission informed us that they plan to implement an automated HR system that will meet the intent of our recommendation. Therefore, we will follow up on this open recommendation at a later date
    Recommendation: The Secretary of the Commission should instruct the Director of Human Resources at the Commission's Paris Overseas Office to establish a consistent policy for Paris and Rome offices to support changes in employee's official personnel files by using an SF-50, Notification of Personnel Action, for all employees.

    Agency: American Battle Monuments Commission
    Status: Open

    Comments: During fiscal year 2012, we determined that the Commission's policy is to use two forms for payroll actions. The headquarters office processes SF-50s for General Schedule (GS) employees and the Paris office uses SF-50s for GS employees and ABM-87s for foreign employees. We did not find any exception with this policy as the SF-50 is a required form for processing payroll actions for GS employees and the ABM 87 is a standard form for processing payroll actions for foreign employees. However, this policy is not documented. To clarify the intent of this recommendation, which is for the Commission to be consistent in processing payroll actions, we issued a subsequent recommendation that calls for the Commission to direct appropriate officials to establish written policies and procedures outlining the key tasks, roles, and responsibilities of both the Human Resources Directorate and the Finance Directorate, including a formal mechanism for communicating all decisions and actions related to processing payroll for foreign employees. This would include the processing of payroll actions. During our fiscal year 2017 follow-up, the Commission informed us that training was provided to employees in the proper production of personnel documentation, however, no policy was provided. Therefore, we will follow up on this open recommendation at a later date.
    Recommendation: The Secretary of the Commission should instruct the Finance Directorate's Finance Officer at the Commission's Paris Overseas Office to modify existing accounting procedures to instruct Finance Directorate personnel to enter the date on the invoice into the accounting system.

    Agency: American Battle Monuments Commission
    Status: Open

    Comments: During our audit of the American Battle Monuments Commission's (the Commission) fiscal year 2010 financial statements, we found that Commission controls were not always effective in ensuring that the receipt and acceptance of goods and services were properly authorized and that invoice dates were accounted for in a consistent manner. The Commission informed us that all Finance personnel were instructed to enter both the invoice receipt date and the invoice date when processing invoices for payment. However, during our fiscal year 2012 audit, we found that the date on the invoice was not consistently entered into the accounting system. For example, we found inconsistencies with the invoice receipt date being entered into the accounting system as either the date the goods were received, the date the invoice was received, or the date the invoice was being entered into the financial system. In addition, we could not verify whether current accounting procedures included this requirement. During our fiscal year 2017 follow-up, the Commission informed us that the invoice date entered in Oracle is taken directly from the invoice approval stamp, however, the Commission was not able to provide a policy, procedures, or statement of work supporting the actions taken. We contacted the agency to ask for further information but no response was received within the established deadline for us to conduct our follow up. Therefore, we will follow up on this recommendation at a later date.
    Director: Brown, Orice Williams
    Phone: (202)512-5837

    4 open recommendations
    Recommendation: While creating control systems at the same time that the emergency programs were being designed and implemented posed unique challenges, the recent crisis provided invaluable experience that the Federal Reserve System can apply in the future should the use of these authorities again become warranted. Going forward, to further strengthen policies for selecting vendors, ensuring the transparency and consistency of decision making involving the implementation of any future emergency programs, and managing risks related to these programs, the Chairman of the Federal Reserve Board should direct Federal Reserve Board and Reserve Bank staff to strengthen procedures in place to guide Reserve Banks' efforts to manage emergency program access for higher-risk borrowers by providing more specific guidance on how Reserve Bank staff should exercise discretion and document decisions to restrict or deny program access for depository institutions and primary dealers that would otherwise be eligible for emergency assistance.

    Agency: Federal Reserve System: Board of Governors
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: While creating control systems at the same time that the emergency programs were being designed and implemented posed unique challenges, the recent crisis provided invaluable experience that the Federal Reserve System can apply in the future should the use of these authorities again become warranted. Going forward, to further strengthen policies for selecting vendors, ensuring the transparency and consistency of decision making involving the implementation of any future emergency programs, and managing risks related to these programs, the Chairman of the Federal Reserve Board should direct Federal Reserve Board and Reserve Bank staff to document a plan for estimating and tracking losses that could occur under more adverse economic conditions within and across all emergency lending activities and for using this information to inform policy decisions, such as decisions to limit risk exposures through program design or restrictions applied to eligible borrowing institutions.

    Agency: Federal Reserve System: Board of Governors
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: While creating control systems at the same time that the emergency programs were being designed and implemented posed unique challenges, the recent crisis provided invaluable experience that the Federal Reserve System can apply in the future should the use of these authorities again become warranted. Going forward, to further strengthen policies for selecting vendors, ensuring the transparency and consistency of decision making involving the implementation of any future emergency programs, and managing risks related to these programs, the Chairman of the Federal Reserve Board should direct Federal Reserve Board and Reserve Bank staff, in drafting regulations to establish the policies and procedures governing emergency lending under section 13(3) of the Federal Reserve Act, to set forth the Federal Reserve Board's process for documenting, to the extent not otherwise required by law, its justification for each use of this authority.

    Agency: Federal Reserve System: Board of Governors
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Recommendation: While creating control systems at the same time that the emergency programs were being designed and implemented posed unique challenges, the recent crisis provided invaluable experience that the Federal Reserve System can apply in the future should the use of these authorities again become warranted. Going forward, to further strengthen policies for selecting vendors, ensuring the transparency and consistency of decision making involving the implementation of any future emergency programs, and managing risks related to these programs, the Chairman of the Federal Reserve Board should direct Federal Reserve Board and Reserve Bank staff to document the Federal Reserve Board's guidance to Reserve Banks on types of emergency program decisions and risk events that require approval by or consultation with the Board of Governors, the Federal Open Market Committee, or other designated groups or officials at the Federal Reserve Board.

    Agency: Federal Reserve System: Board of Governors
    Status: Open

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
    Director: Clark, Cheryl E
    Phone: (202)512-9521

    3 open recommendations
    Recommendation: Based on a review of all existing contracts under $100,000 without an appointed COTR that should require contract employees to obtain favorable background investigation results, the Commissioner of the IRS should direct the appropriate IRS officials to amend those contracts to require that favorable background investigations be obtained for all relevant contract employees before routine, unescorted, unsupervised physical access to taxpayer information is granted.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: According to IRS, it has completed its contract review and made appropriate modifications as of July 2016. However, the modifications to the contracts were not made available for our review during the fiscal year 2016 audit. We will continue to evaluate IRS's actions to address this recommendation during our fiscal year 2017 audit.
    Recommendation: The Commissioner of the IRS should direct the appropriate IRS officials to establish a policy requiring collaborative oversight between IRS's key offices in determining whether potential service contracts involve routine, unescorted, unsupervised physical access to taxpayer information, thus requiring background investigations, regardless of contract award amount. This policy should include a process for the requiring business unit to communicate to the Office of Procurement and the Human Capital Office the services to be provided under the contract and any potential exposure of taxpayer information to contract employees providing the services, and for all three units to (1) evaluate the risk of exposure of taxpayer information prior to finalizing and awarding the contract and (2) ensure that the final contract requires favorable background investigations as applicable, commensurate with the assessed risk.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: IRS's efforts to address this recommendation are ongoing. IRS stated that during fiscal year 2017, several internal organizations will partner to identify the remaining actions needed to address this recommendation. According to IRS, these actions include developing policies and procedures to reasonably assure that (1) oversight between IRS's key offices is conducted to determine whether potential service awards IRS enters into involve routine, unescorted, unsupervised physical access to taxpayer information by contractors, thus requiring background investigations, and (2) the resulting processes make clear who is responsible for completing the various steps, as well as who must maintain documentation of the approved access determination prior to the contractor being allowed to provide the services. We will continue to evaluate IRS's actions to address this recommendation during our fiscal year 2017 audit.
    Recommendation: The Commissioner of the IRS should direct the appropriate IRS officials to revise the post orders for the service center campuses (SCC) and lockbox bank security guards to include specific procedures for timely reporting exterior lighting outages to SCC or lockbox bank facilities management. These procedures should specify (1) whom to contact to report lighting outages and (2) how to document and track lighting outages until resolved.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: IRS's efforts to address this recommendation are ongoing. IRS stated that during fiscal year 2017, it would update campus post orders to help ensure timely reporting, monitoring and repair of exterior lighting outages. In addition, AWSS engaged in discussions with personnel from FPS and GSA to coordinate responsibilities and suggested changes for post orders when security services are contracted by those entities. We will continue to evaluate IRS's actions to address this recommendation during our fiscal year 2017 audit.
    Director: Clark, Cheryl E
    Phone: (202)512-9377

    2 open recommendations
    Recommendation: The Director of Personnel and Administration at Commission headquarters should follow established policies and procedures in taking action to conduct a review of contracts and purchase orders outstanding for completeness, accuracy, and proper dates.

    Agency: American Battle Monuments Commission: Human Resources and Administration Director
    Status: Open

    Comments: In response to this recommendation, the Commission stated that it completed such a review in fiscal year 2009 and made corrections as to how the Commission issues contracts and purchase orders. In addition, the Commission hired a consultant, a retired Federal Government Contracting Officer, to assist with contracting activities and to help draft and implement the Commission's policies and procedures. During our fiscal year 2010 audit, we found errors in relation to the Commission's contracts and found that Headquarter's Active Contracts List for contracts over $100,000 was not up to date. We found 3 out of 20 expenditures we tested that were obligated before there was a signed contract. During our fiscal year 2011 audit, we found that the Headquarter's Active Contracts List for contracts over $100,000 was not being kept up to date and reconciled to the undelivered orders account. During our fiscal year 2012 audit, we found there were no policies and procedures for processing engineering contracts. We were informed by the Commission that they were in the process of documenting policies and procedures for the entire contracting process. We also found there were no documented policies and procedures for reviewing year end open obligations and accounts payable to verify the accuracy and validity of year end balances. Additionally, there was no documented review of accounts payable or open obligations performed at year-end for all the open contracts. As a result, we found errors in year-end aged vendor liability reports and open purchase orders that no longer represented valid obligations and should have been deobligated. During our fiscal year 2017 follow-up, the Commission informed us that they plan to establish procurement-related policies and procedures to address our recommendation. We will follow up on this open recommendation at a later date.
    Recommendation: The Director of Personnel and Administration at Commission headquarters should follow established policies and procedures in taking action to coordinate procurement activity with finance personnel to ensure accurate and compliant obligation of funding of procurements, including proper application of multiyear contract terms.

    Agency: American Battle Monuments Commission: Human Resources and Administration Director
    Status: Open

    Comments: In response to this recommendation, the Commission stated that acquisition personnel would ensure coordination with finance personnel to be certain that accurate and compliant obligation of funding of procurements, including proper application of multi-year contract terms. During our fiscal year 2010 and 2011 audits, we found errors in relation to the Commission's contracts and determined improvements were still needed in the oversight of contracts. During our fiscal year 2012 audit, we found there were no policies and procedures for processing engineering contracts. We were informed by the Commission that they were in the process of documenting policies and procedures for the entire contracting process. We also found there were no documented policies and procedures for reviewing year end open obligations and accounts payable to verify the accuracy and validity of year end balances. Additionally, there was no documented review of accounts payable or open obligations performed at year-end for all the open contracts. As a result, we found errors in year-end aged vendor liability reports and open purchase orders that no longer represented valid obligations and should have been deobligated. During our fiscal year 2017 follow-up, the Commission informed us that they plan to establish procurement-related policies and procedures to address our recommendation. We will follow up on this open recommendation at a later date.
    Director: Clark, Cheryl E
    Phone: (202)512-9521

    1 open recommendations
    Recommendation: The Commissioner of IRS should direct the appropriate IRS officials to, once IRS identifies the control weaknesses that result in inaccuracies or errors that affect the financial reporting of unpaid tax assessments, implement control procedures to routinely prevent, or to detect and correct, such errors.

    Agency: Department of the Treasury: Internal Revenue Service
    Status: Open

    Comments: IRS created a long-term corrective action plan that contains specific actions to improve control procedures to prevent or detect errors. While IRS completed some actions during fiscal year 2016, it has not completed most of the actions in the plan or documented milestones or target completion dates for these remaining actions. In addition, during fiscal year 2016, GAO and IRS continued to identify misclassified unpaid assessments that resulted from inaccuracies or errors in taxpayer accounts. Thus, IRS's actions to date have not been effective at fully addressing the issues that continue to cause a lack of transaction traceability and material inaccuracies produced by the subsidiary ledger. We will continue to evaluate IRS's actions to address this recommendation during our fiscal year 2017 audit.
    Director: Khan, Asif A
    Phone: (202)512-3000

    4 open recommendations
    Recommendation: The Secretary of Defense should direct the Under Secretary of Defense (Comptroller), in coordination with the military service secretaries (as appropriate), to revise the Army procedures to include specific steps required to retain documentation of the activities performed and related results.

    Agency: Department of Defense
    Status: Open

    Comments: In commenting on the draft report, DOD concurred with the recommendation and cited actions in process to revise its Financial Management Regulation (FMR). In 2016, the Office of the Under Secretary of Defense (Comptroller) (OUSD(C)) stated that the Components provided comments and edits to the draft Chapter 23. The comments were more detailed than projected and require extensive research to verify. However, it is not clear whether this action will provide sufficient Army-specific procedural requirements. As of August 2017, we have not been able to obtain supporting documentation to assess whether the recommendation was implemented.
    Recommendation: The Secretary of Defense should direct the Under Secretary of Defense (Comptroller), in coordination with the military service secretaries (as appropriate), to revise the Marine Corps and Air Force procedures to include specific steps required to validate data in the OCO report including reconciliations and retain documentation of the activities performed and related results.

    Agency: Department of Defense
    Status: Open

    Comments: In commenting on the draft report, DOD concurred with the recommendation and cited actions in process to revise its Financial Management Regulation (FMR). In 2016, the Office of the Under Secretary of Defense (Comptroller) (OUSD(C)) stated that the Components provided comments and edits to the draft Chapter 23. The comments were more detailed than projected and require extensive research to verify. However, it is not clear whether this action will provide sufficient Marine Corps and Air Force-specific procedural requirements. As of August 2017, we have not been able to obtain supporting documentation to assess whether the recommendation was implemented.
    Recommendation: The Secretary of Defense should direct the Under Secretary of Defense (Comptroller), in coordination with the military service secretaries (as appropriate), to establish Navy procedures to include specific steps required to validate data in the OCO report including variance analysis and reconciliations, and retain documentation of the activities performed and related results.

    Agency: Department of Defense
    Status: Open

    Comments: In commenting on the draft report, DOD concurred with the recommendation and cited actions in process to revise its Financial Management Regulation (FMR). In 2016, the Office of the Under Secretary of Defense (Comptroller) (OUSD(C)) stated that the Components provided comments and edits to the draft Chapter 23. The comments were more detailed than projected and require extensive research to verify. However, it is not clear whether this action will provide sufficient Navy-specific procedural requirements. As of August 2017, we have not been able to obtain supporting documentation to assess whether the recommendation was implemented.
    Recommendation: The Secretary of Defense should direct the Under Secretary of Defense (Comptroller), in coordination with the military service secretaries (as appropriate), to revise DOD requirements in FMR 7000.14-R, Volume 12, Chapter 23, Contingency Operations, to provide clear, detailed guidance on (1) conducting reconciliations and other validations and (2) documenting military service-level reviews and DOD Comptroller-level reviews.

    Agency: Department of Defense
    Status: Open

    Comments: In commenting on the draft report, DOD concurred with the recommendation and cited actions in process to revise its Financial Management Regulation (FMR). In 2016, the Office of the Under Secretary of Defense (Comptroller) (OUSD(C)) stated that the Components provided comments and edits to the draft Chapter 23. The comments were more detailed than projected and require extensive research to verify. As of August 2017, we have not been able to obtain supporting documentation to assess whether the recommendation was implemented.
    Director: Fleming, Susan A
    Phone: 2025128984

    4 open recommendations
    Recommendation: To improve Amtrak's efforts in addressing financial management challenges and better support management decision making, the president of Amtrak should perform a comprehensive risk assessment of financial reporting processes that support preparation of monthly performance reports and the RPI, to include determining areas of vulnerability, implementing appropriate compensating and mitigating internal controls, and ongoing monitoring to ensure compliance.

    Agency: National Railroad Passenger Corporation
    Status: Open

    Comments: GAO is continuing to work with Amtrak to obtain information on the status of this recommendation and will update provide updates as available.
    Recommendation: To improve Amtrak's efforts in addressing financial management challenges and better support management decision making, the president of Amtrak should document policies and procedures related to controlling the information in the monthly performance reports, including the RPI. The policies and procedures should cover how expenses are allocated to Amtrak's routes, as well as specific guidance on documenting the justification and authorization of changes made to allocation methods.

    Agency: National Railroad Passenger Corporation
    Status: Open

    Comments: We will continue to work with Amtrak to obtain information about the status of this recommendation and will provide updates as available.
    Recommendation: To improve Amtrak's efforts in addressing financial management challenges and better support management decision making, the president of Amtrak should develop a comprehensive action plan for immediately implementing preventive controls to enhance the reliability of financial data and address the reportable condition over accounting for capital assets in the most recent reports and letters of comment from the independent public accountant.

    Agency: National Railroad Passenger Corporation
    Status: Open

    Comments: We will continue to work with Amtrak to obtain information about this recommendation and will provide updates as available.
    Recommendation: To ensure that Amtrak can better meet the challenge of increasing its efficiency and reducing its operating costs, the president of Amtrak should establish efficiency and unit cost measures with clear inputs to benchmark individual asset and corporate productivity, which will demonstrate efficient use of Amtrak's resources.

    Agency: National Railroad Passenger Corporation
    Status: Open

    Comments: We will continue to work with Amtrak to obtain information about the status of this recommendation and will provide updates as available.
    Director: Williams, Mccoy
    Phone: (202)512-3000

    2 open recommendations
    Recommendation: The Senior Civilian Official for the Office of the Assistant Secretary of the Navy should develop a review process so that data call information on sponsor owned material is correctly reported.

    Agency: Department of Defense: Department of the Navy: Office of the Assistant Secretary of the Navy (Financial Management): Senior Civilian Official
    Status: Open

    Comments: According to Navy officials, sponsor owned material is a subset of Operating Materials and Supplies (OM&S) contained within the OM&S--Remainder (OM&S-R) category. The Navy's Office of Financial Operations (FMO) is providing direction to the various Navy budget submitting offices (BSOs) to guide the development of a complete, accurate, and validated population of the OM&S-R balances reported in the Navy's financial statements--to include sponsor owned material. Specifically, FMO is working with the BSOs to develop a review process in which the BSOs will reconcile their Accountable Property System of Record asset listings to the Navy's financial statements on a quarterly basis. FMO has performed a reconciliation for the third and fourth quarter of fiscal year 2016, and is currently performing a reconciliation for the first quarter of fiscal year 2017. However, FMO has yet to achieve a 100 percent accurate reconciliation. According to Navy FMO officials, the projected implementation date for this review process is expected to be after September 30, 2017. We will continue to follow-up on this recommendation.
    Recommendation: The Senior Civilian Official for the Office of the Assistant Secretary of the Navy should revise the Navy's policies for compiling its financial statements so that they are in accordance with federal accounting standards and the DOD Financial Management Regulation. Specifically: (1) ammunition items needing repair and those categorized as excess, obsolete, and unserviceable should be revalued appropriately to comply with SFFAS No. 3 and the DOD Financial Management Regulation; and (2) shipboard inventories aboard smaller combatant ships should be reported as operating materials and supplies in accordance with federal accounting standards.

    Agency: Department of Defense: Department of the Navy: Office of the Assistant Secretary of the Navy (Financial Management): Senior Civilian Official
    Status: Open

    Comments: Regarding the first part of this recommendation, Navy's procedures for financially reporting ammunition items deemed excess, obsolete, or unserviceable and ammunition items needing repair are not in compliance with federal accounting standards. The Statement of Federal Financial Accounting Standard Number 3 (SFFAS 3) states that excess, obsolete, and unserviceable operating material and supplies shall be valued at their net realizable value. The standard further states that repair costs for inventory held for repair must be accounted for and adjusted accordingly based on the method of accounting used. Specifically, for ammunition items needing repair, entities should revalue, or reduce, such items by the estimated repair costs for financial statement reporting purposes. However, the Navy is currently devaluing its excess, obsolete, and unserviceable ammunition to zero and reporting it as such on the financial statements. Further, although the Navy has identified an annual maintenance cost for ammunition items needing repair, the Navy currently does not devalue its ordnance, or ammunition, amounts by the estimated repair costs. The Navy contends that these are routine maintenance events and will elect to expense the ordnance maintenance cost as it is incurred in opposition to SFFAS 3. Regarding the second part of this recommendation, SFFAS 3 states that Operating Materials and Supplies (OM&S) should be accounted for using the consumption method; in that materials are to be reported as an asset until they are issued to an end user for consumption in normal operations, at which point they would be expensed. Navy acknowledges, in its fiscal year 2016 financial statements, that due to current system limitations, the consumption method of accounting for all of the Navy's OM&S is not feasible, although long-term efforts are underway to transition to the consumption method for the recognition OM&S expenses to address this previously identified material weakness. Until these efforts are completed, the Navy has granted the Fleet Forces Command and Pacific Fleet a waiver to account for OM&S utilizing the purchase method of accounting. Under the purchase method, the OM&S supplies are expensed upon purchase for the smaller combatant command ships, as opposed to federal accounting standards requiring them to be recognized as an asset on the balance sheet and then expensed when consumed in the normal course of operations. We will continue to follow-up on this recommendation and the related issues in future Navy Operating Material and Supplies audit work.